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July 25, 2014

Most Health Plans Must Soon Obtain a Health Plan Identifier

In September 2014, the Centers for Medicare & Medicaid Services (CMS) published answers to frequently asked questions (FAQs) relating to health plan identifiers (HPIDs). That guidance is summarized in Sibson’s October 2, 2014 Capital Checkup. On October 31, 2014, CMS announced that it was delaying, until further notice, enforcement of the regulations requiring health plans to obtain an HPID, and for HIPAA covered entities, including health plans and health care providers, to use HPIDs. The agency’s statement is on the CMS website.

Under a final rule issued by the Department of Health and Human Services (HHS),1 most group health plans must obtain a new 10-digit health plan identifier (HPID) by November 5, 2014. Small health plans, meaning those with annual receipts of $5 million or less, have an additional year to apply for their HPID.

Under the final rule, a health plan2 that is a “controlling health plan” must get an HPID. Most employer-sponsored health plans will be considered “controlling health plans” and thus will need to obtain an HPID. Self-insured plans are specifically required to do so. A “subhealth plan” under the direction of a “controlling health plan” may get one but is not required to do so.3

Health plans must use HPIDs in certain electronic transactions by November 7, 2016, and require their business associates to do the same.

Information, including videos, about the HPID application process can be found on the Centers for Medicare & Medicaid Services website.

Because further agency guidance is anticipated about which plans are required to get HPIDs, and due to technical issues with the online application process, many plans have held off temporarily on applying for their HPID. Sibson Consulting will provide additional guidance on the HPID application process soon.

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As with all issues involving the interpretation or application of laws, health plan sponsors should rely on their legal counsel for authoritative advice on HPIDs. As details of the process become clearer, Sibson  Consulting will communicate the news. Sibson can be retained to work with plan sponsors and their attorneys on compliance issues related to HPIDs.


1 The final rule was published in the September 5, 2012 Federal Register and was corrected in the October 4, 2012 Federal Register. (Return to the Capital Checkup.)

2 The relevant definition of “health plan” is very broad, covering nearly every type of plan that provides or pays for medical care. Exceptions include one for self-administered group health plans with fewer than 50 participants, and excepted benefit plans such as workers’ compensation, automobile insurance, and property and casualty insurance. See the definition of “health plan,” and “group health plan” at 45 CFR § 160.10. See also a Centers for Medicare & Medicaid Services flowchart designed to help health plans determine if they are health plans subject to HIPAA. (Return to the Capital Checkup.)

3 A controlling health plan is a health plan that controls its own business activities, actions, or policies, or is controlled by an entity that is not a health plan. A subhealth plan is a health plan whose business activities, actions, or policies are directed by a CHP. See 45 CFR § 160.10. (Return to the Capital Checkup.)