Why NPI Numbers Are Essential for The Healthcare Industry – The national provider identifier (NPI) is a ten-digit number used to identify a healthcare entity or provider. The number is shared with other healthcare plans, employees, healthcare providers, and other crucial stakeholders in the healthcare industry and is also used for billing purposes.
The (HIPAA) health insurance portability and accountability act of 1996 mandates the adoption of a unique identifier for every healthcare provider.
Today, all healthcare plans, providers, and clearing houses covered under the (HIPAA) act must have the NPI number used in financial and administrative transactions.
Why NPI Numbers Are Essential
NPI Numbers Standardized the Healthcare Provider Identification
Before the implementation of NPI numbers, the federal healthcare players and other healthcare plans used to issue identification numbers to healthcare suppliers and providers. This resulted in a single healthcare provider being assigned more than one indentation number since the provider could be enrolled in various health plans. And if the same identification number was issued to different healthcare providers by various healthcare plans, which brought about complications in the provider’s claim submissions and other administration issues.
However, the NPI numbers established a unique healthcare provider identification standard that could be used in the entire healthcare system. The standardization helped reduce administrative burdens on healthcare providers and simplified their claim process.
Improved The Efficiency and Effectiveness of the Healthcare Industry
Healthcare providers must use NPI numbers when transmitting electronic healthcare information with the associated transactions. As the NPI final rule stated, it will improve private, federal, Medicaid, and Medicare health programs.
NPI numbers also simplified the administration of the healthcare system by enabling the efficient transmission of electronic healthcare information, which generally improved the effectiveness and efficiency of the healthcare industry.
NPI Numbers Help to Prevent Healthcare Fraud
Other than standardizing the health care provider identification, NPI numbers are critical in preventing fraud in health care programs such as Medicare. The NPI number helps to identify the specific healthcare provider who was attending to the patient, ordering supplies and equipment, and prescribing the patient.
Even though the NPI number does not necessarily mean that the healthcare provider is appropriately licensed, the credentials are combined with other elements to help detect and prevent fraud in the healthcare system.
Who Needs The NPI Number
All organizational and individual healthcare providers who use healthcare records that fall under (HIPAA) regulations or conduct transactions of healthcare providers as prescribed in 45 CFR 160.103 must obtain the NPI number.
Therefore, all healthcare providers, healthcare plans and clearing houses, healthcare organizations, and other healthcare providers who transmit healthcare information electronically or need access to encrypted healthcare data must have the NPI number.
The national provider identifier numbers are essential because they help standardize healthcare provider identification. NPI numbers also improve efficiency and effectiveness in the healthcare system as providers use their unique numbers to transmit electronic healthcare information and other associated transactions for easier administration and claim submissions. The NPI numbers and other elements also helped prevent and detect fraud in healthcare systems.