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- Health Insurance Portability and Accountability Act (HIPAA) was signed into law on August 21, 1996. The primary intent of HIPAA is to provide better access to health insurance, limit fraud and abuse, and reduce administrative costs.
- As part of HIPAA Administrative Simplification, CMS (Centers for Medicare and Medicaid Services) passed a final rule on a Standard Unique Health Identifier for Health Care Providers. This final rule has adopted the National Provider Identifier (NPI) as that unique identifier standard.
- The NPI is a 10-position numeric identifier, with the 10th position being an ISO standard check digit. There is no embedded intelligence in the number.
- NPI replaces provider identifiers assigned by health plans.
- There are two categories of NPI:
- Type 1 – Health Care Provider Individuals such as:
- Primary Care Physicians
- Non-Physician Specialists
- Type 2 - Health Care Provider Organizations (including but not limited to):
- Skilled Nursing Facilities
- Home Health Agencies
- DME Suppliers
- HIPAA mandates the use of NPI on all electronic transactions on or after May 23, 2007. The final regulations also allow a health plan to require providers (Type 1 and 2) to bill their NPI on paper claims.