NCPDP helps pharmacies get identifiers

July 10, 2006

In less than a year all pharmacies that submit electronic claims subject to Uncle Sam's rules must have a new National Provider Identifier (NPI). To help the profession get a jump on the mandate, the National Council for Prescription Drug Programs has begun submitting NPI applications on behalf of pharmacies.

In less than a year all pharmacies that submit electronic claims subject to Uncle Sam's rules must have a new National Provider Identifier (NPI). To help the profession get a jump on the mandate, the National Council for Prescription Drug Programs has begun submitting NPI applications on behalf of pharmacies.

NCPDP was designated as an Electronic File Interchange Organization (EFIO) able to submit applications on behalf of pharmacies to obtain the NPIs that will be necessary for billing come next May 23. The NPI will replace the NCPDP Provider ID number as the standard pharmacy identifier in electronic transactions specified in the Health Insurance Portability & Accountability Act of 1996 (HIPAA).

Chain executives and independent pharmacy owners can obtain an NPI on their own, but they can also ask NCPDP to do it for them at no cost. Since NCPDP submitted the first batch of NPI applications in May, the pace has picked up considerably, according to Catherine Graeff, R.Ph., M.B.A. NCPDP submits applications through the National Plan & Provider Enumeration System (NPPES). Graeff is senior VP of communications and industry relations for NCPDP.

When NCPDP gets the go-ahead from pharmacies, it sends a batch file in a specific format required by the Centers for Medicare & Medicaid Services. CMS sends back an e-mail acknowledging receipt of the file, and six days later another e-mail informs NCPDP that the file has been processed and is ready to be downloaded from a secure site. The results may show a pharmacy has been assigned an NPI, the application was denied, or it was pended, usually due to some issue, such as an address.

"We e-mail the contact person on the application with the NCPDP number, the new NPI number, the tax ID number, and other information for verification," said Graeff. "It's not just any e-mail. It's an official document that a pharmacy should keep because there may be payers that require proof of the pharmacy's NPI."

While there is heightened awareness in pharmacy of the NPI mandate, there's also confusion over who needs to get an identifier. Pharmacies must get an NPI. "Any pharmacist is a covered entity and can get an NPI, but certainly those who perform medication therapy management services and are billed should get one," said Graeff. "NCPDP is not providing those NPIs. Pharmacists have to do it on their own, but it takes only 20 minutes on the NPI Web site."

Chains and independents should not delay getting their NPIs, Graeff said. The industry wants all pharmacies to be enumerated by the fourth quarter, in time for some testing. They should also check whether their pharmacy system vendors have upgraded to handle the NPI. She expects claims processors to be ready to begin testing in the first quarter of 2007 and go live on a payer-by-payer basis.

One question mark, and it's a big one, is how NPIs will be disseminated throughout the healthcare system. For example, how are pharmacists going to obtain the NPIs for physicians on Rx claims? CMS is supposed to issue instructions on NPI dissemination in August.

"As an industry, we're not sure how pharmacies are going to populate their doctor files with NPIs, short of calling up every physician and talking to the billing office," said Graeff. "It's just going to be a mess. If pharmacies do have to get physician NPIs, they probably should be started on that in the December-January timeframe, because it could take them a while."