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Medical Coding News Archives

New Unique Health Plan Identifier to Save Almost $6 Billion

October 4, 2012:

Karen Adkins, Clinical/Technical Editor

The Department of Health & Human Services recently announced in a final rule the creation of a unique health plan identifier (HPID) designed to save health care providers both time and money. The identifier is effective for all covered entities November 7, 2016, and is expected to lessen bureaucratic red tape, improve efficiency, and save close to $6 billion dollars over 10 years by reducing administrative functions such as completing claim forms and other paperwork.

Currently, health care providers are often required to use various identifiers with no standard format. For example, some identifiers are alphanumeric while others are numeric. Inconsistent provider numbers can lead to claim rejections, patient eligibility problems, and the misrouting of transactions.

The HPID’s goal will be to provide greater uniformity as well as a platform for future regulatory and industry initiatives. By adopting the HPID, provider offices will be able to achieve a higher level of automation, particularly in the areas of billing and insurance tasks, patient eligibility verification, and remittance advice payment posting.

The HPID rule introduces and defines two new terms: controlling health plan (CHP) and subhealth plan (SHP). The terms differentiate between plans required to obtain an HPID and those that, while eligible, are not required to obtain an HPID. A CHP controls its own business activities, actions, or policies or is controlled by an entity other than a health plan and, if it has subhealth plans, exercises sufficient control over those plans that business activities, actions, and policies are overseen by the CHP. An SHP is a health plan whose business activities, actions, and policies are controlled by a CHP. A CHP would be required to obtain an HPID while an SHP would not.

This regulation also adopts a data element called an “other entity identifier (OEID).” The OEID will identify all other entities that are not a health care plan provider or individual but that must be identified in standard transactions; for example, third-party administrators, transaction vendors, clearinghouses, and other payers could all have OEIDs. Although these entities are not required to obtain OEIDs, they could use the IDs to identify themselves in a covered transaction.

For more information on the HPID you can read the final rule here.


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