If Your Vendor Isn't Ready for NPI, Neither Are You
Have you assessed your business need for National Provider Identifier (NPI)? Have you applied for your NPI? Do you think it doesn't apply to you? Do you think it will be delayed? Can your billing system create an electronic claim with an NPI? Can your billing system accommodate the new CMS-1500 (effective date October 1, 2006)? Have you or your vendor tested transactions with NPI?
If you conduct transactions electronically, HIPAA (Health Insurance and Portability Accounting Act) and NPI apply to you. Don't be lulled into thinking that NPI will be delayed and you'll have more time to implement.
The Centers for Medicare and Medicaid Services (CMS) has announced their implementation schedule. CMS intends to fully implement NPI in electronic transactions in May 2007. If you fail to prepare, you may not be able to send electronic claims or receive electronic remittances or conduct any of the other HIPAA transactions, significantly impacting your business and cash flow.
All Medicare physicians, providers, and suppliers who use a vendor, clearinghouse, or other third-party billing agent to submit Medicare claims should understand the requirements of National Provider Identifier (NPI). Providers must assess their business needs for NPI enumeration.
Background
During the past few years WPS has published many articles in our newsletter about the Health Insurance Portability and Accountability Act (HIPAA). The legislation is intended to establish national standards for electronic health care transactions and identifiers for providers, health plans, patients and employers. It also addresses the security and privacy of health care data. The National Provider Identifier is an integral piece of the HIPAA strategy with additional identifiers to follow. An NPI is a unique 10 digit identifier with no embedded intelligence. An NPI will not expire. To date, approximately 15 percent of the estimated number of health care providers who are covered entities under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) have obtained an NPI.
Stage 1 of the implementation of a National Provider Identifier (NPI) is in effect from January 1, 2006 through October 1, 2006. Medicare will accept an NPI as long as it is accompanied by an existing legacy Medicare number. Medicare will begin validating NPIs. Medicare will reject inbound electronic claims (837) and status inquiry (276) transactions that contain ONLY NPIs or invalid NPIs.
Stage 2 implementation begins on October 2, 2006 and will allow providers to send an NPI and/or a Medicare legacy identifier. If there is any issue with the provider's NPI and no legacy identifier is submitted, the provider may not be paid for the claim. Medicare strongly recommends providers, billing services and clearinghouses submit both NPI with Medicare legacy identifier as the secondary identifier. Medicare will be able to send the NPI as the primary provider identifier and Medicare legacy identifier as the secondary identifier in outbound claim, claim status response, remittance advice (electronic but not paper), and eligibility response transactions.
Effective May 23, 2007, the CMS system will accept only NPI numbers.
If you rely on your vendor to maintain your billing system and keep you up-to-date with electronic billing, or if you use a billing service or clearinghouse, you need to ask them about their plans for NPI. Ask them about their NPI readiness. How did they determine their NPI readiness? Is your vendor going to have a billing program that can accommodate NPI? When will your vendor be testing? When will you be able to test? Can your billing system accommodate the new CMS-1500 (effective date October 1, 2006)?
NPI Tip
When applying for your NPI, CMS urges you to include your legacy identifiers, not only for Medicare but for all payors. If reporting a Medicaid number, include the associated State name. This information is critical for payors in the development of crosswalks to aid in the transition to the NPI.
For additional information regarding NPI visit: http://www.cms.hhs.gov/NationalProvIdentStand/. 
In conclusion, the bottom line is that, in order to protect your interests and ensure uninterrupted cash flow, begin immediately to work toward implementing NPI. If you need additional information you may also contact the WPS EDI Hotline for IL, MI & WI: 877-567-7261, or for MN: 952-885-2811, 952-885-2881 or 952-885-2882.
