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Health Plan Identifier

On September 5, 2012, a final rule mandating the use of a unique health plan identifier (HPID) was published by the U.S. Department of Health & Human Services (HHS). The HPID is a numeric identifier that will be assigned to payers to clearly identify them on claims and other transactions bringing greater transparency to the billing process for physicians. Now, physician practices will know who they are actually working with. The establishment of an HPID was included in the 1996 HIPAA law, along with other identifiers, including the National Provider Identifier (NPI).

The regulation requires health plans to obtain an HPID by November 5, 2014, with small health plans having an extra year until November 5, 2015. Physicians will be required to include the HPID in claims and other HIPAA transactions on or after November 7, 2016.

In addition to the HPID, a separate Other Entity Identifier (OEID) was also adopted and will be used by benefit managers, rental network preferred provider organizations (PPOs), and third-party administrators to identify themselves in electronic transactions, which will further improve transparency for physicians. Use of the HPID and OEID are expected to result in up to $6 billion dollars in savings to the health care system, the vast majority of which is expected to accrue to physicians.

The AMA was instrumental in getting HHS to require a more robust identifier than originally proposed. Initial HHS proposals just called for using the number in routing transactions, however, the AMA successfully argued that this would limit the utility of these numbers. The expanded use of the numbers outlined in the final rule will better help physicians and their staff understand who is paying them by building a foundation for a “one-stop, automated billing process."

The AMA continues to encourage HHS to adopt two critical pieces to further increase transparency – a patient-specific benefit plan identifier and a standard fee schedule identifier format. The focus of the HPID must be shifted from the payer-centric system of today to a system that provides patients and their health care providers with the information they need to know to navigate each encounter. This will enable consumers to truly shop for health insurance like they do for other major purchases, and eliminate the extraordinarily high administrative overhead physicians, hospitals, and other health care providers incur today as they grapple with the multitude of different systems the various health insurers have established.

Just as physicians and other health care providers must be clearly identified on all health care transactions, health plans and their agents must also be if we are ever to fully automate the administrative aspects of the health care system. The AMA calls on the health insurance industry to use the opportunity presented by the new HPID to provide complete transparency as to the entity involved in each transaction, whether itself, its subsidiary or a contracted intermediary.