Any incomplete, missing, or wrong NPI number is one of the most common mistakes in medical billing and rejected claims. Without an exact NPI, insurance claims made to Medicare, Medicaid, or other health plans are not paid. NPI is a unique identification number given to each healthcare provider and entity in the United States. In 1996, according to the HIPAA act, NPI came into existence to increase the effectiveness of electronic health records (HIPPA). The Center for Medicare and Medicaid Programs (CMS) and all health care plans and health care clearinghouses use NPIs to manage reimbursement requests and financial claims.
How is an NPI number used?
To protect the personal health records of an individual and to increase the health care system’s efficacy NPI came into existence. It is widely used to increase the effectiveness of electronic health records (HIPPA) and it helps in minimizing fraud and abuse during electronic data transfer of an individual.
It is a unique Id for each healthcare provider and entity. It is mandatory to use NPI by all healthcare plans for every administrative and financial transaction. Health plans are used to assign their ID numbers to each health care provider. The result was that every provider had to use a different ID depending on which health plan they were submitting claims to. The universal NPI number has made billing and tracking more efficient.
The NPI must be used by providers to:
- To identify themselves in HIPAA-compliant health care transactions.
- To identify themselves on related correspondence.
- To identify other health care providers on related correspondence.
- With the help of NPI, you can easily identify other health care providers in health care transactions.
What is the purpose of NPI?
The purpose of NPI is to increase the health care system’s efficiency and help to minimize fraud and abuse. The NPI number is used with any electronic transaction identified in HIPPA. It may also be used by healthcare providers to identify them or other providers in healthcare transactions or related correspondence.
Why NPI is necessary?
The NPI is an Administrative Simplification mandate of HIPAA.