What is the purpose of the NPI Number? The NPI is the only health care provider identifier that can be used for identification purposes in standard transactions by covered entities. NPIs are also used to identify health care providers on prescriptions, in coordination of benefits between health plans, in patient medical record systems, in program integrity files, and in other ways. The Health Insurance Portability and Accountability Act (HIPAA) requires that covered entities use NPIs in standard transactions. The NPI must be used in lieu of legacy provider identifiers in the HIPAA standards transactions.