Administrative simplification

Eligibility and claim status


The Administrative Simplification provision under Section 1104 of the Patient Protection and Affordable Care Act (the Act) intends to improve the standards for electronic transactions mandated by the Health Insurance Portability and Accountability Act (HIPAA). The intent of this provision is to reduce administrative costs by adopting a set of operating rules for each transaction and to create as much uniformity in implementing electronic standards as possible.

Administrative simplification

It's Complicated: Administrative Simplification and the Affordable Care Act

The rules for Administrative Simplification govern the compliance by covered entities – health benefit plans, health care clearinghouses, and certain health care providers.

To date, the Department of Health and Human Services (HHS) released interim final rules (IFR) that govern compliance for eligibility and claim status and electronic funds transfer (EFT) and electronic remittance advice (ERA).

Health plan identifier and national provider identifier

A final rule adopted a 10-digit health plan identifier (HPID) for health plans to use in electronic HIPAA transactions. HIPAA transactions include: medical and dental claims and encounters, payment and remittance advice, claims status request and response, eligibility and benefit inquiry and response, benefit enrollment and disenrollment, referrals and authorizations, and premium payment.

On Oct. 31, 2014, the Centers for Medicare & Medicaid Services (CMS) announced a delay, until further notice, the regulations pertaining to health plan enumeration and use of the Health Plan Identifier (HPID) in HIPAA transactions. This delay applies to all HIPAA-covered entities (i.e., health care providers, health plans, and health care clearinghouses). Health plans apply for an HPID through the Centers for Medicare and Medicaid Services (CMS) . Third-party administrators cannot obtain an HPID for self-funded health plans. Fully insured customers are not required to obtain an HPID for their standalone fully insured medical plans.

The final rule also required certain individual health care providers, who previously were not required to do so, obtain and disclose a national provider identifier (NPI) in 2013.


ICD-10 refers to the International Classification of Diseases, 10th Revision developed by the World Health Organization. ICD-10 replaces ICD-9 codes used by physicians and health care professionals to record and identify diagnoses and procedures for purposes of claims payment and reporting. ICD-10 affects diagnosis and inpatient procedure coding; it does not affect CPT coding for outpatient procedures.

The transition to ICD-10 is significant and challenging for both payers and providers. The number of codes under ICD-10 increased dramatically. In total, the number increased from approximately 18,000 to 140,000 codes. Over time, a number of benefits from the ICD-10 implementation will emerge: improved payment accuracy, fewer rejected claims and improved disease management.

Electronic funds transfer and remittance advice transactions

On Jan. 5, 2012, HHS released an IFR addressing the standards for EFT and ERA transactions that a health plan must comply with to transmit payments to providers via EFT.

Today, with few exceptions, the electronic remittance advice and the health care payment/processing information are sent in different electronic formats through different networks, contain different data that have different business uses, and are often received by the health care provider at different times. The two transmissions must be "reassociated" or matched back together by the provider.

The HHS believes this issue can be alleviated by requiring that a single electronic file format be used by all health plans that transmit health care EFT to their financial institutions.

UnitedHealthcare is compliant under the requirements outlined in the IFR and continues to encourage providers to sign up for EFT and ERA which they can request at:

Eligibility and claim status

On July 8, 2011, the IFR outlined operating rules covering two electronic health care transactions:

  • Eligibility – verifying if a patient has sufficient coverage (e.g., benefit coverage, copays, base deductible and remaining deductible); and
  • Claim Status – the stage of a health care claim (pending, allowed, settled, denied, etc.) after it's submitted to a health insurance company.

UnitedHealth Group completed the CORE Phase I and II testing process that certifies that UnitedHealth Group can deliver more efficient and predictable patient-eligibility and claims-verification information to physicians, hospitals, physician offices and other care providers. UnitedHealth Group is the first health care organization to complete certification using the updated 5010 platform.

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