The importance of maintaining and evaluating a provider NPI database

The National Provider Identification (NPI) number is the primary identifier for medical professionals and healthcare providers. These NPI numbers provide identifying information on the provider, supplier, or institution that is providing healthcare services. They are used to identify the billing, rendering, prescribing, ordering, and referring providers on a claim and are also the key source of information used to identify sanctioned, deactivated, excluded, or suspended providers.

Approach to the study

There are many reasons to keep up with monitoring provider networks and verifying the accuracy of the information, specifically NPI data. The primary reasons are ensuring network adequacy, auto-assigning members accurately, and preventing payments to deactivated, excluded, or sanctioned providers.

Moreover, paying deactivated, excluded, or sanctioned providers creates compliance and financial risk for health plans, as well as federal and state government agencies. Depending on the level of sanction, it could also create a potential for patient harm.

Reviewing and maintaining provider databases is often an overlooked and necessary activity to ensure regulatory compliance and integrity within a health program. Duplicate enrollment, outdated licensure status, and disbarment activity pose some high risks to healthcare programs.

Many of the processes for paying claims, assigning members, and evaluating network adequacy are based on the information contained in these sometimes-outdated provider databases.

Program challenges

Payers, including health plans and state agencies, process hundreds of thousands — even millions — of claims annually. Though much of the process can be automated, there is still a human element to it. Many enrollment systems are often older and although they can handle large claims volumes, they lack the sophistication and ability to be modified without high costs and significant time — sometimes several months or more.

Prompt pay legislation also impacts health plans and state agencies because of the importance placed on paying on time. Claim processing timeliness is a measurement that health plans and states are evaluated on and measured against for effectiveness.

However, the combination of older systems and a focus on timeliness can create vulnerabilities.

Thomson Reuters insights

In a recent study, Thomson Reuters identified an issue with claims paid to providers with deactivated NPI numbers. The deactivation could be due to a variety of reasons and although some did reactivate their numbers, the majority of the providers identified and reviewed as part of the study were deactivated.

The causes for deactivation noted were failure to update license information, failure to pay licensing fees, and delinquency in paying the licensing fee. However, the primary reason for NPI deactivation was that the provider was deceased. Many billing systems store NPI numbers, allowing a biller to inadvertently enter or select a provider who is no longer alive and associated with a group, hospital, clinic, etc.

Therefore, the error could be administrative and not necessarily intentional or fraudulent. If a provider or a biller identifies the error and realizes the claims were paid, it could create a potential vulnerability for intentional ongoing fraud.

State agencies have also conducted similar claims audits and found that the NPI information was not valid or did not contain the correct data. The findings included claims paid for referring or attending NPI numbers that were not enrolled in a state Medicaid program and pharmacy claims paid with inaccurate or excluded NPI numbers for prescribers.