National Provider Identifier requirement swells claim denials
The industry might not have been ready to switch over to the NPI for Medicare claims processing. Source:  
A provision of the 1996 Health Insurance Portability and Accountability Act (HIPAA) requiring healthcare providers to submit a National Provider Identifier (NPI) for Medicare and Medicaid reimbursement went into effect May 23. Early reports indicate that the impact of the oft-delayed NPI deployment has resulted in nearly one-quarter of submitted claims being rejected since that date.

According to the Centers for Medicare & Medicaid Services (CMS), hospitals, physicians, clinics and labs that fail to submit an NPI for Medicare claims for services after May 23 will have their claims returned as unprocessable.

Modern Healthcare reported that healthcare industry claims processors and claims-flow watchers report at least four-fold increases in rejected Medicare claims, similar or even higher rejection rate spikes for Medicaid claims, and a doubling of rejection rates for claims processed by Blue Cross/Blue Shield insurance plans on May 23, the first day a federally mandated NPI was required.

The NPI deployment timeline was announced by CMS in June 2005; it was originally scheduled to be mandated for healthcare providers on May 23, 2007. Healthcare institutions and claims processing firms successfully lobbied the agency for a year-long delay to ensure billing system compliance with the requirement.

CMS reported in April that for all primary and secondary provider fields, only the NPI will be accepted and sent on all HIPAA electronic transactions (837I, 837P, NCPDP, DDE, 276/277, 270/271 and 835), paper claims (UB-04 and CMS-1500) and standard paper remittance (SPR) advice.

The reporting of Medicare legacy identifiers in any primary or secondary provider fields will result in the rejection of the transaction, CMS stated.

Practices that have not yet applied for an NPI may do so online, here. CMS said that the process to complete the request will take approximately 20 minutes and is free of charge. For more information about the NPI, please go to the Healthcare and Human Services (HHS) NPI website.