The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires medical providers, health insurers, group health plans, third party administrators (TPA), and other parties involved in HIPAA “standard transactions” to use standard identifiers to identify themselves, and also to use standard formats and codes for the electronic data being exchanged in a “standard transaction,” such as a medical claim.
The purpose of requiring standard identifiers, formats and codes is to increase the efficiency and accuracy of transactions. Currently, health plans are identified in transactions using various identifiers that differ in length and format. The HPID is a 10-digit identifier that will be unique for each health plan, but will be in the same format.
Although TPAs almost always conduct HIPAA standard transactions on behalf of the self-funded plans they administer, the plans themselves are also now required to obtain HPIDs. Additionally, group health plans must disclose their HPID when requested. (Fully insured employers do not need to obtain a HPID because they do not qualify as a “health plan” under these rules. HHS has stated the insurer must obtain the HPID for the fully insured plan.)
Most employers who sponsor self-funded health plans will need to obtain a HPID by November 5, 2014. Employers should look to their consultant and/or their TPA for help obtaining an HPID.