NRPM: Standard Health Care Provider Identifier. d. Enumerators

05/07/1998

Based on the analysis discussed earlier in the preamble, we assess the two most viable combinations of choices for the entities that would enumerate health care providers. We do not assess choices that permit large numbers of enumerators (for example, all health plans, educational institutions, professional associations) because these choices do not satisfy the critical programmatic requirements of maintaining a high degree of data quality and consistency and minimizing confusion for health care providers.

No matter which of the two enumeration options is chosen, certain costs and impacts would not vary.

  • We assume that the NPS would be used in both options to generate NPIs and serve as the central enumeration system and database. We began to develop the NPS for Medicare use, and this effort, which was funded by HCFA, is now nearing completion. As the NPS becomes national in scope, we estimate that the cost of maintaining the NPS software, hardware, and telecommunications, and operating a Help Desk to deal with user questions, would cost approximately $10.4 million over the first three years of operation and approximately $2.9 million per year thereafter. Roughly half of these costs are attributable to telecommunications expenses. This analysis presumes the availability of Federal funds to support the development and operations of the NPS. However, we are seeking comments on how the NPS could be funded once it becomes national.
  • We further assume that, in both options, the same implementation strategy of loading the NPS database using health plans’ existing prevalidated files will be utilized to the extent possible. This would reduce costs by not repeating the process of soliciting, receiving, controlling, validating and keying applications from health care providers that have already been enumerated by a trusted source. For example, we would use existing Medicare provider files to initially load the NPS database. The majority of work to reformat and edit these files has already been completed.

We estimate that approximately 1.2 million current health care providers and 30,000 new health care providers annually would require NPIs because they conduct HIPAA transactions.

An additional 3 million health care providers (120,000 new health care providers annually) do not conduct HIPAA transactions, but they may choose to be enumerated at some future time. We refer to these health care providers as “non-HIPAA-transaction health care providers” (see section 4. Enumeration Phases of this preamble). These health care providers would be primarily individual practitioners such as registered nurses and pharmacists who perform services in institutions and whose services are not billed by the institution. More research is required on the time frame and process for enumerating these health care providers.

Based on Medicare carriers’ costs, we have estimated that the average cost to enumerate a health care provider should not exceed $50. Enumeration activities would include assisting health care providers and answering questions, accepting the application for an NPI; validating as many of the data elements as possible at the point of application to assure the submitted data are accurate and the application is authentic; entering the data into the NPS to obtain an NPI for the health care provider; researching cases where there is a possible match to a health care provider already enumerated; notifying the health care provider of the assigned NPI; and entering updated data into the NPS when notified by the health care provider. The cost of processing a data update is not known, and for purposes of this analysis we are assuming an average cost of $10 per update transaction, and that 5 percent per year of these health care providers on file would have updated data. However, we estimate that approximately 15 percent of health care providers that do not conduct business with Federal health plans or Medicaid would require updates each year. These health care providers may be unfamiliar with the terminology for some of the information they need to provide in order to be enumerated; thus, they may need to correct errors they could have made in completing the applications for NPIs or may have a need to change some of that information for other reasons. The per transaction cost would be lower if practice location addresses and membership in groups were not collected (see section IV., Data, and section IX.E., Maintenance of the Database, of this preamble) and if enumerators were already validating data as part of their own enrollment processes. The number of updates would also be affected by the practice location and group membership issues because these data are more volatile than demographic data (see IV., Data, and IX.E., Maintenance of the Database, of this preamble).

For a similarly sized commercial numbering system that uniquely identifies corporations and assigns unique identifiers, we have received independent estimates from Dun & Bradstreet (D&B) of $7 per enumeration and $3 per update. The D&B estimates are based on the cost of assigning and maintaining the Data Universal Numbering System (D-U-N-S) number. The D-U-N-S number is a nine- digit, non-indicative number assigned to each record in D&B’s file. It uses a modulus 10 check digit in the ninth position. Over 47 million D-U-N-S numbers have been assigned, worldwide, with 22 million attributed to locations in the United States. D&B uses the D-U-N-S number to enumerate businesses, including commercial sites, sole proprietorships, cottage industries, educational institutions, not-for-profits, and government entities, but does not maintain records on private individuals. D&B estimates an average cost of $7 to add a record to its database and assign it a unique record identifier. To establish a record and ensure uniqueness, D&B requires the entity's legal name, any "doing business as" names, physical address, telephone number, chief executive, date started, line of business, number of employees and relationship(s) with other business entities. D&B runs a daily computer process to audit all records added during the day and extracts any that may be duplicates for research by an analyst. Updates to each record are estimated at approximately $3 but can run as high as $30 per year for very robust database entries, some of which contain 1500 different data elements. The D&B estimates may be understated for our purposes because the four to six data elements used to uniquely identify the enumerated corporations do not require verification. We welcome comments on which data elements are required to uniquely identify health care providers (individuals, groups, and organizations), on whether verification of the data is necessary for purposes of enumeration, and on estimates of the cost to enumerate and update that minimum data set. We understand that the cost would be lower if the number and complexity of the data elements were reduced, but this cost must be balanced against the level of confidence that can be placed in the uniqueness of the health care providers identified. Specific consideration of these tradeoffs in submitted comments will be very helpful.

The $50 estimated average cost to enumerate a health care provider is an upper limit. The cost would decrease significantly if the second data alternative is selected (see section IV.B., Practice Addresses and Group/Organization Options, of this preamble). Under this alternative, the NPS would capture only one practice address for an individual or organization provider. It would not assign location codes. The NPS would not link the NPI of a group provider to the NPIs of individuals who are members of the group. Costs would decrease because we would collect significantly less data at the time of enumeration, and the data that would be collected would not need to be updated very frequently. Recent consultations with the industry reveal a growing consensus for this alternative.

Table 5 below provides estimates as to the cost of each enumeration option for start-up and outyear, with Federal, State, and private costs, for HIPAA-transaction and non-HIPAA-transaction health care providers, and the Federal costs of the NPS. We define “start-up” as the first 3 years during which the NPS becomes operational nationally and the bulk of the health care providers requiring NPIs are enumerated. “Outyear” would be each subsequent year, in which the majority of actions would be enumerations of new health care providers and provider updates. Assumptions follow the table.

Table 5 - Enumeration Costs: Federal, State, and Private

ENUMERATION COSTS: Federal, State, and Private

COSTS TO:

START-UP COSTS
HIPAA- TRANSACTION PROVIDERS

OUTYEAR COSTS
HIPAA- TRANSACTION PROVIDERS

START-UP COSTS
NON-HIPAA- TRANSACTION PROVIDERS

OUTYEAR COSTS
NON-HIPAA- TRANSACTION PROVIDERS

OPTION 1 -- REGISTRY

Federal for NPS

10,400,000

2,900,000

   

Federal for non-HIPAA- transaction health care providers

-

-

165,000,000

7,500,000

Federal

64,560,000

2,280,000

-

-

State

0

0

-

-

Private

0

0

-

-

TOTAL

74,960,000

5,180,000

   
 

OPTION 2 -- COMBINATION OF FEDERAL HEALTH PLANS, MEDICAID STATE AGENCIES, AND FEDERALLY-DIRECTED REGISTRY

Federal for NPS

10,400,000

2,900,000

   

Federal for non-HIPAA- transaction health care providers

-

-

165,000,000

7,500,000

Federal (if all Medicaid State agencies participate)

9,990,000

495,000

-

-

Federal (if 5% of Medicaid State agencies decline to participate)

10,310,000

505,000

-

-

State (if all Medicaid State agencies participate)

0

0

-

-

State (if 5% of Medicaid State agencies decline to participate)

0

0

-

-

Private

0

0

-

-

TOTAL (if all Medicaid State agencies participate)

20,390,000

3,395,000

   

TOTAL (if 5% of Medicaid State agencies decline to participate)

20,710,000

3,405,000

   

ASSUMPTIONS:

  1. Definitions:

    a. “HIPAA-transaction health care provider” means a health care provider that we would require to have an NPI; that is, a health care provider that must be identified in the transactions specified in HIPAA.

    b. “Non-HIPAA-transaction health care provider” means a health care provider that we would not require to have an NPI.

    c. “Start-up” means the first 3 years in which the NPS becomes operational nationally and the bulk of the health care providers requiring NPIs are enumerated. It is the sum of the cost of enumerating existing health care providers in the first year plus the annual cost of enumerating new and updating existing health care providers for the 2 subsequent years.

    d. “Outyear” means each subsequent year in which the majority of actions would be enumerating new health care providers and updating existing ones. It is the sum of the cost of enumerating new health care providers plus the cost of updating existing health care providers.

  2. The cost to enumerate a health care provider that is not enrolled or enrolling in a Federal health plan (e.g., Medicare, CHAMPUS) or Medicaid is estimated to be $50. (See Assumption 4.)
  3. The cost to update information on a health care provider that is not enrolled or enrolling in a Federal health plan (e.g., Medicare, CHAMPUS) or Medicaid is estimated to be $10. (See Assumption 4.)
  4. The cost to Federal health plans (e.g., Medicare, CHAMPUS) and Medicaid to enumerate or update their own health care providers is relatively small as these health plans must collect the same information to enroll or update the health care providers in their own programs. Possible up-front costs to these health plans and Medicaid would be offset by simpler, more efficient coordination of benefits, elimination of the need to maintain multiple enumeration systems, and elimination of the need to maintain other provider numbers. The Federal Government pays 75 percent of Medicaid State agencies’ costs to enumerate and update health care providers. Because all of these costs are relatively small and would be offset by savings, they are considered to be $0 (zero).
  5. This analysis presumes the availability of Federal funds to support the registry.
  6. It is estimated that 5 percent of existing HIPAA-transaction health care providers that conduct business with Federal health plans or Medicaid require updates annually; 15 percent of the remaining HIPAA-transaction health care providers require updates annually.
  7. It is estimated that 5 percent of Medicaid State agencies may decline to participate in enumerating/updating their health care providers. The registry would enumerate/update that 5 percent.
  8. Non-HIPAA-transaction health care providers would not be enumerated in the initial phases of enumeration. These costs are estimated to be $165,000,000 for start-up and $7,500,000 for outyear. The registry would enumerate/update these health care providers only if funds are available.

Option 1 calls for all 1.2 million HIPAA-transaction health care providers to be enumerated by a Federally-directed registry. The one-time cost for the registry to assign NPIs to existing HIPAA-transaction health care providers would depend on the extent to which existing files could be used. The cost could be as high as $60 million (1.2 million health care providers x $50) or as low as $9 million (see option 2). The low estimate assumes that prevalidated provider files are available for 100 percent of all Federal and Medicaid providers. The annual outyear cost would be $2.1 million (30,000 new health care providers x $50 plus 60,000 updates x $10). The Federal health plans and Medicaid State agencies would no longer have to assign their own identifiers, which would result in some savings, but they would still incur costs related to provider enrollment activities that would duplicate Federally-directed registry functions (for example, duplicate collection and verification of some information).

Option 2 calls for enumeration of HIPAA-transaction health care providers to be performed by a combination of Federal programs named as health plans, Medicaid State agencies, and a Federally-directed registry. This registry would enumerate non- Federal, non-Medicaid providers. All enumerators would receive, validate, and enter application data into the NPS and would communicate with health care providers. Data files would be available from a central source. The registry would utilize the NPS and would be operated under Federal oversight but could, if appropriate, be contracted out.

Medicare, Medicaid, CHAMPUS, and the Department of Veterans Affairs already assign identifiers to health care providers with whom they conduct business. They would simply begin to use the NPS to issue NPIs instead of using their own systems to assign the identifiers they now use. Initially, these Federal health plans and Medicaid may incur up-front costs in issuing NPIs; however, these additional costs would be offset by savings from the fact that each health care provider would only have to be enumerated once; multiple enumeration systems would not have to be maintained; other provider numbers would not have to be maintained; and coordination of benefits would be simpler and more efficient. We estimate that approximately 5 percent of Medicaid State agencies may decline to participate (that is, they would not enumerate and update their health care providers). These health care providers would need to be enumerated and updated by the Federally-directed registry; however, that cost would be offset by savings realized by the discontinuance of UPIN assignment and maintenance of the UPIN registry. We estimate that approximately 85 percent of the health care providers that conduct HIPAA transactions would be enumerated in this manner (75 percent by Federal health plans, 10 percent by Medicaid). Additional costs, if any, to enumerate these health care providers or update their data would be insignificant.

The remaining 15 percent of health care providers that conduct HIPAA transactions (180,000) would be enumerated by a Federally-directed registry. The one-time cost of enumerating these health care providers would be $9 million (180,000 health care providers x $50). The cost of enumerating 4,500 new health care providers would be $225,000 per year, and the cost to process 27,000 updates would be $270,000, for a total registry cost of $495,000 per outyear.

Based on the cost estimates in this analysis, option 1 is considerably more expensive than option 2. We believe option 2 to be preferable to option 1 in that Federal programs and Medicaid State agencies would enumerate and update their own health care providers. The enumeration functions of the 5 percent of Medicaid State agencies that may decline to enumerate and update their own health care providers would fall to the Federally-directed registry.

The initial and ongoing cost of developing, implementing and operating the NPS would be borne by the Federal government, depending on the availability of funds; some of this cost could be offset by ceasing current enumeration systems like Medicare’s UPIN registry.

The previous analysis relates only to health care providers that are required to have an NPI to perform HIPAA transactions. The remaining health care providers would not be required to obtain an NPI but could do so if they wished to have one for other reasons. We indicated in the Implementation section of this preamble that we would not issue NPIs to these health care providers until the health care providers that needed NPIs to conduct any of the electronic transactions specified in HIPAA had been enumerated. The cost of enumerating the approximately 3 million non-HIPAA-transaction health care providers could be as high as $150 million (3 million health care providers x $50). We are soliciting comments on sources of information on non-HIPAA-transaction health care providers. We cannot provide a realistic estimate of the cost of enumerating these health care providers without this additional input.