DEPARTMENTOFHEALTH &. HUMAN SERVICES Office of InspectorGeneral
Washington, D.C. 20201
JUN -8 200J
TO: DeborahTaylor
Acting Director and ChiefFinancial Officer
Centers for Medicare & Medicaid Services
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FROM: Stfi'ari . -
Deputy Inspector General
for Evaluation and Inspections
SUBJECT: Memorandum Report: "Inaccurate Data inthe ProviderEnrollment, Chain, and
Ownership System Individual Global Extract File" (OEI-07-08-00181)
This memorandum report describes inaccurate datathat we found inthe Provider Enrollment,
Chain, and Ownership System (PECOS) Individual Global ExtractFile (the Extract). During
datacollection for a study entitled"ReassignmentofMedicare Benefits" (OEI-07-08-00180), we
identified discrepancies between PECOS and the May 2008 Extract inthe number ofactive
Medicare reassignments ofbenefits (hereinafterreferred to as reassignments) and the effective
dates ofreassignments.I We asked the Centers for Medicare & Medicaid Services (CMS) staff
to explainthe discrepancies betweenthe two data sources. CMS staffinvestigated and found
that the Extractretained records ofterminated reassignments, when only active reassignments
should have been reflected. Additionally, the Extract contained inaccurate effective dates of
reassignments. CMS staffagreed to add informationregarding the inaccurate data to their
tracking log for PECOS and prioritize the identification ofsolutions for a future release of
PECOS, although they did not indicate whenthe solutions would be implemented.
BACKGROUND
The PECOS is the electronic system ofrecords Medicare contractors use to enroll and maintain
information on providers. The PECOS contains informationonreassignments, provider
correspondence and payment addresses, ownership and management, and adverse legal actions
against providers.
The Extract is designed to provide apoint-in-time snapshot ofall PECOS dataon active
providers and their active reassignments.2 A new Extract is created onthe first business day of
every month. There are two separate Extract files: the Individual Global ExtractFile, which
contains records for individual providers; and the Organizational Global Extract File, which
I ReassignmentsareamechanismbywhichaMedicareproviderallows anotherentity, orthirdparty,to bill for
servicesthat itrendered.
2CMS, "GlobalExtractFileHow-ToGuide," DocumentID: PECOS-4.4.0-UG-31339-v.2.10, p. I.
OEI-07-08-00181 InaccurateDatainthe PECOS IndividualGlobalExtractFile  
Page 2  Deborah Taylor 
 
 
contains records for organizational providers.3  The Extract was developed to eliminate the need 
for CMS staff to fulfill many one-time and ongoing data requests.  CMS staff, research firms, 
and Medicare contractors use the Extract to obtain provider participation status and practice 
location information.4  It is also used to assist beneficiaries with finding a provider through the 
Medicare.gov Web site. 
 
CMS issues periodic releases and updates to PECOS to add new functionality and correct errors 
as needed.  These releases can result from CMS initiatives or change requests.  CMS issued the 
most recent release in March 2009, and CMS staff indicated the next release will likely occur in 
May 2009.  CMS staff anticipate additional releases later in 2009 and 2010. 
 
From late 2008 to early 2009, we attempted to contact sampled providers for our ongoing study 
on Medicare reassignment of benefits.  The purpose of that study is to determine whether 
Medicare providers were aware of all active reassignments as listed in the Extract.  Prior to 
beginning data collection, CMS staff confirmed their belief that the Extract contained only 
records of active reassignments (i.e., reassignments that had never been terminated).   
 
METHODOLOGY 
 
We used the May 2008 Extract to select a random sample of 497 Medicare providers whose 
benefits had been reassigned.  These providers had a total of 1,816 reassignments in the Extract.  
We searched the PECOS database to ascertain whether providers correspondence addresses had 
changed between the creation of the May 2008 Extract and the date we attempted to contact the 
providers (i.e., September 2008March 2009).  We found that some of the reassignments 
contained in the Extract had end dates in the PECOS database, indicating that they had been 
terminated.  Upon further examination, we also found that the effective dates for many of the 
reassignments recorded in the Extract were different from the effective dates recorded in the 
PECOS database.  We asked CMS staff in the Office of Financial Management to explain these 
discrepancies.  
 
This study was conducted in accordance with the Quality Standards for Inspections issued by 
the Presidents Council on Integrity and Efficiency and the Executive Council on Integrity and 
Efficiency (now Council of the Inspectors General on Integrity and Efficiency). 
 
 
                                                                                                                                                 
3  We reviewed only the Individual Global Extract File. 
4  Research firms and contractors using the Extract include:  IOWA Foundation, Lockheed Martin, National 
Government Services, Thompson Reuters, and ViPS. 
OEI-07-08-00181      Inaccurate Data in the PECOS Individual Global Extract File   
Page 3  Deborah Taylor 
 
 
RESULTS 
 
The Extract Contains Records With Terminated Reassignments and Inaccurate Effective 
Dates, Which Limits Its Usefulness 
The inaccurate data we identified limited the usefulness of the Extract, requiring us to search the 
PECOS database for the individual records of all 497 Medicare providers in our sample to verify 
the accuracy of the Extract data.  We found two types of errors.  One type of error caused records 
of terminated reassignments to be retained in the Extract, which should have contained only 
records of reassignments that were active on the date the Extract was created.  We found that 
3.2 percent of the records present in the Extract were affected by this type of error.5  The second 
type of error occurred when the date that the reassignment record was created in PECOS 
populated the effective date field in the Extract, rather than the date the reassignment took effect.   
 
CONCLUSION 
 
In response to our inquiries about the discrepancies between the Extract and the PECOS 
database, CMS staff indicated that they would conduct further research to determine the exact 
cause of errors in the Extract.  CMS staff indicated that they would add information regarding 
the inaccurate data to their tracking log for PECOS and prioritize identifying solutions in a future 
release of PECOS, although they did not indicate when the solutions would be implemented.  
Until these errors are corrected, the Extract will continue to include inaccurate data, which limits 
its usefulness.   
 
To limit the impact of the inaccurate data, CMS may want to alert all users of the Extract of the 
extent and nature of data inaccuracies in the Extract until a corrected version of PECOS is 
released.   
 
When correcting the processing errors, CMS may also want to explore whether other 
inaccuracies exist in the Extract, such as whether 
 
  the Organizational Global Extract file contains similar inaccuracies, 
  other date fields are populating incorrectly, and  
  records of disenrolled providers remain in the Extract. 
 
This memorandum report is being issued directly in final form because it contains no 
recommendations.  If you have comments or questions about this report, please provide them 
within 60 days.  Please refer to report number OEI-07-08-00181 in all correspondence. 
                                                                                                                                                 
5 The 95-percent confidence interval for the 3.2 percent of reassignments present in the Extract that should have 
been terminated was 1.8 percent4.6 percent.  This projects to 26,511 reassignments with a 95-percent confidence 
interval of 15,03137,991 reassignments.   
OEI-07-08-00181      Inaccurate Data in the PECOS Individual Global Extract File