Provider Data Management is a Painful Process; Automation Makes it Easier

Posted by Patrick Bores on December 21st, 2023
Patrick Bores
Patrick is the Chief Information Officer and product and technology development leader with over two decades of experience in the healthcare industry. As a healthcare automation expert, he spearheads innovative AI/ML solutions to improve accuracy, efficiency, and cost-effectiveness. He graduated from the University of Minnesota in Computer Science and is a Certified Information Systems Security Professional.

Few would deny the American healthcare system faces a great number of complex challenges. Health plans struggling to maintain accurate provider data shouldn’t be one of them, but it is. In fact, in a representative survey by the American Medical Association, more than half of physicians said their patients encounter coverage issues due to inaccurate information in the provider directories maintained by insurance companies. It’s frustrating for healthcare consumers, but it’s also a big problem for providers and payers, as the burdensome task of keeping provider data current bogs down claims processes and inflates the costs of doing business.

In a time when improving access to high-quality and affordable healthcare is a critical issue across the country, there is an urgent need for technologies that can remove bottlenecks and unlock efficiencies. More specifically, the challenge of constantly updating provider data is a perfect candidate for automation solutions.

In this article, we’ll take a closer look at why bad data is so prevalent, why it’s so detrimental to the healthcare system, and how automation may be the key to greater data accuracy, faster turnaround times, better service and lower costs for everyone involved.

The Backstory: Provider Data is a Mess

Every healthcare insurance company is required by state and federal laws to keep a record of providers (physicians, clinics, labs, etc.) who accept their plans. The record typically includes information such as the provider’s office address, hours of operation, specializations and licenses, which plans they accept, and other data that may be visible only to the payer, such as tax ID numbers. Consumers use this information to find physicians that meet their needs, and payers use it to help them manage the insurance claims process.

Unfortunately, much of the information found in these records is wrong. It may have been entered incorrectly or incompletely. It could be outdated if the provider’s details have changed.  Or, it might be duplicated across redundant entries containing slight discrepancies.

Although various regulations require payers to contact providers regularly to verify or update their information, this “solution” creates more problems than it solves. To stay in compliance, payers must employ whole teams of workers whose sole responsibility is making account updates. Meanwhile, the providers’ administrative staff must constantly field information requests from multiple health plans (the average physician has more than 20 payer contacts). They submit provider information in various ways – phone, fax, email, regular mail, or through any number of software platforms – and the burden falls to payers to sort it all out. It’s a time-consuming and tedious process, prone to errors and omissions on both sides, and it’s not effective in cleaning up provider records.

Ultimately, bad provider data slows down the process of managing healthcare claims, leads to further mistakes and rework, and may even trigger penalties from regulatory agencies. All of this comes at an enormous cumulative cost to payers and providers, and contributes to a consumer healthcare experience that is expensive, confusing and inconvenient.

Automation to the Rescue

What the healthcare industry desperately needs is a more efficient way to create and maintain accurate provider records. It’s been a vexing problem for decades, but as with so many aspects of healthcare, the proliferation of advanced technology is enabling realistic and cost-effective solutions. With the power of automation and artificial intelligence (AI), modern software can take over much of the tiresome administrative work required to keep provider data current.

Instead of payer employees having to sift through electronic data and piles of paperwork submitted by providers, an automated program can capture data from any format, match it to existing entries and update the listing accordingly. Going a step further, automation can recognize and correct errors in the data, verifying it against external sources like the U.S. Postal Service, NPPES and 1099 databases, and even track the most recent service and billing provider addresses. It can also scan the entire provider file to identify and remove duplicate listings. Steps like these, which typically represent hours or days of manual labor, can be performed almost instantaneously through automation. And when human intervention is required, the system can escalate issues or route recommendations to appropriate parties.

The result is cleaner, more complete and more accurate provider data to serve as the payer’s “single source of truth.”

High-quality Data, Far-reaching Benefits

In most cases, automating data management will begin with payers, but the positive results won’t end with them. After all, healthcare is a vast ecosystem shared by a myriad of stakeholders, all of whom could greatly benefit from more accurate records and streamlined processes.

Progress Within Reach

The provider data problem is one of many facing the healthcare sector. But unlike other complex issues that could take decades to resolve, this one has a clear, relatively simple solution in sight. Implementing AI-powered automation to streamline data management could be considered low-hanging fruit for healthcare payers – a minimal investment with potentially profound impacts on cost control, business performance and customer satisfaction. The technology is here today and ready for action. The industry need only put it to use.

Patrick Bores serves as CIO at Smart Data Solutions, while Tracy Altman specializes as a Subject Matter Expert in Provider Contracting and Data Management within the same organization. Smart Data Solutions is a leading provider of automation solutions for the healthcare industry. For more information, contact us at

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