Thank you for the opportunity to share the Pharmacy Benefit Manager (PBM) perspective. My name is Diane Hillbrant, Senior Director, Strategic Provider Services, Diversified Pharmaceutical Services. Diversified is one of the three largest PBMs in the United States: our business is focused primarily in the managed care marketplace. I am a member of NCPDP and co-chair for the workgroup responsible for reviewing the options for the unique health identifier for individuals. As you may recall from previous NCPDP testimony, NCPDP is the ANSI accredited Standards Development Organization representing the pharmacy services sector of the health care industry.
Currently there are more than 120 PBMs providing services to self-funded employers, insurance companies and managed care organizations covering over 125 million people. Our industry maintains on line connections with over 54,000 pharmacies with the total number of electronic prescription claims, including Medicaid, surpassing 1 billion in 1997. Each of these claims submitted and responded to within seconds.
1.The law requires the Secretary to adopt a unique identifier for individuals for use in health care. What are the most important reasons for having such an identifier?
The most important reason for adopting a unique identifier is that standardization will improve the ability of authorized health care providers and others providing valuable service to share information that enhances patient care. The pharmacy services industry has benefited tremendously from the standardization developed through NCPDP.
Patient care and administrative efficiencies are enhanced when components of the health care system are able to easily communicate information to each other. Through the use of a unique identifier, all health care services rendered to or with respect to an individual can easily be linked.
2.If you are opposed to the adoption of an identifier for individuals for health care, what alternative(s) should the Secretary consider?
We, as an industry, believe that the adoption of unique identifiers is necessary for the advancement of health care in this country.
3.Which identifier option do you prefer and which ones should be eliminated from consideration? Why? Are there other identifier options that should be considered?
The NCPDP membership has considered the options and has decided to support the CPRI proposal. The membership, including the PBM industry, has eliminated any system that does not produce a unique identifier for the individual for the reasons discussed earlier.
4.Based on your experience, what identifiers for individuals are used currently?
The most common identifier used in the private pay portion of the pharmacy industry is a variant of the social security number. The social security number of the subscriber or the individual covered by the prescription drug program is used as the base. Additional numbers are generally added to the social security number to identify, for example the applicable group or other members of the family.
5.The White Paper outlines several options that do not require a universal, unique number to be assigned to each person. Could any of these be used to fulfill the Secretary’s statutory obligation to choose an identifier? If so, how?
It is our hope that a unique identifier will be adopted. Earlier discussion addressed the benefits that the pharmacy and health care industry consider important reasons for the adoption of a unique identifier. If we do not have a unique identifier, the costly administrative and technological investments to translate and match information will continue.
It is important to acknowledge and address the need to maintain confidentiality and privacy of health care information relating to individuals. Industry participants should be expected and required to take precautions to safeguard this information with associated fines and penalties for violations. The health care industry and especially pharmacy, which has been using electronic claims submission for many years, must be allowed to continue to perform the administrative and clinical services that are helping to control health care cost. Legislative or regulatory action must be carefully considered; the health care system can not afford to hinder the quality enhancing, cost-effective administration of the pharmacy benefit.
concise numbering system - As the length of the number increases, so does the cost of storage. As part of the health care industry, we are required to keep significant amounts of data and information. The expansion of field lengths results in incremental increases in storage costs.
permanent - To develop a numbering system that is subject to change will require the industry to develop linkages or valuable clinical services will be lost. Net result would be to increase health care costs.
compatible with other commonly used standards - The current electronic pharmacy claims standard has been in place since 1988. The current identifier field allows for 18 alphanumeric bytes although few within the industry use 18 bytes. Significant costs throughout the pharmacy and health care industry would be incurred to support a change in the electronic standard.
timely - Millions of pharmacy claims are submitted on a daily basis. A delay in the assignment and distribution of the individual identifier would delay or deny the individual’s access to the prescription drug benefit and could have a disastrous effect on every link of the pharmacy industry.
unique to the individual - We have discussed the rationale for the unique identifier, in addition the pharmacy health care industry must continue to develop new and innovative services that enhance administrative and clinical services while controlling cost.
universal - Developing a standard which can not accommodate every individual may result in conversion of the identifier. Conversions are costly. The assignment of duplicate identifiers would compromise the PBM industry’s ability to delivery administrative and clinical services.
One advantage to the security number is that it is currently in use. It is compatible with the current electronic pharmacy standard. When compared to other options, it is concise. Its uniqueness can be addressed through a re-verification process.
The use of the individual identifier requires a balance of privacy and health care needs. The health care industry must be able to continue to provide services, noting that this is not a complete list, such as disease management, treatment, epidemiological research, quality assurance and general health care operations.
The identifier must be capable of assignment to an individual in a short period of time. The assignment of the unique identifier should occur prior to accessing the health care system, ideally no later than birth. Because of the potential impact on the delivery of health care services, it is important that adequate verification occur prior to assignment of the identifier.
For a smooth implementation the identifier must be readily available. That is, before mandating use, every chain in the link of the health care system must have the information. The individual must be able to supply each family members’ identifier to the employer. The employer provides this information to the health plan administrator or PBM. The individual enters the pharmacy and presents the prescription with the identification card containing the unique identifier. The PBM matches the identification number on the pharmacy claim with the eligibility file. Such a match will produce an immediate response to the pharmacy facilitating the prompt delivery of services.
The more concise the better, since each link within the pharmacy system uses the identifier and stores the data as part of a pharmacy claim. Any approach that expands the length of the identifier incrementally increases the costs of storage and administration for every sector in the health care continuum.
The addition of a check digit can significantly decrease the incidence of inaccurate recording of the individual identifier and lower administrative costs. The check digit algorithm should be made readily available to all sectors of the health care industry, including pharmacy.
Expedited assignment of individual identifiers will minimize the need for temporary identifiers. Although necessary to consider, every effort should be made to limit the need for temporary identifiers.
Encryption of the identifier would minimize the privacy concerns associated with the use of the social security number. Encryption increases the cost of the unique health identifier proposal.
The costs of a unique identifier will be lowered if current capabilities and systems are used. It is important that any project of this magnitude receive proper funding to assure quality and security. Any change to the current system will result in costs. Items impacting cost are the length of the unique identifier, the magnitude of change from the current business practices and the timeline for implementation.
The PBM industry supports the adoption of a unique identifier for individuals. Within the pharmacy health care sector the most commonly used identifier is the social security number. Privacy and confidentiality concerns of the individual are important, but must be balanced with the health care industry’s need to perform vital clinical and administrative health care services.