A proposed rule that would establish a unique "health plan identifier" under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was announced today by Department of Health and Human Services (HHS) Secretary Kathleen Sebelius.  

The proposed changes would save health care providers and health plans up to $4.6 billion over the next ten years, according to estimates released by the HHS today. The estimates were included in a proposed rule that cuts red tape and simplifies administrative processes for doctors, hospitals and health insurance plans. The proposed rule would also implement several administrative simplification provisions of the Affordable Care Act.

“The new health care law is cutting red tape, making our health care system more efficient and saving money,” Secretary Sebelius said. “These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients.”

Currently, when health plans and entities like third party administrators bill providers, they are identified using a wide range of different identifiers that do not have a standard length or format. As a result, health care providers run into a number of time-consuming problems, such as misrouting of transactions, rejection of transactions due to insurance identification errors, and difficulty determining patient eligibility. 

The proposed rule announced today is the third in a series of administrative simplification rules in the new health care law. HHS released the first in July of 2011 and the second in January of 2012, and plans to announce more in the coming months.  More information on the proposed rule is available on fact sheets at http://www.cms.gov/apps/media/fact_sheets.asp.  The proposed rule may be viewed at www.ofr.gov/inspection.aspx.

Source: US Department of Health & Human Services, News Release – April 9, 2012.  New health care law provisions cut red tape, save up to $4.6 billion