Life Science Compliance Update

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June 19, 2013

Physician Payment Sunshine Act: HHS OIG Reports the NPPES Database as Largely Inaccurate

The Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) issued a report titled "Improvements Needed to Ensure Provider Enumeration and Medicare Enrollment Data Are Accurate, Complete, and Consistent."  The report cites multiple failings in the reliability of the data contained in the National Plan and Provider Enumeration System (NPPES) and the Provider Enrollment, Chain and Ownership System (PECOS). 

Provider information, including National Provider Identifiers (NPIs), is maintained in the NPPES. To enroll in Medicare, providers must supply their NPIs and other information, which is then entered into the PECOS. PECOS contains data on roughly 1.2 million providers, while the NPPES has data on roughly 2.3 million individual providers.

This report is of particular interest to those stakeholders who are currently gearing up for implementation and compliance with the Physician Payments Sunshine Act a government surveillance and monitoring program targeting manufacturers' payments to physicians and teaching hospitals. One of the main requirements under the reporting provisions is that manufacturers and GPOs report a physician's name, address, NPI number, and other identifying information all based on information in the NPPS database.

The Centers for Medicare & Medicaid Services (CMS) clarified in its final rule that manufacturers and GPOS will have to use the name of physicians "as listed in the NPPES." CMS also required that manufacturers use the NPPES for a physician's business address, specialty, and NPI number. According to the recent OIG report, there are currently significant discrepancies for all of this information.

This OIG report serves as a reminder for all physicians (who are covered recipients): check the NPPES website today or as soon as possible to make sure the following information is correct:

  1. Name (first, last, middle)
  2. Mailing address
  3. Primary Practice address (and secondary if applicable)
  4. Specialty
  5. NPI #
  6. State license number(s) if applicable

According to an article from MedPage Today analyzing the recent report, OIG found that "[d]ata in at least one field were inaccurate in 48% of inspected records in the NPPES and in 58% of inspected records in PECOS.

For NPPES, providers said mailing addresses and practice addresses were inaccurate 44% of the time, the OIG report found. There were errors in both mailing addresses and inaccurate practice addresses. According to NPPES guidelines, changes in required data, such as mailing and practice address, must be communicated by providers within 30 days of the change.

For PECOS, 52% of respondents spotted at least one inaccurate address. Providers are required to report changes in required information to PECOS within 90 calendar days of change.

Provider data were also "inconsistent between NPPES and PECOS 97% of the time, and CMS didn't verify most provider information," MedPage wrote. "Addresses, which are essential for contacting providers and identifying trends in fraud, waste, and abuse, were the source of most inaccuracies and inconsistencies," the report found.

"Inaccurate, incomplete, and inconsistent provider data coupled with insufficient oversight place the integrity of the Medicare program at risk and present vulnerabilities in all health care programs."

The OIG report raises concerns from manufacturers who will begin reporting in almost six-weeks.

  • Will CMS penalize an applicable manufacturer who uses incorrect data from the NPPES website?
  • How will CMS address these errors and discrepancies?
  • Will there be any further affirmative duty on manufacturers to verify this information?
  • Will there be any affirmative duty on physicians to update and correct this information, even though the Sunshine Act does not regulate or require physicians to do anything (only manufacturers)?

These questions may all depend on the context and nature of the error. If addresses or middle initials are incorrect, this may not be enough of a mistake for CMS to impose a fine whatsoever. However, multiple errors, or errors where there may be other discrepancies such as covered product or nature of payment inconsistency may raise additional red flags for CMS.

The key for many manufacturers here will be pre-submission review. If manufacturers can get their payment reports for physicians out early for physicians to review, this may avoid any incorrect information because the physicians can correct address, NPI number, name, etc. Moreover, this report underscores the importance of manufacturers telling all physicians to ensure that their information is correct in the NPPES.

Based on OIG's findings, the agency made the following recommendations:

  • CMS should require Medicare Administrative Contractors to implement program integrity safeguards for Medicare provider enrollment as established in the Program Integrity Manual.
  • CMS should require more verification of NPPES enumeration and PECOS enrollment data; and
  • CMS should detect and correct inaccurate and incomplete provider enumeration and enrollment data for new and established records. CMS concurred with all three of our recommendations.

With respect to the second recommendation, OIG said that CMS should consider:

  • using the new PECOS automated provider-screening tool to verify provider data in NPPES, including name, DOB, place of birth, licensure, credentials, mailing address, practice location, telephone numbers, and legitimacy of business;
  • monitoring NPPES applications by geographic area to detect potential fraud; and
  • enabling NPPES contractor staff to immediately deactivate or suspend the NPIs of providers who are presumed to be deceased.

With respect to the third recommendation, OIG said that CMS should consider:

  • requiring more frequent revalidation of selected variables, especially address information;
  • implementing an automated system edit that will require license information for providers with applicable specialty/taxonomy codes;
  • reducing or eliminating the option for providers to submit enumeration and enrollment applications via paper; and
  • offering providers incentives to keep their data accurate and current

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