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Does EHR Adoption Really Lower Administrative Costs?

The government mandated adoption of electronic health records (EHR) systems claims the change improves patient care and reduces costs for healthcare providers. Healthcare providers adopted systems in stages to meet the requirement, hoping costly implementation would eventually pay off. Many facilities aren’t seeing the benefits they’d hoped for. The results are leaving many providers skeptical of the claim that EHR truly lowers administrative costs.

What Are Electronic Health Records?

Electronic Health Records (EHRs) are digital versions of a doctor or hospital patient’s paper chart. The goal of EHRs is to remove the need for physical documents to keep track of a person’s medical information. They contain extensive information including past diagnoses, past and current medications, immunization dates, allergies, any radiology images, lab and test results, and most other information traditionally provided by medical records. They also feature evidence-based tools created to help healthcare providers make decisions about how to care for a patient. EHRs are meant to simplify and streamline the workflow for providers by increasing organization and accuracy of all patient information. They are also set up to align and adapt to key market changes in payer requirements and consumer expectations.

One of the major benefits of an EHR is that it eliminates the difficulty that comes from utilizing more than one healthcare provider. The necessary information is all in one computerized location. so any provider can access it without needing to worry about communicating with other facilities.

Meaningful Use and Electronic Health Records

The term “meaningful use” refers to the way that providers use EHR technology. Providers are supposed to use EHR technology to make healthcare completely patient-centered, evidence-based, prevention-oriented, efficient, and equitable.

Stages of Meaningful Use

There are three stages of meaningful use that were meant to develop to meet the objective over a 5-year period. Each stage is outlined to bring the EHR systems closer to effectively revolutionizing medical records. The first stage, for the years 2011 and 2012, was perfecting data capture and sharing. Stage 2, in 2014, focused on moving the improved data capture and sharing into advancing clinical processes. The third stage predicted better medical outcomes in the year 2016.

Health Information Privacy and Security

As EHRs developed, many people expressed concerns about the privacy and security of their medical records. If patients are hesitant to provide complete medical information for fear that someone will steal it, healthcare providers will have a significantly more difficult time caring for and healing them. Providers have the responsibility of making sure that their EHR is safe and secure from cyberattacks.

Electronic Health Record Incentives

In order to encourage and help healthcare providers make the shift to EHRs over paper records, the government created Medicare and Medicaid EHR incentive programs. EHR incentive programs offer payments and rewards to any health provider that effectively adopts and implements an EHR program and demonstrates meaningful use of it.

Medicare EHR Incentive Payments

Medicare EHR incentive payments can be a maximum of $44,000 over 5 consecutive years of using an EHR system. The payments begin to decrease if the provider is beginning after 2012. In order to be eligible to receive incentive payments, the provider must have started using an EHR system by 2014. The last year for incentive payments is 2016. There are extra incentive funds available for medical professionals who are practicing in predominantly Health Professionals Shortage Areas. Certain hospitals may also be eligible to apply for incentive payments of $2 million or more.

Medicaid EHR Incentive Payments

The maximum for Medicaid EHR incentive payments is $63,750 over 6 years. The years, unlike Medicare incentive payments, do not need to be consecutive. The payment for the first EHR year is $21,250 and for the other five years it is $8,500. A provider must start by 2016 to be eligible to receive payments. The last year for Medicaid incentive payments is 2021. In order to be eligible for Medicaid incentive payments, a medical professional must meet one of the following requirements:

  • Have at least a 30% volume of Medicaid patients
  • Have at least a 20% volume of Medicaid patients and be a pediatrician
  • Practice mostly in Federally Qualified Health Centers or rural health clinics and have at least a 30% patient volume of individuals in need

Expenses Not Appearing to Lower

According to a study by the Journal of the American Medical Association, medical administrative costs do not seem to be going down with the implementation of EHRs. Even with the electronic system in place, health providers are still spending large amounts of money on administrative costs.

The study was conducted by tracking the path of an insurance claim with 27 healthcare system administrators and 34 physicians in 2016 and 2017, years when the EHR system was in place. Billing
and administrative costs ranged from $20 for a primary care visit to $215 for a surgical procedure. These costs amounted to 3% to 25% of healthcare providers’ professional revenue. Previous research showed that billing amounted for 10% to 14% of professional revenue prior to EHR systems being implemented, indicating that EHR systems have not yet achieved a reduction in administrative costs. The study theorized that one of the reasons for the current ineffective nature of the EHR systems is that there is a lack of knowledge about how specific billing and insurance activities contribute to administrative costs.

How Using a Medical Billing Clearinghouse Can Help

The amount of professional revenue that administrative costs use is inconveniently large for medical professionals and providers. A medical billing clearinghouse can help save administrative costs while the EHR system is still being perfected. A good clearinghouse can reduce errors and save time on claims, resulting in significant financial savings that can help make up for at least a portion of the extensive administrative costs that healthcare providers are still dealing with under the current healthcare system. Contact APEX EDI for more information about how a medical billing clearinghouse can help you with administrative costs.

revcycleintelligence.com/news/ehr-adoption- does-not- lower-administrative- medical-billing-costs
www.healthit.gov/providers-professionals/learn- ehr-basics

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