Improving accuracy and controlling costs with incentivization
The healthcare industry depends on elaborate, costly processes to keep healthcare data timely and accurate. This is especially true in the domain of provider verification. Patients need health insurance companies to match their medical needs with an approved provider to ensure that claims are paid.
Unfortunately, provider verification tends to be complex, expensive, and error-prone. But innovations in cryptography and blockchain networking are clearing the path to more accurate and less costly provider verification. How would this work? Through the implementation of a blockchain network using a token called NPI Coin to reward network participants.
Why call it NPI Coin? NPI means National Provider Identifier. Like a Social Security number for the healthcare industry, an NPI is a unique identifier for medical providers, insurers, and medical clearinghouses. Each clinician also has an NPI, making it a useful standard for vetting provider data across the healthcare ecosystem.
In blockchain networks, tokens reward people for activities that encourage useful outcomes. The most recognized example is Bitcoin, which awards coins to blockchain participants called miners who deploy computing resources to fulfill the network’s goals.
We propose an NPI Coin that applies this principle to provider verification. NPI Coin would be a medium of exchange that gives network users a strong incentive to participate. With network effects, more entrants joining the NPI Coin ecosystem would drive more value over time.
This proposal explores the potential of an NPI Coin ecosystem in four parts:
NPI Coin was proposed by Alok Mandal, vice president of technology with a leading U.S. IT system integrator that is helping clients develop blockchain solutions. Mandal also is an MIT-certified blockchain professional with many years of experience implementing healthcare technologies. He drew on this background in recent MIT blockchain course that asked students to map out real-world use cases for blockchain technologies.
Mandal proposed using blockchain to confirm the accuracy of a specific subset of healthcare data. Mandal needed a realistic proposal, as he could not take on verifying all medical data in the vast U.S. healthcare sector, where spending of $4.1 trillion accounts for nearly one-fifth of U.S. gross domestic product.
Instead, he focused on a slice of the challenge: provider data verification. Providers are the clinicians, hospitals, and healthcare companies that diagnose and treat injuries and illnesses and transact business with health insurance companies (also called payers), and patients (also called the membership of payer companies).
Confirming the accuracy of provider data is a consistent source of friction. Provider data changes frequently because doctors add certifications, switch employers, change their legal names, and so on. These changes can cause challenges that ripple through the healthcare ecosystem.
Mandal’s idea: Why not use blockchain networks and tokens to remove this friction?
In U.S. healthcare, payers must manage contracts with providers and keep all provider information accurate and up to date. Claims are settled and reconciled through an expensive, highly regulated process called primary source verification (PSV).
“Every payer organization needs to deploy PSV to validate that patients are visiting the right providers,” Mandal explains. PSV also helps payers identify fraud, waste, and abuse.
While PSV is essential, it is also fraught with difficulties that inspired Mandal to devise the NPI Coin solution. “Provider information usually gets stale,” Mandal explains. “Say, for example, a doctor changes his office, opens a new branch, or joins another practice group. What if that data update doesn’t reach all the different insurance companies his patients use?”
Too many times, stale data causes payers to reject legitimate claims, angering the membership and damaging the payers’ reputations. Adding another layer of inaccuracy is simple human error. Incorrect addresses or misspelled provider names may be entered. Data also may be stored in multiple formats and locations, increasing the odds of PSV inconsistencies.
Provider verification is an expensive prospect. “Insurance companies spend millions and millions of dollars every year” making PSV work, Mandal says. Third parties that specialize in PSV impose costs on every transaction.
PSV is costly because of its complexity and redundancy. Verification must happen across multiple venues, requiring sophisticated, often intricate human and technical solutions. Multiple providers and payers often perform identical verifications, creating inefficiencies that inflate the cost of doing business.
PSV is a robust process, but it still cannot ensure that all sources of provider data are timely and factually correct. Inaccuracies and high costs persist, Mandal says, because providers lack incentives strong enough to overcome them.
This is where NPI Coin and blockchain come in.
Let’s start with a quick refresher on blockchain technologies. Blockchain databases host permanent, immutable blocks that are extremely difficult to delete or amend. Any revisions to a block become digitally attached to the original — hence the term blockchain.
Each block in the chain is encrypted and stored in a ledger distributed to every user in the blockchain network. Everybody on the ledger must approve revisions to blocks, creating massive obstacles to hackers and other troublemakers.
Bitcoin, the most famous blockchain use case, is structured to encourage participation in the network. People put computing resources to work performing complex calculations that make the Bitcoin network possible. Miners earn bitcoins for completing these calculations, encouraging them to mine even more.
NPI Coin would emulate these incentives, giving the healthcare industry a monetary motive to participate in the system.
A blockchain network and NPI coin could address the shortcomings of current verification practices thanks to:
“Virtusa helps some of the biggest U.S. payers use provider lifecycle management, or PLM, technologies to keep their provider data current,” Mandal says. “Even with PLM, there are lots of opportunities to bring cost efficiencies. This blockchain solution can solve many of them.”
Of course, NPI Coin must overcome a host of obstacles before it becomes a reality.
With NPI Coin, the provider’s data would always be accurate and timely. Insurance companies could avoid paying to “recertify” provider data, which costs an industry average of $100 for every recertification, Mandal explains. There would be no more stale data to trip up patients’ claims.
“It's a win-win-win,” Mandal says.
For all the potential advantages of NPI Coin, adoption will require the medical industry to deal with profound human and technical challenges.
One of the biggest human issues is incentive engineering. Bitcoin became a notorious example of this phenomenon when it started attracting miners worldwide. The energy costs of their computing tasks exploded, with electricity demands rivaling the consumption of small countries.
Fortunately, not all blockchain technologies require such massive energy expenditures. NPI Coin users would not mine anything, for instance. “They just come in the blockchain ledger and certify themselves,” Mandal explains. “That certification would have its own digital signature. After that is established, they become part of the whole ecosystem.”
In Mandal’s proposal, NPI Coin would employ Ethereum technologies, which use smart contracts to regulate transactions and award coins to those who conduct business on the network. Once this network becomes fully established, the NPI Coin methodology could be extended to the processing of healthcare claims — potentially disbursing claims in NPI Coins.
Of course, implementing NPI Coin would pose a raft of technology challenges, including:
Admittedly, change management for adopting NPI Coin will not be easy, Mandal concedes. Payers, members, and providers all will likely resist the new technology because they’re unfamiliar with its benefits.
Of these three audiences, Mandal sees the most potential in payers: “The starting point has to be one of the insurance companies, who have all the right connections to make this blockchain work, because the networking is the key,” he suggests.
Blockchain is like any technology network: It gets more powerful as more people use it. If a system integrator like Virtusa succeeded with one NPI Coin in one insurance company, it could apply that model with other insurers. As insurers embrace the value of the network, they can invite members to participate as well.
“If you don’t have the right networking, the blockchain concept would not work,” Mandal cautions. If you get the networking right, however, the concept could be applied to healthcare networks worldwide, he says.
Envisioning a global NPI Coin is ambitious, given that the technology exists primarily on paper. Making NPI Coin into a working prototype is much more realistic, thanks to advances in automation.
Automation and learning algorithms will be pivotal to the effectiveness of NPI Coin. This will take three forms:
A fabric of bots, scripts, and algorithms would have to connect providers to the blockchain and keep it perpetually updated. “We need to stitch this automation into the whole provider ecosystem,” Mandal says.
One question about NPI Coin remains: Who would build this blockchain network and orchestrate the automation required to implement it?
NPI Coin is based on widely available technology including AI/ML, repetitive process automation, and machine learning. Developing NPI Coin will most likely require healthcare payers to partner with technology providers who are committed to the coin’s potential. The technology partner should meet three base requirements: extensive experience in advanced automation, a current track record for delivering blockchain solutions, and a portfolio of clients in the payer sector.
The exploding costs of healthcare and the extreme difficulty of cost control give medical providers a strong incentive to explore practical alternatives. NPI Coin, built on a robust blockchain network, can be the means to make that happen. While not an easy task, given the abundance of serious challenges that must be overcome, the rewards will far outweigh the risks.
Vice President, DPA Practice Lead for Healthcare and Life Sciences
Alok leads the digital process automation (DPA) solution group for the healthcare and life sciences segment in Virtusa.
He is an accomplished enterprise architect professional with expertise in developing enterprise business solution comprising DPA, BPM, CRM, integration components, and data analytics (inclusive of predictive and adaptive models). He spearheads key DPA solution initiatives that are implemented in line with industry trends and go-to-market strategies.
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