According to the Centers for Medicare and Medicaid Services (CMS), all healthcare providers and organizations need to obtain a National Provider Identifier (NPI) to eliminate the need to use different identification numbers when conducting business with multiple health plans. As NPI numbers are free and easy to get, they are commonly used to validate and verify a wide range of authentication, individual claims, contracts or agreements, and much more.
Furthermore, to be compliant with CMS payment eligibility and prevent the risk of HHS OIG fines and penalties, it is critical to conduct comprehensive monitoring of referring providers and physicians. Since monthly exclusion checks can pose a significant challenge to healthcare organizations due to insufficient information available, NPI numbers can be a useful asset in this process. Searching NPI records when screening and monitoring for excluded parties, as well as referring providers and physicians, provides critical data resulting in full transparency.
Background of NPI Numbers
An NPI number is a unique identification number issued to every healthcare provider and organization in the United States. In order to improve the efficiency of electronic health records, NPI numbers were introduced in 1996 as part of the Health Insurance Portability and Accountability Act (HIPPA). They are used by the CMS and all health care plans and health care clearinghouses to process payment claims and financial and administrative transactions.
Any healthcare provider or healthcare organization that conducts transactions or uses health records that fall under HIPPA regulations is required to obtain an NPI number. This includes organizations and providers that use a medical billing company to process their claims. Any individual, business, or healthcare agency that transmits any patient health information in electronic form in connection with a transaction is required to have an NPI number. Once a provider receives their NPI it cannot be changed and remains with them regardless of their position or where they live or work. Individuals and entities apply for NPI numbers through the CMS National Plan and Provider Enumeration System (NPPES).
NPI number replaces an older system where identification numbers were assigned to providers and supplier entities by health plans. However, providers and entities had different identification numbers for each health plan and sometimes the same number would be assigned to different providers by different plans. On the other hand, NPI number is used in claims submissions as well as to facilitate the tracking of current and historical transactions to a single provider or entity through a single NPI.
Having an NPI simplifies the exchange of healthcare information. A provider’s NPI is associated with information that health insurance companies use to identify and categorize the types of services they provide. This information helps verify the provider’s information and identify their patients’ claims. As a result, patients get reimbursed more quickly while reducing the likelihood of errors.Use this detailed guide to find out how to develop and keep effective healthcare compliance while meeting industry standards, federal, state, and local regulations.
Types of NPI Numbers
According to CMS, there are two types of healthcare providers in terms of NPI number: Type 1 and Type 2.
Type 1 providers include individuals, such as physicians, dentists, and all sole proprietors. On the other hand, type 2 providers encompass organizations, such as physician groups, hospitals, nursing homes, and the corporation formed when individuals incorporate them into a group practice.
Healthcare organizations need to determine if they have subparts that need to be uniquely identified in HIPAA standard transactions with their own NPI numbers. A subpart is a component of an organization that furnishes healthcare and is not a separate legal entity.
In case an individual is both a healthcare provider and incorporated, it is necessary to obtain an NPI number Type 1 and an NPI number Type 2 for a corporation.
Exclusions Monitoring for Provider Referrals
Given that an NPI record is a uniform identification tool for healthcare providers and health plans, it can be of great use for identifying false claims and healthcare fraud, but also in the process of exclusion screening. The main source for referencing federal healthcare exclusions is the List of Excluded Individuals and Entities (LEIE). Before hiring or engaging any employee or contractor, healthcare providers and suppliers need to check the LEIE and ensure that no employees or referring providers are on the list.
Searching for sanctioned organizations or individuals can be conducted only by using names, but this can present a number of inconsistencies or errors. However, since the OIG started upgrading federal and state databases to include NPI numbers, the screening process is far more accurate. Using unique identifiers such as NPI numbers is far less subject to errors and information gaps.
Healthcare organizations can easily face compliance issues without active research of regulatory requirements and exclusion lists. Using the NPI number in combination with screening against LEIE, SAM, and state Medicaid lists is key for obtaining all available information on excluded and sanctioned healthcare staff, vendors, volunteers, referrals, business associates, and more. Since this process can be complex and time-consuming, exclusion screening solutions can save healthcare organizations time and reduce the risk of non-compliance. Such an approach simplifies ongoing monitoring of the entire provider network across all federal and state exclusions lists, together with validating NPI numbers against NPPES NPI Registry. As a result, healthcare organizations meet all necessary requirements while mitigating fraudulent activity and elevating the level of healthcare compliance.