The Centers for Medicare & Medicaid Services says it will try to be flexible when getting doctors, hospitals, health plans and other organizations to use the new National Provider Identifier system.

The system, created by the Health Insurance Portability and Accountability Act of 1996, is scheduled to take effect for most health care organizations, including large and midsize health plans, May 23, and to take effect for small health plans in May 2008.

Continuing to use old, “legacy” identifier systems in affected transactions will be against the rules, and so will using the NPIs together with the old identifiers, according to CMS officials.

“Although compliance with the NPI is a huge undertaking, the result will be greatly enhanced electronic communication throughout the health care community,” officials say.

But “CMS will focus on obtaining voluntary compliance and use a complaint-driven approach for enforcement,” officials say. “Following notification from CMS, the entity will have the opportunity to 1) demonstrate compliance, 2) document its good faith efforts to comply with the standards, and/or 3) submit a corrective action plan.”

Until May 2008, the CMS will evaluate affected entities on a case-by-case basis to see whether they are making good faith efforts to use NPIs and get the entities they do business with to use NPIs, officials say.

“CMS will not impose penalties on covered entities that deploy contingency plans (in order to ensure the smooth flow of payments) if they have made reasonable and diligent efforts to become compliant and, in the case of health plans (that are not small health plans), to facilitate the compliance of their trading partners,” officials say.

A copy of the CMS discussion of NPI compliance efforts is on the Web