| Two, One or None: How Many NPIs Do You Need?
Like many federal laws, the NPI regulations are deliberately expansive so they can cover a wide range of circumstances. Many health care providers — including dentists — are not sure if they have to get an NPI, and, if they do, what type of identifier they need to ensure compliance with NPI regulations.
The two types of NPIs are Type 1 (individual) and Type 2 (organizational). Individual dentists and dentists structured as sole proprietors may have a Type 1 NPI. Organizational, or Type 2, NPIs designate incorporated business entities such as group practices and clinics.
Effective May 23, 2007, federal law (HIPAA) requires dentists to get an NPI if they use electronic transactions to:
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Submit claims, attachments, or predeterminations
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Verify patient eligibility
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Check claims status
Even dentists who do not conduct business electronically should get an NPI; it is the one universal identifier that can be used with all benefit carriers, billing services, other health care providers, dental specialists, or hospitals.
All dentists involved in electronic transactions need a Type 1 (individual) NPI. The Type 1 NPI is the only number required for dentists or sole proprietors who submit claims as an individual and receive payments under a Social Security number or unique identification number.
Group practices, such as organizations and clinics that are legally structured as a partnership or corporation and use a tax identification number, need a Type 2 (organizational) NPI. These practices will use both identifiers on claims — the Type 2 NPI identifies the business or corporation receiving the payment, and the Type 1 NPI identifies the treating dentist.
Here's an example of a practice that needs both types of NPIs: Valley Dental Center is a group practice with five dentists on staff. The office submits claims as Valley Dental Center, Inc. under a single TIN. This practice must have a Type 2 NPI, because it submits claims and receives payments from carriers under the corporate name/TIN. The five employee-dentists need Type 1 NPIs so that the group practice can report the treating dentist on claim forms.
Consistent use of NPIs ensures efficient, accurate payment and HIPAA compliance.
For more information about NPI compliance, visit the official government Web site at http://www.cms.hhs.gov/NationalProvIdentStand/
If you are one of those dentists who have already received your NPI(s), you know that the application process was quick and easy. Now you are ready to begin transitioning your internal and external systems to properly use the NPI(s).
Although the application only took about 20 minutes to complete, full implementation of the NPI takes approximately 120 days. Start by reviewing all of your business systems and identifying all transactions that will require the NPI. Share your NPI with all relevant business partners, such as benefit carriers or billing services.
If you use a commercial practice management system, contact your vendor to find out how to integrate your NPI(s) into the software's billing modules. Confirm that your system can support the transmission of NPI compliant claims and find out if upgrades are needed.
If you submit claims through a clearinghouse, make sure they will be NPI compliant on or before May 23, 2007. Since clearinghouses also fall under HIPAA regulations, they should be prepared to use NPI(s), and some may have systems in place to help you convert from your old (a.k.a. legacy) identifiers to your new NPI.
As the May 23 compliance date approaches, be aware that you and your staff will need time to make the necessary updates or upgrades. Delays in applying for and preparing to use your NPI can put your cash flow at risk.
For more information about NPI compliance, visit the official government Web site at http://www.cms.hhs.gov/NationalProvIdentStand/
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