Attention Self-funded Health Plan Sponsors: The HPID Obligation Looms Large (article)
As discussed in a prior Benefit Beat, the Administrative Simplification Rules enacted under the Health Insurance Portability and Accountability Act (HIPAA) set forth standards relating to privacy, electronic transactions and security of medical information. A portion of the electronic transaction rules require implementation standards for purposes of streamlining the payment of claims. Specifically, the law requires health plans to obtain a health plan identifier (HPID) (see Health Plan Identifier -- Attention: Self-funded plans. Apply or Wait? That is the Question, Benefit Beat, June 2014)
In addition, the Affordable Care Act requires “controlling health plans” (CHP) and “subhealth health plans” (SHP) with an HPID to certify compliance with certain standards for electronic transactions (see CBIZ Health Reform Bulletin, Certification of Compliance with Electronic Transaction Requirements, 1/23/14), as well as applicable standards and operating rules for:
- Eligibility for a health plan transactions;
- Health care claim status transactions; and
- Health care electronic funds transfers (EFT) and remittance advice transactions.
Large health plans are required to obtain an HPID by November 5, 2014; by November 5, 2015 for small plans (those with “annual receipts” of $5 million or less). Annual receipts is determined as follows:
- For an insured plan, annual receipt is determined by premiums paid in the preceding fiscal year.
- For a self-funded plan, this means claims paid in the preceding fiscal year.
- If the employer has a combined insured and self-funded plan, the employer adds premium and claims paid to determine receipts.
- If stop loss insurance is held by the employer, and not by the plan to reimburse the employer for its expenses, it would appear that the premium for the stop loss insurance would not be included in the calculation of annual receipt.
The use of an HPID for all plans must begin by November 7, 2016.
The HPID will be used by the claims payer, which would, in most instances be the third party administrator unless the employer self-administers the plan. An employer should work closely with it TPA to obtain any assistance it can in obtaining the HPID. For insured health plans, the insurer is generally responsible for obtaining the HPID.
Steps in obtaining an HPID
A CHP or SHP obtains a health plan identifier (HPID) by an on-line application process with CMS’s Health Insurance Oversight System (HIOS) through the CMS Enterprise Portal (https://portal.cms.gov/). Existing HIOS users would have automatically received an account to login into the Enterprise Portal. New HIOS users will need to register in the Enterprise Portal to obtain a user ID and password.
For purposes of the HPID process, a CHP is defined as a health plan that controls its own business activities, actions and policies; or is controlled by an entity that is not a health plan. A CHP may control the business activities, actions and policies of one or more “subhealth plans” (“SHP”). A SHP is a health plan whose business activities, actions or policies are controlled by a CHP.
Step 1: Register the organization in HIOS
To determine if the organization already exists in HIOS, search by the organization’s Federal Employer Identification Number (EIN).
- If the organization already exists in HIOS, users may proceed directly to Step 2.
- If the organization does not already exist in HIOS, users will need to register their organization. Required information to register a new company includes:
1. Company Legal Name
2. Federal Employer Identification Number
3. Incorporated State
4. Domiciliary Address
Step 2: Determine HPOES user role and request HIOS access to the company.
Users will need to determine their user role and identify the company to which they need access. There are three different HPOES user roles:
- Guest User: A user that is able to view general HPOES information (no company association needed).
- Submitter User: A representative of a health plan or other entity that submits an application.
- Authorizing Official User: A company executive that has the authority to approve applications, including CEOs and CFOs.
If requesting the Submitter or Authorizing Official role, users will need to identify the company to which they wish to be granted access. Users can only have one HPOES role at a time.
Step 3: Access HPOES and select an application type
There are two different HPID application types: CHP or SHP. If completing a SHP HPID application, users will be required to select a CHP company.
Step 4: Complete and Submit an Application
Users will need to complete their application and provide the necessary information. Following is required information for a CHP:
- Company Information: Company Name, Federal Employer Identification Number and Domiciliary Address
- Authorizing Official Information: First and Last Name, Title, Phone Number and Email Address. The company’s Authorizing Official needs to be identified if one has not already been designated.
- The Health Plan’s NAIC Number or Payer ID used in standard transactions
Information requested on an application for a SHP company includes:
- SHP Company Information: Company Name, Federal Employer Identification Number and Domiciliary Address
- The Health Plan’s NAIC Number or Payer ID used in standard transactions.
Step 5: Application Review
Once the application has been submitted, the company’s Authorizing Official will be notified that an application is pending CMS approval. The Authorizing Official will need to review each application and will have the option to approve or reject it.
Step 6: HPID Number Assigned
Once the application is approved by the Authorizing Official, the system will generate an HPID. An email notification will be sent to the submitter user with the HPID generated. Since it is the claim payer who will ultimately use the HPID, the employer will want to share it with its TPA.
The application process for obtaining an HPID remains a bit oblique. There continues to be an effort to have the process re-visited and streamlined. Thus far, no changes have been made, leaving sponsors of self-funded plans responsible for obtaining the ID number. While it is certainly possible that changes will occur in the next several weeks, sponsors of large health plans ($5M or more in annual receipts) may want to begin familiarizing themselves with the process as described above in order to meet the November 5, 2014 deadline.
Additional information about obtaining a HPID, including tutorials, an HPID User Manual, and videos can be found on the Centers for Medicare & Medicaid Services (CMS) webpage.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.