NPI Type 1 vs Type 2: How to Choose Based on Healthcare Organization

About NPI Numbers

Do you know whether you must use NPI type 1 vs type 2? The government mandates that all healthcare providers have an NPI number, which stands for National Provider Identifier. An NPI number is a 10-digit code that serves as a unique identifier in the healthcare system for entities covered by HIPAA, the Health Insurance Portability and Accountability Act. 

Any provider submitting claims electronically or transmitting information to another provider (such as when referring a patient or coordinating care) falls under HIPAA privacy regulations, and is therefore required to include the NPI number. 

You also need an NPI number if you employ a clearinghouse to process claims for service to insurance organizations. For claims attachments that you send online or in a paper format, you will use an NPI number. The same goes for checking the status of a claim over a computer network or other communication methods.

Your NPI number only verifies that you have a valid number in the system, administered through the National Plan and Provider Enumeration System. That is, the existence of an NPI number does not reflect whether you are currently licensed or possess proper credentials for insurance billing. It simply is a standard number that you must have to submit claims to insurance carriers and Centers for Medicare & Medicaid Services (CMS). Moreover, the government uses NPI numbers to track fraud and abuse claims during investigations. You must also use your NPI number for e-prescribing.

Providers use NPI numbers in their electronic health record (EHR) and medical billing software, in correspondence with other providers, writing prescriptions, and submitting claims. An NPI number is necessary to avoid claims being kicked back. You should ensure the accuracy of your NPI number in all healthcare documentation, for greater efficiency, and to speed up the flow of revenue in your organization.

With NPI numbers, it’s easier to share data with other providers and manage treatment and billing. You cut down on errors, avoiding misidentification. For greater transparency, NPI numbers provide a uniform, consistent way to identify each healthcare provider in the system.

This article further covers the difference between type 1 NPI vs type 2.

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Two Types of NPI Numbers

There are two types of NPI numbers: type 1 and type 2. The only difference is whether the covered entity is an individual, such as a doctor, or an organization, such as a group of physicians.

As for group NPI vs individual NPI, individual providers are required to get a type 1 NPI number, while organizations must get a type 2 NPI number.

Your NPI number is a permanent identifier. A doctor who moves to a new location does not receive a new NPI number.

Remember that you also need an NPI number to gain access to the national prescription database, which integrates with e-prescription software so you can check a patient’s prescription history online.

 

Type 1

Individuals who need a type 1 NPI number include:

  • Pharmacists
  • Dentists
  • Physical therapists
  • Nurses
  • Physicians

Specifically, a type 1 NPI number denotes an individual who provides a healthcare service for accurate claim processing as a sole provider. But when you join forces with multiple physicians operating through the same entity, you’ll use a type 2 NPI number.

 

Type 2

Organizations that must use a type 2 NPI number include:

  • Laboratories
  • Pharmacies
  • Ambulance businesses
  • HHAs
  • HMOS
  • Clinics
  • Hospitals

A type 2 NPI number serves to identify an entire organization sending bills for services to insurance organizations. A benefit of having a type 2 NPI number is that all members of your group can obtain credentials with a payer at once. Doing so facilitates that your billing goes out under the same unique identifier for your organization.

Whether You Use NPI Type 1 or NPI Type 2, Benchmark Solutions Is Standing By to Assist

As someone working as an individual healthcare provider using a type 1 NPI number or as a stakeholder working in a group using a type 2 NPI number, you may need assistance in streamlining your operations and ensuring your NPI number is used accurately and consistently. Doing so is crucial to avoid making common administrative errors that would negatively affect how your claims are processed. Specifically, you want to avoid claims being kicked back to you to fix an easily avoided error. 

To that end, Benchmark Solutions and our revenue cycle management team will ensure that your NPI number is correctly recorded for use in all claims submissions and other financial documentation. 

Thanks to our SureScripts integration via our eRx software enhancement, you will be able to access a national prescription database, giving you insight into patients’ prescription history.

Watching over the use of your NPI number, we adhere to privacy regulations under the Health Insurance Portability and Accountability Act. 

To avoid rejected claims, Benchmark Solutions’ team of experts manages NPI numbers and uses specialized software to promote uninterrupted cash flow, making the billing cycle function more efficiently.

Interested in learning more? Let us know below.