What Are the Benefits of an NPI?

The 1996 Health Insurance Portability and Accountability Act requires that all individual and institutional providers be assigned a National Provider Identifier. This is a 10-digit, permanent marker attached to a doctor, dentist, hospital, home care agency, employer or ambulance service. It is attached, in other words, to any health institution that bills insurance.


A NPI is not, in itself, a coded number that contains information. It does, according to the U.S. Department of Health and Human Services, give the user the ability to look up health care providers on the Internet. It is possible to look up information on an institution or person and download the file, often called an NPPES file, from the NPI registry. It contains basic information about the person or institution. The purpose here is to connect users to institutions of providers in order to make intelligent choices and "check up" on various health care services. It is meant to reduce fraud by having a single, permanent identification number that is always attached to a health care provider no matter where they move or how many times they change practices.


Other than tracking health care providers, the other main point of the NPI is to give a provider a single number. This is meant to replace the multiple numbers that each practitioner was given under the old system. Each insurance firm as well as the government gave doctors or institutions different numbers. This caused confusion and was more vulnerable to fraud. Under HIPAA, there is only one number for all transactions. Therefore, the system of medical billing is simplified and costs are controlled.


Limiting each institution to one identification number also is intended to decrease errors. The old confusion over multiple identification numbers relative to different agencies caused benefits to be slowed down and errors to multiply. With the new NPI system, benefits are meant to be processed faster as clerical duties in the medical field become easier to manage. At the same time, doctors and other health care professionals do not need to resubmit forms for new identification numbers if they change practices, locations or specialties. This substantially cuts down on paperwork and bureaucracy.