65118 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 

additional steps as specified in S.L. 

2017, ch. 199, Section 75, to ensure that 

NDDEQ comes into existence and that 

the NDDEQ rules are effective as a 

matter of state law prior to the effective 

date of the EPA’s approval of these 

revisions. Unless and until the NDDEQ 

rules and agency become fully effective 

under federal law, for purposes of 

federal law the EPA recognizes the 

State’s program as currently approved. 

For additional information, see the 

direct final rule published in the ‘‘Rules 

and Regulations’’ section of this issue of 

the Federal Register. 

Authority: This rule is issued under the 

authority of Sections 2002(a), 7004(b), and 

9004 of the Solid Waste Disposal Act, as 

amended, 42 U.S.C. 6912(a), 6991c, 6991d, 

and 6991e. 

List of Subjects in 40 CFR Part 281 

Environmental protection, 

Administrative practice and procedure, 

Hazardous substances, State program 

approval, and Underground storage 

tanks. 

Dated: December 13, 2018. 

Douglas Benevento, 

Regional Administrator, Region 8. 

[FR Doc. 2018–27421 Filed 12–18–18; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of the Secretary 

45 CFR Part 162 

[CMS–0054–P] 

RIN 0938–AT42 

Administrative Simplification: 

Rescinding the Adoption of the 

Standard Unique Health Plan Identifier 

and Other Entity Identifier 

AGENCY: Office of the Secretary, HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

rescind the adopted standard unique 

health plan identifier (HPID) and the 

implementation specifications and 

requirements for its use and the other 

entity identifier (OEID) and 

implementation specifications for its 

use. The decision to propose to rescind 

the adopted standards was made 

following a careful assessment of 

industry input, as well as HHS’s 

intention to explore options for a more 

effective standard unique health plan 

identifier in the future. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on February 19, 2019. 

ADDRESSES: In commenting, please refer 

to file code CMS–0054–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–0054–P, P.O. Box 8013, Baltimore, 

MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–0054–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT:

Lorraine Doo, (410) 786–6597, for all 

policy questions. 

Rosali Topper, (410) 786–7260, for 

information about website content and 

frequently asked questions. 

Gladys Wheeler, (410) 786–0273, for 

information about the Health Plan and 

Other Entity Enumeration System 

(HPOES). 

Heinz Stokes-Murray, (410) 786–0383, 

and LaKisha Brown, (410) 786–1798, for 

general information. 

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. 

I. Background 

A. Statutory and Regulatory History 

Section 262 of the Health Insurance 

Portability and Accountability Act of 

1996 (HIPAA) (Pub. L. 104–191) added 

section 1173 to the Social Security Act 

(the Act) and required, among other 

things, that the Secretary of the 

Department of Health and Human 

Services (HHS or the Secretary) adopt a 

standard unique health plan identifier. 

The stated purpose of section 261 of 

HIPAA is to improve the effectiveness 

and efficiency of the health care system 

by encouraging the development of a 

health information system through the 

establishment of standards and 

requirements for the electronic 

transmission of certain health 

information and reducing the clerical 

burden on patients, health care 

providers, and health plans. 

Section 1173(b)(1) of the Act specifies 

that, in adopting a standard unique 

identifier for health plans, the Secretary 

must take into account multiple uses for 

the identifier, and section 1173(b)(2) of 

the Act provides that, in adopting a 

standard health plan identifier, the 

purposes for which the identifier may 

be used must be specified. Congress 

renewed the requirement for the 

Secretary to adopt a standard unique 

health plan identifier in section 

1104(c)(1) of the Patient Protection and 

Affordable Care Act (Pub. L. 111–148) 

((as amended by the Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152) and collectively 

known as the Affordable Care Act) by 

requiring the Secretary to promulgate a 

final rule to establish a unique health 

plan identifier, as described in section 

1173(b) of the Act and based on the 

input of the National Committee on 

Vital and Health Statistics (NCVHS). 

To implement these statutory 

provisions, we adopted the HPID and 

OEID via a final rule published on 

September 5, 2012 (77 FR 54664) 

entitled Administrative Simplification: 

Adoption of a Standard for a Unique 

Health Plan Identifier; Addition to the 

National Provider Identifier 

Requirements; and a Change to the 

Compliance Date for the International 

Classification of Diseases, 10th Edition 

(ICD–10–CM and ICD–10–PCS) Medical 

Data Code Sets (hereafter, referred to as 

the September 2012 final rule). The 

September 2012 final rule did the 

following: 

• Adopted the HPID as the standard 

unique identifier for health plans. 

• Defined the terms ‘‘Controlling 

health plan’’ (CHP) and ‘‘Subhealth 

plan’’ (SHP). The definitions of these 

two terms differentiate health plan 


amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 65119 

entities that are required to obtain an 

HPID and those that are eligible, but not 

required, to obtain an HPID. 

• Required all covered entities to use 

an HPID whenever a covered entity 

identifies a health plan in a covered 

transaction. 

• Established requirements for CHPs 

and SHPs in order to enable health 

plans to obtain HPIDs to reflect different 

business arrangements so they can be 

identified appropriately in HIPAA 

transactions. 

• Adopted a data element to serve as 

an ‘‘other entity identifier’’ (OEID). 

++ The OEID functions as an 

identifier for entities that are not health 

plans, health care providers, or 

individuals (including, for example, 

third party administrators, transaction 

vendors, clearinghouses, and other 

payers), but that need to be identified in 

HIPAA transactions. 

++ Did not require other entities to 

obtain an OEID, but permitted them to 

obtain and use one if they need to be 

identified in covered transactions. 

For more detailed information 

regarding the statutory and regulatory 

history of the HPID and OEID or HIPAA 

legislation and regulations, see the April 

17, 2012 proposed rule titled 

‘‘Administrative Simplification: 

Adoption of a Standard for a Unique 

Health Plan Identifier; Addition to the 

National Provider Identifier 

Requirements; and a Change to the 

Compliance Date for ICD–10–CM and 

ICD–10–PCS Medical Data Code Sets’’ 

(77 FR 22952 through 22954), 

(hereinafter referred to as the April 2012 

proposed rule) and the September 5, 

2012 final rule (77 FR 54666). 

B. Adoption of the Health Plan 

Identifier (HPID) and Other Entity 

Identifier (OEID) 

The NCVHS Subcommittee on 

Standards conducted a public hearing 

about the health plan identifier between 

July 19 and 21, 2010. Industry 

stakeholders—including representatives 

from health plans, health care provider 

organizations, health care 

clearinghouses, pharmacy industry 

representatives, standards developers, 

professional associations, 

representatives of Federal and State 

public programs, the Workgroup on 

Electronic Data Interchange (WEDI), the 

National Uniform Billing Committee 

(NUBC), the National Uniform Claim 

Committee (NUCC), and individuals 

with health plan identifier proposals— 

provided in-person and written 

testimony at the hearing. Stakeholder 

testimony focused on the use and need 

for an HPID to: Facilitate the 

appropriate routing of HIPAA 

transactions; reduce the cost of 

managing financial and administrative 

information; reduce dissatisfaction 

among health care providers and 

patients/members by improving 

communication with health plans and 

intermediaries; and provide information 

about health plan products and benefits. 

Stakeholders provided suggestions on 

the types of entities to be identified in 

HIPAA transactions, those that should 

be eligible to obtain an HPID, and the 

level of enumeration needed for each 

plan (for example, the legal entity, 

product, and benefit package). For a full 

discussion of the key topics and 

recommendations from that NCVHS 

hearing, see the April 2012 proposed 

rule (77 FR 22956 and 22957). 

Following the hearing in 2010, the 

NCVHS submitted recommendations to 

the Secretary regarding the HPID, 

including definitions and types of 

entities that should be eligible for 

enumeration. In that recommendation 

letter, the NCVHS advised HHS to 

collaborate across federal agencies and 

to request stakeholder input on each 

topic through national associations, 

Designated Standards Maintenance 

Organizations (also known as standards 

development organizations or SDOs), 

and WEDI. The letter included 

observations relating to the levels of 

entity enumeration, and the format and 

content of the HPID. It also included 

recommendations for a publicly 

accessible directory database to support 

the enumeration system and process, as 

well as testing, use of the HPID on a 

health plan ID card, exempting its use 

in pharmacy transactions, and 

improving its use through operating 

rules. The full text of the letter can be 

found on the NCVHS website at: https:// 

www.ncvhs.hhs.gov/wp-content/ 

uploads/2014/05/100930lt1.pdf. 

After the receipt of the NCVHS 

recommendations, and upon internal 

review, HHS published the April 2012 

proposed rule incorporating several of 

the recommendations, including the 

following proposals: 

• The adoption of a standard for a 

unique health plan identifier, the HPID, 

for use in HIPAA transactions. 

++ The concepts of Controlling 

health plan and Subhealth plan. 

++ The requirement that all 

controlling health plans, including selffunded health plans, obtain an HPID. 

• The creation of a new data 

element—the OEID—for use by entities 

that do not meet the definition of a 

health plan, but that need to be 

identified in HIPAA transactions. 

• Requirements and provisions for 

the implementation of the HPID and 

OEID. 

The policy in the September 2012 

final rule (77 FR 54666 and 54667) that 

requires health plans to enumerate with 

an HPID attempted to address the issues 

associated with health plans being 

identified in HIPAA transactions with 

different numbers originating from 

multiple sources and with multiple, 

proprietary formats. We believed that 

the various identifiers, assigned by 

different governmental or private 

organizations, were the identifiers 

health plans used to represent 

themselves in the HIPAA transactions. 

These identifiers included the National 

Association of Insurance 

Commissioners’ (NAIC) Company code, 

the U.S. Department of Labor (DOL) and 

the Internal Revenue Service (IRS) 

Employer Identification Number (EIN) 

number, the Tax Identification Number 

(TIN), and proprietary numbers assigned 

by clearinghouses. We refer herein to 

the various identifiers that identify 

payers in the HIPAA transactions as 

Payer IDs. We did not define the term 

payer in the September 2012 final rule, 

but are aware that while the industry 

uses the terms payer and health plan 

interchangeably, they do not have the 

same meaning when referenced for 

purposes of a transaction. 

We believed our policies specifying 

requirements for health plans to obtain 

identifiers, and use them in HIPAA 

transactions when appropriate, 

resolved, or took steps towards 

resolving, the issues of transaction 

routing, difficulty determining patient 

eligibility, and challenges identifying 

the health plan during claims 

processing. Specifically, we assumed 

the HPID framework, with the use of 

CHPs and SHPs, would address any 

industry confusion of having multiple 

ways to identify a health plan in a 

transaction. In the September 2012 final 

rule (77 FR 54667), we explained which 

entities would be required to obtain and 

use an HPID in HIPAA transactions in 

order to identify the plan in the 

appropriate loops and segments of the 

transactions. We stated that we believed 

the adoption of the HPID and the OEID 

would increase standardization within 

HIPAA transactions and provide a 

platform for other regulatory and 

industry initiatives, and that their 

adoption would allow for a higher level 

of automation for health care provider 

offices, particularly for provider 

processing of billing and insurancerelated tasks, eligibility responses from 

health plans, and remittance advice that 

describes healthcare claim payments. 

However, the importance of the 

distinction between the HPID and Payer 

IDs, and the industry’s use of, and 

reliance on, Payer IDs in the HIPAA 


amozie on DSK3GDR082PROD with PROPOSALS1
65120 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 

1https://www.ncvhs.hhs.gov/wp-content/ 

uploads/2014/05/140515lt2.pdf. 

2Statement of Enforcement Discretion regarding 

45 CFR 162 Subpart E—Standard Unique Health 

Identifier for Health Plans https://www.cms.gov/ 

Regulations-and-Guidance/AdministrativeSimplification/Unique-Identifier/HPID.html. 

transactions, became evident after 

publication of the September 2012 final 

rule when health plans and insurers 

began to prepare for enumeration and 

realized the impact of having to 

accommodate the HPID rather than a 

Payer ID in the HIPAA transactions. 

C. Events Leading to This Proposed Rule 

After publication of the September 

2012 final rule, we conducted outreach 

on the enumeration process (for 

example, we held webinars and 

attended industry conferences), 

published guidance on our website, and 

hosted an email box to receive industry 

inquiries. Through these initiatives, we 

received questions from health plans 

and providers about a number of issues, 

including: How many HPIDs health 

plans should obtain; why self-funded 

plans were being required to obtain an 

HPID; how the HPID and Payer IDs were 

to be used together in the HIPAA 

transactions; whether certain providers 

could or should obtain OEIDs (for 

example, atypical providers); which 

HPID would be used for enforcement 

actions; and whether or how the HPID 

database would be made accessible to 

industry for look-up and verification. In 

October 2012, organizations began to 

apply for HPIDs, and 11,000 numbers 

were assigned between that date and 

October 2014. As the enumeration 

process began, professional associations 

for both health plans and health care 

providers submitted feedback that stated 

there was no need for the HPID in 

HIPAA transactions, and that the policy 

requirements were problematic, costly, 

and burdensome. 

The NCVHS Standards Subcommittee 

held a hearing on February 19, 2014, 

and sent a letter to the Secretary on May 

15, 2014, summarizing participant 

comments and providing 

recommendations (https://www.ncvhs.

hhs.gov/wp-content/uploads/2014/05/ 

140515lt2.pdf). 

The NCVHS wrote: 

[T]estifiers indicated that there is 

confusion on how the HPID and OEID should 

be used. Many health plans face challenges 

with respect to the definitions of controlling 

health plan (CHP) and sub-health plan (SHP); 

the use of HPID for group health plans that 

do not conduct HIPAA standard transactions 

(the self-insured plans); and the cost to 

health plans, clearinghouses and providers 

because software has to be modified to 

account for the HPID. Testifiers questioned 

the impact on health plans, third-party 

payers (TPAs) and Administrative Services 

Only (ASO) self-insured groups and the 

degree of granularity required to enumerate. 

Others expressed concerns that the HPID 

database would not be accessible and 

without public access to the HPID database, 

the identifier is of no value to trading 

partners; validation cannot be performed; a 

crosswalk would not be possible among 

Medicaid proprietary plans, and the data 

collection did not include reference to the 

Bank Identification Number/Processor 

Control Number (BIN/PCN) used in 

pharmacy claims processing. Concern was 

also expressed that self-insured health plans 

are not aware of the requirements that apply 

to them.1

On June 10, 2014, the NCVHS held 

another hearing and sent a follow-up 

letter to the Secretary on September 23, 

2014 titled ‘‘Letter to the Secretary, 

Findings from the June 2014 NCVHS 

Hearing on Coordination of Benefits, 

Health Plan Identifier (HPID), and ICD– 

10 Delay,’’ in which it recommended 

that HHS specify that the HPID not be 

used in HIPAA transactions, that the 

HPID’s use be better clarified, and that 

the HPID not replace the existing Payer 

IDs. See https://www.ncvhs.hhs.gov/wpcontent/uploads/2014/10/14092

3lt5.pdf. Specifically, the NCVHS 

highlighted the following items from the 

June 2014 stakeholder testimony: 

• Lack of clear business need and 

purpose for using HPID and OEID in 

health care administrative transactions. 

• Confusion about how the HPID and 

OEID would be used in administrative 

transactions, including strong concerns 

that HPID might replace current Payer 

IDs which were widely in use between 

covered entities. 

• Challenges faced by health plans 

with respect to the definitions of CHPs 

and SHPs. 

• Use of the HPID for group health 

plans that do not conduct HIPAA 

transactions. 

• Cost to health plans, 

clearinghouses, and providers for 

modifying software to account for the 

HPID. 

In response to the NCVHS’s 2014 

recommendations, HHS took two 

administrative actions. 

First, on October 31, 2014, through a 

statement of enforcement discretion,2

HHS delayed enforcement of the 

regulations pertaining to HPID 

enumeration and use of the HPID in the 

HIPAA transactions in order to review 

the NCVHS’ recommendations and to 

consider any appropriate next steps. 

The enforcement discretion, which 

remains in effect, means that HHS will 

not impose penalties if it determines a 

covered entity is out of compliance with 

the HPID requirements of the September 

2012 final rule. 

The effect of the enforcement 

discretion has been two-fold: (1) In 

general, it appears that industry has 

taken little action to implement the 

requirements of the September 2012 

final rule; and (2) we have not 

published any further educational, 

outreach, or guidance materials on the 

industry’s use of the HPID and OEID. 

Second, in the May 29, 2015 Federal 

Register (80 FR 30646), we published a 

request for information (RFI) to solicit 

additional public input to determine 

whether HPID policies were still 

warranted. Through the RFI, we sought 

public comment on three (3) topics: (1) 

The HPID enumeration structure, 

including the use of the CHP/SHP and 

OEID concepts; (2) use of the HPID in 

HIPAA transactions in conjunction with 

the Payer ID; and (3) whether changes 

to the nation’s health care system since 

the issuance of the September 2012 final 

rule had altered perspectives about the 

need for the HPID. 

We received 53 timely comments in 

response to the RFI, with the 

overwhelming majority of submissions 

recommending that the HPID not be 

required in the HIPAA transactions, 

either alone or in combination with the 

Payer IDs. A small minority of 

commenters continued to support the 

concept of a standard health plan 

identifier, though not the specific HPID 

adopted by HHS, believing it may have 

some value for enforcement or HIPAA 

health plan certification of compliance. 

Although many commenters 

acknowledged that they had supported 

the creation of a standard health plan 

identifier in the proposed rule and 

understood its policy intent, in response 

to the RFI they warned that inclusion of 

the HPID in the transactions would 

create significant administrative 

problems without corresponding benefit 

due, at least in part, to a confusing 

framework. 

A commenter stated that, regardless of 

the enumeration schema, converting 

from the Payer IDs to the HPID would 

be costly for all stakeholders because of 

the potential for misrouting transactions 

and disrupting claims processing, while 

multiple commenters indicated that the 

health care community had become 

adept at using the Payer IDs, and that 

those, along with the operating rules, 

were enabling benefits and cost savings 

of the HIPAA transactions. 

In response to the third topic in the 

RFI, ‘‘whether the changes in health 

care had altered perspectives about the 

need for an HPID,’’ some commenters 

stated that too much time had elapsed 

since industry had been using the Payer 


amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 65121 

3https://www.caqh.org/core/caqh-core-phase-iirules. For a Direct link to the Phase II Operating 

Rules. 

IDs in transactions, and the industry 

had established appropriate routing 

technologies. These commenters said 

that the requirement for a standard 

unique health plan identifier no longer 

represented best practices for how 

information was exchanged between 

health plans and health care providers. 

A number of commenters stated that the 

health care system was continuing to 

undergo innovation and 

experimentation with care delivery and 

payment models. These commenters 

noted that the market required 

flexibility to enable continued 

innovation to mature, and suggested 

that HHS allow payers, clearinghouses, 

and third party administrators more 

time to adapt to the evolving health care 

environment before implementing a 

unique health plan identifier. Other 

commenters stated that if there were 

other proposed purposes or future use 

cases for a standard health plan 

identifier, a lawful and compelling 

business case for its intended use 

should be made and sufficient 

opportunity for comment be available in 

the Federal Register. We did not receive 

specific recommendations or alternative 

proposals for consideration. 

In summary, from the NCVHS 

hearings as well as comments on the 

May 2015 RFI, several common themes 

emerged. First, the industry already has 

satisfactorily functioning mechanisms to 

route claims and other HIPAA 

transactions using the existing Payer 

IDs. Second, it would likely be a costly, 

complicated, and burdensome 

disruption for the industry to have to 

implement the HPID because it would 

require mapping existing Payer IDs to 

the new HPIDs, which would likely 

result in the misrouting of claims and 

other transactions. Third, the HPID 

framework does not provide added 

value for other anticipated purposes, 

such as including certain information in 

the transaction, including the name of 

the health plan name, the level of 

benefits or coverage description 

(medical, dental, vision, pharmacy), or 

co-payment and co-insurance 

responsibility for certain services (for 

example, certain optional and required 

coverage types). 

The Affordable Care Act amended 

HIPAA to require the Secretary to adopt 

a set of operating rules for each of the 

HIPAA transactions with the intent of 

creating as much uniformity in the 

implementation of the HIPAA standards 

as possible. Operating rules are business 

rules for the exchange of electronic 

information, and are not already defined 

by a standard. HHS named the Council 

for Affordable Quality Healthcare 

(CAQH) Committee on Operating Rules 

for Information Exchange (CORE) the 

authoring entity for the operating rules, 

which labels its operating rules in 

Phases as they are developed and 

approved. To date, HHS has adopted 

operating rules for three HIPAA 

transactions—eligibility for a health 

plan, health care claim status, and 

health care electronic funds transfers 

(EFT) and remittance advice. On July 8, 

2011, HHS adopted the CAQH CORE 

Phase I and Phase II operating rules for 

the eligibility for a health plan and 

health care claim status transactions (77 

FR 40458), and on August 10, 2012, 

HHS adopted the CAQH CORE Phase III 

operating rules for the health care 

electronic funds transfers (EFT) and 

remittance advice transaction (77 FR 

48008). For additional information 

about the operating rules and the 

designation of the operating rules 

authoring entity, we refer the reader to 

the July 8, 2011 interim final rule (77 FR 

40458) and the August 10, 2012 interim 

final rule (77 FR 48008). 

Specific to the HPID and challenges 

for its use with eligibility for a health 

plan and claim status transactions, the 

operating rules require that coverage 

description data elements be provided 

by a health plan in HIPAA transactions 

(CORE Phase I Operating Rule 154 and 

CORE Phase II Operating Rule 260: 

Eligibility & Benefits (270/271) Data 

Content Rule version 2.1.0 March 

2011).3 For example, health plans must 

support an explicit request for content 

related to 12 service types specified in 

the Phase I operating rules in the 

eligibility transaction, and the Phase II 

operating rule provides a list of 51 

service types for which health plans 

must provide some type of information 

to providers in both the eligibility and 

claim status responses. Providers need 

information about health plan coverage 

type along with a Payer ID to 

successfully determine: If an individual 

is eligible for services, what coverage 

can be provided, the co-payments that 

are due, and where to submit the final 

claim for processing. The operating 

rules combined with Payer IDs enable 

improved communication between 

health plans and providers. The HPID as 

adopted does not enable information 

about benefits, coverage, or payment, in 

part because it is only to be used for 

routing, and in part because it does not 

contain any ‘‘intelligence’’ about the 

health plan with which the coverage for 

the patient is associated. 

On May 3, 2017, the NCVHS held 

another hearing on the HPID to solicit 

industry input on the business needs for 

the HPID, its use in HIPAA transactions, 

and to confirm whether the testimony 

from the 2014 and 2015 NCVHS 

hearings was still valid. The questions 

for testifiers were as follows: 

• What identifiers are used today and 

for what purpose? 

• What business needs do you have 

that are not adequately met with the 

current scheme? 

• What benefits do you see that the 

current HPID model provides? Does it 

meet those needs? 

• What challenges do you see with 

the current HPID model? 

• What recommendations do you 

have going forward regarding health 

plan identifiers and the HPID final rule? 

At the May 3, 2017 NCVHS hearing, 

testimony was consistent with that from 

the February and June 2014 hearings 

and the May 2015 RFI. Health plans, 

providers, self-funded/Employee 

Retirement Income Security Act (ERISA) 

plans, clearinghouses, and vendors 

confirmed that the HPID did not satisfy 

a business need, did not provide other 

value, and its implementation would be 

costly and disruptive. 

Furthermore, industry indicated that 

it wished to continue using the Payer 

IDs instead of the HPID, and health 

plans and providers testified 

consistently that, even if required to use 

the HPID, they would not give up use 

of the Payer IDs. Importantly, as had 

been indicated in 2014 and 2015, 

multiple testifiers in 2017 reiterated that 

the health plan is the HIPAA covered 

entity that establishes the payment 

policies, but the payer is the entity that 

needs to be identified in the 

transactions. Organizations had 

evaluated the HPID policy and 

determined they could not use the 

HPID. Testifiers stated that it would be 

too confusing to make the change to 

using the HPID because it is not clear 

which of the components—CHP, SHP or 

OEID—should be used in HIPAA 

transactions in place of the Payer IDs. 

One testifier noted that if none of those 

entities is the payer, the transaction 

routing process will be disrupted. 

Furthermore, testifiers were concerned 

about the cost to map Payer IDs to 

HPIDs without knowing how many 

HPIDs an entity has obtained, especially 

across the many systems and 

organizations involved. Stakeholders 

informed HHS that mapping would be 

a complex endeavor that would impact 

all parties. Mapping could be made 

more difficult by the potential for other 

changes in the edits and rules that 

would be required for reporting, 

provider enrollment, payer distribution, 

rerouting, and other related tasks. 


amozie on DSK3GDR082PROD with PROPOSALS1
65122 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 

4 June 21, 2017 NCVHS Letter to Secretary Price 

from May 3, 2017 Hearing on the HPID. 

The May 2017 hearing provided 

additional confirmation of what HHS 

was previously told by health plan and 

provider testifiers in hearings. 

Moreover, those same testifiers were 

beginning to experience a positive 

return on investment due to use of the 

CAQH CORE operating rules adopted in 

July 2011. Both health plan and 

provider testifiers explained that 

operating rules supporting the eligibility 

and health care claim status transactions 

drive down the cost of using the HIPAA 

transactions—communication is faster, 

the contents of the transactions are more 

predictable, and the information more 

reliable. Based on industry testimony, 

use of Payer IDs in these transactions 

also appears to facilitate the provision of 

needed health plan information. 

Overall, there was near unanimity 

from testifiers that HHS should rescind 

the HPID and OEID. The oral and 

written testimony can be found on the 

NCVHS website at https://

www.ncvhs.hhs.gov/meeting-calendar/ 

agenda-of-the-may-3-2017-ncvhssubcommittee-on-standards-hearing-onhealth-plan-identifier-hpid/. 

In a June 21, 2017 letter to the 

Secretary,4 the NCVHS wrote that 

testifiers were unanimous regarding 

their preferred use of Payer IDs versus 

the HPID. The net of all the testimony 

was that while Payer IDs do not identify 

the health plan, they identify the payers, 

which is necessary to meet transaction 

routing needs. The NCVHS wrote that 

they heard from testifiers that the HPID 

interferes with the established processes 

and provides no value to industry. The 

NCVHS made three recommendations to 

HHS in this letter: 

• HHS should rescind its September 

2012 final rule which required health 

plans to obtain and use the HPID. 

• HHS should communicate its intent 

to rescind the HPID final rule to all 

affected industry stakeholders as soon 

as a decision is made. HHS should 

provide the applicable guidance on the 

effect a rescission may have on all 

parties involved. 

• HHS should continue with the 2014 

HPID enforcement discretion until 

publication of a final regulation 

rescinding the HPID final rule. 

For a full discussion of the key topics 

and recommendations from all of the 

NCVHS hearings from 2010 through 

2017, we refer readers to the text of the 

documents on the NCVHS website: 

https://www.ncvhs.hhs.gov/ 

subcommittees-work-groups/ 

subcommittee-on-standards/. 

Industry has provided substantial 

input to the NCVHS and HHS regarding 

the use of identifiers, the terminology 

surrounding identifiers, and routing of 

standard transactions. We acknowledge 

that we envisioned the HPID as being 

foundational to other industry uses in 

the future, though we did not 

specifically describe these uses in the 

September 2012 final rule. Given the 

uncertainty and confusion about the 

HPID framework and enumeration, we 

believe it would be useful to reassess 

any future standard health plan 

identifier with additional input from 

industry. Several testifiers stated that 

any use case for a health plan identifier 

should be clearly defined in advance, 

and that ample opportunity for public 

comment be made available, and we 

agree that public input has often been 

useful for assessing complex concepts. 

We will consider options for industry 

engagement in the future. 

The OEID was intended to identify 

entities that are not health plans, health 

care providers, or individuals. As 

specified in 45 CFR 162.514, these other 

entities are not required to obtain an 

OEID, but may obtain one if they need 

to be identified in covered transactions. 

During the outreach period in 2013, 

covered entities submitted questions 

about the enumeration, purpose, and 

use of the OEID. Commenters asked 

about its value in their responses to the 

2015 RFI. In general, the industry 

continued to seek greater specificity and 

definitive information about uses for the 

OEID. 

To date, a total of 99 OEIDs have been 

assigned. None of the industry surveys 

conducted to date have collected data 

on the use of the OEID in HIPAA 

transactions, and none of the testifiers 

or commenters requested that it be 

retained for future use. 

III. Provisions of the Proposed 

Regulations 

As noted previously, the HPID and 

OEID were adopted in the September 

2012 final rule under the statutory 

authority of HIPAA and the Affordable 

Care Act. However, as we describe in 

this section of this proposed rule, we 

now believe, based on recommendations 

from the NCVHS and overwhelming and 

persistent industry input, the HPID and 

OEID do not, and cannot, serve the 

purpose for which they were adopted. 

Therefore, this rule proposes to remove 

Subpart E—Standard Unique Health 

Identifier for Health Plans at 45 CFR 

162, as well as the definitions of 

‘‘Controlling health plan’’ (CHP) and 

‘‘Subhealth plan’’ (SHP) at 45 CFR 

162.103. 

Two primary areas of industry 

concern emerged from the May 2015 

RFI. These concerns were emphatically 

repeated in all the post-final rule 

industry feedback, through direct 

inquiries to HHS and NCVHS hearings 

testimony and recommendations. 

Industry has developed best practices 

for use of Payer IDs for purposes of 

conducting the HIPAA transactions. The 

adopted HPID does not have a place in 

these transactions, and from industry’s 

perspective, does not facilitate 

administrative simplification. 

We now better understand the 

significance of providers being able to 

identify the payer in a HIPAA 

transaction. The provider needs to know 

which organization should receive an 

inquiry about a patient’s eligibility for 

services, or which entity will receive the 

health care claim transactions. The 

organization that needs to be identified 

in transactions is the payer, rather than 

the health plan. Industry has clearly 

communicated that they are 

successfully routing transactions using 

the various Payer IDs, and cannot use 

the HPID. Payers often contract with 

many health plans or own a network of 

health plans which operate in different 

geographic regions. In their letters and 

testimony, payers maintained that the 

process of determining how to designate 

and enumerate the health plans as CHPs 

or SHPs was a significant challenge. 

Many organizations were concerned 

about being able to accurately conduct 

what they deemed a complicated 

analysis to determine corporate entity 

ownership and organizational 

relationships, and make the right 

decisions about enumeration. According 

to health care providers, their 

information exchange systems are 

programmed to identify the payers in 

the transactions, not the individual 

health plan. Once enumeration was 

complete, neither the payers nor the 

providers were confident that the 

mapping would be accurate. Regardless 

of the enumeration, according to 

testimony and comments, requiring 

covered entities to use the HPID in 

HIPAA transactions would not have 

addressed any remaining routing 

challenges, provided information about 

the services covered under a health 

plan’s benefit package, or allowed for a 

higher level of automation for health 

care provider offices, particularly for 

provider processing of billing and 

insurance-related tasks, eligibility 

responses from health plans, and 

remittance advice that describes health 

care claim payments. 

Likewise, when we adopted the OEID, 

we believed that because entities other 

than health plans were identified in 


amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 65123 

HIPAA transactions in a similar manner 

as health plans, establishing the OEID 

would increase efficiency. The few 

comments we received on the OEID in 

any forum have led us to believe that 

the identifier is not useful or necessary, 

and that the fields where the OEID 

would go in the HIPAA transactions can 

be successfully populated using other 

numbers such as the TIN, EIN, or North 

American Industry Classification 

System code from the NAIC. Similar to 

the HPID, we now understand that 

providing another data element for other 

entities does not add value for 

industry’s business processes. 

Second, it would be a costly, 

complicated, and burdensome 

disruption for the industry to have to 

implement the HPID because it would 

require mapping existing Payer IDs to 

HPIDs. This process was perceived as 

complicated, with the potential for 

wide-scale misrouting of claims and 

other transactions. 

We also believe it is appropriate to 

remove the definitions of controlling 

health plan (CHP) and subhealth plan 

(SHP) at 45 CFR 162.103. Those terms 

were established in the September 2012 

final rule in association with the HPID 

requirements. Because the two terms are 

integrally related to the HPID 

requirements, we believe they would 

have no application if we finalize our 

proposal to rescind the HPID. 

Finally, should we finalize this 

proposal to rescind the HPID and OEID, 

rather than having each entity 

deactivate their HPIDs and OEIDs, we 

are proposing that we would deactivate 

each HPID and OEID record in the 

Health Plan and Other Entity 

Enumeration System (HPOES) on behalf 

of each enumerated entity, and notify 

the manager of record at the current 

email address in the system. We 

propose that HHS would store the 

numbers for 7 years in accordance with 

federal record keeping requirements and 

that HHS would not regulate any actions 

entities may take with their existing 

HPID identifiers or their use. We 

propose that entities that acquired 

HPIDs and OEIDs would be free to 

retain and use these identifiers at their 

own discretion. 

There are two legislative enactments 

that require us to adopt a standard 

unique health plan identifier, and in 

this proposed rule we have provided a 

history of our efforts to do so. We will 

continue to work with industry on other 

solutions to meet those requirements, 

and we remain open to industry and 

NCVHS discussion and 

recommendations for an appropriate use 

case that might eliminate or reduce 

costs and burden on covered entities. 

We welcome comments on these 

proposals. 

IV. Collection of Information 

Requirements 

This document does not impose 

information collection requirements, 

that is, reporting, recordkeeping or 

third-party disclosure requirements. 

Consequently, there is no need for 

review by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995 (PRA) 

(44 U.S.C. 3501 et seq.). 

However, it must be noted that the 

information collection request (ICR) 

associated with the HPID was 

previously approved under OMB 

control number 0938–1166 and 

subsequently expired May 31, 2016. 

HHS incurred a violation of the PRA 

when the ICR expired. As stated earlier 

in this document, we are proposing to 

rescind the adoption of the HPID and 

the other entity identifier (OEID) along 

with the implementation specifications 

and requirements for the use of the 

HPID and OEID; therefore, we will not 

be seeking to reinstate the ICR 

previously approved under 0938–1166. 

V. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble; and when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

VI. Regulatory Impact Statement 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Act, section 

202 of the Unfunded Mandates Reform 

Act of 1995 (March 22, 1995; Pub. L. 

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), the 

Congressional Review Act (5 U.S.C. 

804(2)), and Executive Order 13771 on 

Reducing Regulation and Controlling 

Regulatory Costs (January 30, 2017). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A Regulatory Impact Analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any 1 year). 

This rule does not reach the economic 

threshold and thus is not considered a 

major rule, thus we are not required to 

prepare an RIA. We discuss our 

approach to Executive Order 12866 and 

demonstrate that this rule would not 

have economically significant effects 

because it would not only remove 

requirements perceived by industry as 

burdensome, but it would rescind a 

regulation that has effectively never 

been implemented by industry. We have 

described in detail the history and 

impact in the preamble, and provide 

more information later in this section. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $7.5 million to $38.5 

million in any 1 year. Individuals and 

states are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because we have 

determined, and the Secretary certifies, 

that this proposed rule would not have 

a significant economic impact on a 

substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare an RIA if a rule 

may have a significant impact on the 

operations of a substantial number of 

small rural hospitals. This analysis must 

conform to the provisions of section 603 

of the RFA. For purposes of section 

1102(b) of the Act, we define a small 

rural hospital as a hospital that is 

located outside of a Metropolitan 

Statistical Area for Medicare payment 

regulations and has fewer than 100 

beds. We are not preparing an analysis 

for section 1102(b) of the Act because 

we have determined, and the Secretary 

certifies, that this proposed rule would 

not have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2018, that threshold is approximately 

$150 million. This rule would have no 

consequential effect on state, local, or 


amozie on DSK3GDR082PROD with PROPOSALS1
65124 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 

tribal governments or on the private 

sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on state and local 

governments, preempts state law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on state or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

Executive Order 13771, titled 

Reducing Regulation and Controlling 

Regulatory Costs, was issued on January 

30, 2017, and requires that the costs 

associated with significant new 

regulations ‘‘shall, to the extent 

permitted by law, be offset by the 

elimination of existing costs associated 

with at least two prior regulations.’’ 

This proposed rule is expected to be an 

E.O. 13771 deregulatory action. Details 

on the estimated cost savings of this 

proposed rule can be found in the rule’s 

economic analysis. 

A. Cost and Savings 

As stated previously, and shown in 

this section, we estimate that this 

proposed rule would not have 

economically significant effects on 

industry. We refer readers to the 

September 2012 final rule where we 

made several references to the large 

measure of uncertainty in the 

assumptions of our original impact 

analysis. In some cases we indicated 

that the HPID would be ‘‘foundational’’ 

to subsequent activities such as the 

automation of the Coordination of 

Benefits (COB) process (77 FR 54705). 

We also stated that the costs and 

benefits associated with the HPID were 

applicable only to entities that are 

directly involved in sending or 

receiving HIPAA transactions and that 

the cost estimates were based on the 

number of health plans that would use 

the HPID in the transactions, though we 

did not have data on how many health 

plans were actually identified in HIPAA 

transactions, as opposed to ‘‘other 

entities’’ that were, instead, identified in 

HIPAA transactions (77 FR 54703). 

Therefore, we said that we had no 

assurance of how many health plans 

would use the HPID in standard 

transactions, and took a conservative 

approach to the costs to health plans. 

We were aware that covered entities 

were using Payer IDs to identify the 

health plan or the responsible entity in 

transactions. Though a few commenters 

did not agree with the methodology we 

chose for our cost analysis in the 

proposed rule, we did not change it in 

the September 2012 final rule. 

For the estimated cost and benefits of 

implementation and use of HPID, we 

reiterate the narrative from the April 

2012 proposed rule: The discussion 

needs to be understood in the context of 

the initial belief that the HPID would be 

foundational to other administrative 

simplification initiatives, both those 

initiated by industry and those 

regulated by State or Federal 

governments. In the proposed and final 

rules published in 2012, we suggested 

that if other initiatives did not follow, 

then the HPID would likely have little 

substantive impact (77 FR 22977). Since 

we essentially imposed a delay on 

implementing the HPID through the 

enforcement discretion, its use has not 

had an impact on other administrative 

simplification initiatives. Rather, 

industry has made its own operational 

improvements by other means. 

In the April 2012 proposed rule, we 

stated that the possible cost and benefit 

impacts are reflective of the uncertainty 

inherent in the health care industry. 

However, to illustrate the foundational 

aspects of the HPID, we estimated an 

increase in the use of two transactions, 

eligibility for a health plan and health 

care claim status, in the range of 1 to 2 

percent per year, for 10 years, starting in 

2015. The increase could be attributable 

to the implementation of the HPID (77 

FR 22977). We also estimated a 1 to 3 

percent increase in the use of the 

electronic health care payment and 

remittance advice transaction 

attributable to implementation of the 

HPID because the routing of that 

transaction is especially important for 

the payment process. Yet, despite HPID 

compliance having been under 

enforcement discretion, all three of 

these transactions have seen modest 

increases in use. Thus, our assumption 

that an increase in the use of those 

transactions could be attributed to the 

HPID was incorrect. As we have 

explained elsewhere in this proposed 

rule, some of the increases (and 

therefore savings) may be due to use of 

the adopted operating rules and some 

may be due to improved system 

capabilities. CAQH conducts a study 

each year to assess the utilization of the 

transactions and operating rules, and 

tries to identify savings opportunities 

from their use. The most recent report 

from 2016 shows progressive adoption 

of the eligibility for a health plan, health 

care claim status, and health care 

electronic funds transfers (EFT) and 

remittance advice transactions. The 

transactions use Payer IDs for routing 

and other payer and health plan 

identification purposes. We 

acknowledge that while this study only 

includes those payers, plans, and 

providers that participated, it is 

nonetheless indicative of a positive 

trend in the utilization rate without use 

of the HPID. Table 1 shows the steady 

increase in industry’s use of three 

transactions over a period of 4 years, 

which includes 2 years where HPID rule 

was in effect but compliance action was 

not taken due to the ongoing 

enforcement discretion. 

TABLE 1—CAQH STUDY PARTICIPANT ADOPTION RATE OF CERTAIN STANDARD TRANSACTIONS * 

Claim status 

(fully electronic) 

Eligibility 

(%) 

Remittance advice 

(%) 

2012 ......................................................................................................... 48 65 NA 

2013 ......................................................................................................... 50 65 NA 

2014 ......................................................................................................... 57 71 51 

2015 ......................................................................................................... 63 76 55 

* CAQH 2016 Efficiency Index https://www.caqh.org/explorations/2016-caqh-index-report. 

We do not attempt to attribute other 

cost savings to this proposed rule 

because we do not have industry data 

regarding expenditures, if any, for 

anticipated system implementation and 

transition costs such as software and 

software development, testing, training, 

and other conversion costs. To the best 

of our knowledge, expenditures have 

not been made to prepare for use of the 

HPID during the enforcement discretion 

period, nor have new contracts been 

executed for the services of software 

system vendors, billing companies, 

transaction vendors, and/or health care 

clearinghouses to facilitate the 

transition to the HPID. We invite 

industry comment on our assumptions. 


amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 65125 

5See Robinson, James C., ‘‘Consolidation and the 

Transformation of Competition in Health 

Insurance,’’ Health Affairs, 23, no.6 (2004):11–24; 

‘‘Private Health insurance: Research on Competition 

in the Insurance Industry,’’ U.S. Government 

Accountability Office (GAO), July 31, 2009 (GAO– 

09–864R); American Medical Association, 

‘‘Competition in Health Insurance: A 

Comprehensive Study of US Markets,’’ 2008 and 

2009. 

1. Costs 

Certain funds have already been 

expended and cannot be recouped by 

the federal government and by those 

organizations that have already applied 

for and obtained an HPID or OEID. The 

federal government spent $1.5 million 

to build the components of the 

enumeration system specific to the 

HPID and OEID, and currently spends 

$45,000 annually for operations and 

maintenance. We cannot account for the 

cost of legal personnel that may have 

been expended in conducting the 

analysis for the number or type of HPIDs 

or OEIDs that may have been acquired. 

2. Savings 

As a result of our proposal to rescind 

the HPID and OEID, we believe there 

would be modest cost avoidance 

(savings). First, we assume there will be 

no costs for enumeration of new health 

plans or other entities while the 

September 2012 final rule remains in 

effect due largely to the ongoing 

enforcement discretion, and because 

there is no growth in the number of 

overall health plans. We base this 

assumption on data from our April 2012 

proposed rule, in which we reported 

that from 2013 to 2018, industry trends 

indicate that the number of health plans 

will remain constant, or even decrease.5

Our calculations reflected that there 

would be no statistically significant 

growth in the number of health plans or 

other entities and we calculated zero 

growth in new applications (77 FR 

22971). We acknowledge that some of 

our assumptions in the April 2012 

proposed rule may be outdated, and 

welcome industry feedback on our use 

of those assumptions for purposes of 

this analysis. 

In the April 2012 proposed rule, we 

estimated that there would be up to 

15,000 entities that would be required 

to, or would elect to, obtain an HPID or 

OEID. We based this number on the data 

in Chart 2 from the April 2012 proposed 

rule which is republished here for 

reference (77 FR 22970). 

TABLE 2—NUMBER AND TYPE OF ENTITIES THAT WERE EXPECTED TO OBTAIN AN HPID OR OEID 

Type of entity Number of 

entities 

Self-insured group health plans, health insurance issuers, individual and group health markets, HMOs including companies offering Medicaid managed care ........................................................................................................................................................ * 12,000 

Medicare, Veterans Health Administration, Indian Health Service ..................................................................................................... ** 1,827 

TriCare and State Medicaid programs ................................................................................................................................................ 60 

Clearinghouses and Transaction vendors ........................................................................................................................................... *** 162 

Third Party Administrators ................................................................................................................................................................... **** 750 

Total .............................................................................................................................................................................................. 15,000 

* Report to Congress: Annual Report on Self-Insured Group Health Plans,’’ by Hilda L. Solis, Secretary of Labor, March 2011. 

** Patient Protection and Affordable Care Act; Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment, 2011 Federal Register 

(Vol. 76), July, 2011,’’ referencing data from www.healthcare.gov. 

*** Health Insurance Reform; Modifications to the Health Insurance Portability and Accountability Act (HIPAA) Electronic Transaction Standards; Proposed Rule http://edocket.access.gpo.gov/2008/pdf/E8-19296.pdf, based on a study by Gartner. 

**** Summary of Benefits and Coverage and the Uniform Glossary; Notice of Proposed Rulemaking http://www.gpo.gov/fdsys/pkg/FR-2011-08- 

22/pdf/2011-21193.pdf. 

As we stated earlier in this proposed 

rule, slightly fewer than 11,000 entities 

applied for and obtained an HPID 

immediately following publication of 

the September 2012 final rule. The cost 

for enumeration was explained in the 

April 2012 proposed rule (77 FR 22970). 

Health plans and other entities were 

required to complete the application or 

update form online through the Health 

Plan and Other Entity Enumeration 

System (HPOES). Any changes to a 

health plan’s information are submitted 

to the same system. Most applications 

were received shortly after publication 

of the September 2012 final rule, 

subsequent to which the application 

rate slowed down considerably. 

Between May 2016 and May 2017, 156 

applications for HPIDs were received. 

The HPID and OEID application is a 

one-time burden, and our cost savings 

estimate for this proposed rule is based 

on the elimination of that burden. For 

purposes of this impact analysis, we 

make an estimate of the elimination of 

that burden. We have proposed a 

method to help industry implement this 

proposal in a cost effective way if it is 

finalized, by HHS deactivating the 

HPIDs and OEIDs. The cost savings are 

estimated as follows: We estimated that 

it would take 30 minutes to complete 

the on-line application form or make 

updates, and used an hourly labor rate 

of approximately $23/hour, the average 

wage reported for professional and 

business services sector, based on data 

from the Department of Labor, Bureau of 

Labor Statistics, June 2011, ‘‘Average 

hourly and weekly earnings of 

production and nonsupervisory 

employees (1) on private nonfarm 

payrolls.’’ (https://www.bls.gov/ 

news.release/empsit.t24.htm). If we 

increase the rate to account for 2017 

dollar values (March 2017 table), to $31/ 

hour, this represents a unit cost of 

$15.00 per HPID or OEID application. 

For the initial enumeration of 11,000 

entities, this would have been $165,000. 

Rather than having each entity 

individually deactivate their HPIDs and 

OEIDs if this proposed rule is finalized, 

HHS is proposing that it would 

deactivate each HPID and OEID record 

in the HPOES and notify the manager of 

record at the current email address 

available in the system. The HPIDs and 

OEIDs would be stored securely in the 

HHS record system for 7 years. There 

would be no further cost to the 

enumerated entities. We believe that the 

cost to HHS will not be substantial for 

this task because it will be conducted as 

part of regular staff activities. 

We also estimated the potential 

savings for those entities that might 

have already updated their HPID or 

OEID records before the HHS 

deactivation and based our assumption 

on the actual number of updates to the 

HPOES system since 2013. Each year, an 

average of 95 records, or 1 percent of 


amozie on DSK3GDR082PROD with PROPOSALS1
65126 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 

valid applications have been 

deactivated or updated. Using the same 

formula, if 1 percent of the current 

organizations (110 entities) update their 

HPIDs/OEIDs, the cost would be $1,650 

(110 × $15). To account for any increase 

in wages and benefits, we multiply this 

by two (2), and arrive at a sum of 

$3,300. This proposed rule might result 

in savings of $3,300 if finalized. We 

typically provide ranges in an impact 

analysis, and so provide a high range of 

3 percent as well. Therefore, our 

calculation means 330 entities would 

make updates, for a total high end 

savings estimate of $9,900 (330 × $15) 

× 2. However, should this proposed rule 

be finalized, those updates would not be 

necessary and organizations that have 

obtained HPIDs or OEIDs would not 

need to take any action. See Table 3 for 

a summary of the savings for updates 

that would not have to be made to 

HPIDs and OEIDs after 2019. 

We welcome industry feedback on our 

assumptions, estimates, and the 

deactivation of the HPID and OEIDs. 

3. Summary of Costs and Savings for the 

Proposal To Rescind the HPID 

TABLE 3—SAVINGS (COST AVOIDANCE)—UPDATES THAT WOULD NOT HAVE TO BE MADE TO HPIDS AND OEIDS AFTER

2019 

Savings 

2019 

2020 2021 2022 2023 2024 2025 2026 

1% 3% 

Updates to enumeration .............. $3,300 $9,900 $0 $0 $0 $0 $0 $0 $0 

Total ...................................... 3,300 9,900 

D. Regulatory Review Costs 

If regulations impose administrative 

costs on private entities, such as the 

time needed to read and interpret a 

proposed rule, we should estimate the 

cost associated with the review of our 

documents. We assume that 

commenters on this proposed rule will 

be representative of HIPAA covered 

entities and their business associates— 

primarily health plans, health care 

clearinghouses, health care providers 

and vendors. However, it is not possible 

to accurately quantify the number of 

entities, or the number of individuals 

within each organization who will 

participate in reviewing the proposed 

rule. Our best estimate is based on the 

number of organizations who have 

submitted comments on previous 

regulations related to HIPAA standards 

and operating rules, and organizations 

who have participated in NCVHS 

hearings. HHS has received comments 

from approximately 100 to 150 

commenters on past HIPAA regulations, 

and there are a similar number of 

organizations who either testify or listen 

to the NCVHS hearings. We assume this 

number will hold true for this proposed 

rule. We acknowledge that this 

assumption may result in an 

understatement or overstatement of the 

cost calculation for the review of this 

proposed rule. We also recognize that 

this proposed rule will affect covered 

entities in different ways, however, both 

health plans and health care providers 

have provided feedback on this topic in 

the past, and may have a positive or 

negative response to the proposal. For 

purposes of our estimate we assume that 

each reviewer reads approximately 50 

percent of the proposed rule. Using the 

wage information from the BLS for 

Computer and Information Systems 

managers for insurance carriers (Code 

11–3021), we estimate that the cost of 

reviewing the proposed rule is $70.07 

per hour, including overhead and fringe 

benefits (https://www.bls.gov/oes/ 

current/oes113021.htm). Assuming an 

average reading speed, we estimate that 

it will take approximately 2.5 hours for 

these individuals to review half of the 

proposed rule. We estimate that 

multiple individuals from 150 

organizations will read the proposed 

rule, and that the key readers are likely 

the information systems manager and 

legal staff. We selected the information 

systems manager for purposes of this 

analysis. For each information systems 

manager that reviews the rule, the 

estimated cost is $175.17 (2.5 hours × 

$70.7). Therefore, we estimate that the 

total cost of reviewing this proposed 

rule is $175 × 150 reviewers = $26,250. 

Though we acknowledge that our 

estimate for the total number of 

reviewers may be high, we are trying to 

provide an estimate for the burden of 

reviewing our proposal and welcome 

feedback if appropriate. 

E. Alternatives Considered 

We are not required to provide 

alternatives for our proposal because we 

are not providing a full regulatory 

impact analysis, and we have fully 

discussed our reasons for proposing to 

rescind the HPID and OEID throughout 

this proposed rule. However, we did 

consider several alternatives before 

making this proposal, including the 

effects of these alternatives. We are 

providing our rationale for not selecting 

these options in accordance with OMB 

Circular A–4, which directs agencies to 

consider a range of regulatory and nonregulatory alternatives, including 

different choices defined by statute, 

different compliance dates, marketoriented approaches, and different 

enforcement methods, to name a few. 

We considered, but did not propose, 

to allow covered entities to apply for 

and use the HPID or OEID voluntarily 

between willing trading partners. We 

rejected this option because there has 

been no demand for the use of these 

identifiers. Industry has clearly stated 

that there is no business use case for the 

HPID and OEID, and there is no 

anticipated benefit or savings from its 

use in the HIPAA transactions or for 

other purposes. An entirely voluntary 

model using the HPID and OEID would 

likely result in confusion in its 

implementation and impose costs on 

trading partners who did not choose to 

implement the two identifiers. We also 

rejected this option because it would be 

inconsistent with the statutory 

requirement to adopt an identifier for 

health plans that would be required for 

use. 

We considered retaining the option of 

allowing health plans to obtain an HPID 

and enumerate as a CHP or SHP for their 

own systems, and use the identifier for 

their own purposes. Given the low 

enumeration numbers over the past 4 

years, we decided not to pursue this 

alternative because we believe it would 

be confusing to the industry to enable 

enumeration without providing federal 

guidance on the use of the HPID. We 

determined that it was best to rescind 

the entire scheme (HPID, OEID, CHPs, 

and SHPs), and leave room to hear from 

industry about further business changes 

that may inform specific needs in a 

future standard unique health plan 

identifier. 

At the May 3, 2017 NCVHS hearing, 

two commenters suggested that HHS 

consider alternative uses of the HPID, 

such as placing the HPID on health 

insurance identification cards to assist 


amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules 65127 

with better understanding of patient 

coverage and benefits (including its use 

in patient medical records to help 

clarify a patient’s healthcare benefit 

package). A commenter stated that the 

HPID could be used for enforcement or 

certification of compliance of health 

plans. The adoption of a standard 

unique health plan identifier is required 

by statute, and HHS remains open to 

industry and NCVHS discussion and 

recommendations for appropriate use 

case(s) that meet the requirements of 

administrative simplification and will 

explore options for a more effective 

standard unique health plan identifier 

in the future. 

We solicit and welcome comments on 

our proposal, on the alternatives we 

have identified, and on other 

alternatives that we could consider, as 

well as on the costs and benefits of a 

health plan identifier. 

In accordance with the provisions of 

Executive Order 12866, this proposed 

rule was reviewed by the Office of 

Management and Budget. 

List of Subjects in 45 Part 162 

Administrative practice and 

procedures, Electronic Transactions, 

Health facilities, Health insurance, 

Hospitals, Medicaid, Medicare, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Department of Health and 

Human Services proposes to amend 45 

CFR part 162 to read as follows: 

PART 162—ADMINISTRATIVE 

REQUIREMENTS 

■ 1. The authority citation for part 162 

is revised to read as follows: 

Authority: 42 U.S.C. 1320d–1320d–9 and 

secs. 1104 and 10109 of Pub. L. 111–148, 124 

Stat 146–154 and 915–917. 

§ 162.103 [Amended] 

■ 2. Section 162.103 is amended by 

removing the definitions of ‘‘Controlling 

health plan (CHP)’’ and ‘‘Subhealth plan 

(SHP)’’. 

Subpart E [Removed and Reserved] 

■ 3. Part 162 is amended by removing 

and reserving Subpart E. 

Dated: December 6, 2018. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2018–27435 Filed 12–18–18; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 17 

[4500090022] 

Endangered and Threatened Wildlife 

and Plants; 12-Month Findings on 

Petitions to List 13 Species as 

Endangered or Threatened Species 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Notice of 12-month petition 

findings. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service (Service), announce 12- 

month findings on petitions to list 13 

species as endangered or threatened 

species under the Endangered Species 

Act of 1973, as amended (Act). After a 

thorough review of the best available 

scientific and commercial information, 

we find that it is not warranted at this 

time to list the Cedar Key mole skink, 

Florida sandhill crane, Fremont County 

rockcress, Frisco buckwheat, Ostler’s 

peppergrass, Frisco clover, 

MacGillivray’s seaside sparrow, Ozark 

pyrg, pale blue-eyed grass, San Joaquin 

Valley giant flower-loving fly, striped 

newt, Tinian monarch, and Tippecanoe 

darter. However, we ask the public to 

submit to us at any time any new 

information that becomes available 

relevant to the status of any of the 

species mentioned above or their 

habitats. 

DATES: The findings in this document 

were made on December 19, 2018. 

ADDRESSES: Detailed descriptions of the 

basis for each of these findings are 

available on the internet at http://

www.regulations.gov under the 

following docket numbers: 

Species Docket No. 

Cedar Key mole skink .................................................................................................................................................... FWS–R4–ES–2015–0047 

Florida sandhill crane ..................................................................................................................................................... FWS–R4–ES–2018–0099 

Fremont County rockcress ............................................................................................................................................. FWS–R6–ES–2018–0049 

Frisco buckwheat, Ostler’s peppergrass, and Frisco clover .......................................................................................... FWS–R6–ES–2018–0100 

MacGillivray’s seaside sparrow ...................................................................................................................................... FWS–R4–ES–2018–0067 

Ozark pyrg ...................................................................................................................................................................... FWS–R4–ES–2018–0101 

Pale blue-eyed grass ...................................................................................................................................................... FWS–R1–ES–2018–0102 

San Joaquin Valley giant flower-loving fly ...................................................................................................................... FWS–R8–ES–2015–0023 

Striped newt .................................................................................................................................................................... FWS–R4–ES–2018–0065 

Tinian monarch ............................................................................................................................................................... FWS–R1–ES–2018–0103 

Tippecanoe darter ........................................................................................................................................................... FWS–R5–ES–2018–0066 

Supporting information used to 

prepare these findings is available for 

public inspection, by appointment, 

during normal business hours, by 

contacting the appropriate person, as 

specified under FOR FURTHER

INFORMATION CONTACT. Please submit any 

new information, materials, comments, 

or questions concerning these findings 

to the appropriate person, as specified 

under FOR FURTHER INFORMATION

CONTACT. 

FOR FURTHER INFORMATION CONTACT: 

Species Contact information 

Cedar Key mole skink ........................................ Jay Herrington, Field Supervisor, North Florida Ecological Services Field Office, 904–731– 

3191. 

Florida sandhill crane ......................................... Jay Herrington, Field Supervisor, North Florida Ecological Services Field Office, 904–731– 

3191. 

Fremont County rockcress ................................. Tyler Abbot, Project Leader, Wyoming Ecological Services Field Office, 307–772–2374, ext. 

231. 


amozie on DSK3GDR082PROD with PROPOSALS1