Deadline Day Comes for the NPI

HDM Breaking News, May 23, 2008

May 23 is the compliance date for the National Provider Identifier to be used exclusively for electronic health care claims under HIPAA. Barring a last minute government decision to extend the deadline, health insurers starting today will reject and return electronic claims that do not include the identifier.

As of May 1, the National Plan and Provider Enumeration System had issued NPIs to 2.55 million providers—1.93 million individual providers and 620,593 provider organizations, according to figures from Fox Systems Inc. of Scottsdale, Ariz., the NPI enumerator. That figure suggests nearly all providers who bill for health care services have an NPI, as CMS previously estimated nearly 2.3 million identifiers were needed.

But no one knows how many providers are in compliance with the NPI, says Bob Booz, a NPI specialist and vice president at Gartner Inc., a Stamford, Conn.-based research and consulting firm. “We know the payers with a few exceptions are complaint,” he adds.

Booz predicts a tough period for the next few weeks or months, as even providers sending what they believe are compliant claims see them being rejected by payers.

That’s because every insurer has, to some degree, different interpretations of NPI implementation requirements. Claims submitted by a provider organization to one insurer may be paid while equally prepared claims sent to another insurer may be denied. But the problem could be magnified because every claims clearinghouse and claims management software vendor also may have different interpretations.

Providers also may be confused, and put the wrong identifier on claims. For instance, many provider organizations have received more than one NPI for their organization. That’s an easy fix once the problem is figured out, Booz says.

But many problems won’t be so easy. For instance, billers may put the organizational NPI on claims rather than the NPI of the attending physician. That means an insurer would send checks to organizations when they should be going to individual providers.

“The NPI is not a simple change,” Booz contends. “It goes to the fundamental elements of the health care reimbursement system. So for many hospitals and physician offices, it could be a serious problem at the end of May.”

If there is an uproar of protest across the industry--which would start on May 27 as claims generated over the Memorial Day holiday weekend are denied--it is possible that CMS would relax the deadline, Booz notes. “But if I were a health care provider, I wouldn’t count on it.”

Providers getting too many claim rejections, or their clearinghouses, may resubmit the claims on paper. That will enable providers to get paid, but slow the process considerably and adversely affect cash flow. “There are a lot of small payers and third-party administrators that providers did not test with and the providers won’t know there’s a problem until it exists,” Booz says.

The bottom line is simple, he believes. “It’s going to be very rocky.”

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