The importance of data quality in producing savings

Contributed By Sam Muppalla

THE HEALTHCARE INSURANCE MARKET is in an era of change driven by both external and internal forces, including the consumerism movement, increased competition, the changing regulatory landscape and the ubiquitous pressure to reduce care and administration costs.
These changes are forcing payers to re-evaluate core operating capabilities and identify opportunities for improvement. Provider data and its quality is being recognized as a key area that affects a payer’s ability to adapt to the changing marketplace.
As the burden of healthcare cost shifts to consumers, they are faced with decisions to choose healthcare providers for their specific needs. To serve their members, payers must offer high quality and actionable provider information.
Similar transparency pressures are being applied at a regulatory level. After President Bush signed the executive order promoting increased healthcare information transparency in August 2006, more than 30 states have proposed or passed transparency legislation. Transparency is being further promoted by the Centers for Medicare & Medicaid Services, the Joint Commissions on the Accreditation of Healthcare Organizations, the Blue Cross Blue Shield Association and others.
Increasing adoption of pay for performance as well as other quality improvement programs is shining a spotlight on the quality of provider data maintained by payers. Leading plans are correlating provider quality of care information with provider contracting information to accurately reward providers with compensation incentives. Making this information transparent to providers in near real-time will enable payers to more effectively recognize top-performing providers in their networks.
Increased competition among payers will require them to use provider relationships and network completeness as a critical asset. Making improvements to provider data will have a measurable and significant impact on internal operations that drive provider satisfaction and loyalty. Common provider complaints include inaccurate, late or misaddressed claims payments and time-consuming enrollment processes. Improving provider data quality and process automation can alleviate these recurring issues.
In addition to improving provider and member satisfaction, maintaining accurate provider data delivers measurable operational savings. Consider the financial impact of the following scenarios:
•    By increasing auto-adjudication rates by 2 percent through improvements in provider data quality, a plan that processes 20 million claims per year can realize savings of $1.5 million savings over three years.
•    By decreasing the amount of annual returned mail resulting from poor quality data by just 10 percent, a plan with 500,000 providers, both participating and non-participating, can realize $400,000 in savings over three years.
•    A 30 percent reduction in provider 1099 reporting errors caused by claim payment inaccuracies resulting from data problems equals a three-year savings of $525,000 for a plan with 10,000 errors per year.
•    A payer receiving 7 million provider and member service calls per year can save $1.1 million with a call volume reduction of 15 percent over three years.
The lack of industry standards defining provider data quality has made achieving high-quality data a nebulous goal. Typically, provider data quality is synonymous with data accuracy. A more compelling measure for provider data quality is whether payers can reliably use it across business processes.
Provider data is reliable when it is complete enough to describe a 360-degree view of a payer’s various provider relationships; accurate in all elements of its content; current with internal and external reference sources; secure based on the identity of the requesting user; transparent and accessible to all required business processes; and interoperable with downstream systems through predictable electronic exchange.
This broadened definition of quality will enable payers to transform their provider data into dependable provider information.
Building a sustainable provider data infrastructure that ensures continuous quality improvement is usually a journey for most payers. A prudent first step is to assess the current state of provider data and incorporate the aforementioned comprehensive definition of provider data quality.
The next step is to understand the metrics and barriers to efficiencies across business processes affected by provider data. These two steps will help payers create a quality improvement roadmap consisting of discrete tactical projects. Aligning the roadmap projects with measurable improvement goals in business metrics will be a crucial factor in achieving success.
An effective quality improvement roadmap should include the following components: a flexible provider information repository; a business rules engine to centralize provider data integrity and workflow rules; a workflow engine to orchestrate provider data acquisition, maintenance and exchange; applications and portals that support provider data-driven business processes while enabling transparency to all constituencies using provider data; and integration frameworks that enable automated interoperability with internal and external systems.
Improving provider data quality is a daunting task, but it’s absolutely essential for reducing costs, improving operational efficiency and, perhaps most importantly, maintaining positive relationships with providers. All of this is achievable with a comprehensive quality improvement roadmap in place.

Sam Muppalla is COO at Portico Systems, a company offering provider network management solutions. More on the benefits of improving data quality can be found at

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