The deadline for a large health plan to obtain its health plan identifier (“HPID”) is quickly approaching. As we previously advised (please see our Client Alert dated April 21, 2014), the Patient Protection and Affordable Care Act requires a controlling health plan (“CHP”) to obtain a HPID, which must be used in any HIPAA electronic covered transaction that the health plan conducts or that a business associate conducts on behalf of the health plan. The term “controlling health plan” or “CHP” means a health plan (as defined by HIPAA) that (1) controls its own business activities, actions, or policies; or (2) (i) is controlled by an entity that is not a health plan; and (ii) if it has a subhealth plan [a health plan whose business activities, actions, or policies are directed by a controlling health plan], exercises sufficient control over the subhealth plan to direct its business activities, actions, or policies. A controlling health plan can also obtain a HPID on behalf of its subhealth plans. Alternatively, a subhealth plan may obtain its own HPID. The HPID generally must be obtained by November 5, 2014. However, a small health plan (i.e., a health plan with annual receipts of $5 million or less) has until November 5, 2015 to obtain its HPID. Beginning November 7, 2016, a health plan must use the HPID to identify the health plan in covered transactions where the health plan is identified.
The government recently issued additional guidance with respect to the HPID requirement in the form of frequently asked questions (“FAQs”). In the FAQs, the government clarified a number of issues, including but not limited to the following:
- The requirement to obtain a HPID applies to both fully-insured and self-funded plans.
- The health insurance issuer (carrier) is the controlling health plan and is therefore required to obtain the HPID for a fully-insured plan. An employer’s individual fully-insured plan is a sub-health plan of the insurance carrier’s controlling health plan. Pursuant to the regulation, a sub-health plan is permitted to obtain a HPID, but is not required to do so.
- A health plan may use its HPID for any lawful business purpose.
- The methodology used to determine whether a controlling health plan is a “small health plan.”
- FSAs and HSAs are not required to obtain a HPID.
- HRAs that cover deductibles only or out-of-pocket costs do not require a HPID.
- A health plan may authorize a third party administrator to obtain the HPID on the health plan’s behalf.
You can access the governments FAQs at: https://questions.cms.gov/faq.php?id=5005&faqId=10706. CMS also posted a quick reference guide for obtaining a HPID, which is available at: http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Downloads/HPIDQuickGuideSeptember2014.pdf
Time is of the essence for a large health plan to obtain its HPID by the November 5, 2014 deadline. Please contact us with any questions related to the HPID requirement. Please note that the definition of “health plan” for this purpose includes more than just your major medical plan.
This alert serves solely as a general summary of a health plan’s potential obligations under the electronic transaction standards. Please contact us to discuss the application of these requirements to your plan in detail. Failure to comply with any of these requirements related to covered transactions may subject your health plan to civil penalties under both HIPAA and the PPACA.