The Healthcare Billing and Management Association

Before the National Committee on Vital and Health Statistics

January, 24, 2007

Mr. Chairman and members of the subcommittee. On behalf of the Healthcare Billing And Management Association (HBMA), I want to thank you for this opportunity to present our views on the implementation and utilization of the National Provider Identifier (NPI). My name is Barry Reiter and I am president of Faculty Practice Services, Inc. A medical billing company headquartered in New York City. I am also a member of the HBMA board and vice chair of the government relations committee.

Founded in 1993, HBMA is the largest trade association representing the third party billing community. HBMA members process physician and other provider claims integral to the health care delivery system. They not only bill for medical services, but frequently perform all of the physician’s administrative functions. One of the reasons the HBMA was created was to work with and educate Congress, the Administration and Federal Agencies on issues affecting third-party billers and their physician clients.

HBMA member companies typically provide services to specialty physician groups and primary care practices and process Medicare, Medicaid, and private health insurance claims. The typical HBMA Member Company:

  • Has been in business for over 10 years; and,
  • Serves a client base of more than 20 physician practice groups and more than 50 physicians.

Although the third party billing industry dates back to the 1950’s; large billing companies did not emerge until the 1980’s when it was required that hospital-based physicians’ services be billed separately. Healthcare billing companies come in all sizes, ranging from one person small businesses to publicly traded companies with revenues of $300 – 400 million annually. Third party medical billing companies employ nearly 20,000 people nationwide, and process more than 17 million claims per month, representing more than $18 billion per year.

HBMA participated in the development of the OIG’s guidelines for third party medical billing companies and strongly urges its members to follow these guidelines.

In my testimony today, i will be discussing the findings of an HBMA Membership Survey on NPI readiness, some anecdotal stories we are hearing from the field regarding NPI readiness, identifying concerns we have about NPI readiness and finally recommendations regarding the planned implementation of the NPI initiative.


Since 2004 HBMA has conducted numerous educational programs to make our membership aware of the NPI program, as well as the importance of obtaining NPIs for the physicians for whom they bill. For several years, staff from the office of e-health standards have worked with HBMA representatives, listened to our suggestions and actively participated in HBMA-sponsored programs. More than three years ago, staff for the Office Of E-Health Standards participated in the first HBMA sponsored webinar covering a variety of HIPAA and billing-related issues. CMS staff have consistently made themselves available to participate in HBMA education programs in person or via satellite video conference. We believe this willingness on the part of CMS and the Office of E-Health Standards and Services to collaborate with us to help educate billing companies helped achieve the kinds of numbers you find in the survey documents we shared with you.

Early in the enumeration process, HBMA responded to CMS request to participate in the testing of the paper and electronic application processes. HBMA member companies volunteered to participate in the testing and, we believe, provided valuable input on the process, the clarity of instructions and forms and the inevitable bugs in the application methodology.


In early December, at the suggestion of CMS staff, HBMA conducted an on-line survey of its membership to collect information about NPI readiness. A copy of the survey was provided to the subcommittee prior to our testimony. I d like to review some of our findings:

As you will note, we received responses from 135 of our 650+ member companies. This represents a response rate of approximately 20 percent. Respondents ranged from companies that bill for fewer than 10 physicians (11%) to companies that bill for more than 200 physicians (18%). We were very pleased with the survey results, which show that the vast majority of billing companies (over 75%) have sought and received NPIs for all or nearly all of the physicians for whom they bill. Only one company reported that it had yet to obtain NPIs for their physicians.

We believe that this high rate of NPI enrollment is a combined result of CMS efforts to work with the billing community, share information, make speakers available at our meetings and our efforts as an association to remind our members of the importance of obtaining NPIs for their physicians. Clearly, this effort to communicate and collaborate has been effective. We want to take this opportunity to publicly thank the Office of E-Health Standards for their diligence and responsiveness and pledge to continue to work with them towards smooth transition to the NPI.

Our survey revealed that a majority of physicians using billing companies have obtained their NPI numbers and a majority (nearly 60%) have been loaded into the billing company s computer system. However, very few billing companies are submitting claims during the NPI transition phase with both the NPI and the providers legacy UPIN numbers. We believe that the inability to obtain the NPI for the referring physician may be part of the reason so few are testing using the NPI.

Also, in talking with companies that have begun testing, we have received anecdotal reports of serious problems. For example, one company reported rejection of numerous claims because of discrepanices between the provider information on file with the enumerator and the information the provider put on their medicare enrollment forms. In most cases, these were things as simple as use of a middle initial on one form and failure to use the middle initial on the other. And in another case, a claim was rejected because the provider used upper case with the enumerator and lower case initials on the enrollment form (i.e. jr vs. JR). The significance of these incidents is that the imposition of new, stricter edits in conjunction with NPI implementation were not announced or communicated in advance.

These examples of problems are very destressing and suggest that the transition from the old to the new may take longer than anyone has anticipated.

Based on our survey, we know that although a high percentage of physicians for whom billing companies submit claims have obtained their NPI, relatively few of the billing companies are using the NPI when they submit claims. In fact, nearly 75% of billing companies indicate that they have yet to start submitting claims using the NPI.

A significant percentage of HBMA Members are confident (fairly, pretty or very) that they will be ready to begin billing utilizing the NPI by the May 23rd start date. For those who are concerned about the MAY 23rd deadline, their concerns seems to be about the software not being ready, the (other) physicians failure to obtain an NPI or the Clearinghouse not being ready to handle claims using the NPI.


Although we are pleased with the response of HBMA companies and their physician clients to the call for obtaining an NPI, we are equally troubled by numerous anecdotal stories we hear about physicians who have not obtained their NPIs or the types of transition problems cited above. We have heard from companies who are finding physicians who not only have not obtained their NPI numbers, but who are unaware of the conversion to NPI and in several instances, indicate that they have never heard of the NPI.

For example, we recently heard from an HBMA Board Member who had just returned from a speaking engagement in the Pacific Northwest:place> where she was asked to address an audience representing a variety of different specialties. She reported to us that of the approximately 30 physicians in attendance, only 1 had even heard of NPI and her office thought it did not apply to them!

I wish that i could tell you that this experience was unique but it is not. Sadly, as much as CMS and the Office of E-Health Standards have tried to get the word out and educate the provider community about the role of the NPI and the importance of the NPI, it is quite clear that many providers are not getting the message or are not hearing the message or are not understanding what they are hearing.

Many member companies tell us that they ve had physicians joining group practices for whom they bill and they ask the new physician for his or her NPI. When the physician indicates that they do not have an NPI, the billing company proceeds to contact the enumerator to get the NPI for the physician, only to find out that one has already been issued. When the billing company goes back to the physician, they invariably are told that the physician has no idea what their NPI is, but that their previous group must have gotten one on his or her behalf. We have also noted the same phenomenon where hospitals and medical schools have obtained NPI numbers for physicians who are unaware it has been done.

While we recognize that the physician has the responsibility to maintain this information and should know his or her NPI, many simply do not understand the importance of the NPI, nor its role in reimbursement. To many, it is just another number.


Hbma recommends that cms explore different communication mediums to get the word out to the provider community urgently. Our members receive a steady flow of NPI related information in an electronic format. This works well for our membership. But as amazing as this may sound, a majority of physicians and other providers reject electronic communications and do not use e-mail or the internet in their practices. We presume that cms has established the types of collaborative efforts with other associations that we have seen at hbma. If we are the exception, rather than the rule, we would strongly encourage cms to work more closely with other provider associations to get the word out.


While 100% of claims submitted will have to have an NPI number for the billing provider (the primary NPI ), half or more of all physician claims submitted will also require the NPI number of the ordering or referring physician (the secondary NPI ). Without the second NPI number, even responsible providers who obtained their NPI number over a year ago face rejected claims and/or significantly delayed payment, as well as substantially increased administrative costs to chase missing NPI numbers and resubmit claims. This will be extremely problematic for diagnostic specialties, surgeons and consulting specialists of all types. The economic consequences of payment denials or delays will be devastating for many practices.

I want to draw your attention to the number of referring physicians billing companies interact with on behalf of their clients, as revealed in the hbma survey. Nearly 60% of billing company respondents will need the NPI numbers for more than 200 physicians each. In discussing this question after the survey with some of our member companies, we learned that it is not uncommon for billing companies particularly those that are multi-state or national to have databases with the names and data for 25,000 – 50,000 referring physicians.

As you can imagine, given the large numbers of referring physicians for whom our members will need the NPI, the issue of public availability of the NPI database and an electronic method for cross-walking the data from the old UPIN number to the new NPI number becomes extremely important.

We contrast our experience with HBMA Member s ability to obtain and load their clients NPIs into their systems with the billing industry s inability to obtain the NPIs from referring physicians. More than 50% of billing companies report that they have not received the NPIs for any of their referring physicians. And only 13% report having received NPIs for a majority of their referring physicians. We don t believe the failure of billing companies to obtain the referring physician s NPI is a failure to request it or understand the need for the referring physicians NPIs. We believe the inability of billing companies to obtain referring physician NPIs is due to the fact that these physicians have not obtained their number, do not know their NPI number, or are, for some reason, refusing to share this number with the billing company or the physicians to whom they refer.

Regardless of the reason, the fact remains that if the physician to whom the patient has been referred is unable to provide the NPI of the referring physician to the 3rd party payer, payment will either be denied or payment will be delayed.

As i mentioned above, we have companies who will need to enter the NPIs for tens of thousands physicians. Because the NPIs are not available in a public use file, physicians and billing companies must rely on the referring physician to make the number available.


We know that CMS and HHS have indicated on numerous occasions that it is their intention to make the NPIS available in a public use file. We have also been lead to believe that the NPIS will be available in a variety of formats. We cannot state emphatically enough that the NPIS must be available and must be available in an electronic format that will allow billing companies and physicians to electronically cross-walk large databases.

We also urge you to urge the Secretary to approve the necessary regulatory authority to create the public use file as quickly as possible. We have recently heard rumors that the paperwork will be completed by early May. Of course, CMS officials have been telling us soon since as early as March 2006! May is too late in fact, even February may be too late. We need access to the database now!


Assuming that an accurate and accessible source of NPI numbers will not be available by March 15 and/or if less than 80% of all providers have obtained and NPI number by APRIL 1, we strongly recommend that only primary NPI numbers be required on claims for the remainder of 2007. This will hold providers accountable for obtaining their own NPI numbers without penalizing those who must rely on numbers from those who have not obtained one.


Finally, Mr. Chairman, we have had an opportunity to review the December 5th letter from Mark Mclaughlin, Chair of the Workgroup For Electronic Data Interchange (WEDI) recommending that HHS and CMS provide flexibility in the enforcement of the compliance deadlines.

Based upon the results of our survey and the anecdotal information we ve heard from the field, we must concur with their recommendations. As recommended above, we concur that a contingency plan be established that would allow use of the legacy identifiers for up to 12 months after we have access to the NPI database.


We wish that all other segments of the healthcare delivery system were as far along as we believe practices using billing companies are, in terms of NPI readiness. Because physicians, hospitals, rural health clinics, home health agencies, nursing homes, etc. Have a long way to go before they will be ready to submit NPI-ready claims, we believe it only prudent to plan for the worst and hope for the best.

CMS must develop a contingency plan so that providers who are not ready are still able to submit claims in a timely fashion and get reimbursed in a timely fashion. Failure to do so could be devastating to the availability of health care and will have a corrosive effect on provider s trust of CMS, the Medicare Program and the implementation of the NPI program.

On behalf of the Healthcare Billing and Management Association, i want to thank you for this opportunity to present our views. I will be happy to answer any questions you may have.