National Provider Identifier Activities Begin in 2005
Dear Health Care Provider:

The Centers for Medicare & Medicaid Services (CMS) is pleased to announce the
availability of a new identifier for use in the standard electronic health care transactions.
The National Provider Identifier (NPI) will be the single provider identifier, replacing the
different provider identifiers you currently use for each health plan with which you do
business. The identifier, which implements a requirement of the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), must be used by most HIPAA
covered entities, which are health plans, health care clearinghouses, and health care
providers that conduct electronic transactions for which the Secretary has adopted a
standard (i.e., standard transactions). This letter will help you to understand the
background of this requirement and what steps you need to take to apply for and receive
an NPI.

The NPI is one of the steps that CMS is taking to improve electronic transactions for
health care. National standards for electronic health care transactions encourage electronic
commerce in the health care industry and simplify the processes involved to reduce the
administrative burdens on health care providers. With national standards and identifiers in
place for electronic claims and other transactions, health care providers will be able to
submit transactions to any health plan in the United States. Health plans will be able to
send standard transactions such as remittance advices and referral authorizations to health
care providers. These national standards will make electronic data interchange a viable and
preferable alternative to paper processing for health care providers and health plans alike.

To date, we have adopted and implemented the following HIPAA standards: electronic
health care transactions and code sets, privacy, security, and the national employer
identifier.

We are now beginning the NPI. On January 23, 2003, the Secretary published a Final Rule
that adopted the NPI as this identifier. As of the compliance dates listed below, HIPAA
covered entities must use NPIs to identify health care providers in standard transactions.
These transactions include claims, eligibility inquiries and responses, claim status inquiries
and responses, referrals, and remittance advices.

Health care providers include individuals, such as physicians, dentists, and pharmacists,
and organizations, such as hospitals, nursing homes, pharmacies, and group practices.
Health care providers who transmit health information electronically in connection with
any of the standard transactions are required by the NPI Final Rule to obtain NPIs, even if
they use business associates, such as billing agencies, to prepare the transactions.

The NPI will replace health care provider identifiers that are in use today in standard
transactions. Implementation of the NPI will eliminate the need for health care providers to
use different identification numbers to identify themselves when conducting standard
transactions with multiple health plans. Many health plans, including Medicare, Medicaid,
and private health insurance issuers, and all health care clearinghouses must accept and use
NPIs in standard transactions by May 23, 2007. Small health plans have until May 23,
2008. After those compliance dates, health care providers may use only their NPIs to
identify themselves in standard transactions, where the NPI is called for.

You will be able to apply for your NPI in on of three ways:
  • You may apply through an easy web-based application process, beginning May 23,   
    2005. The web address is https://nppes.cms.hhs.gov.
  • You may prepare a paper application and sent it to the entity that will be assigning
    the NPI (the Enumerator) on behalf of the Secretary, beginning July 1, 2005. A copy
    of the application, including the Enumerator's mailing address will be available on
      https://nppes.cms.hhs.gov. You may also call the Enumerator for a copy.
     The phone number is 1-800-465-3203 or TTY 1-800-692-2326.
  • With your permission, an organization may submit your application in an electronic
    file. This could mean that a professional association or perhaps a health care provider
    who is your employer could submit an electronic file containing your information and
    the information of other health care providers. This process will be available in the
    fall of 2005.

Remember, you may apply for an NPI using only one of the ways described above. When
gathering information for your application, be sure that all of your information, such as
social security number and Federal employer identification number, are correct. Once you
receive your NPI, safeguard its use. The application form contains a Privacy Act
Statement, which explains how we may disseminate the information collected in the
application.

You may receive notices about the NPI from many of the health plans with which you do
business. Remember that you need apply only once for an NPI. The same NPI is used for
every health plan.

The transition from existing health care provider identifiers to NPIs in standard transaction
will occur over the next couple of years. We urge health care providers to apply for an
NPI beginning on May 23, 2005. While the NPI must be used on standard transactions
with health plans, other than small health plans, no later then May 23, 2007, health care
providers should not begin using the NPI in standard transactions on or before the
compliance dates until health plans have issued specific instructions on accepting the NPI.
Health plans will notify you when you can begin using NPIs in standard transactions. You
should be aware that health plans might request that you begin using your NPI prior to the
compliance dates. Applying for an NPI does not replace any enrollment or credentialing
processes with any health plan, including Medicare.

You may obtain information about the NPI at
www.cms.hhs.gov/hipaa/hipaa2. This site
contains Frequently Asked Questions and other information related to the NPI and other
HIPAA standards.

Beginning May 23, 2005,w will also provide up-to-date information about the NPI such as
when and how to apply on the NPPES we site at
https://nppes.cms.hhs.gov or you may
call the Enumerator at 1-800-465-3203 or TTY 1-800-692-2326.



                                                                              Sincerely,

                                                                              Mark B. McClellan, M.D., Ph.D.