Decoding the transition to Medicare Beneficiary Identification

In the next 18 months, 150 million Medicare beneficiaries (active, archived, or deceased) will be transitioned to new ID numbers, called Medicare Beneficiary Identification (MBI) codes. The goal – to protect a vulnerable population from identity fraud – is admirable and urgent.

But the sheer magnitude of the process, combined with significant uncertainties about its rollout, should be of great concern to health IT leaders at hospitals and healthcare systems. Hiccups in the transition could potentially disrupt continuity of care and delay payments to providers. Health IT leaders would be well-served to develop a strategy now to minimize negative impacts down the road.

Why the change is needed

Up until now, Medicare beneficiaries have been using 11-character codes called Health Insurance Claim Numbers (HICN). The problem is that they all begin with the member’s social security number, with two characters added to the end. These ID numbers are easy to crack and – since Social Security numbers provide access to all sorts of private information – leave beneficiaries open to identity theft, both medical and financial. A Medicare card that is lost, copied, or even left in view in a public area or in the home could jeopardize a member’s personal health information or life savings.

So as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the Centers for Medicare and Medicaid Services (CMS) will be replacing the old Health Insurance Claim Number (HICN) on Medicare cards with new, randomly generated Medicare Beneficiary Identification (MBI) codes. Officially, the change is known as the Social Security Number Removal Initiative. The new MBI codes will use a randomly generated combination of letters and numbers, similar to the recommended best practices for passwords.

First the good news

The new codes will also feature 11 characters – but instead of the first nine characters being numbers, the new codes will feature letters in the 2, 5, 8, and 9 positions of the code, to make them more difficult to crack. The numbers will have no correlation to other patient identifiers.

Staying with 11 characters should help ease the transition for providers to some degree, since the field and rules around it will be similar. There will also be a transition period in which CMS will accept either the old HICN or the new MBI, or both, to smooth reimbursements during the changeover.

That’s pretty much the extent of the good news.

The bad news

One of the biggest hurdles for providers in making this shift is getting the new MBI numbers into the system in the first place. CMS made the decision NOT to send the numbers to providers proactively, to further protect beneficiaries from fraud.

The goal is for each beneficiary to provide their new Medicare card to providers at the first visit after the new cards are issued. But there are 60 million active beneficiaries, and many – particularly those in very poor health and/or residents of long-term care facilities – may not reliably bring their cards with them to provider visits.

Under current practice, providers can quickly retrieve the HICN with a simple eligibility verification request. Under the new system, however, CMS will instead send the updated code as part of the remittance advice, after the claim has been filed and processed.

Industry leaders have raised the alarm, providing feedback directly to CMS that this approach may unnecessarily delay the use of the new codes and create disruptions to payments and care delivery. But for now, providers should assume that they will need to wait until the remittance advice to receive any MBIs that are not presented at the provider appointment. Providers should develop a workflow to make sure the MBI is scraped from the remittance advice and entered into the system, rather than potentially being overlooked.

As with the transition to ICD-10, CMS will initially pay claims filed with either or both numbers during the transition period. But using the old HICN for a claim after December 31, 2019 could mean a denial or a delay in payment until it is updated with the proper MBI.

There are several other areas of concern on which CMS has not yet given clear direction. For instance:

• Will the new cards be rolled out all at once, or in waves based on geography, jurisdiction or some other criteria?
• What will happen with new Medicare beneficiary applicants? Will they be assigned a new Medicare ID card if the application is filed before April 1, 2018, but approved after that date?
• From a practical standpoint, how will providers use both the HICN and MBI codes together during the transition period?
• How will Medicare Advantage plans be affected?
• Will there be a grace period if the transition period proves to be too short for all providers to prepare their systems to initially include both numbers, attach all their records to the MBI, and then eliminate the HICN completely? 

The answers to these and other questions will have a profound effect on the success of the transition and how effectively providers will be able to serve Medicare beneficiaries during this period.

The way forward

While significant questions remain, HIT leaders can help hospitals and health systems prepare for this change now – first by asking the following questions, and then by addressing any deficits the answers to those questions reveal:

• How long will my vendor need to have my systems ready for the new cards?
• What software development and infrastructure changes are needed, and what business logic and workflows need to change?
• What effort and time are needed to map the process through its entire lifecycle?
• How much will all this cost?
• Will my system be functional and able to accept a dual processing of the HCIN and MBI?
• What editing will be involved to ensure the system adjusts accurately and quickly during the short CMS-designated transition period? And for the longer term?
• If new cards are distributed to my Medicare patients gradually, will that be better for my system’s capacity vs. if they are all distributed at the same time?
• Will the system be able to accommodate both the card number change and the volume of card number changes?
• Will my system coincide with CMS’ eligibility verification process and its authorization process for old and new card numbers?
• How will this change to new Medicare cards impact patient care? Can we avoid claims denials?
• How will this change to new Medicare cards impact provider and revenue integrity?

Thinking through the technical process ahead of the transition will help ensure providers are prepared, no matter how the program is ultimately structured. The key is getting out ahead of the MBI migration instead of waiting until the last minute. Taking a proactive stance will help avoid or minimize negative impacts to revenue cycle management and continuity of care for patients.