Avoiding Financial Losses After EMR Implementation

While hospitals buy EMRs to improve their operations – both clinically and financially – too often they take a hit before they work out the kinks in their installation.  In fact, healthcare institutions often end up losing up to 5 percent of their gross revenue after EMRs are implemented, according to consultant Erick McKesson.

One typical story comes from Maine Medical Center, which found that patient charges weren’t appearing after its $150 million Epic installation in 2012. These billing errors were one of the reasons the medical center posted a $13.4 million loss in the first six months after the installation, hospital executives reported.

But according to McKesson, managing consultant with Navigant, it’s possible to overcome these problems. In an article for Becker’s Hospital Review, he tells the story of a group of health systems which worked together to avoid such losses. The group worked together to identify the most valuable software features that flagged mischarges or reporting errors. They then identified the five charge program “edits” which had the largest financial impact.

Areas the cooperating health systems considered the most important included:

* Administrative codes

The health systems noted that incorrect administrative codes lead to lagging revenue. That’s particularly the case when there are different codes for the same procedure. Hospitals need to be sure that clinicians use the higher code if appropriate, which can be helped by the right technological fixes.

* Anesthesia

It’s important to monitor your charges when there are two distinct aspects of a single procedure that are charged separately, particularly with anesthesia services. If your audit system flags the absence of the added codes, it can recapture a substantial level of missing revenue.

* CT

Seeing to it that radiology charges are automatically reviewed can ensure that appropriate levels of revenue are generated. For example, in the case of CT exams, it’s important to see that charges are assessed for both the exam and if needed, the use of a contrast agent.

* Emergency Department

It’s not unusual for ED physicians to undercode high-acuity patients. But it’s important to address this issue, as undercoding can result in significant financial consequences.  Not only that, in addition to generating financial losses, undercoding can create problems with performance-based reimbursement contracts. If patients are depicted as less acute than they actually are, payors may expect better outcomes than the patients are likely to have. And that can lead to lower revenue or even significant financial penalties.

* Infusions

Auditing infusion charges can be very helpful in capturing added revenues, given that they are one of the most frequent charges in healthcare. Infusion codes are very complex, including the need to track start and stop times, difficult rules regarding what charges are appropriate during infusions and issues related to “carve out periods.” Auditing systems can help clinicians comply with requirements, including simple-to-create functions which automatically flag missing stop times.

As readers will doubtless know, getting competing health systems to engage in “coopetition” can be tough, even if it helps them improve their operations. But given the need to combat post-EMR lags in revenue, maybe more of them will risk it in the future.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

1 Comment

  • I’m curious; when a physician in a hospital orders, say, a CT, say with contrast, how does that order get carried out? IOTW, does someone pick up the phone and call radiology, or send a fax, or send a paper form down with a patient? Or, as one would hope, (and as it was working in one hospital that I’m familiar with as early as 1973) someone, perhaps the doctor, logs into the EMR and enters the order – as an order, not as notes, to get the test done? And if so, does the EMR 1. ask for the diagnostic reason or ICD (if the reason, does it generate the ICD) code, and 2. then generate the treatment code (cat of x with contrast)? Or does someone have to go in separately to do that?

    I’m well aware there is no straight answer to the question – but there should be. I expect that some EMR’s generate the needed codes from the orders, and that some don’t, or allow the provider to just put in an order as a note which he or she actually did the order for some manual method.

    The very early system I hinted at above did not hold diagnostics, but it captured, transmitted, and accounted for monetarily every single order given in the hospital for tests, drugs, etc. Imagine, in 1973, an xray is needed, the nurse enters the order in the massive IBM terminal in the nursing station, and moments later a printer down in radiology spits it out. And when the patient was discharged, the bill was complete – and accurate. Sure, things were simpler, but computers were still very new then – I just started using them later that year, but our hospital had been using one at least a year already, and as a volunteer I used it. Part of what inspired me to go into computer programming, and got me interested in EHR’s decades later when the rest of the world started to catch up to what a Scranton PA hospital had been doing so much earlier – capturing all needed data for accurate billing from the moment of admission.

    I find it scary that hospitals today are still trying to figure this out. Sure, CPT and ICD and everything around them is far more complex, but we’ve had over 40 years to figure this out. When a hospital implements a (new) EMR, there is plenty of precedent, lots of examples and case studies, numerous experts to help guide the way, with piles of warnings of what happens when you don’t do your due diligence.

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