A National Provider Identifier (NPI) is a unique ten-digit identifying number assigned to health care providers by the Centers for Medicare & Medicaid Services. NPI is used to determine the eligibility of patients for Medicare. According to the Center for Medicare & Medicaid Services (CMS), a National Provider Identifier can be any one of the following seven digits: Individual Identification Number (ISIN), first name, middle name or middle initial, Sinthyavelu, last name, primary doctor, designation, specialty, or hospital. NPI assigned to Medicare beneficiaries may vary according to the state the provider is serviced.
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Medicare utilizes the National Provider Identifier (NPI) system to generate taxonomic identification numbers for hospitals, home health agencies, nursing homes, and primary care physicians. National provider identifier (NPI) records also contain codes that describe services received and procedures performed by the listed service provider. This article describes how these codes are determined and used by the CDS and how the National Provider Identifier affects the calculation of cost and reimbursement rates for Medicare benefits.
Medicare includes more than eighty different classes of providers, and each class has its own code designated to identify them. These are known as covered entities, service categories, or service specialties. CDS uses these National Provider Identifier (NPI) taxonomy codes crosswalk to generate the coverage determination. The CDS also crosswalks these NPI codes with other information to identify provider settings that are similar to the target NPI class.
CDS uses classification codes based on the type of service received. Service classifications are further categorized into three levels. Level I is the lowest level of quality and includes common chronic illnesses. Level II includes more common chronic illnesses and represents the next level down in quality. Level III includes moderate and severe chronic diseases and represents the highest quality standard of care.
The CDS maintains detailed information on all medical specialties. It crosswalks these medical specialties in two different categories. The first category is called generic or procedural codes. These generic codes include diagnoses that occur in office-based procedures. The second category, called hospital-based codes, involves diagnoses that occur in inpatient settings. This second category is the higher level of quality indicator in a CDS model and is used by CMS to evaluate the value of the services received by hospitals.
CMS uses codes to create reimbursement schedules for providers based on their expected costs for services. These costs include inpatient and outpatient services that are conducted by healthcare providers and the equipment that they use. Items that are expensive to provide are considered Type I non-reimbursable services, while items that are inexpensive to provide are considered Type II non-reimbursable services.
Providers that exceed the estimated charges will not be reimbursed, and providers that underpay may need to find a different category of service or equipment to deliver the service or equipment. This process is standard across all health plans in CMS’s Title IV program and is used with all durable medical equipment. When considering the addition of new or durable medical equipment to an existing plan, it is important to review the plan and the equipment that will be used to provide the service in order to ensure that the new or durable medical equipment will be compatible with the current plans.