National Provider Identifier (NPI) planning and implementation fundamentals for providers and payers.

Federal HIPAA legislation mandates that the National Provider Identifier (NPI) be fully implemented across all healthcare entities between May 2005 and May 2007, or 2008 for small payers. Starting May 2005, healthcare providers will be eligible to obtain an NPI and use these numbers to submit claims or conduct other transactions specified by HIPAA. By 2007, the NPI must be used in connection with the electronic transactions identified in HIPAA. Today, individual payers assign unique identification numbers to healthcare providers, and, in most cases, payers assign multiple identification numbers to healthcare providers and their "subparts." As a result, providers have multiple payer-specific identification numbers. The NPI is a unique, 10-digit federal healthcare provider identification number that will be used by all healthcare providers and payers and other healthcare entities involved in administrative and financial transactions associated with health service events and related activities. This article will use software and data experts' knowledge as well as the authors' NPI implementation readiness assessment work to review the impact to both payers and providers, including hospitals, clinics, and other service entities. The authors will suggest planning, budgeting, architecting, and data management solutions for payers and providers to achieve the optimal administrative simplification goals intended by the NPI, without compromising data integrity and interoperability objectives across the service spectrum of the healthcare enterprise.