Fact Sheets


For Immediate Release: Friday, August 24, 2012
Contact: CMS Media Relations



A final rule announced today by the Department of Health and Human Services (HHS) adopts the standard for a national unique health plan identifier (HPID) and a data element that will serve as an “other entity” identifier (OEID). This is an identifier for entities that are not health plans, health care providers, or individuals, but that need to be identified in standard transactions.  The rule also specifies the circumstances under which an organization-covered health care provider, such as a hospital, must require certain non-covered individual health care providers who are prescribers to obtain and disclose a National Provider Identifier (NPI).


The final rule was developed by the Office of E-Health Standards and Services (OESS) as part of its ongoing role, delegated by HHS, to adopt standards for electronic health care transactions under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).   OESS is part of the Centers for Medicare & Medicaid Services (CMS).  The adoption of the HPID implements an administrative simplification provision of the Affordable Care Act.




Section 1104 of the Affordable Care Act requires HHS to issue a series of regulations over five years that are designed to streamline health care administrative transactions, encourage greater use of standards by health care providers, and make existing standards work more efficiently.  On July 8, 2011, HHS published the first regulation in the series, an interim final rule with comment period (IFC) that adopted operating rules for two electronic health care transactions to make it easier for health care providers to determine whether a patient is eligible for coverage and the status of a health care claim submitted to a health insurer.  On Jan. 10, 2012, HHS published the second regulation, an IFC that adopted standards for the health care electronic funds transfers (EFT) and remittance advice transaction between health plans and health care providers. On Aug. 10, 2012, HHS published the third regulation in the series, an IFC that adopted operating rules for the health care (EFT) and remittance advice transaction.


The final rule announced today, the fourth in the series, adopts the standard for a national unique health plan identifier (HPID) and a data element that will serve as an “other entity” identifier (OEID).


Future administrative simplification rules will address adoption of: 


·   a standard for claims attachments;

·   operating rules for claims attachments; and

·   requirements for certification of health plans’ compliance with all HIPAA standards and operating rules. 



Currently, health plans are identified in standard transactions using multiple identifiers that differ in length and format.  Health care providers are frustrated by the following problems associated with the lack of a standard identifier: the routing of transactions, rejected transactions due to insurance identification errors, and difficulty determining patient eligibility. 


On July 19, 2010, the National Committee on Vital and Health Statistics (NCVHS)

Subcommittee on Standards held a hearing on the health plan identifier to gather information for developing a recommendation to the Secretary. Participants represented a cross-section of the health care industry. On Sept. 30, 2010, the NCVHS sent the Secretary its recommendations for adoption of a standard establishing a unique health plan identifier. Another recommendation addressed the need for an identifier for entities such as health care clearinghouses, third party administrators (TPAs), and repricers, that are not health plans but that perform certain health plan functions. These entities are currently identified in the standard transactions in the same fields and using the same types of identifiers as health plans, but are not health plans and so cannot obtain a health plan identifier.  Based on the NCVHS recommendations, HHS proposed to adopt a data element that would serve as an OEID. 


The primary purpose of the HPID and the OEID is for use in the HIPAA standard transactions.  The most significant benefit of the HPID and the OEID is that they will increase standardization within the HIPAA standard transactions. 



In January 2004, HHS published a final rule in which the Secretary adopted the NPI as the standard unique health care provider identifier and adopted requirements for obtaining and using the NPI.  Since that time, pharmacies have encountered situations where the NPI of a prescribing health care provider needs to be included in the pharmacy claim, but the prescribing health care provider does not have an NPI or has not disclosed it.  This situation has become notably problematic in Medicare Part D. The final rule announced today addresses this problem. The rule specifies the circumstances under which an organization covered health care provider, such as a hospital, must require certain noncovered health care providers, such as physicians who are prescribers, to obtain and disclose an NPI.


Provisions of the Final Rule announced today

HHS adopts a standard for a HPID, a data element that will serve as an OEID, and an addition to the NPI requirements.  HHS also adopts a delay by one year, from Oct. 1, 2013 to Oct 1, 2014, the date by which covered entities must comply with International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10).





The HPID is expected to benefit health care providers, producing savings from two indirect consequences of implementation of the HPID: the cost avoidance of a decrease in administrative time spent by physician practices interacting with health plans, and a material cost savings through automation of processes for every transaction that moves from a manual transaction to an electronic transaction.


Over ten years, the projected net savings of implementing HPID for the entire health care industry is approximately $1.3 billion to $6 billion.



HHS estimates that the addition to the NPI requirements will have little impact on health care providers and on the health industry at large because there are few health care providers who do not already have an NPI. In addition, for those health care providers who do not already have an NPI, obtaining one is free of charge and takes little time to obtain. 


Regulation effective date and compliance requirements


The regulation is effective 60 days after publication in the Federal Register.


Health plans, excluding small health plans, are required to obtain HPIDs by 2 years after the effective date, in 2014. Small health plans are required to obtain HPIDs 3 years after the effective date, in 2015.  All covered entities are required to use HPIDs where they identify health plans that have HPIDs in standard transactions 4 years after the effective date, in 2016.


Covered entities have 180 days from the final regulation’s effective date to comply with the additional NPI requirement. 


The final rule, CMS-0040-F, may be viewed at www.ofr.gov/inspection.aspx.


A news release on the final rule may be viewed at http://www.hhs.gov/news and http://www.cms.gov/apps/media/press_releases.asp.


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