The National Provider Identifier (NPI) is a unique identification number for covered healthcare providers, created to help send health information electronically more quickly and effectively. The NPI is a 10-digit numerical identifier that identifies an individual provider or a healthcare entity. It was introduced in 1996 as part of the Health Insurance Portability and Accountability Act (HIPAA) to improve the efficiency of electronic health records. The use of the NPI will improve the Medicare and Medicaid programs, and other federal health programs and private health programs, and the effectiveness and efficiency of the healthcare industry in general, by simplifying the administration of the healthcare system and enabling the efficient electric transmission of certain health information.
All individuals and organizations that meet the definition of healthcare provider as described in 45 CFR 160.103 that conduct transactions or use health records that fall under HIPAA regulations are required to obtain an NPI. These include health plans, health plan clearinghouses, healthcare providers who transmit health information electronically, and healthcare organizations that transmit.
There are two types of NPIs:
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Type 1: or rendering, NPIs include healthcare providers who operate individually, usually as a sole proprietor. The number of different office locations, other employees, and if those employees have EIN does not change your eligibility for a Type 1 NPI. All healthcare providers should obtain an individual Type 1 NPI at the start of their career, as it acts similarly to your social security number; it allows you to be easily identified as a healthcare provider.
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Type 2: or billing, NPIs are assigned to organizations such as hospitals, clinics, and group practices. Type 2 NPIs are used for billing purposes and are not tied to an individual healthcare provider.
The NPI number is a unique ID for each provider or entity and is required to be used by all healthcare plans for every administrative and financial transaction. The universal NPI number has made billing and tracking more efficient.
