NRPM: Standards for Electronic Transactions. Standard: Enrollment and Disenrollment in a Health Plan (Subpart O)


[Please label any written comments or e-mailed comments about this section with the subject: Enrollment]

a. Background

Currently, employers and other sponsors conduct transactions with health plans to enroll and disenroll subscribers and other individuals in a health insurance plan. The transactions are rarely done electronically.

However, the ASC X12 834, Benefit Enrollment and Maintenance has been in widespread use within the insurance industry at large since February 1992 when ANSI approved it as a draft standard for trial use. Variants of this transaction standard have been widely used by employers to advise insurance companies of enrollment and maintenance information on their employees for insurance products other than health. It has rarely been used within the health care industry.

i. Candidates for the Standard.

According to the inventory conducted for HHS by the HISB, only two standards developed and maintained by a standards developing organization for the enrollment transaction exist. The first is the ANSI ASC X12 834. The second is the Member Enrollment Standard developed by the NCPDP.

ii. Recommended Standard

The ANSI ASC X12 834 - Benefit Enrollment and Maintenance is the standard proposed for electronic exchange of individual, subscriber, and dependent enrollment and maintenance information between sponsors and health plans, either directly or through a vendor, such as a health care clearinghouse. In some instances, this transaction may be used also to exchange enrollment and maintenance information between sponsors and health care providers or between health plans and health care providers.

The NCPDP standard, which was developed to enhance the enrollment verification process for pharmaceutical claims, rather than for transmitting information between health plan and sponsor, is not being proposed for adoption in this rule. The NCPDP standard pertains to these specific uses and is therefore not suitable in its current form for the more general uses needed for the enrollment transaction.

With the implementation of the ASC X12 834 for health care, sponsors would be able to transmit information on enrollment and maintenance using a single, electronic format; health plans would be required to accept only the standard transaction; neither sponsors nor health plans would have to continue to maintain and use multiple proprietary formats or resort to paper.

Adoption of this standard would benefit sponsors, especially, by providing them the ability to convert to electronic transmission formats where paper is still being used today. Many of these sponsors already use X12 standards in their core business activities (for example, purchasing) unrelated to the provision of health care benefits to employees. The utility of this particular standard for health care transactions would be synergistic when considered in combination with the other standards in this proposed rule (for example, ASC X12 820) and other rules (PAYERID, national provider identifier) promulgated under HIPAA.

In addition to being the only relevant standard for the enrollment and maintenance process designed for use by sponsors, the ANSI ASC X12 834 met all of the 10 criteria deemed to be applicable in evaluating this potential standard.

  1. It will improve the efficiency of enrollment transactions by prescribing a single, standard format.
  2. It was designed to meet the needs of health care providers, health plans, and health care clearinghouses by virtue of its development within the ASC X12 consensus process, in which representatives of health care providers, health plans, and health care clearinghouses participate.
  3. It is consistent with the other X12 standards detailed in this proposed rule.
  4. Its development costs are relatively low, given the ASC X12 development process; its implementation costs would be relatively low as it can be implemented along with a suite of X12 transaction sets, often with a single translator.
  5. It was developed and will be maintained by the ANSI-accredited standards setting organization ASC X12.
  6. It is ready for implementation, with the official implementation guide to which we refer in Addendum G to this proposed rule.
  7. It was designed to be technology neutral by ASC X12.
  8. Precise and unambiguous definitions for each data element in the transaction set are documented in the implementation guides.
  9. The transaction is designed to keep data collection requirements as low as is feasible.
  10. All X12 transactions, including the X12 834, are designed to make it easy to accommodate constantly changing business requirements through flexible data architecture and coding systems.
iii. Uses of the ANSI ASC X12 834.

Transaction data elements in the implementation guide for the ASC X12 834 are defined as either required or conditional, where the conditions are clearly stated. This transaction would be used to enroll and disenroll not only the subscriber, but also any covered dependents. In some instances, this would be an enhancement to enrollment information maintained by sponsors or health plans, compared with the common practice today of maintaining detailed records on the subscriber alone. In an increasingly value-conscious health care environment, detailed information on subscribers and covered dependents is necessary for the effective management of their health care utilization.

Administrative and financial health care transactions such as the ASC X12 834 enrollment transaction may have other, secondary uses that may be important to consider as well. For example, secondary uses of health care claims data are common and include analyses of health care utilization, quality, and cost. The ASC X12 834 enrollment transaction has been discussed (for example, by the NCVHS) as a means to collect demographic information on individuals for use by public health, State data organizations, and researchers. Typically, demographic data elements would be used in combination with information obtained from other health care transactions, such as health care claims and equivalent encounter transactions, and from other sources.

Proponents of this approach and these uses have expressed their beliefs that the enrollment transaction includes patient demographic data elements and that this would provide more reliable data on patient demographics than are available currently from health care claims and encounter databases. Proponents also believe that the availability of demographic information is in jeopardy because the X12 837 health care claim transaction proposed elsewhere in this rule includes minimal patient demographic data elements. The use of this standard would be a change from current practice in many States where the health care claim is the vehicle for collecting such information. Some proponents also have indicated a desire to expand the number of demographic data elements contained in the ASC X12 834 enrollment transaction to serve these secondary uses.

Opponents of this approach argue that the ASC X12 834 enrollment transaction is not a suitable vehicle for collecting demographic information for these secondary purposes. They also assert that such information would never be available on the uninsured and, since there is no obligation on the part of sponsors to adopt the electronic transactions, would be only intermittently available on the insured. They also state that, although some demographic elements are already contained in the ASC X12 834 enrollment transaction, no business need has been identified that would support the addition of other such data elements. Finally, the opponents argue that secondary uses, while legitimate, should not be allowed to subvert the primary purposes of these transactions nor the goal of administrative simplification.

We welcome comments on the practical utility of the ASC X12 834 enrollment transaction as a vehicle for collecting demographic information on individuals and its value as an adjunct to claims and encounter data in this regard.

The data elements for this transaction, and other information, may be found in Addendum 5.

b. Requirement

In § 142.1502, we would specify the ASC X12 834 Benefit Enrollment and Maintenance (004010X095) as the standard for enrollment and disenrollment transactions. We would also specify the source of the implementation guide and incorporate it by reference.

i. Health plans.

In § 142.1504, Requirements: Health plans, we would require health plans to use only the standard specified in § 142.1502 for electronic enrollment and disenrollment transactions.

ii. Health care clearinghouses.

We would require in § 142.1506 that each health care clearinghouse use the standard specified in § 142.1502 for enrollment and disenrollment transactions.

iii. Sponsors.

There would be no requirement for sponsors to use the standard: they are not one of the entities subject to the requirements of HIPAA. However, to the extent a sponsor uses an electronic standard, it would benefit that sponsor to use the standard we adopt for the reasons discussed earlier. In addition, HIPAA contains no provisions that would prohibit a health plan requiring sponsors with which its conducts transactions electronically to use the adopted standard.

c. Implementation Guide and Source

The implementation guide for the ASC X12N 834 (004010X095) is available at no cost from the Washington Publishing Company site on the World Wide Web at the following address: The data definitions and description of data conditions may also be obtained from this website.

Users without access to the Internet may purchase implementation guides from Washington Publishing Company directly. Washington Publishing Company, 806 W. Diamond Ave., Suite 400, Gaithersburg, MD, 20878; telephone 301-590-9337; FAX: 301-869-9460.