The Centers for Medicare and Medicaid Services (CMS) announced the adoption of the National Provider Identifier (NPI) as the standard health identifier for healthcare providers to use in filing and processing healthcare claims and other transactions.

The health identifier is mandated by the Health Insurance Portability and Accountability Act (HIPAA). According to the agency, adoption of the NPI is the latest step in implementing the administrative simplification provisions of HIPAA.

The effective date of the final rule will be May 23, 2005.

Replacing all legacy identifiers, the NPI is a new number that will be issued through CMS' national provider system. All healthcare providers - whether or not they are covered entities under HIPAA - are eligible to be assigned NPIs. Non-covered providers may obtain NPIs.

According to CMS, covered entities must use NPIs in standard transactions no later than the compliance dates - May 23, 2007 for all but small health plans and May 23, 2008 for small health plans.

Adoption of the standard healthcare provider identifier enables a provider to use only one NPI to identify itself in all standard transactions.