May 12, 2014

ICD-10 or EHR: Which is a Larger Financial Burden

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Yet another postponement of ICD-10 implementation has brought about negative postings and comments regarding the decision to delay, along with skepticism about any future implementation, in light of all of the dollars already spent in preparation.

Larger entities and hospital systems are financially shaken, as they had large budgets set and already had spent large sums investing in training and readiness programs, which now may reflect unpracticed skills that could diminish over the next 18 months. 

Smaller organizations and physician practices have let out an audible sigh of relief, noting that they now have one more year to put off the training, investment, and upgrades necessary to be ready to go live. It’s an ironic thought that there are so many outspoken commenters complaining about the money that has or will be spent on ICD-10 training and implementation, but yet entities and practices have been forced into electronic health records (EHR). They have walked willingly into this forced change with little to no outrage – or lobbying by associations and organizations to make such a change voluntary and not mandatory.

Maybe the financial incentives, being substantial in nature ($44,000 to $63,750 per provider), lured the medical field into willingness to comply with this adaptation. The “money carrot” camouflaged the requirements and mandates that would come about through EHR incentives and meaningful use regulations. At the beginning phases of EHR, the full rules and breakdown of meaningful use were still ill-defined, but the promise of the incentive bonus was widely broadcasted. Was the promise of a minimum of $44,000 the reason there was not as much opposition to EHR as there has been to ICD-10? Many were willing to adapt to EHR for the promises of the efficiency that this implementation would bring, not to mention the increased revenue with and higher billable levels of service. However, for many we have seen the exact opposite take place, with the shift causing a decrease in patient volumes and costly medical necessity audits producing enhanced scrutiny of increased utilization in higher levels of service.

Let’s think back to the implementation of electronic medical records (EMRs) and consider why there was such a demand for having electronic access to individuals’ medical records. The concept of EMRs was quite brilliant and ultimately would, as we hoped, lead to an end product of better patient care. This would be accomplished by allowing a patient’s records to be accessed regardless of the whereabouts of the patient or location(s) of their previous services. For example, this means that if I were to walk out in front of a taxi in New York City and arrive at the ER unresponsive and unable to give my medical history or allergies, my medical records from Melbourne, Fla., could be accessed with relative ease. This is far from what we have experienced with EMR (now known as EHR). Commercialization and capitalization have taken over, and systems have been created that actually do increase efficiency – but at the cost of sacrificing quality documentation.

The financial investment in EHR in most cases has far exceeded the bonus incentives. Healthit.gov reports that the average five-year total cost of ownership is $48,000-$58,000 per provider, which far exceeds the Medicare incentive bonus. The cost factors of this study were costs associated with hardware, software, implementation assistance, training, and ongoing network fees. But think of the missing components not taken into consideration: template creation, uploading of old/current information, staff adaptation and on-the-job training, not to mention decreases in patient flow as providers and staffs learn to implement the EHR into their day-to-day operations. The March 2011 edition of Health Affairs included information on a study the publication had performed looking at more than 25 Texas-based practices; the study found that on average, 611 hours were spent merely implementing the EHR and that clinical staffs (providers and nursing staff) required approximately 134 hours each to even become familiar with the EHR. Taking all of those costs into consideration, this likely would produce a figure of more than double that of the analysis created by Healthit.gov, which furthermore would show a five-year cost analysis of a net loss for EHR use. And again I ask you, where is the roar of the crowd complaining about the implementation costs of her, as they have about ICD-10 implementation and delay?

There is also the risk and liability that a practice must take into consideration with EHR; that is, the risk of increased audit vulnerability and contradictory medical records. The implementation of EHR was supposed to reduce the claims payment amounts collected by the government yet the providers began billing higher levels of service, which actually caused an increase in reimbursement payments. This has led to calls for the Centers for Medicare & Medicaid Services (CMS) to steer its scrutiny away from medical records and to focus more on complexity-of-care code validation and auditing of the actual documentation component content to support the codes (commonly known as the “bottom-up” approach).

Self-scoring EHRs are created to “count” the documentation elements of a medical record and assign a level of service based on 1+1=2, but this leaves absolutely no consideration of the medical necessity or complexity, or the process of sorting through the actual analysis of the details of the content of the medical service. This typically leads to an over-coding situation. Medicare has indicated that medical necessity is the “overarching determining factor” regarding the evaluation of claims, and that this factor therefore should be considered in each and every encounter that is produced and billed. Yet a software system cannot analyze medical necessity, and therefore, the “suggested” coding of an encounter is based on the documentation content only. EHR self-scoring applications are meant to be a guide for providers, but they certainly do not represent an authoritative choice for code selection.

Medical necessity should not be confused with medical decision-making (which, yes, is determined from the counting method), and the medical necessity of each note should be valued in line with the complexity of care based on the overall severity of the patient encounter. This has led to claims and services being overvalued, causing increased utilization of certain codes, which has led to increases in audit services.

Finally, we now have a growing new concern regarding the findings of post-payment meaningful use audits uncovering a common deficiency among EHRs. It is being noted that the ePHI (electronic health protected information) has not been as thoroughly tested as the MU guidelines require, and this may lead to recoupment of bonus payments made to providers. This may prove to be yet another cause of further expenses related to EHR implementation. 

So CMS has forced providers into using a system that promotes over-coding and paid providers to do so, and the agency now is spending millions of dollars auditing and recouping these funds (often costing the providers even more money to defend their documentation, mount appeals, and in some instances, appear before an ALJ). All of this is going on and I still beg to ask – why has EHR not stimulated the same protests as ICD-10? Ask yourself, how much has my practice spent on EHR, as opposed to ICD-10 readiness? It is an interesting consideration, especially if you ask how ICD-10 would have been received by the healthcare industry if there had been a bonus incentive involved with implementation and/or early implementation. The implementation date of October 2014 had created a sense of urgency for many to finally begin training and addressing challenges that they may encounter in a go-live scenario, and while that training will still be good for the delayed date, learned skills will diminish over the next 18 months. Ultimately, these training efforts were not a waste of time, money, or resources – but at the same time, loss of revenue and increased scrutiny of EHR-produced documentation have been financially taxing for practices.

About the Author

Shannon DeConda is the founder and president of the National Alliance of Medical Auditing Specialists (NAMAS) as well as the President of Coding & Billing Services and a Partner at DoctorsManagement, LLC. Ms. DeConda has more than 16 years of experience as a multi-specialty auditor and coder. She has helped coders, medical chart auditors, and medical practices optimize business processes and maximize reimbursement by identifying lost revenue. Since founding NAMAS in 2007, Ms. DeConda has developed the NAMAS Medical Auditing Certification Training, written the NAMAS Medical Auditing Study Guide, and launched a wide variety of educational products and web-based educational tools to help coders, auditors, and medical providers improve their efficiencies.

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Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Shannon DeConda CPC, CPC-I, CEMC, CMSCS, CPMA®

Shannon DeConda is the founder and president of the National Alliance of Medical Auditing Specialists (NAMAS) as well as the president of coding and billing services and a partner at DoctorsManagement, LLC. Ms. DeConda has more than 16 years of experience as a multi-specialty auditor and coder. She has helped coders, medical chart auditors, and medical practices optimize business processes and maximize reimbursement by identifying lost revenue. Since founding NAMAS in 2007, Ms. DeConda has developed the NAMAS CPMA® Certification Training, written the NAMAS CPMA® Study Guide, and launched a wide variety of educational products and web-based educational tools to help coders, auditors, and medical providers improve their efficiencies. Shannon is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.