One of the components of the HIPAA Administrative simplification law is the establishment of a national provider identification number (NPI).  The intent of this law is to simplify health plan processes, by ensuring that health care providers who engage in electronic transactions will use one identifying number for all of the various health plans with which they engage.  The NPI is similar to a Social Security Number that is used to identify the provider for all purposes. 

Generally, these rules do not significantly affect employers.  However, employers who pay claims directly, or who sponsor self-funded plans and hire third party administrators (TPAs) to pay claims, should be aware of these rules.  At minimum, employers sponsoring self-funded health plans should make certain that their business associate agreements with TPAs require the TPA to be able to accept an NPI. 

The NPI rules become effective to HIPAA covered entities on May 23, 2007 (or, May 23, 2008 for small plans with fewer than $5M in annual receipts). 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

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