Proposed Health Plan Identifier Could Cost Plans More Than $1B

Source: hr3590.com

A standard health plan identifier proposed by the U.S. Department of Health and Human Services (HHS) could cost health plans a total of up to $1.3 billion to implement.

The proposed rules, released April 9, would establish a unique health plan identifier (HPID) for HIPAA-covered health plans (both group health plans and insurers), and an “other entity” identifier (OEID) for third-party administrators (TPAs) that are not health plans but perform certain plan functions. Like HHS’ previously issued identifiers for employers and health care providers, the HPID and OEID would have to be used in HIPAA-standard transactions.

Use of the identifiers would be required for health plans and providers alike by Oct. 1, 2014, except for “small health plans” as defined under HIPAA, which would have until Oct. 1, 2015. The original 1996 HIPAA law called for HHS to issue a health plan identifier, but this got put on hold until the health reform law revived it.

“The HPID is expected to yield the most benefit for providers, while health plans will bear most of the costs,” HHS flatly states in the preamble to the proposed rules. “Costs to all commercial and government health plans together … are estimated to be $650 million to $1.3 billion,” the agency explained, but “plans are expected to make up those costs in savings.”

In current HIPAA-standard transactions, health plans and TPAs are identified “with multiple identifiers that differ in length and format,” HHS stated. This gives providers problems like “improper routing of transactions; rejected transactions due to insurance identification errors; [and] difficulty in determining patient eligibility.”

In addition to establishing a plan identifier of standard length and format, the proposed rules would make minor changes to HIPAA’s national provider identifier rules, and formally postpone the deadline for ICD-10 code sets from Oct. 1, 2013, until Oct. 1, 2014. (HHS initially announced an ICD-10 delay in February.)

The proposed rules are scheduled to be published in the April 17 Federal Register, and HHS will accept public comments on them until May 17.

HIPAA’s privacy, security and identifier rules are detailed in the Employer’s Guide to HIPAA and Employer’s Guide to HIPAA Privacy Requirements.