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CMS: Initial NPI deadline will not be enforced

Patient Financial Services Weekly Advisor, April 6, 2007

CMS will not enforce the May 23 deadline for national provider identifier (NPI) implementation, as long as covered entities "demonstrate good faith efforts and employ contingency plans," the agency announced April 2. The NPI will replace the legacy numbers that providers currently use to identify themselves in healthcare transactions.

The enforcement delay allows the industry to continue using legacy numbers on claims as part of contingency plans to ensure payment. Contingency plans may not extend past May 23, 2008. The agency also announced that Medicare will soon release its own contingency plan for use of the new identifier.

"CMS will focus on obtaining voluntary compliance and use a complaint-driven approach for enforcement," the agency said in its guidance. "CMS will not impose penalties on covered entities that deploy contingency plans (in order to ensure the smooth flow of payments) if they have made reasonable and diligent efforts to become compliant."

CMS will provide written notice to the covered entity of any complaints it receives. The entity will then have the opportunity to do one of the following:

• Demonstrate compliance with the NPI standards
• Document its good faith efforts to comply with the NPI standards
• Submit a corrective action plan

The announcement is a response to several NPI implementation difficulties, says Chris Apgar, CISSP, president of Apgar & Associates, in Portland, OR, and board member for the Workgroup for Electronic Data Interchange (WEDI). "The industry is not prepared to fully implement the NPI," Apgar says.

CMS has issued approximately 1.95 million of the new identifiers, but many providers have still not applied for a number. Reasons include procrastination and lack of awareness, say industry groups. And despite significant outreach efforts on behalf of CMS and WEDI, some providers remain unaware of the need to obtain an NPI and test it with health plans prior to the compliance date.

The guidance answers these concerns, says Susan A. Miller, JD, independent consultant, chief operations officer for Healthtransactions.com, in Concord, MA, and coauthor of HCPro, Inc.'s HIPAA NPI Road Map: How to navigate and implement the National Provider Identifier. "It is the breathing space that the industry was hoping for," she says.

Importantly, the enforcement delay allows both providers and payers to participate in contingency plans. "Each health plan can now have its own contingency plan, as each provider may," Miller explains. "It's the recognition that there are two players in each transaction. And if you're partner is not ready, it gives you, as the other covered entity, the ability to deal with it."

According to the CMS guidance, good faith efforts to comply might include the following:

• A health plan making concerted efforts to conduct outreach and make testing opportunities available to providers
• A healthcare provider obtaining an NPI and being able to use it on HIPAA transactions

However, covered entities should bear in mind that CMS' announcement is only "permission" for contingency plans, Miller warns. The announcement does not force payers or providers to continue using legacy numbers after May 23, 2007. For example, a provider can avoid enforcement action by implementing a contingency plan in good faith, but it will run into reimbursement problems with payers that do not adopt such a plan. "The bad news is that the providers and health plans are now going to have to confront many different contingency plans," Miller says.

Providers ultimately must still obtain and share NPIs to get paid, Apgar says. "Providers need to prioritize. Ask, 'Who's paying me the most?' " They must then work with the most important payers to give them the information they need to accept and pay claims based on whatever plan is in place, he adds.

CMS' full guidance is available at www.cms.hhs.gov/NationalProvIdentStand/Downloads/NPI_Contingency.pdf.

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