An Overview of NPIs types and their differences
How Do NPI Numbers Work?
NPIs are 10-digit numbers that identify a healthcare entity or a provider. NPI numbers are shared with other health care providers, employers, health plans, and payers for billing purposes.
According to CMS.gov's Administrative Simplification provisions, each healthcare provider must use a standard, unique health identifier. The NPI Search accomplishes this. NPI numbers are currently required in all administrative, financial, and clinical transactions under the HIPAA regulations for all health plans, providers, and clearinghouses.
Who Are the Two Types of NPI Providers?
NPI number assignments are divided into Type 1 and Type 2. NPIs of Type 1 include individuals, such as sole proprietors, dentists, physicians, and surgeons. Each provider may have one NPI. The second type of NPI consists of organizations, such as acute care facilities, hospitals, physician groups, assisted living facilities, and healthcare providers incorporated.
Type 1: Individual providers of healthcare, including sole proprietors
Entity Type 1 NPIs are available to individual health care providers. You must apply for an NPI using your own Social Security number (SSN), not your Employer Identification Number (EIN), even if you have one.
Like any other individual, a sole proprietor may have only one NPI. A sole proprietor physician, for example, may receive only one NPI (the individual's NPI). The following factors don't determine entity Type 1 status:
-Locations of different offices
-Whether you have employees
-Your employees' W-2 forms appear with the EIN instead of yours if the IRS has issued you an EIN
Your Social Security Number is your TIN (Taxpayer Identification Number).
Incorporated individuals are single health care providers that form and conduct business under the legal umbrella. Sole proprietors aren't incorporated because they don't form corporations. You aren't necessarily a sole proprietor if you are a sole practitioner.
Type 2: Organizations that provide health care
An organization can employ just one employee or thousands. The only employee of an organization may be an incorporated individual.
The components of some organization-based health care providers function somewhat independently of the parent organization. There may be different types of health care provided by these components, or they might be located at separate locations. Health care providers are legal entities, but the components and their locations are not. Components and locations are referred to as subparts in the NPI Final Rule.
Subparts of a health care organization can have their own NPIs. An independent subpart that conducts HIPAA standard transactions must obtain its own NPI.
An entity within a covered organization needs to be uniquely identified for all transactions with Medicare and other covered entities conducted under the HIPAA standards. Hospitals, for example, provide acute care, laboratory, pharmacy, and rehabilitation services. Each subpart may require a separate NPI since it sends standard transactions to at least one health plan.
When Did NPI Numbers Start?
To meet the needs of the Medicare and Medicaid programs and to create a national identification system for all healthcare providers, the Centers for Medicare and Medicaid Services (CMS) began a project in July 1993. NPI as a standard was established by the NPI Final Rule, published on Jan. 23, 2004.
NPI replaced UPIN as the national provider identifier. As an alternative to the Social Security number, the UPIN (Unique Physician Identification Number) was created by Medicare. CMS discontinued it in 2007 when NPI numbers replaced UPINs as preferred provider identification numbers. UPINs were replaced by NPI numbers as preferred provider identification numbers.