June 9, 2014

Health Plan Identifier -- Attention: Self-funded plans. Apply or Wait? That is the Question

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).   

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.

Indications are that the governing agencies are scrutinizing this requirement.  What they are looking at is who best is situated to obtain this ID number; and whether the application process is designed appropriately.  Again, the purpose of the HPID is to streamline claims payment.  Generally, for a self-funded health plan, this would be accomplished by the third party administrator (TPA).  And yet, the obligation to obtain the HPID falls on the CHP and its plan sponsor.  The application process is more geared toward a payor, rather than an employer.  Note, for insured plans, the insurer, in effect, is the CHP and is responsible for obtaining the HPID.

Large health plans are required to obtain an HPID by November 5, 2014; by November 5, 2015 for small plans (those annual receipts of $5 million or less). The use of an HPID for all plans must begin by November 7, 2016.  At this point, for plans that have not already obtained an HPID, it may be wise to wait a month or two before applying for an HPID in the hope that additional guidance will be forthcoming.  It is very important for the plan to work closely with its TPA to garner as much synergy as possible.

Additional information about HPIDs, including tutorials, a user manual, and videos can be found on the Centers for Medicare & Medicaid Services’ website.


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