Guest Column | July 30, 2018

Healthcare M&A Activity Elevates The Importance Of Provider Data Management

By Scott Friesen, Newport Credentialing Solutions

Vertical Communications merger

Following a record year of healthcare mergers and acquisitions (M&A), there are no signs of a slowdown. In fact, according to data compiled by Bloomberg, in the first quarter of this year, M&A activity reached a record $156 billion. Philadelphia-based Einstein Healthcare Network and Jefferson Health announced their intent to merge. Meanwhile Grand Rapids-based Spectrum Health, one of Michigan's largest not-for-profit health systems, and Lakeland Health, a three-hospital system based in St. Joseph, signed a letter of intent to merge. These are just two of many M&A examples.

While hospitals and health systems have gotten better at post-M&A integration throughout the years, one area continues to be overlooked — provider data management (PDM). When provider contracting and data management are not factored into M&A integration plans, hospitals and health systems put themselves in a costly financial position.

Understanding The Issues

Several PDM challenges typically follow a merger or acquisition. First, provider data is stored in multiple locations/systems that don’t allow data to be shared. Second, provider contracts, fee schedules, and rates are typically with different insurance companies and therefore need to be consolidated. And, third, health systems have different Tax Identification Numbers (TINs). These challenges are compounded by the fact that critical data is housed in physical and virtual silos, unable to be shared or cross-accessed.

For example, in the case of a merger, provider data must be reviewed and consolidated into a central, enterprise-wide PDM system. If multiple PDM and/or credentialing systems are in use, a single system must be identified. The data must be converted to the single system, and all data must be validated to ensure that the data going into the central system is accurate. Centralized data management is particularly important when dealing with a health system’s TINs. If the acquired health system’s TINs are not converted to the acquiring health system’s TIN, the acquiring health system runs the risk of payments being stopped or routed to the wrong TIN. Either scenario can result in delays in cash posting which in turn can directly affect the financial life blood of the health system.

Another example is the storing of provider and payor contracts in separate contract management systems. Similar to the TINs example, if provider and payor contracts are not centralized into a single provider contract management system, the acquiring health system runs the risk of missing contracts and/or not converting contracts correctly which can negatively impact patient outcomes.

When working in disparate systems and data silos, it is very difficult to ensure that all provider data (which includes enrollment and credentialing data) is active and up-to-date. Managing each provider through the process of enrollment, privileging, provider and payer primary source verification as well as maintaining PAR status is difficult at best. Furthermore, if data is not kept up to date and made available to payers, this sets off a red flag for CMS.

A Course Of Action

Strategic decisions must be made on how to best manage provider data and plans put into place to accelerate the PDM onboarding/integration process. Technology must also be evaluated to see if it is capable of handling a modern-day provider enrollment and data management program. This requires management of the entire provider credentialing and enrollment life cycle within one cloud-based database. This integrated digital backbone can facilitate the collection, management, and collaboration of provider data for every department/organization that shares this data. While each department may manage their respective tasks independently, utilizing an integrated digital backbone allows each department to holistically view and manage where their provider is in the PDM life cycle.

The technology should allow users to easily link all of the hospital’s providers to all of their enrollment contracts. It should also allow for TIN conversions to be managed from this one central location by one group. Because access to information—regardless of location—is essential, a cloud-based technology is highly recommended.

Lastly, hospitals and health systems must also evaluate whether they have the necessary skilled resources in-house to handle the volume of providers being on-boarded. If the volume is too high to manage in-house, look to a credentialing and enrollment partner with proven experience in provider enrollment post-M&A integration.

Managing Provider Data

Healthcare M&A activity shows no signs of slowing. This means healthcare consolidation will likely continue to increase. With greater awareness of the need to include PDM in post-M&A integration plans, financial loss can be avoided.

A merger or acquisition also presents a unique opportunity for a do-over; a chance to get things right. When considering credentialing and provider enrollment, hospitals and health systems that have operated in a silo can link connections with cloud-based technology, and implement processes to link provider data and manage the entire provider enrollment life cycle.

About The Author

Scott Friesen is CEO of Newport Credentialing Solutions.