A Little Bit of Enforcement Can Go A Long Way in the Battle Against Fraud, Waste and Abuse

Insurance companies are well-aware of the costs of fraud, waste and abuse.  They are able to leverage the CMS guidelines for filing claims which would increase the ability to detect fraud, waste and abuse.  The recent HIPAA guidelines for using the standard American National Standards Institute (ANSI) X12 transaction sets, complete with National Provider Identification number (NPI) requirements, can take a bite out of billions of dollars that are stolen from them if strongly enforced by all carriers, processors and adjudicators.

One area where standardization would strengthen the healthcare industry’s ability to detect fraud, waste and abuse is with provider databases.  Currently, it’s evident that healthcare provider databases are built to show a new provider record for each group, hospital, or facility where the providers practice. Often, companies have no way to show that these records represent one person.  NPI numbers would solve that problem.  In other instances, the databases may be set up to use a group or facility NPI instead of the individual provider’s type one NPI from the CMS registry.  This makes any analysis of trends and behaviors of individual health care providers inaccurate and inconclusive.  If the healthcare industry would force providers to identify themselves with their individual NPI number instead of a Federal Tax Identification Number (TIN) or company specific ID, company databases could be “cleaned” or “scrubbed”.  Once “cleaned”, companies could identify and track individual provider and facility activity.  Each individual provider should only be listed by their individual NPI. Groups and facilities should be listed once with a list of individual NPI numbers from providers working there.  Relationships between groups, facilities and individual providers could be identified and stored separately.  Proper data storage is only one of several key areas where improvements need to be implemented to prevent fraud, waste and abuse.

Proper identification of rendering providers and sites of service is also crucial in the battle against fraud, waste and abuse.  The ANSI X12 guidelines currently in place are not tight enough to enforce proper identification of rendering providers and sites of service.  When providers submit claims without a rendering provider, the rules require the use of the billing provider as the rendering provider.  The problems arise when the system responsible for processing the claims fails to check and make sure that the billing provider is the rendering provider when the rendering provider isn’t present in the rest of the claim.  The segment in the ANSI X12 837 transactions that identify the service facility (or site of service) is actually described as “do not use” when the site of service is the billing provider or part of the billing provider’s corporate structure.  Instead, a claimant is to identify their site of service through the billing provider section at the lowest level of enumeration.  The unclear wording in the implementation guide implies but doesn’t clearly spell out this requirement.  Room for interpretation makes it possible for claimants to argue that the site of service does not need to be identified.  Enforcement then becomes incredibly difficult.  Completion of the loops and segments that identify these key elements provides for reactive correction to fraud waste and abuse, but also encourages prevention.

On the other side of transaction, patients would also benefit from this data normalization effort.  Patients obviously benefit from reduced costs if healthcare fraud, waste and abuse are reduced, but they also gain when health plans are able to improve quality across the board.  This is where health care reform should start.  Distinctly identifying providers and facilities will give health plans useful and meaningful analytics that can drive decisions about quality of care through network management.

Although it may be difficult to see from the beginning, there will be a payoff for providers as well.  Due to the requirements already placed upon them by health care reform legislation, some providers may be reluctant to register for NPI numbers that allow better tracking of their activities.  Providers often feel as if they are being squeezed by all the new regulations being placed upon the healthcare industry.  Being forced to invest in new technology to meet the meaningful use requirements, paying consultants and hiring experts to do their billing in accordance with the changing rules, and accepting lower and lower fees for their services have all contributed to this pressured feeling.   Compared to the other requirements thrown at them, requiring them to enumerate all facilities is relatively simple to accomplish and is no cost to them.  Additionally, if the industry as a whole enforces this, the honest provider benefits when the providers committing fraud, waste and abuse are found out.

Requiring NPI enumeration at each site of service, as well as enforcing the X12 837 standard requirements on all claim files is in the insurance companies’ best interests.  The payoff extends to providers and patients.  The tools needed to tackle fraud, waste, and abuse and to improve quality have been provided in the HIPAA guidelines.  It’s up to the industry to use them.

3 thoughts on “A Little Bit of Enforcement Can Go A Long Way in the Battle Against Fraud, Waste and Abuse

  1. I hear ya! It seems like if the NPI is not used in a manner that is outlined in the article, then it would defeat the purpose of having the NPI.

  2. CareCore actually is in the midst of a major “report carding” process. Hence the blog. There’s verbiage in the NPI Final rule that says it’s up to provider organizations to determine at what level they enumerate, but then there’s implications in 2 different sections of the ANSI X12 837 guide that states that the site of service must be identified (either in 2010AA, or in 2310C for professional 837) – and it further states that 2310C cannot be used if the site of service is under the corporate structure of the billing provider (2010AA). That circles back around to the conclusion that 2010AA must be the site of service. I don’t know why CMS doesn’t just come out and say it so that it can be enforced without question.

  3. GREAT BLOG! This approach is an absolutely essential requirement.
    It would help enable several things: Most important as a window to potential fraud and abuse, it could also enable some innovative “report carding” of care givers, care facilities in order to provide incentives for excellence in treatment, improving their patient outcomes etc.

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