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Even the smallest provider data management mistakes can have a significant financial impact on healthcare organizations. It’s often the hidden costs that sneak up with the biggest impact to revenue and compliance. As AI and automation continue to evolve, technology can streamline data management processes and improve accuracy to prevent costly mistakes.
This article highlights the most common hidden costs and strategies to avoid them.
Find out how much revenue your provider credentialing process is losing.
How Bad Data Leads to Financial Losses
Revenue loss from poor provider data management mistakes is largely driven by denied claims, billing errors, and enrollment delays. The average provider earns $9,000 per day in revenue for the organization, so when they’re unable to bill or be reimbursed, the organization is losing $45,000 per week. It adds up fast!
According to the Experian Health Report, provider ineligibility is the second highest reason for claim denial, accounting for 42% of denials. More often than not, provider ineligibility means that incorrect information was submitted. While many claims initially denied are overturned, it costs an average of $118 per claim for rework.
If your billing and coding team is working from inaccurate provider data, they have little chance of accuracy in their work, which increases the likelihood of compliance penalties and denials. Rejected claims lead to delayed payments and increased administrative work to correct and resubmit them.
These are the obvious costs caused by provider data management mistakes, but there are many more lurking in the dark.
Hidden Costs of Provider Data Management Mistakes
Provider data management mistakes can have far-reaching financial, legal, and operational consequences for healthcare organizations. The obvious financial hits come in the form of claim denials, write-offs, and compliance penalties. However, many hidden costs are eroding revenue and harming the organization. Here’s a look at some of the unexpected costs you may run into as a result of provider data management mistakes.
Increased Regulatory Scrutiny
Incomplete or inaccurate provider data can trigger audits from CMS, OIG, and state agencies. Once a provider data management mistake is detected, many surveyors will dig deeper to expose further issues. In addition to the fines and non-payment, your staff might be burdened with more visits, reviews, and requirements.
Legal Liabilities & Malpractice Risks
When provider data management mistakes result in a lapsed license or missed exclusion, organizations can face malpractice lawsuits or contract disputes. Even if a provider is unknowingly practicing with an expired license, or an unverified specialty, the legal and financial repercussions can be severe.
Delayed Reimbursement
A provider data management mistake, such as mismatched NPI numbers, either results in an enrollment delay, or a denied claim (if the provider is already enrolled). Either way, it’s additional administrative labor to correct and resubmit the paperwork, plus delayed reimbursement.
Provider Dissatisfaction
Delays in credentialing and enrollment can frustrate providers, leading to attrition or a poor reputation in your clinical community. This could make it harder to hire quality providers and positions could remain open for longer, limiting the number of patients that can be seen.
Higher Administrative Costs
Provider data management mistakes require manual data corrections and additional compliance reviews, which add to staff workload and labor costs.
Contractual Penalties
If you’re consistently submitting incorrect data to payers, they can decide enough is enough. For recurring issues, organizations may face penalties or even termination of payer contracts.
Increased IT & System Costs
Often provider data management mistakes can be the result of using multiple single solutions that don’t work together or integrate with original data sources. This requires additional time for the IT team to troubleshoot, work with multiple vendors, or figure out manual workarounds.
Strategies to Prevent Provider Data Management Mistakes
As healthcare systems become more multifaceted, the most important strategy is to implement healthcare credentialing software. Here are some ways that your organization can prevent provider data management mistakes with technology:
- Implement AI tools: AI-powered data addition and extraction can improve accuracy by automatically classifying and verifying provider documents.
- Reduce redundant data entry: Pull information directly from CAQH to get the most up-to-date provider data, minimizing manual data entry while improving accuracy.
- Use a centralized system: Implement a cloud-based platform to prevent provider data management mistakes.
- Enforce data entry standards: Create standardized fields and required formats for names, NPI numbers, and credentialing details to prevent inconsistencies.
- Conduct real-time verifications: Use automated tools to cross-check credentials with the original source, such as licensing boards and the National Practitioner Data Bank (NPDB).
- Track license expiration dates: Proactively manage credentials with automated alerts that notify admins and providers before licenses expire.
- Conduct routine audits: Use internal audits to identify bad data (such as missing credentials or training deficiencies) so you’re ahead of issues.
- Customize reports: Set up real-time reports and dashboards that help to surface missing documents and inaccuracies, such as a provider not enrolled at a location.
- Use analytics and reporting: Track key metrics, such as claim denial rates or application age, to identify areas for improvement.
- Leverage pre-filled applications: Use pre-populated credentialing applications to eliminate redundant manual work.
- Educate employees on best practices: Train credentialing and HR teams on data accuracy, compliance requirements, and automation tools.
Implement Technology to Avoid Provider Data Management Mistakes
Technology is revolutionizing credentialing and preventing many of the costs associated with provider data management mistakes. The key is to find a credentialing platform that brings all related processes into one place that is easy to use. Here are the features that will make the biggest impact on your provider data management:
- Automation eliminates manual data entry and keeps expirations top of mind.
- AI-powered tools can quickly verify credentials, auto-fill forms, and compile credentialing packets.
- Integration with HR, learning, and enrollment systems streamlines workflows, preventing data silos and reducing administrative burden.
- Advanced analytics and reporting provide visibility into provider status, helping organizations proactively address issues before they impact operations or revenue.
- Standardized workflows ensure consistency and surface gaps or missing documents.
By leveraging technology, healthcare organizations can take a proactive approach to avoiding provider data management mistakes. It provides long-term benefits, including fewer denied claims, stronger compliance, and seamless provider operations. This stability allows healthcare organizations to reinvest in patient care, staffing, and operational improvements.
Employees can enjoy real-time access to accurate information and enhanced coordination across teams, which not only saves organizations time and money, but also allows them to focus on their main priority — offering quality care.
