Client Alert

HHS Rescinds Requirement for Health Plans to Adopt Unique Health Plan Identifiers

Effective December 27, 2019, the Department of Health and Human Services (HHS) issued a final rule that rescinds the adopted standard unique health plan identifier (HPID) including the implementation specifications and requirements for their use.

The effect of this final rule is to remove pertinent sections of the regulations.1 In addition, each HPID maintained by HHS on behalf of an entity will be deactivated on the rule’s effective date. A copy of the final rule can be found at this link.

Background:  

The Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA) required health plans to obtain a unique health plan identifier (HPID) from the Department of Health and Human Services (HHS). The HPID was to be used to identify the plans in claims processing and other HIPAA covered standard transactions.

A final rule published in September 2012 required "Controlling Health Plans" ("CHPs") as defined in the law to obtain unique HPIDs by November 5, 2014. For small plans (less than $5 million) the deadline was November 5, 2015. FAQs provided guidance on what is a CHP, and made it clear that for insured plans, the insurance company was responsible for obtaining the HPID. Most self-insured plans had to obtain an ID, but HSAs, FSAs, and HRAs that only cover deductibles or other out-of-pocket costs did not need an HPID. See Cheiron’s prior alert, Deadline for Health Plans to Acquire Unique Health Plan Identifier Fast Approaching, for more information.

Soon after publication of the 2012 final rule, industry stakeholders, and, in particular, health plans identified a number of implementation challenges with the policy and barriers to implementation of the HPID. Stakeholders informed HHS that the HPID had minimal value, was not needed for routing HIPAA transactions, and that if they were to implement the HPID, it would impose significant costs instead of decreasing them. The National Committee on Vital and Health Statistics (NCVHS) held hearings and wrote to HHS about the problems with the 2012 regulation. As a result, on October 31, 2014, HHS announced that enforcement would be delayed and on May 29, 2015, issued a request for information. After considering the comments, on December 19, 2018, HHS published a proposed regulation to rescind the rule. The rescission also applies to other entity identifiers (OEID) applicable to TPAs and other transaction vendors.

Further Action: Given the uncertainly and confusion around the HPID, HHS is encouraging stakeholders to continue considering business cases for a standard health plan identifier and to share those options with HHS or NCVHS.

CHEIRON OBSERVATION: This final rule will likely not be the last word on this issue. HHS acknowledges that there are statutory requirements requiring HHS to adopt a standard unique health identifier for health plans. HHS states that it looks forward to future industry and NCVHS discussions of appropriate use or business cases regarding such an identifier that might reduce costs or burden on covered entities.

If you have any questions about discontinuation of the HPID and OEID identifiers, contact your Cheiron consultant.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.


 1  Specifically, Subpart E - Standard Unique Health Identifier for Health Plans at 45 CFR part 162, and the definitions of ‘‘Controlling health plan’’ (CHP)  and ‘‘Subhealth plan’’ (SHP) at 45 CFR162.103 are removed.