BALTIMORE--At a recent conference call on the National Provider Identifer, CMS gave some insight into why the agency has softened its mandate for use of the new number.

"By some estimates, almost half of the industry's health plans are not yet ready to use the NPI on the adjudication of claims," an agency official said. "More than a third of clearinghouses will not use their NPIs to process transactions by the deadline. And while we don't have authority over the software vendors, we understand that about half of the vendors' software still cannot generate claims using NPIs. Those are not very positive statistics this close to a deadline."

The agency set May 23 this year as the compliance deadline for using the NPI on claims and emphasized that date is still firm for all except small health providers, who have until May 23, 2008, to comply. (See HomeCare Monday, April 9.)

However, under a contingency plan released April 20, CMS said that for "some period after May 23, 2007," Medicare will:

--Allow continued use of legacy numbers on transactions;
--Accept transactions with only NPIs; and
--Accept transactions with both legacy numbers and NPIs.

But the agency cautioned that as soon as it considers the number of claims submitted with an NPI for primary providers (billing, pay-to and rendering providers) is sufficient, Medicare could begin rejecting claims without an NPI, perhaps as early as July 1, 2007.

This month, according to CMS, Medicare will evaluate the number of claims it gets containing an NPI. If the analysis shows "a sufficient number" of claims that have them, Medicare will begin to reject claims without NPIs on July 1. If the agency judges there are not enough claims containing NPIs, it will assess compliance again in June and could begin rejecting non-compliant claims in August.

Between now and May 23, 2008, CMS has previously said it will not impose penalties for non-compliance "as long as covered entities, including health plans and covered health providers, continue to act in good faith to come into compliance, meaning they are working towards being able to accept and send NPIs."

While CMS believes some 2 million health care providers have received their NPIs, "we think that's only about 85 percent of the universe," the official said.

CMS has scheduled another conference call on the NPI contingency plan on Thursday, May 10, at 2:00 p.m. EDT. Visit http://www.cms.hhs.gov/NationalProvIdentStand/Downloads/NPIRoundTable.pdf for details and registration information.