ACA Requires All Health Plans to Obtain Health Plan Identifier (“HPID”)

Under health care reform, health plans are now required to obtain a Health Plan Identifier number (“HPID”).  Under the HPID final regulations (published on September 5, 2012), large health plans must obtain an HPID by November 5, 2014.  Small health plans with $5 million or less in annual receipts have an extra year (that is, until November 5, 2015) to register for an HPID.

Beginning November 7, 2016, all covered entities must use an HPID to identify a health plan in any HIPAA standard transaction where the covered entity is identifying a health plan in the standard transaction.  As a reminder, under HIPAA, if a covered entity or its business associate conducts certain transactions electronically with another entity (mostly related to claims billings), those transactions must be conducted using certain standardized formats and content (i.e., as a “standard transaction”).

The preamble to the final regulations recognizes that, in practice, “very few self-insured group health plans conduct standard transactions themselves; rather, they typically contract with third-party administrators or insurance issuers to administer the plans.  Therefore, there will be significantly fewer health plans that use HPIDs in standard transactions than health plans that are required to obtain HPIDs…” [emphasis added]  These vendor claims administrators will each have their own HPID, which they will use in administering standard transactions for the health plan.  What this means is that even though HHS recognizes that vendors will likely continue to use their own HPIDs for standard transactions relating to the health plan, it is still requiring self-funded health plans to each obtain an HPID.

Employers should check with their vendor claims administrators to see if one of them will help it obtain an HPID for the health plan.

Regardless of who obtains the HPID, employers will also need to determine how many HPIDs it wants to obtain.  For employers who have a “wrap” welfare plan that includes more than one group health plan, the final regulations appear to allow the wrap plan (in its capacity as the “Controlling Health Plan”) to obtain just one HPID on behalf of all of the component group health plans (the “Subhealth Plans”) instead of requiring each of the component group health plans to obtain its own HPID.  For administrative ease, we believe that many employers will choose to obtain just one HPID.

For more information about this process, please see the website HHS has set up to allow health plans to register for and obtain an HPID.

Today’s post was contributed by Cynthia Y. Lee

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