Tuesday, July 22, 2014

HPID identifiers FAQ

In response to client inquiries regarding HPID identifiers, our attorneys have compiled a list of frequently asked questions. Please feel free to contact your account representative at Friedman Associates to discuss your issues or questions.
Who iconsidered  a CHP?
 Armost self insured plans CHP's?

Short Answer:

A self-funded health plan could be a CHP if the self-funded health plan controls its own policies and is not controlled by another health plan or the self-funded health plan is controlled by an entity that is not a health plan (such as the employer sponsor).  Self-funded health plans that are controlling health plans will need to obtain an HPID in accordance with the compliance dates described below.  It is our understanding that most self-funded health plans will need to obtain an HPID.  Please see the remainder of this memorandum for a more detailed explanation of health plan identifiers.


On September 5, 2012, the Department of Health and Human Services (HHS) and its Center for Medicare & Medicaid Services (CMS) released a final rule regarding HIPAA Administrative Simplification.  Included in this rule is a mandate that all health plans and other entities (such as third party administrators) will obtain an identification number to be used in electronic health care transactions.  These identifiers will be used in HIPAA standard transactions where health plans and other entities need to be identified.  HIPAA standard transactions include medical and dental claims and encounter information, payment remittance advice, claim status requests and responses, eligibility and benefit inquiries and responses, enrollment and disenrollment, referrals and authorizations, and premium payments.   For example, these identifiers will be needed in electronic data interchanges (EDI).  An EDI is used to send claims electronically between the entity that processes claims, the clearinghouse, and the health care provider.

The cumulative set of rules that HHS and CMS are producing will include additional topics including electronic funds transfers (EFTs), ICD-10, and further administrative simplification rules creating standards for claims attachments, operating rules for claims attachments, and requirements for health plans to certify compliance with the HIPAA standards and operating rules.

HHS determined the need for health plan identifiers (HPIDs) and potentially the need for other entity identifiers (OEIDs) to streamline health care administrative transactions and make the existing standards more efficient. The rule is intended to make it easier for health care providers to determine participant eligibility and obtain status information on claims that have been submitted.  As there is currently no standard for health plans identification numbers, each health plan and third party administrator creates their own identifiers for electronitransactions.  These identifiers differ in length and format and create issues for health care providers with the routing of transactions, rejections of transactions, and difficulty in determining eligibility.

Who Must Obtain an Identifier:

HIPPA defines the term health plan in 45 CFR 160.103 which includes self-funded health plans. A controlling health plan (CHP) is required to obtain an HPID.  A controlling health plan is defined in 45 CFR 162.103:
Controlling health plan (CHP) means a health plan that
(1) Controls its own business activities, actions, or policies; or
(2)        (i) Is controlled by an entity that is not a health plan; and
(ii) If it has a subhealth plan(s) (as defined in this section), exercises sufficient control over the subhealth plan(s) to direct its/their business activities, actions, or policies.

A subhealth plan (SHP) is a health plan whose business activities, actions, or policies are directed by a controlling health plan.

A self-funded health plan that is a CHP will need to obtain an HPID.  Fully insured health plans will not need to obtain HPIDs as the insurance carrier will be required to obtain an HPID.

A subhealth Plan (SHP) is nto required to obtain an HPID, but may obtain an HPID at teh direction of its CHP or on its own. CHP's may obtain HPIDS for its SHPs.

Third party administrators and other entities (such as repricers) that perform certain health plan functions will have the option of obtaining an OEIDs as they are not health plans and are not eligible to obtain an HPID. Health plan clients of third party administrators may require the third party administrator to obtain an OEID for plan administration purposes.  It is possible that OEIDS may be mandated in the future.

Required and Permitted Uses:
A covered entity is required to use an HPID when it identifies a health plan in a standard transaction (standard transactions are described in the Background section above).  Business associates of the covered entities will be required to use the HPIDs to identify the health plans in standard transactions.

HPIDs may also be used in the following manners (but it is not required):
1.   In internal files;
2.   On an enrollees health plan identification card;
3.   As a cross-reference in health care fraud and abuse files and other program integrity files;
4.   In patient medical records to help identify health care benefit packages;
5.   In electronic health records to identify the health plan;
6.   In federal and state health insurance exchanges to identify health plans; and
7.   For public health date reporting purposes.

Compliance Date:

Health plans, with the exception of small health plans, must obtain an HPID by November 5, 2014.   Small health plans are defined as those whose annual receipts total $5 million or less.  Small health plans must obtaian HPID by November 5, 2015.  Health care providers and clearinghouses must be able to implement the use oHPIDs in standard transactions by November 7, 2016.

Additional Resources:

CMSs website offers a multitude of resources including presentations, videos, and a HPID user manual that can offer additional guidance on HPIDs, OEIDs, including a step-by-step process to obtain an HPID and OEID.  The application process takes place through the CMS Health Plan and Other Entity Enumeration System (HPOES). New users must register themselves and their organization prior to gaining access to the HPOES.  After registration, the organization would then apply for an HPID (See http://www.cms.gov/Regulations-and- Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Health-Plan-Identifier.html).


In 2010, HHS started the process of standardizing and simplifying the way health care providers, health plans, and other entities assisting health plans transmit electronic information.  A series of rules has been issued by HHS over the last several years to guide the process.   One of the rules contains the creation of HPIDs and OEIDs Health plans and other entities that participate in health care transactions may need to obtain a standardized identifier that will be used to streamline HIPAA standard transactions as described in this memorandum.


Simplification/TransactionCodeSetsStands/index.html?redirect=/transactioncodesetsstands/02_transactionsandc odesetsregulations.asp

Disclaimer: This opinion is based on the facts as presented and re-stated above, and our research. It is a consulting opinion only, and does not purport to offer legal advice or fiduciary guidance as to the denial or acceptance of claims. This opinion is based upon our interpretation of the relevant materials and may not conform to official interpretations of statutes, regulations, contracts, or other materials. Ultimately the Plan Administrator has the discretionary authority to interpret the terms of the Plan Document and accept or deny claims for benefits.