September 23, 2012

Unintended Consequences: Electronic Medical Records Enable "Gundecking"

Marc Comtois

Whoda thunk? (via the New York Times)

When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.

But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care....Over all, hospitals that received government incentives to adopt electronic records showed a 47 percent rise in Medicare payments at higher levels from 2006 to 2010, the latest year for which data are available, compared with a 32 percent rise in hospitals that have not received any government incentives, according to the analysis by The Times.....

Some experts blame a substantial share of the higher payments on the increasingly widespread use of electronic health record systems. Some of these programs can automatically generate detailed patient histories, or allow doctors to cut and paste the same examination findings for multiple patients — a practice called cloning — with the click of a button or the swipe of a finger on an iPad, making it appear that the physicians conducted more thorough exams than, perhaps, they did.

Critics say the abuses are widespread. “It’s like doping and bicycling,” said Dr. Donald W. Simborg, who was the chairman of federal panels examining the potential for fraud with electronic systems. “Everybody knows it’s going on.”

It's all in the number-coding apparently. And the ease with which health care providers can tag procedures or checks being performed--for good or ill. In the maritime industry that's called "gundecking".
[S]ome critics say an unintended consequence is the ease with which doctors and hospitals can upcode — industry parlance for seeking a higher rate of reimbursement than is justified. They say there is too little federal oversight of electronic records.... As software vendors race to sell their systems to physician groups and hospitals, many are straightforward in extolling the benefits of those systems in helping doctors increase their revenue. In an online demonstration, one vendor, Praxis EMR, promises that it “plays the level-of-service game on your behalf and beats them at their own game using their own rules.”

The system helps doctors remember what they did when they successfully billed for similar patients, and ensures that they do not forget to ask important questions or to perform necessary tests, said Dr. Richard Low, chief executive of Infor-Med Corporation, which developed Praxis. “The doctor can use a chart the way the pilot uses a checklist,” he said.

But others place much of the blame on the federal government for not providing more guidance. Dr. Simborg, for one, said he helped draft regulations in 2007 that would have prevented much of the abuse that now appears to be occurring. But because the government was eager to encourage doctors and hospitals to enter the electronic era, he said, those proposals have largely been ignored.

“What’s happening is just the problem we feared,” he said.

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for many years, and perhaps still, "consulting" for hospitals to "improve" their Medicaid/Medicaire billing was a very lucrative business. It amounted to changing the "code" on services provided to patients. Naturally, the "consultants" were paid on commission.
"Tell me how a man is paid and I will tell you how he works". J.P. Morgan

I knew some people who "did some time" for this, that was back in the late 80's when computer records/billing were fairly new.

Posted by: Warrington Faust at September 23, 2012 8:56 AM

These aren't inherently bad people, but the incentives are all going one way, the wrong way, and despite progressive anti-economic propaganda, people do respond to incentives. Like most misdeeds, it probably starts small. Reporting half an exam as a full exam or leaving a cancelled exam on the report. Then, after months of it being painfully obvious that nobody from the Federal government will ever come sniffing, the misreporting grows more brazen. This type of fraud creep is common wherever government is writing checks with little oversight and few incentives to care. HUD and DOT employees don't start out taking 3-hour lunches. It starts with an hour and 5 minute lunch, nobody reports it, then an hour and 10, nobody reports it...

Posted by: Dan at September 23, 2012 10:47 AM

Seems like the fraud assertion is at least somewhat presumptuous. At least some of the increase is probably, as suggested in one of Marc's blockquotes, a matter of having a reminder to do certain tests and such. Some portion may be the result of doctors' now including items that they didn't used to bother with, given the paperwork.

Posted by: Justin Katz at September 23, 2012 11:45 AM

Another story I believe to be factual. A man of slight acquaintance was unable to become licensed as a psychologist. His father, an M.D., setup an office for him in the basement of his building. the father then referred people to the son for "therapy". The father would then bill Medicaire for an "office visit".

How do I know this? He announced it at a party.

Posted by: Warrington Faust at September 23, 2012 12:06 PM

Justin - If a situation is created with overwhelming financial incentives to commit fraud and essentially no risk of consequences, there is going to be fraud and lots of it. It's a part of our biology - people, even good people, are very good at justifying moving boundaries to themselves. Military contractors know that the Department of Defense isn't going to question a few billable hours on this project, a few billable hours on that project. Private law firms know major corporations aren't going to question this added expense, that added expense. A Federal employee will be questioned on their timesheet when hell freezes over. We would expect fraud to occur under the incentives the Medicare system has in place, and when examined, sure enough the claims are skyrocketing. I don't pretend there is enough to convict on (and that is precisely the point) but I think a presumption of fraud is warranted under the circumstances. Rebutting the presumption would require rebutting all I have observed of government's workings and everything I know about human nature.

Posted by: Dan at September 23, 2012 12:13 PM

Yeah but the President said he was going to cut billions in waste and fraud so it will all work out in the end...right?

Posted by: Max D at September 23, 2012 5:46 PM

There are a lot of different things at play here.

Medical billing is nightmarish at best, there are new codes to figure out, and constant downward pressure for reimbursements.

So now you get this spiffy new EMR system which actually tracks all sorts of information, and yes, if one cpt code pays more than another for essentially the same test/procedure then why not use it?

As far as oversight, if you think this is bad, wait until the rest of Obamacare kicks in. If you checked out any of the actual legislation when it came out, there are entire sections the were 'TBD', basically leaving the Head of HHS to appoint people and create policy.

Is there 'real' fraud, I'm certain of it, but the process is so complicated I can see where a lot of healthcare providers just simply want to get paid for services rendered and end up running into issues.

When a payer sends you a letter flat out telling you it will only reimburse you for 5 tests per date of service, regardless of how many the Doctor ordered (and you performed all 10 tests because you do actually care about level of service) you do what you can to maximize reimbursements on those 5 tests.

There's no silver bullet, overall we're talking HUGE dollars.

If the system could be simplified somehow it would make life easier for everyone.

Posted by: StuckHereinRI at September 24, 2012 12:08 PM
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