Warnings from the Centers for Medicare & Medicaid (CMS) citing inaccurate provider directories, high claim-reprocessing volumes and substantial encounter-data rejection rates all are telling symptoms of expensive and expansive problems with provider data.
We estimate that errors in provider data cost payers over $3 billion yearly. However, that estimate is likely conservative, because it excludes eventual CMS fines or state sanctions, such as losing auto-enrollment status. That figure also doesn’t accurately capture the downstream snags caused by poor provider information. These include incorrect claims payments; high volumes of grievances and appeals; lower volumes of referrals due to inaccurate or missing specialty codes in directories; negative evaluations from members; and providers leaving networks. Moreover, CAQH estimates physician practices spend a total of $2.76 billion yearly on provider directory maintenance. This would indicate that provider data issues cost the industry about $6 billion annually.
Many payers try to address symptoms of problematic provider data by cleaning up a database here and there. Those efforts are ineffective because they are not broad enough and do not identify the root causes of bad data. All too soon, provider data is once again inaccurate, with its negative effects traceable throughout preauthorization, claims processing, member and provider satisfaction, compliance and so on.
Optimizing provider data and addressing the value chain problems it causes requires a holistic approach we call provider information management (PIM). PIM is a comprehensive and process-oriented view that broadly defines “provider data” as any provider-related data that is part of the payer value-chain. PIM reveals how provider data has an impact on or is affected by virtually every payer process (see Figure 1). Adopting the scope of PIM helps payers create and sustain clean provider data that they can use in more proactive, digitally mature ways. That helps payers streamline processes and workflows and greatly reduce the systemic costs of out-of-date, inaccurate provider data.
PIM redefines the scope of reference for provider data. It shows why managing provider data goes beyond the IT department and any single database. PIM captures how provider data is created, gathered, transformed, validated and consumed, and published by each workflow, application or system within the payer value chain. This expansive view of provider data reveals how inaccurate provider data, such as a missing provider name, not only causes claims rejections and grievance issues downstream but may ultimately result in upstream issues such as lower Stars ratings, impacts to sales and marketing efforts, and overall enrollment levels.
PIM also is adaptable to industry shifts, such as the category of “provider” enlarging to include nonmedical service providers such as Lyft and Uber Health, community organizations and more.
With a complete understanding of which processes affect and rely on provider data, payers can create comprehensive PIM strategies. While the solutions may vary depending on the size of payer operations, differences among lines of business and specific business goals, to build an effective PIM payers will need to address these four components:
Even with these four components in place, it’s important to approach PIM as a journey, not a one-and-done initiative. PIM represents a new view of how to manage and sustain accurate provider data across a healthcare ecosystem. As such, PIM is adaptable to different healthcare organizations and their business models and objectives.