Clarifying Some NPI Number Mis-Understandings

The NPI Number: What is is – How it works?

By Carol S. Miller RN, MBA

The National Provider Identifier (NPI) is a HIPAA Administrative Simplification Standard that provides a unique identification for covered health care providers, all health plans and health care clearinghouses.  The NPI must be used in administrative and financial transactions adopted under HIPAA and with one identifying number will simplify security and allow greater protection or encryption of the provider number.  The NPI can be used to identify the health care provider on prescriptions, COB between health care plans, inpatient medical record systems, program integrity files, and other areas.

Dependent on his/her medical practice, the provider can obtain an individual or group NPI; however, there are situations where an individual NPI number is required such as with the submission of pharmacy and lab claims.  The NPI remains with the provider regardless of job or location change.  NPI will eventually be the standard identifier for all e-prescribing under Medicare Part D.

A Ten Digit Number

The NPI is a ten digit, intelligence-free numeric identifier with a check digit in the last position to help detect keying errors.  If there is a security breach, the number in itself cannot identify the protected health organization.  The use of one identifier with a check digit simplifies encryption of this number when transmitted electronically and thereby enhances security.


HIPAA also requires that employers have standard national numbers that identify them on standard transactions.  The Employer Identification Number (EIN), issued by the Internal Revenue Service (IRS) was selected as the identifier for employers.  This number is used as a Federal tax identification number for the means of identifying any business entity and for the purpose of reporting employment taxes.  The EIN number should be protected as a social security number is.


Both the Information Technology Laboratory (ITL) and the National Institute of Standards and Technology (NIST) are involved in the development of technical, physical, administrative, and management standards and guidelines for cost-effective security and privacy of sensitive unclassified information in federal computer systems.  These standards and guidelines can be applied to the management of medical IT.


Additional reference material for NPI can be found at:


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