The Cost Burden of Maintaining Provider Directories

April Todd

Responding to health plan requests to verify and update directory information is a significant administrative burden on providers and may be undermining the accuracy of directories.  

In fact, providers spend $2.76 billion each year on provider directory maintenance, a new survey by CAQH found. 

Directory maintenance costs the typical provider practice $998 per month and requires one full staff day per week. CAQH recently surveyed 1,240 physician practices and released “The Hidden Causes of Inaccurate Provider Directories.”

Nationwide, responding to health plan requests to update and verify directory information costs practices $2.76 billion each year. Streamlining this process through a single platform could reduce the administrative burden by 39.6%, and reduce the cost to practices nationwide by $1.1 billion.

“In recent years, health plans, policy makers, patient advocates, and other industry stakeholders have paid increasing attention to the error rates in health plan directories,” says April Todd, senior vice president CORE and Explorations at CAQH, a Washington, D.C-based non-profit alliance, which creates shared initiatives to streamline the business of healthcare. “In spite of the focus and investment in this area, according to CMS, over the past few years the accuracy of directories has not significantly improved. We conducted the survey to quantify the burden on providers associated with directory maintenance and identify a new way to improve the accuracy of the information.”

Related: Inaccurate Provider Directories Create Barriers To Care

Challenges with provider data impact countless  business functions across healthcare, from claims payment to credentialing, according to Todd.

“This study highlighted one step that could improve the quality of the data and yield significant and widespread benefits across the healthcare economy,” she says.

The survey also revealed that practices have, on average, 20.2 health plan contracts. Through common platforms that allow providers to share directory, credentialing and other information with many plans at once, the industry can both improve data quality and reduce administrative burdens on providers that draw resources away from patient care.

A survey released by the American Medical Association in January 2018, showed that 52% of physicians said their patients encounter coverage issues at least once a month due to inaccurate directories. To address this problem, 67% of physicians surveyed by the AMA expressed an interest in having their practice use just one interface to send and update information to payers.

Tracey Walker is managing editor of Managed Healthcare Executive.