New Standardized Identifiers For Health Care Providers Will Save Time, Money

Federal government efforts to reduce unnnecessary spending on health care administration continue with the backing of the Patient Protection and Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA).


Most recently, the Centers for Medicare and Medicaid Services (CMS) announced a final rule expected to save time and money for physicians and other health care providers by establishing a unique health plan identifier (HPID) and a data element that will serve as an “other entity” identifier (OEID) for entities that are not health plans, health care providers, or individuals, but that need to be identified in standard transactions. The rule also specifies the circumstances under which an organization-covered health care provider, such as a hospital, must require certain non-covered individual health care providers who are prescribers to obtain and disclose a National Provider Identifier (NPI). The final rule is scheduled to be published in the September 5 Federal Register.

The adoption of the HPID implements an administrative simplification provision of the ACA, and one of a series of changes required to cut red tape in the health care system. The measure is projected to save up to $6 billion over ten years. Currently, when a health care provider bills a health plan, that plan may use a wide range of different identifiers that do not have a standard format. As a result, health care providers run into a number of time-consuming problems, such as misrouting of transactions, rejection of transactions due to insurance identification errors, and difficulty determining patient eligibility. The final rule will simplify these processes.

Future administrative simplification rules enacting HIPAA will address adoption of:

• a standard for claims attachments;

• operating rules for claims attachments; and

• requirements for certification of health plans’ compliance with all HIPAA standards and operating rules.

“These new standards are a part of our efforts to help providers and health plans spend less time filling out paperwork and more time seeing their patients,” said Health and Human Services Secretary Kathleen Sebelius.

The rule also makes final a one-year proposed delay—from Oct. 1, 2013, to Oct. 1, 2014—in the compliance date for use of new codes that classify diseases and health problems. These code sets, known as the International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10) will include codes for new procedures and diagnoses that improve the quality of information available for quality improvement and payment purposes.

This rule is the fourth administrative simplification regulation issued by HHS under the ACA, including the following with anticipated savings over ten years:

• On July 8, 2011—Operating rules for two electronic health care transactions to make it easier for health care providers to determine whether a patient is eligible for coverage and the status of a health care claim submitted to a health. Savings from this measure could be up to $12 billion.

• On Jan. 10, 2012—Standards for the health care electronic funds transfers (EFT) and remittance advice transaction between health plans and health care. Savings could be up to $4.6 billion.

• On Aug. 10, 2012—An IFC that adopted operating rules for the health care EFT and electronic remittance advice transaction. Savings are anticipated to be up to $4.5 billion.

The regulation is effective November 5. Health plans, excluding small health plans, are required to obtain HPIDs two years after the effective date, in 2014. Small health plans are required to obtain HPIDs three years after the effective date, in 2015. All covered entities are required to use HPIDs where they identify health plans that have HPIDs in standard transactions four years after the effective date, in 2016.

Covered entities have 180 days from the final regulation’s effective date to comply with the additional NPI requirement.