CMS opposes adding unique device identifiers (UDIs) to insurance claims forms because it would entail significant technological and financial challenges. Inserting UDIs could cost over $700 million to implement due to necessary changes to claims processing systems across the healthcare industry. It may also result in inaccurate data on claims forms if UDIs are entered incorrectly. While CMS supports including UDIs in electronic health records and registries, it believes alternative methods like clinical registries could gather useful post-market information without burdening providers and payers. Key standards groups also have concerns about mandating UDIs on claims forms at this time.

1. INSIDE HEALTH POLICY
CMS tells key lawmakers why
it opposes putting UDIs on
claims forms
Published Wednesday, Mar. 11,
2015
BYLINE: By David Hood
LENGTH: 1325 words
WASHINGTON – CMS says adding unique device identifiers on insurance claims
forms would “entail significant technological challenges, costs, and risks to normal
claims processing for Medicare and other payers,” detailing its opposition for
the first time publicly in a letter responding to key senators’ call for the agency to
change its position. FDA and a prominent standards accrediting body are pressing
CMS to add UDIs to claims forms, and Senior Finance GOP Sen. Chuck Grassley
(R-IA) and Sen. Elizabeth Warren (D-MA) recently asked the agency to explain its
reported resistance.
Inserting UDIs on claims forms could potentially cost the agency more than $700
million and result in potentially inaccurate data be put on claims forms when
UDIs are not even needed to adjudicate claims, recently departed Administrator
Marilyn Tavenner tells the senators in a Feb. 23 letter. But, the claims issue aside,
Tavenner adds that CMS backs FDA’s plan to add UDIs to electronic health
records as well as appropriate medical device and disease registries.
Tavenner floats an alternative to putting UDIs on claims forms: She writes that non-
claims collection activities could be used to gather robust information in addition
to UDIs that could still be helpful to payers. “For example, information on patient
status, laboratory and imaging results, medication use, and surgical details are
often used to evaluate post-market safety and in effectiveness research but cannot
be captured on claims,” she tells the lawmakers.
Although the American National Standards Institute accrediting committee is
pushing CMS to add UDIs to claims, Tavenner says other prominent groups share
CMS’ concerns. She specifically points to the National Uniform Billing Committee
(NUBC) and the National Committee on Vital and Health Statistics (NCVHS),
which is the statutory advisory committee to the HHS secretary on health
information policy and standards.
She notes that last September NCVHS recommended that HHS hold off on
mandating the capture, reporting and use of UDI in administrative transactions.
“NCVHS recommended that ‘HHS should continue to work with the industry to
better understand and document the value, benefits and cost of reporting UDI
in administrative transactions,’” she tells the senators. “This would include ‘the
business reasons for, and costs and benefits of, including UDIs in administrative
transactions including the added burden for providers and payers to capture,
report and receive/use UDI and the system and workflow changes required;
and ‘the potential post-market surveillance role of payers who receive UDI from
providers via administrative transactions.’”
She says NCVHS also suggested the possibility of pilot tests and efforts to improve
Page 1 of 4

2. INSIDE HEALTH POLICY
CMS tells key lawmakers why
it opposes putting UDIs on
claims forms
Published Wednesday, Mar. 11,
2015
BYLINE: By David Hood
LENGTH: 1325 words
existing mechanisms for post-market device surveillance. She says these concerns
were raised at the January 2015 meeting of the ANSI’s Accredited Standards
Committee (ASC X12), and the issue was referred to a special workgroup.
Tavenner lays out in detail for the senators what she views as the significant cost
and operational challenges involved in adding UDIs to claims.
She says the main challenge would be changing a form called 837 to include UDIs.
Changing that form would require a five-step process, CMS says in the letter, that
would involve a lengthy multi-party, multi-stepped effort:
ASC X12 would first adopt changes to the standard electronic claims formats and
implementation guides to provide space for submission of multiple iterations of the UDI.
ASC X12 would then submit changes to the National Committee on Vital and
Health Statistics.
NCVHS would consult with the National Uniform Billing Committee, National
Uniform Claim Committee (NUCC), Workgroup for Electronic Data Interchange
(WEDI), and the American Dental Association before any changes are adopted
(NUBC and NUCC would likewise need to update paper forms).
The HHS secretary would consult with the NCVHS prior to making a decision.
The HHS secretary would issue proposed rulemaking to adopt the new standard,
followed later, if the decision were made to finalize the proposed rule, by a final rule.
The ASC X12 is a committee of stakeholders and government officials tasked with
developing operational and data transfer standards. A subcommittee called the
ASC X12N committee is developing standards to change the 837 form to include a
field for UDI. The group’s chairwoman, Margaret Weiker, told Inside Health Policy
earlier this year that representatives from CMS had been voicing vocal dissent on the
committee. That dissent prompted the letter from the pair of senators to Tavenner.
Tavenner stresses to the senators that adding UDIs to claims would not be
a simple shift. “Changing the claim format to include UDI would also require
substantial, expensive, and time-consuming changes to claims processing systems
and claims warehouses for all health plans, providers, clearinghouses, and vendors
and business associates (e.g., billing services, and repricers),” CMS says.
“Retrofitting Medicare’s legacy claims systems to accommodate UDI reporting
would require extensive programming changes and claims edits that could
negatively impact the processing time and adjudication of the more than 1.2 billion
Page 2 of 4

3. INSIDE HEALTH POLICY
CMS tells key lawmakers why
it opposes putting UDIs on
claims forms
Published Wednesday, Mar. 11,
2015
BYLINE: By David Hood
LENGTH: 1325 words
claims that Medicare annually processes.”
The ASC X12 committee is working to revise the standards in a document called
the Business Requirements and Technical Solutions that will ultimately be approved
or rejected by CMS by the time insurance claims forms undergo updates in 2017.
Tavenner also says the move could be expensive -- likely more than $700 million.
While the agency can’t estimate the exact cost of putting UDIs in claims forms
without knowing the specific requirements for a UDI standard, Tavenner writes that
adding the data would be “a much more complicated change” than that required
for the recent claim form update from version 4010 to 5010, a five-year effort that
cost CMS $700 million.
Information errors are another CMS concern. “CMS is concerned that collecting
UDIs on claims would be prone to errors because there are an estimated 300,000
UDIs just for high-risk implantable medical devices, multiple UDIs may need to be
reported on a claim, UDIs vary in format depending on the UDI-assigning entities,
the UDI is more than 10 times longer than an ICD-10 code, and the data are not
essential to adjudicate claims,” Tavenner writes. In the absence of validity checks,
she says, “simple errors could lead to improper identification of products and
patients.” She notes that a database that contains all full UDIs is not currently
available, so payers wouldn’t be able to validate that UDIs submitted on claims
were actual assigned UDIs.
FDA finalized the UDI rule in 2013 and set implementation dates for medical
device manufacturers every year for the next three years. UDIs are alphanumeric
codes affixed to devices that identify the make, model, expiration date and other
key information about each medical device. They are readable by humans and
scanners, intended to be uploaded to hospital registries, patient electronic health
records and even insurance claims forms. FDA also set up a massive Global UDI
Database so anyone can access to see in near-real time if any adverse events or
recalls are reported.
FDA maintains that UDIs are central to the effective postmarket surveillance of
medical devices, but only if the tool is adopted throughout the healthcare system.
A study published by the Brookings Institution, and commissioned by FDA, laid out
a 17-point roadmap for UDI adoption and implementation. A key component was
creating a UDI field in insurance claims forms.
A similar effort is underway to push the Office of the National Coordinator for
Health Information Technology to create a UDI field in patient electronic health
records. ONC originally had the UDI field in an update to its Certification Criteria
last year but ultimately pulled it before finalization.
Page 3 of 4

4. INSIDE HEALTH POLICY
CMS tells key lawmakers why
it opposes putting UDIs on
claims forms
Published Wednesday, Mar. 11,
2015
BYLINE: By David Hood
LENGTH: 1325 words
But the senators remained optimistic, saying CMS will find a way to include UDIs
in insurance claims forms.
“Private hospitals, health plans, clinicians, the FDA, and HHS Secretary Burwell
have all acknowledged the potential benefits to adding more specific medical
device information to claims forms,” the senators said in a joint statement. “If there
are administrative concerns about collecting UDI information, we expect that CMS
will work to resolve them. We will continue to engage with CMS to be sure that
UDIs can be collected and used to improve patient safety.”
Page 4 of 4