The National Provider Identifier (NPI) is a standard, unique 10-digit number assigned to covered health care providers in the United States. Mandated by the Health Insurance Portability and Accountability Act (HIPAA), the NPI streamlines administrative and financial transactions across the healthcare system. It replaces various legacy provider identification numbers previously used by different health plans and payers. Providers who conduct electronic health information transmissions, such as submitting claims, must obtain and use the correct NPI.
The Purpose and Structure of a Group NPI
A Group NPI, formally known as a Type 2 NPI, is designated for organizational healthcare entities. This identifier is assigned to business entities that provide healthcare services, including group practices, clinics, hospitals, home health agencies, and corporations. The primary function of the Type 2 NPI is to identify the organization that is legally and financially responsible for the services rendered and that will receive the subsequent payment.
The mandate for this standardized identification system stems from the HIPAA Administrative Simplification provisions. Requiring a Type 2 NPI provides a consistent way to track the entity responsible for billing, irrespective of the specific practitioner who delivered the care. The 10-digit NPI itself is “non-intelligent,” meaning the digits do not contain coded information about the provider’s location or specialty. This structure ensures the number remains permanent and unique, even if the organization moves or changes its focus.
Key Differences Between Individual and Group NPIs
The two types of NPIs serve distinct roles, requiring most multi-provider practices to possess both. The Individual NPI, or Type 1 NPI, is issued to a single healthcare provider, such as a physician, nurse, or therapist. This number identifies the specific person who delivered the service to the patient.
In contrast, the Group NPI (Type 2) is assigned to the business entity, functioning as the collective organization. In a group practice setting, every individual practitioner must have their own Type 1 NPI, and the practice itself must have a Type 2 NPI. The individual Type 1 numbers are linked electronically to the group’s Type 2 NPI within payer systems for administrative tracking.
How Group NPIs Function in Billing and Claims
The Group NPI’s most practical application is its role in the submission of insurance claims for reimbursement. On standardized paper and electronic forms used for professional claims, such as the CMS-1500, the Type 2 NPI is placed in the field designated for the “Billing Provider.” This placement identifies the organization that is submitting the claim and is expecting to receive the payment from the payer.
For institutional claims, which are typically submitted by hospitals and facilities, the Group NPI is similarly used to identify the facility as the billing entity. The claims submission process requires both NPI types to be reported: the Group NPI identifies the entity being paid, while the individual provider’s Type 1 NPI identifies the specific practitioner who performed the service, usually in the “Rendering Provider” field. This dual identification ensures payers can accurately track both the organization receiving the funds and the professional who delivered the care.