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By Arlene Furlong

With the deadline to include a national provider identifier on electronic transactions fast approaching, the American Dental Association is on call, ready to answer members' questions.

This ADA News article is a refresher on the basics of the NPI—a standard identification number for health care providers, required by May 23, 2007, under the Health Insurance Portability and Accountability Act. It answers the questions the ADA Department of Dental Informatics is getting from ADA members. Look to future issues of the ADA News for more frequently asked questions, as well as updates on NPI testing and implementation.

What is a national provider identifier?

The NPI is a 10-digit standard identification number that will replace the current provider identification information used—usually referred to as legacy identifiers. Legacy identifiers can be dental plan-specific identifiers, license numbers and Social Security numbers. The NPI will be required on all HIPAA standard transactions.

The NPI will not replace a tax identification number or social security number. It will be used when dentists are identifying themselves, their employees or their practices as health care providers (not as taxpayers) when using electronic transactions and when insurers or state law requires its use. However, Social Security numbers and taxpayer identification numbers will still be used for taxpayer identification purposes.

Who should apply for an NPI?

Just like other regulations under HIPAA (electronic transactions, privacy and security), the NPI applies to all health care providers and provider organizations that transmit HIPAA standard electronic transactions—either directly or through a vendor or clearinghouse.

By May 23, 2007, dentists who use HIPAA standard electronic transactions must include an NPI. The most common HIPAA standard electronic transactions used by dentists are electronic claims and eligibility inquiries. Other HIPAA standard electronic transactions used by dentists include electronic claims attachments and claim status inquires.

But even dentists who do not use HIPAA standard electronic transactions may encounter health plans that require an NPI on paper claims, according to the ADA Department of Dental Informatics. Some have already expressed this intention at NPI-related public hearings. Additionally, state laws could require dentists who are not HIPAA-covered entities (do not file electronic transactions) to obtain NPIs. Minnesota has already enacted such a law. For such reasons, the ADA encourages all dentists to apply for an NPI.

Dentists who have no plans to implement electronic transactions and don't want to apply for an NPI should check with their patients' dental plans to determine whether they will require NPIs on paper claims or other additional identifying information.

How will dentists use the NPI?

After the May 23, 2007, deadline, a standard electronic dental claim will contain an NPI to identify a dentist or dental practice as the health care provider, as well as a Social Security or taxpayer identification number for tax reporting reasons. When required to do so, dentists who file paper claims will include an NPI (and possibly other identifying information per the dental plan's instructions) in addition to a taxpayer identification number on paper claim forms.

When should dentists apply for an NPI?

The ADA Department of Dental Informatics recommends that anyone who wants to avoid disruptions in claim payments should apply for an NPI as soon as possible. "As we steadily move to a full electronic business world, the NPI number will be a great and necessary asset," said Dr. Billie Sue Kyger, vice-chair of the Council on Dental Practice. She applied for an NPI two weeks ago and received it within 10 days via e-mail.

"By applying now, dentists can avoid any chaos as the May '07 deadline approaches," she said. "It's easier than booking a hotel reservation online. Use the ADA link and follow the simple directions."

Am I a Type 1 or Type 2?

There are two types of NPIs available to dentists and dental practices—Type 1 and Type 2.

• Type 1 enumeration distinguishes an individual provider as a health care provider who is operating independently. All dentists are eligible to apply for a Type 1 NPI, regardless of whether or not they file electronic transactions and are required to have an NPI under HIPAA.
• Type 2 enumeration distinguishes a health care provider that is an organization, such as a hospital, clinic, group practice or corporation. All incorporated dental practices and/or group practices are eligible for enumeration as Type 2 providers. Additionally, Type 2 organization providers may wish to also enumerate their individual provider employees as Type 1 providers to distinguish them individually and avoid possible delays in payments.

Incorporated individual providers who have an employee identification number should have a Type 2 NPI. However, it is entirely possible for an independent dentist with an incorporated practice to have both a Type 2 NPI for the incorporated practice and a Type 1 individual NPI. By enumerating both ways, the dentist achieves practice flexibility if required to distinguish a human being who provided services from the practice entity. Down the road this may help ensure that tax responsibilities are properly assigned.

During the NPI application process, an individual dentist enumerating as a type 1 must supply a Social Security number or individual tax identification number if he or she does not qualify for a social security number. Type 2 applications require an employer identification number.

On paper, there is no way to distinguish a Type 1 from a Type 2. In the absence of any associated data, they are identical in format.

What should dentists do after they apply for an NPI?

For now, the Department of Dental Informatics suggests that dentists begin identifying key partners who will need their NPI information. This means any business that needs an NPI from a dentist or dental practice to facilitate payment of benefits and/or delivery of health care. These include, but are not limited to dental plans, clearinghouses, systems vendors, billing services and other health care providers. Laboratories and pharmacists should also be included in the health care provider category dentists identify as key partners who may need their NPI information.

After identifying partners, dentists can request their dental practice management system vendors to update their systems to include the NPI and conduct tests to ensure that each dental plan is receiving information necessary to process claims efficiently. Dentists who submit electronic claims to a clearinghouse can ask if the clearinghouse is conducting NPI tests in preparation of the May 23, 2007, compliance deadline. In addition, the clearinghouse may need legacy identifier information during the transition phase to the NPI.