SHALALA PROPOSES NATIONAL STANDARD EMPLOYER IDENTIFIER

06/16/1998

FOR IMMEDIATE RELEASE

Contact: HCFA Press Office
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SHALALA PROPOSES NATIONAL STANDARD EMPLOYER IDENTIFIER


HHS Secretary today announced plans for HHS to standardize the identifying numbers assigned to employers in the health care industry by using the existing identifying numbers already assigned by the IRS. The move is expected to save $1.5 billion over the first five years of implementation.

"The national standard employer identifier will help eliminate paperwork, simplify activities such as enrollment in health plans and payment of health insurance premiums, and save money for consumers," said Shalala. "This is good government, and good sense."

The proposed national standard employer ID number is the Employer Identification Number (EIN), which is issued and maintained by the Internal Revenue Service. Businesses that pay wages to employees already have an EIN. Under the proposed rule, health care providers, health care clearinghouses, and health plans would use this number to identify the employer on electronic health transactions that require an employer identifier.

Currently, health plans, providers, and employers may use different ID numbers for an employer when they conduct business. Having multiple ID numbers for a single employer slows activities such as health plan enrollments and health plan premium payments, and increases costs.

"Standard health identification numbers are important components of electronic health transactions. Using the existing Employer Identification Number is an efficient, logical choice because most employers already have it," said Nancy-Ann DeParle, administrator of the Health Care Financing Administration, which runs the Medicare and Medicaid programs.

The national standard employer ID number proposal, published in today's Federal Register, is one of several administrative simplification efforts underway. These efforts will promote electronic transactions and the reduction of paperwork. Savings, even taking into account start-up costs, are expected to total $1.5 billion over the first five years of implementation.

In addition to the national standard employer identifier, other proposals under the law will call for national standard ID numbers for use in health care systems for health care providers and health plans. Further, the law also requires standards for common electronic health care transactions, code sets, and stringent new security rules to protect confidentiality of and access to health records. All health plans, health care clearinghouses, and any health care providers that conduct electronic health transactions will be required to abide by these standards.