NRPM: Standard Health Care Provider Identifier. B. Introduction

05/07/1998

We assessed several strategies for determining the impact of the various standards that the Secretary will designate under the statute. We could attempt to analyze the costs and savings of each individual standard independently or we could analyze the costs and savings of all the standards in the aggregate. We chose to base our analysis on the aggregate impact of all the standards. Assessing the cost of implementing each standard independently would yield inflated costs. The statute gives health care providers and health plans 24 months (36 months for small health plans) to implement each standard after it is designated. This will give the industry flexibility in determining the most cost- effective way of implementing the standards. A health plan may decide to implement more than one standard at a time or to combine implementation of a standard with other system changes dictated by its own business needs. As a result, overall estimates will be more accurate than individual estimates.

Assessing the benefits of implementing each standard independently would also be inaccurate. While each individual standard is beneficial, the standards as a whole have a synergistic effect on savings. For example, the combination of the standard health plan identifier and standard claim format would improve the coordination of benefits process to a much greater extent than either standard individually. Clearly, the costs and benefits described in this impact analysis are dependent upon all of the rules being published at roughly the same time.

It is difficult to assess the costs and benefits of such a sweeping change with no historical experience. Moreover, we do not yet know enough about the issues and options related to the standards that are still being developed to be able to discuss them here. Our analysis, as a result, will be primarily qualitative and somewhat general. In order to address that shortcoming, we have added a section discussing specific issues related to the provider identifier standard. In each subsequent regulation, we will, if appropriate, include a section discussing the specifics of the standard or standards being designated in the regulation. In addition, we will update this analysis to reflect any additional cost/benefit information that we receive from the public during the comment period for the proposed rule. We solicit comments on this approach and on our assumptions and conclusions.