NPI deadline: Insurers won't pay claims with old IDs after May 23

Physicians should not count on getting any additional time to become compliant, a CMS official said.

By — Posted May 12, 2008

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Starting May 23, physicians must use only their National Provider Identifiers in place of any other IDs when filing all electronic claims and some paper claims with Medicare and other payers. The Bush administration already has extended this deadline by a year, but organizations representing doctors and others warn that even more time is needed before they will be ready to make the final transition.

The American Medical Association and the Medical Group Management Assn. are soliciting support from medical specialty societies in asking the administration for a delay on enforcing the deadline. While the vast majority of physicians have NPIs and are using them on claims, most also are still providing their older, "legacy" ID numbers as an interim step toward the new system. The organizations want that step to remain intact for now.

"The AMA is urging Medicare to continue to allow physician practices to submit claims with both the legacy and NPI numbers for at least six more months beyond the May 23 deadline to ensure a smooth transition without disruption in claims processing and payment," said AMA Board of Trustees Chair Edward L. Langston, MD. "The low level of industry readiness and few claims being processed with just an NPI number both point to the need for this extended timeline."

Near the end of April, about 20% of all Medicare claims were being submitted with NPIs only, according to the Centers for Medicare & Medicaid Services. CMS will continue to monitor physicians' progress on the identifier in the days leading up to May 23 and will evaluate if any administrative action on its part is necessary.

But doctors should not count on the agency delaying enforcement of the NPI-only rule. "I don't know that I see a compelling argument there," one official said. "I wouldn't want people to count on having more time at this point."

CMS originally set May 23, 2007, as the compliance date for physicians and other health professionals to adopt the NPI, a 10-digit number designed to replace legacy identifiers on all electronic claims with public and private payers. NPIs also were mandated for paper claims with Medicare and any other payer that required them. But physicians, practice managers and others convinced CMS last year that the industry as a whole needed more time to transition to the new ID system.

So from May 2007 until March 2008, Medicare continued to allow claims to go through even if they contained only older ID numbers. On March 1, carriers started rejecting claims that did not have NPIs but kept approving ones that contained both kinds of identifiers. Now, to take the final step, Medicare is preparing to instruct payers to reject claims that are not NPI-only. Private payers were given the option to implement their own contingency plans as long as they also ended on May 23.

Slow going

The low NPI compliance rate in April prompted the National Uniform Billing Committee and the National Uniform Claim Committee -- which work to create claims standards for both institutional and noninstitutional health care entities -- to ask the administration for more time to complete the switch to the NPI. The AMA and MGMA soon followed suit.

Many physicians could be holding off on dropping their legacy identifiers from claims because they are concerned about continuing problems that Medicare and other payers are having with transferring personal information from the old ID systems to the new one, said Nancy W. Spector, the AMA's director of electronic medical systems and the NUCC's chair. Doctors are worried that they will run into a cash-flow problem when they go NPI-only and start seeing claims rejected because their data don't match between the two systems.

"The bottom line is that the industry is unlikely to be ready, and it's going to be physicians and providers who suffer, because they're going to be the ones who send in their claims and don't get paid," she said.

CMS officials, while concerned about the low volume of NPI-only claims submissions, do not see the situation as that dire. The agency has a prevailing theory as to why more doctors are not following its advice to test-file a few NPI-only claims now. The billing services or clearinghouses many physicians use might find it difficult to handle a small batch of claims in a different way than they normally do for a doctor.

CMS is urging all physicians to work with these entities to file the NPI-only test claims right away, and the agency expects the roughly 20% figure to rise rapidly over the last few weeks leading up to the deadline. On May 7, participating clearinghouses planned to hold a "Legacy Free" day by stripping all old ID numbers from claims processed with dual identifiers. Physicians who still needed to fix their information in the new NPI system or Medicare enrollment files would see those claims rejected but would have some time to set the record straight before the deadline.

Too late for some

Some physicians might not realize they have an issue with their NPI information until May 23 rolls around. For others, the cash flow challenges already are here.

Terrance G. Furlow, MD, an internist in Lexington, Ky., saw his Medicare payments dry up after the first deadline on March 1. He discovered that his Medicare carrier mistakenly had him in its system as an incorporated physician. He had been supplying his NPI on all of his claims in addition to his legacy numbers. But because his NPI was an individual ID and not a corporate one, his information did not match up, and the carrier rejected the claims.

The only way out of the mess was to re-enroll in Medicare completely, a process that would take weeks and one that forced Dr. Furlow to round up a bunch of supporting documents, including his medical diploma from 1974. He still has not been paid for any of the Medicare claims he filed since March 1, which poses a major problem, since about half of his patients are Medicare beneficiaries.

"I'm still up a creek until they input this in the database," he said. "Because I practice alone, I've got a pretty big overhead with my staff and other things. Right now I'm making it, but I'm probably going to have to swing a loan by the end of the month to make the numbers and keep my house mortgage paid."

Dr. Furlow worries that many more physicians are in a similar boat but might not be able to hang on as he has while Medicare sorts it out.

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Be prepared

Starting May 23, physicians filing electronic claims with any payer -- as well as paper claims with Medicare or some private payers -- must be using only the National Provider Identifier to identify themselves. Here's how the Centers for Medicare & Medicaid Services suggests physicians prepare:

  • Test a small batch of claims using the NPI only. If billing is done through a billing service or clearinghouse, work with them to arrange the test batch.
  • If the claims go through, continue to increase the volume of NPI-only claims in advance of the deadline.
  • If the claims are rejected, call the National Plan and Provider Enumeration System (800-465-3203) to check if the information on the claims matches what is in the system. Update the system if needed and resend the rejected claims after three to four days.
  • If the information matches, but the claim is not paid, call the appropriate carrier's customer service number to see if Medicare enrollment data need to be changed to match the NPI.
  • Obtain NPIs for all referring professionals for inclusion in the secondary provider identifier fields on claims. Starting May 23, if several attempts to obtain these numbers have failed, report the primary physician's name and NPI in the secondary provider identifier field.

Source: Centers for Medicare & Medicaid Services

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