Certain group health plans are required to obtain a 10-digit
Health Plan Identifier ("HPID") from the Center for
Medicare and Medicaid Services ("CMS") by November 5,
2014. Currently various users of the health care system such as
health plans, third party administrators ("TPA") and
clearinghouses use multiple identifiers which differ in length and
format. The HPID is required by HIPAA and creates a standard data
element for health plans, including employer sponsored health
plans. The HPID is used in electronic transactions involving health
plans and is intended to improve accuracy and efficiency in the
healthcare experience. Group health plans must use the HPID for
HIPAA transactions such as medical and dental claims, claims
payment and remittance, referrals and authorizations, benefit
enrollment and disenrollment and premium payments.
Who is required to have a HPID?
HIPAA requires medical providers, health insurers, TPAs and
other parties involved in HIPAA transactions to obtain HPIDs
Self-insured group health plans must obtain a HPID if they
control their own business activities, actions or policies (e.g.,
selecting a TPA or health care platform), or are controlled by an
entity that is not a health plan such as an employer. These plans
are referred to as Controlling Health Plans ("CHPs").
Since most self-insured plans are controlled by their employer
sponsors, most will be considered CHPs and the HPID requirement
will apply to most self-insured plans. There is a
one-year delayed effective date for small self-insured plans which
include plans with claims paid (annual receipts) of $5 million or
less. The delayed effective date for small self-insured plans is
November 5, 2015.
Insured plans are not required to obtain a HPID because the
health insurer uses its own unique identifier to conduct electronic
transactions on their behalf. In addition, if a self-insured CHP
has a sub-health plan, such as a self-insured dental, prescription
drug or retiree health care, then the HPID requirement also applies
to the sub-health plan. A CHP can obtain one HPID for itself and
all sub-health plans or require each sub-health plan to obtain its
own HPID. There may be circumstances when there is an
administrative advantage to each sub-health plan obtaining their
own HPIDs. Employers with self-insured plans should discuss this
with their TPAs.
Health reimbursement accounts ("HRAs") with 50 or more
participants are considered to be self-insured under HIPAA because
the employer funds the HRA. Accordingly, HRAs (including HRAs
associated with fully insured plans) are required to obtain a HPID,
unless they only pay for deductibles or out of pocket costs in
which case no HPID is required for them. However, an employer with
a self-insured plan may choose to obtain a single HPID for the
primary plan and the HRA.
Flexible Spending Accounts ("FSAs") and Health Savings
Accounts ("HSAs") are not required to have HPIDs.
How Does a Health Plan Get a HPID?
Self-funded health plans must obtain the HPID
themselves, although their TPA may obtain an HPID for them.
However, the HPID is still the group health plan's
Self-funded health plans must apply on-line at the CMS website:
https://portal.cms.gov. See CMS instructions on the Health Plan
Identifier page. The plan will be asked to complete an application
which requires several steps. The application requests a Payer ID
or NAIC number (for insurance companies and agents) which can be
skipped by group health plans for purposes of completing the
application. On October 3, 2014, the CMS updated the Health Plan
and Other Entity Enumeration System ("HPOES") application
process, which is the step required after you apply for a HPID.
Plans that have gone through the process have reported that
completing the application is cumbersome. Given this, employers
sponsoring group health plans should get started with the
application if they have not already done so.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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