An Interview with Health Market Science’s Matt Reichert

By John Becker for ComputerTalk

Matt Reichert is CEO of Health Market Science, a provider of solutions that leverage the industry’s most comprehensive and accurate prescriber database. Reichert has managed the launch of several new products, overseen aggressive revenue growth at the company, and been instrumental in developing the infrastructure and staff to support company growth. Reichert sat down recently with John Becker, representing ComputerTalk, to discuss the new provider data requirements defined in CMS-4157 and how the industry is reacting to the new requirements.

CT: What is CMS-4157 and why the call for new and additional provider data this year?

Reichert: Simply put, CMS-4157 (final rule) is designed to get a handle on fraud, waste and abuse by addressing the gaps in provider data that we continue to see in today’s market. Here’s the backdrop, according to a 12-month sampling of data by the Office of the Inspector General:

● 18.2 million prescription drug events contained invalid identifiers

● $1.2 billion was paid to pharmacies for claims where provider IDs were either missing or invalid
● 17% of claims didn’t meet the identifier’s format for DEA or NPI representing $213 million paid to pharmacies
● Another $48 million in claims had dummy DEA numbers
● 97% of flagged identifiers were DEA numbers
● 10% of submitted claims did not have a valid NPI or state license number

You almost have to look at prescriber data as a living, breathing entity. We see prescriber data changing 1-3% each month on a national basis so the challenges to keeping the data current and accurate are enormous. Pharmacies are adding 1-10 new records per week and samples show that 25% of these new records have errors.

The rule and call letter are CMS’s way of acknowledging the work that needs to be done to improve the quality of data being submitted today. The call letter requirements go to the payers, the payers pass them on to the PBMs and the PBMs pass them along to pharmacy. It all gets pushed down to the point of sale where responsibility for compliance ultimately lies, but everyone along the way has a role to play in making sure data is compliant.

CT: What’s required for compliance with CMS-4157?

Reichert: The most significant requirement is that, starting next year, there must be a valid, active individual NPI number submitted with each claim. You won’t be able to use the Type II or organizational DEA number any longer. This new rule applies to foreign prescribers as well. Payer/processors will still pay claims with non-compliant NPIs but will send a reject message asking the pharmacy to correct the data and resubmit the claim. Sponsors will be required to have controls in place to ensure that network pharmacies resubmit rejected claims. This puts some pressure on at the point of sale, which can be alleviated if the pharmacy has access to clean, complete prescriber data up front.

One thing left out of the final rule is verification of the submitted NPI. I could use your NPI or the one belonging to the doctor across the street or even one belonging to an ambulance driver. I think they’ll tighten this requirement up soon by linking the NPI to first and last name and doing a validation based on that.

CT: How is the industry reacting?

Reichert: Industry groups like NCPDP, ASAP and AMCP work hard to raise awareness within their memberships to the new requirements and to influence what’s included in the requirements and the timing of when they go into effect. For the most part, these groups do a great job. For example, NCPDP has formed a task force to clearly define the term ‘valid prescriber.’ They’ve also helped define new approved/rejected message codes as well as new submission clarification codes and are preparing a white paper on best practices.

However, given the current budget deficit realities and the opportunity the government has to generate revenue through issuing fines for non-compliance, it’s a safe bet there will be more requirements going forward, not less, and that there will be continued emphasis on enforcement. It’s important for everyone involved – especially those who control pharmacy system functionality – to realize this and plan accordingly. Whether it’s the IT department of a pharmacy chain or the vendor who provides pharmacy systems to independents, pharmacists at the point of sale must have access to accurate and up-to-date provider data. These folks hold the key as to if and how that happens.

CT: What functionality are pharmacists going to need from their system vendors to comply and do you think vendors are in a position to comply in the required timeframe?

Reichert: Broadly speaking, pharmacies must take ownership of 4157 compliance at the point of sale. They’ll need advanced systems that keep pace with regulatory requirements and processes in place to support making sure their data is compliant. They’ll need to be able to demonstrate ‘continuous process improvement’ with respect to compliance. They’ll need to be vigilant and show a willingness to make an investment with respect to prescriber data cleanliness and accuracy, and they’ll need to be able to ‘manage and defend’ their practices if they’re audited. Defining and sharing best practices can play a big role in helping everyone stay as compliant as possible.

The systems these pharmacies use will need to be able to be more amenable to data from external sources – from consumption to ongoing management. They’ll need to be able to merge and decommission records and also manage new or changed records through outside data exchanges. Data structures will have to be developed for storing and utilizing sanction, status, and licensure information and there will have to be real-time validation of licensure, sanctions, DEA to credential, etc. System vendors and IT departments will have to move quickly and be flexible in order to quickly respond to the ever-evolving regulations in a cost-effective manner. They’ll need to have clearly defined strategies for providing this functionality to their users, whether it be through use of API call-outs, or by actually building the databases and functionality into their own systems. Pharmacies should spare no effort to make sure whoever supplies their systems is aware of the changes that are required and is in a position to deliver those changes.

The challenges are significant from a technology perspective but our industry has faced significant challenges before and survived. The technology providers who will be in the best position to thrive in this environment are those who embrace the opportunity and who make comprehensive and cost-effective data management technology a centerpiece of their offering. CT