Type 1 vs Type 2 NPI: Individual vs Organizational

The Two Types of NPI in the NPPES System

The NPPES registry issues two distinct classes of NPI numbers, each serving a different function in the healthcare system. Type 1 NPIs belong exclusively to human healthcare professionals — any individual person who provides healthcare services and participates in HIPAA-covered transactions. Type 2 NPIs belong to healthcare organizations — business entities that provide healthcare services or employ or contract with individual providers. The distinction matters enormously in billing because claims require specific NPI types in specific fields, and using the wrong type in the wrong field causes claim rejections. CMS uses this two-type system to distinguish between individual provider identity and organizational billing entities.

Who Receives a Type 1 (Individual) NPI?

Type 1 NPIs are issued to individual human healthcare providers. This includes all physicians (MDs and DOs) regardless of specialty, dentists and oral surgeons, optometrists, chiropractors, podiatrists, pharmacists, registered nurses and licensed practical nurses, nurse practitioners and certified nurse midwives, certified registered nurse anesthetists, physician assistants, physical therapists, occupational therapists, speech-language pathologists, clinical psychologists and licensed counselors, clinical social workers, dietitians and nutritionists, and any other individual licensed healthcare provider. The critical point: each individual gets exactly one Type 1 NPI for their entire professional lifetime. If a physician switches from academic medicine to private practice, their NPI stays the same. If they retire and return, it's the same NPI. There is no circumstance under which an individual provider should have two Type 1 NPIs.

Who Receives a Type 2 (Organizational) NPI?

Type 2 NPIs are assigned to healthcare organizations that function as providers. This includes hospitals and health systems, group medical practices and physician groups, ambulatory surgical centers, outpatient clinics and urgent care centers, pharmacies (both retail and specialty), home health agencies, hospice programs, nursing facilities and long-term care facilities, diagnostic imaging centers, clinical laboratories, durable medical equipment (DME) suppliers, mental health facilities, substance abuse treatment centers, community health centers, and any other organizational entity that provides, delivers, or pays for healthcare services. Unlike individual providers, an organization may legitimately have multiple Type 2 NPIs — one for each distinct legal entity, tax ID, or separate practice location that bills independently.

How Type 1 and Type 2 NPIs Appear on Claims

On a professional claim (CMS-1500 form or 837P electronic transaction), both NPI types appear in different required positions. The billing provider NPI (Loop 2010AA) identifies who is billing for the service — typically the group practice or clinic, which would be a Type 2 NPI. The rendering provider NPI (Loop 2310B) identifies the individual who actually performed the service — always the individual practitioner's Type 1 NPI. The referring provider NPI (Loop 2310A) identifies who ordered or referred the service — the individual physician's Type 1 NPI. Institutional claims (UB-04 / 837I) similarly use the hospital's Type 2 NPI as the billing NPI while the attending physician's Type 1 NPI appears in the attending physician field.

When a Provider Needs Both Types

Many healthcare providers legitimately interact with both NPI types. A solo practice physician has their personal Type 1 NPI for rendering services. Their practice also has a Type 2 NPI for the business entity that does the billing. Both NPIs appear on their claims — the Type 1 for rendering and the Type 2 for billing. This is standard and correct. A hospital-employed physician uses their Type 1 NPI as the rendering NPI, while the hospital's Type 2 NPI serves as the billing NPI. The physician doesn't own or control the Type 2 NPI — it belongs to the hospital. This structure allows payers to separately track individual provider performance (via Type 1 NPIs) while routing payments to billing entities (via Type 2 NPIs).

Can an Organization Use a Type 1 NPI?

No. Organizations must use Type 2 NPIs for billing. A common mistake among solo practitioners who operate as an LLC or professional corporation is using their personal Type 1 NPI for both the rendering and billing positions on claims. If the solo physician is billing through their professional corporation (a separate legal entity with its own EIN), the corporation should have a Type 2 NPI for the billing position. However, for a truly solo practitioner who is the only provider in their practice and bills under their own SSN (not an EIN), using their Type 1 NPI in the billing position is generally acceptable. When in doubt, consult your MAC (Medicare Administrative Contractor) about the correct NPI configuration for your specific practice structure.

Type 2 NPIs for Multiple Locations

Healthcare organizations frequently need multiple Type 2 NPIs — one per distinct practice location or service line. A hospital system with three campuses may have three separate Type 2 NPIs if each campus operates as a distinct legal entity with a different EIN. A pharmacy chain uses individual Type 2 NPIs for each store location, which is why a CVS pharmacy in Austin has a different NPI than a CVS pharmacy in Dallas. This granularity allows insurance payers to network-credential specific locations separately, route claims correctly, and analyze service delivery at the location level. For credentialing purposes, always verify the Type 2 NPI that corresponds to the specific location where services will be rendered.

Deactivating Type 1 and Type 2 NPIs

The processes for deactivating Type 1 and Type 2 NPIs differ. A Type 1 NPI is deactivated when a provider retires, dies, surrenders their license, or otherwise permanently stops practicing. The NPI Enumerator or the provider's estate can request deactivation. A deactivated Type 1 NPI is not reassigned to another provider — it permanently belongs to that individual even after deactivation. A Type 2 NPI is deactivated when an organization closes, dissolves, merges, or ceases operating under that particular EIN. Payers and credentialing organizations should be notified of deactivations to prevent fraudulent claim submission using inactive NPIs.

Frequently Asked Questions