What is it?

What is it good for?

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Let’s talk NPI...What is it and What is it good for?

 

NPI stands for National Provider Identifier and is a 10 digit number used to identify health care providers, partners and payers who engage in HIPAA standard transactions. These transactions can be for administrative or financial purposes. 

 

You may be wondering what are transactions.

 

Pretty basically, it is any electronic activity that includes insurance, such as verification of benefits, submitting electronic claims, and checking claim status (to name a few). 

 

There are 2 types of healthcare providers, according to CMS (Centers for Medicare and Medicaid Services). 

 

The first type, known as the NPI1, is for individual providers, therapists, psychologists, physicians, dentists, and all sole proprietors. That seems pretty clear...Right?

 

It’s the second type that can confuse people.

 

The NPI2 is for health care providers that are organizations, like group practices, hospitals, and agencies. That seems straightforward enough but it also applies to individuals who incorporate themselves (LLC, S-Corp, C-Corp).

 

According to investopedia, "A limited liability company (LLC) is a corporate structure in the United States whereby the owners are not personally liable for the company's debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship."

 

If you are an individual health care provider who has incorporated, you will need an NPI1 for yourself and NPI2 for your corporation or LLC. 

 

For example, if a therapist names their therapy practice Helping Hands Counseling, LLC, the business needs its own NPI2. 

 

An individual provider has only one NPI. But an organization or business can have many NPI’s (one for each provider who works there, for example).

 

You might be wondering how you get one of these NPI’s. 

 

CMS has developed the National Plan and Provider Enumeration System (NPPES) which is responsible for assigning NPI 1 and NPI 2. Click on the NPPES and it will take you over to their website where you apply.

 

One more thing, you will need your tax id or EIN (Employer Identification Number) in order to apply.

 

I hope that helps shed some light on the NPI 1 versus 2 business. It may seem like a lot to apply for these things, but you only have to do it once, then you’re golden.

 

As a Psychologist with a thriving business, I believe that owning an insurance based private practice is the key to financial freedom, professional freedom, and personal freedom. If you have questions or need help creating your own practice, contact me at Robin@DrRobinMyers.com. I offer Coaching and Consulting Services.

 

 

 

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