HHS has prepared a proposal to create a single, unique identification number for every provider, health plan, claims middleman and others who submit or pay healthcare bills electronically.
The national provider identifier would replace the sometimes dozens of identification numbers assigned by private health plans and government agencies to the healthcare providers and suppliers with which they transact business.
The national identifier is the first order of business in designing a set of mandatory standards for submitting electronic healthcare claims, a four-year project set in motion by last year's signing of the Health Insurance Portability and Accountability Act.
The move to a national provider identification system comes despite the Clinton administration's decision to pull the plug on a project to modernize the Medicare claims handling process (See story, this page).
The primary aim of an identifier is to decrease administrative costs of claims processing. But it also could serve as a tool to discourage or root out healthcare fraud, according to a draft of an HHS position paper scheduled for publication in late September or early October. MODERN HEALTHCARE obtained a copy last week.
The draft likely will become the basis for a proposed regulation scheduled to be published by Oct. 31, said William Braithwaite, senior adviser on health information policy in the office of the assistant secretary for planning and evaluation at HHS.
After a 60-day public comment period, the regulations will be made final in February.
During the past several years, payers ranging from HCFA to Blue Cross and Blue Shield plans have tried to create incentives to wean healthcare off the routine of submitting claims on paper, pointing to inherent savings in turnaround time, clerical expense and rework.
But inefficiencies remain in the electronic realm. That's mainly because each payer has developed different formats for receiving claims details and keeping track of the submissions from various providers and suppliers.
A whole industry-claims clearinghouses-has sprung up around the need for middlemen to receive claims and edit them for the particular quirks of the payer destination.
A central feature of the new law is a mandate to standardize nine types of transactions that account for most of the traffic back and forth between providers and payers (See chart).
In addition, HHS must come up with some standard way for health plans to electronically coordinate responsibilities for benefits and payments when a patient is covered by multiple plans.
That process is made more difficult because health plans and federal agencies "routinely, and independently of each other, assign identifiers" that "are frequently not standardized within a single health plan or across plans," the HHS position paper noted. "The lack of a single and unique identifier for each healthcare provider . . . makes exchanging data both expensive and difficult."
HHS is proposing an eight-digit format, using both numbers and letters, that would allow for about 20 billion unique identifiers. The system to assign, maintain and avoid duplicated identifiers will be set up by HCFA, either from scratch or by deputizing federal and state agencies. Several options are floated in the HHS position paper to attract industry feedback, Braithwaite said.
Providers and suppliers participating in Medicare, including individual physicians, automatically would receive an identifier based on validated information in Medicare databases. Others outside Medicare would apply for a number under a priority system outlined in regulations.
With unique numbers attached to all transactions, the national system could reduce excessive or fraudulent claims, Braithwaite said.
"A healthcare provider's identifier would not change with moves or changes in specialty," according to the HHS document. A provider "would receive only one identifier and would not be able to receive duplicate payments from a program by submitting claims under multiple identifiers."
Braithwaite said the antifraud aspects of the identifier system are a secondary benefit but much-anticipated by fraud-fighting forces. "They've woken up to the fact that this number can be useful," he said.
The new law also attaches penalties for failure to use correct identifiers, though the sanctions are limited to use of the numbers or other standards in the nine designated electronic transactions.