Data inaccuracies have always posed a risk of litigation and penalties, particularly when they come in the form of bad data in a patient chart that compromises patient safety.

However, the new rules around price and coverage transparency introduced by the Centers for Medicare and Medicaid Services add a new layer of risk involving patient data and patient interactions for both providers and payers.

Russ Thomas, CEO of Availity – which just this week announced its acquisition of Diameter Health – spoke with Healthcare IT News to discuss how inaccuracies put hospitals and health systems at greater risk of litigation, government penalties and investigations, and significant administrative costs associated with correcting errors.

Q. How do data inaccuracies put healthcare provider organizations at greater risk?

A. The new CMS regulations require providers and payers to keep patients informed about the costs of care and their personal financial responsibility throughout the care journey. Furthermore, they require providers and plans to receive patient consent for the services and associated expenses.

The costs reflected in the final bill must also align with those quoted prior to the encounter or procedure. Under these new rules, if patients aren't informed or are informed inaccurately, the provider could end up being responsible from a financial standpoint.

These regulations add a layer of complexity for providers and payers when it comes to tracking and reporting financial data. For example, this practice is straightforward when it comes to a standard procedure, such as an annual visit (for example, the cost of the appointment is X, the patient co-pay is Y).

However, it becomes more complex when new needs are uncovered during a patient encounter. For example, if a patient presents in the ED in terrible pain, and a series of tests must be performed to diagnose the cause. Or, during a colonoscopy, if a physician finds several polyps that must be removed and tested. These costs can range wildly, and it is not always possible to inform the patient beforehand.

Accurate provider data is important to ensuring alignment between the provider and the health plan on specific members. The more complex the event, the more risk involved and the more difficult it will be to pinpoint an expected expense for the member.

Hospitals face the greatest level of exposure in this environment because of the number of unplanned medical activities they manage, but risk has increased across the board.

Q. There can be significant administrative costs associated with correcting errors. Why is this?

A. If you think about provider data specifically, there are certain elements that are easy to validate. For example, it is easy to know if Dr. Smith is a male or female or whether she is an internal medicine physician or osteopathic specialist.

However, there are other elements that are difficult to verify, especially when it comes to resource allocation in large, complex health systems. Tracking the locations where Dr. Smith is contractually able to see and treat patients is one of those elements.

This is becoming an increasing problem as health systems continue to expand their service offerings via acquisition. For example, if a hospital acquires Dr. Smith's standalone practice, her office is now one of multiple facilities in the hospital network. Dr. Smith's contract may change as a result, enabling her to see and treat patients at other hospital-owned locations outside of her own practice.

Keeping track of where Dr. Smith will show up and provide services is tricky in these instances because the healthcare industry currently doesn't have a standard way to communicate the difference between contractually able to see patients versus actually seeing patients.

For example, Dr. Smith may primarily see patients in location A, but is also contractually able to see patients in locations B, C, D and E. A health plan's system may not have the ability to differentiate between where Dr. Smith sees patients and where she is contracted to see patients.

If the health plan chooses to indicate that Dr. Smith is no longer contracted to see patients in locations B through E, and Dr. Smith fills in for a provider one day at location B, then the incoming claim could be incorrectly viewed by the health plan as a non-par claim, which is much more expensive.

These types of physician allocation errors can often be corrected on the back end, but new regulations state that patients should not be responsible for solving these issues. Therefore, aligning this data is typically a very manual effort undertaken by providers and payers.

For example, I spoke with a physician's office recently, and they have an FTE whose sole responsibility is to ensure their provider contract data is aligned with the 10 insurance companies they work with to enable accurate cost estimates and price transparency.

Q. You say that as healthcare tries to adhere to new regulations, it faces tremendous operational challenges. What are these challenges?

A. One of the challenges is how differences in patient profile can drastically change the costs associated with the same procedure. For example, a healthy patient with no comorbidities can likely receive a colonoscopy at an outpatient center.

However, a patient with a medical condition such as hemophilia would need that same colonoscopy performed in the more costly hospital setting because of the complications that could potentially arise. This variability makes providing accurate estimates complicated.

One way to potentially address this issue is to provide best-case and worst-case estimates. Getting to the point where these estimates can be made in real time, so that a procedure can safely continue when a complication arises without the concern of being fined or not properly reimbursed, is key.

Also, while the regulations are well-intended, the reality is it is probably unnecessary to have the specified level of price transparency for every encounter. We need to focus on the most problematic events – those medical episodes that bankrupt people because they had no idea what their out-of-pocket costs would be.

It would be much easier for the healthcare community to rally around this effort and eliminate many of the challenges associated with addressing variability in more routine scenarios.

Q. In light of all these problems and challenges, what can healthcare provider organizations do to mitigate risk and improve data management? How can they improve the accuracy and currency of their data?

A. Most provider organizations don't have the same type of contract with every insurance company. Much of this is legacy-based. Provider organizations must proactively manage and align their contracts. There is a lot of vagueness in this area right now. If providers understand the differences in each of their insurance contracts and update each appropriately, then it lessens the impact of variability.

Provider organizations also need to understand the differences between their systems and the back-end systems leveraged by their contracted health plans.

They need to understand their payers' capability to deal with complexities such as determining if a provider is contractually able to see a patient in each location versus how the provider is set up in their directories. They need to know if a payer system will categorize a claim as a par or non-par claim in any of those locations.

Finally, provider organizations need to make sure their own data is clean, accurate and up to date. One of the biggest complaints from CMS is that retired or deceased physicians still often show up on directories. There are solutions on the marketplace that can help automate the effort of cleaning data.

These solutions can leverage transactional data and issue prompts asking if a specific doctor is still with a specific provider organization. If not, the solution can kick off a workflow to communicate this change to contracted health plans.

This capability is crucial in reducing the administrative burden required to comply with the new price transparency regulations that focus on the association of physicians to location and the impact on cost.

Twitter: @SiwickiHealthIT
Email the writer: bsiwicki@himss.org
Healthcare IT News is a HIMSS Media publication.