National Provider Identifier
What’s the Big Deal?

A Guide for Providers Who Will Successfully Implement the National Provider Identifier into Their Environment

The National Provider Identifier, also known as the NPI, may have many providers asking themselves “What’s the big deal? We apply for a new Provider ID and change it to this new 10-digit number. Done!”
Unfortunately, it is not that easy! The application process to receive an NPI is relatively simple, but the implementation of the NPI includes multiple steps and a number of complex decisions. The improper implementation of the NPI is a potential receivables nightmare and many providers will need to take action now to reduce the risk of cash flow interruption.

Plan Ahead and Anticipate Challenges

It is likely your hospital will need one, several, or dozens of NPI’s to help manage services of several hundred doctors practicing at your facility. Getting your claims paid may also require a number of NPI’s. Because NPI’s are used with remittance, the accuracy of cash posting at a hospital with multiple NPI’s can pose a serious challenge. All of these potential issues can arise and adversely affect how payers process your claims, which can lead to billing office resources correcting and rebilling claims.

Other lack-of-planning risks include having an incorrect NPI or not having one at all. These new identification numbers will need to be validated and cross-checked against legacy identifiers, as well as if archived reports are needed. Hospitals should recognize that legacy Provider ID’s are linked to payment rates and contracts by the payers. If the new NPI is not associated with the correct contract or the correct rate, your managed care claims could get underpaid or overpaid. Regardless, your cash could get interrupted while a correction is in process. So…plan ahead and anticipate these challenges. If your NPI is not carefully implemented, your reimbursement rates could be negatively impacted, which could increase accounts receivables days.

Build Awareness

To raise awareness of risks poor NPI implementation could cause a hospital’s cash flow, developing and delivering an education program is critical for key managers and departments. An effective educational program will underscore the value of an implementation plan that includes analyses, training, testing, and correspondence with payers, trading partners, and business associates. Successfully offering an educational program will also yield informative white papers and other research documents that can provide tips, suggestions, and detailed information. Many of these informative white papers are available from organizations like WEDI (The Workgroup for Electronic Data Interchange).

Enumeration

Enumeration is the assignment of an NPI to your facility or physician by NPPES, the contractor responsible for assigning the NPI.

Large or multi-facility hospitals typically bill separately for their services. These types of hospitals will need to coordinate, plan, and organize the various NPI applications for each facility.

All hospitals will need to reference CMS guidelines to decide which legal entities inside the hospital require separate NPI’s from the main hospital. Typically, a skilled nursing facility, a psychiatric unit, or a lab will need its own separate NPI because they are separate units that may already have their own legacy ID’s. These units are called subparts and determining subparts is often tricky.

Some hospitals may consider applying for NPI’s for their on-staff physicians using a process called Electronic File Interchange (EFI). The EFI process allows for bulk processing of many NPI’s with a single electronic file. CMS will provide guidance on this process in the near future. Once EFI is available, the hospital or other third party organization would need to become a certified EFI Organization or EFIO (Electronic File Interchange Organization). The EFIO, with the providers’ permission, can apply for many NPI’s at a time, streamlining the application process. Determining how your hospital approaches the enumeration task can be called the enumeration strategy. Developing your enumeration strategy, including cross walking your legacy Provider Identifiers to your new NPI’s is an essential step the will help reduce risk.

Dissemination and Disclosure

Disclosure

Hospitals must make sure they share or disclose their new NPI with organizations and systems that can help get their claims paid! This process is called disclosure and is a requirement if A) you want to get paid and B) do not want to get into trouble with the government. If you have an NPI, the law says you must share it with your trading partners so their reimbursement is not disrupted. Failure to share your NPI can be subject to monetary penalties. But, despite the legal implications, the big issue here is how to communicate to payers. How often and what form should communications take so the information is understood?

Dissemination

One plan underfoot is for all providers to start electronically sending their NPI to payers, along with their legacy Provider ID. Start doing this sooner rather than later so payers can begin to build crosswalks and get to know each provider’s NPI. Begin conversations with your payers so you can first identify when they will begin accepting the NPI. Keep in mind, each payer may suggest how to officially inform them about NPI in a regular, ongoing dissemination of the NPI data; which is a slightly different term than what applies to the enumerator, NPPES. When NPPES provides a means for providers to validate NPI’s against its database, that’s called dissemination. This form of inquiry is not available yet but CMS will announce what information will be made available and how it can be accessed in the near future. The ability to validate the NPI of your referring physicians will become a necessity. Data has a tendency to get corrupt, changed, or distorted and the dissemination strategy CMS proposes is important to the integrity of your claims data.

Summary

Hopefully, this article has inspired you to look further into some of the complex decisions and implementation tasks that lie behind the NPI. Through education you can help raise awareness of some of the issues surrounding the enumeration process of your hospital, your referring physicians, and your other facilities. Plus, as you communicate with your payers, business associates, and other physicians with privileges, a plan and process for sharing your NPI’s will need to be developed to minimize the risk of claims payment delays. Paying attention to these steps helps ensure a successful implementation of the NPI at your hospital.
Great information about the NPI can also be found here.

About the Author

Seth Masters, MBA has eight years experience researching and implementing health care industry changes, on behalf of Gaffey + Associates, for its clients nationally. Mr. Masters is currently the VP of Payer Relations with Gaffey + Associates and has successfully managed the transition of dozens of hospitals and their trading partners through the HIPAA transactions and codes sets requirements. Gaffey + Associates is a leading EDI software solutions vendor, whose corporate office is located in Pleasanton, California.

Questions or comments can be sent to hipaa@gemsedi.com.