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Hospital Execs Underestimate QPP Impact

Posted on July 7, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

A new survey by Nuance Communications suggests that hospital finance leaders aren’t prepared to meet the demands of MACRA’s Merit-Based Incentive Payment System (MIPS), and may not understand the extent to which MIPS could impact their bottom line. Worse, survey results suggest that many of those who were convinced they knew what was involved in meeting program demands were dead wrong.

The survey found that many hospital finance leaders weren’t aware that if they don’t participate in the MIPS Quality Payment Program (QPP), they could see a 4% reduction in Medicare reimbursements by 2019.

Not only that, those who were aware of the program didn’t have a great grasp of the details. More than 75% respondents that claimed to be somewhat or very confident about their understanding of QPP got the 4% at-risk number wrong. Meanwhile, 60% of respondents either underestimated the percent of revenue at risk or simply did not know what the number was.

In addition, a significant number of respondents weren’t aware of key QPP reporting requirements. For example, just 35% of finance respondents that felt confident they understood QPP requirements actually knew that they had to submit 90 day of quality data to participate. Meanwhile, 50% either underestimated or did not know how many days of data they needed to provide.

On a broader level, as Nuance noted, the issue is that hospitals aren’t ready to meet QPP demands even if they do know what’s at stake. Too many aren’t prepared to capture complete clinical documentation, develop business processes to support this data capture and raise provider awareness of these issues. In other words, not only are finance leaders unaware of some key QPP requirements, they may not have the infrastructure to meet them.

This is a big deal. Not only will their organizations lose money if they don’t meet QPP requirements, but they’ll miss out on a 5% positive Medicare payment adjustment if they play by the rules.

Lest the respondents sound careless, let’s do a reality check here. Without a doubt, the transition into the world of MIPS isn’t a simple one. Hospitals and medical practices will have to meet deadlines and present quality data in new ways. That would be a hassle in any event, but it’s particularly difficult given how many other quality data reporting requirements they must meet.

That being said, I’d argue that even if they’ve gotten a slow start, hospitals have enough time to meet the basic requirements of QPP compliance. For example, turning over 90 days of quality data by March of next year shouldn’t be a gigantic stretch in contrast to, say, submitting a year’s worth of data under advanced Meaningful Use models. Not to mention the Pick Your Pace option of only 1 measure which avoids all penalties.

Clearly, having the right health IT tools will be important to this process. (Not surprisingly, Nuance is picking its own reporting tools as part of the mix.) But I’m struck by the notion that organizations can’t live on technology alone in this case. As with many problems in healthcare, tech solutions aren’t worth much if the business doesn’t have the right processes in place. Let’s see if finance executives know at least that much.

Avoiding Financial Losses After EMR Implementation

Posted on April 3, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

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.

Health IT Preserves Idaho Hospital’s Independence

Posted on February 1, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Most of the time, when I write about hospital IT adoption, I end up explaining why a well-capitalized organization is going into the red to implement its EMR. But I recently found a story in RevCycle Intelligence in which a struggling hospital actually seems to have benefitted financially from investing in IT infrastructure. According to the story, a 14-bed critical access hospital in Idaho recently managed to stave off a forced merger or even closure by rolling out an updated EMR and current revenue cycle management technology.

Only a few years ago, Arco, Idaho-based Lost Rivers Medical Center was facing serious financial hurdles, and its technology was very outdated. In particular, it was using an EMR from 1993, which was proving so inflexible that the claims stayed in accounts receivable for an average of 108 days. “We didn’t have wifi,” CEO Brad Huerta told the site. “We didn’t have fiber. We literally had copper wires for our phone system…we had an EMR in a technical sense, but nobody was using it. It was a proverbial paperweight.”

Not only was the cost of paying for upgrades daunting, the hospital’s location was as well. Arco is a “frontier” location, making it hard to recruit IT staffers to implement and maintain infrastructure, staff and servers, the story notes. Though “fiercely independent,” as Huerta put it, it was getting hard for Lost Rivers to succeed without merging with a larger organization.

That being said, Huerta and his team decided to stick it out. They feared diluting their impact, or losing the ability to offer services like trauma care and tele-pharmacy, if they were to merge with a bigger organization.

Instead of conceding defeat, Huerta decided to focus on improving the hospital’s revenue cycle performance, which would call for installing an up-to-date EMR and more advanced medical billing tools. After the hospital finished putting in fiber in its area, Lost Rivers invested in athenahealth’s cloud-based EMR and medical billing tools.

Once the hospital put its new systems in place, it was able to turn things around on the revenue cycle front. Total cash flow climbed rapidly, and days in accounts receivable fell from 108 to 52 days.

According to Huerta, part of the reason the hospital was able to make such significant improvements was that the new systems improved workflow. In the past, he told RevCycle Intelligence, providers and staff often failed to code services correctly or bill patients appropriately, which led to financial losses.

Now, doctors chart on laptops, tablets or even phones while at the patients’ bedside. Not only did this improve coding accuracy, it cut down on the amount of time doctors spend in administrative work, giving them time to generate revenue by seeing additional patients.

What’s more, the new system has given Lost Rivers access to some of the advantages of merging with other facilities without having to actually do so. According to the story, the system now connects the critical access hospital with larger health systems, as the athenahealth system captures rule changes made by the other organization and effectively shares the improvements with Lost Rivers. This means the coding proposed by the system gradually gets more accurate, without forcing Lost Rivers to spend big bucks on coding training, Huertas said.

While the story doesn’t say so specifically, I’m sure that Lost Rivers is spending a lot on its spiffy new EMR and billing tech, which must have been painful at least at first. But it’s always good to see the gamble pay off.

Do Health IT Certificate Of Need Requirements Make Sense?

Posted on January 23, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

The other day, I read an interesting piece about the University of Vermont Medical Center’s plans to create an integrated EMR connecting its four network hospitals. The article noted that unlike its peers in some other states, UVMC was required to file a Certificate of Need (CON) application with the state before it proceeds with the work.  And that struck me as deserving some analysis.

According to a story appearing in Healthcare Informatics,  UVMC plans to invest an initial $112.4 million in the project, which includes an upgrade to informatics, billing and scheduling systems used by UVMC and network facilities Central Vermont Medical Center, Champlain Valley Physicians Hospital and Elizabethtown Community Hospital. The total costs of implementing and operating the integrated system should hit $151.6 million over the first six years. (For all of you vendor-watchers, UVMC is an Epic shop.)

In its CON application, UVMC noted that some of the systems maintained by network hospitals are 20 years old and in dire need of replacement. It also asserted that if the four hospitals made upgrades independently rather than in concert, it would cost $200 million and still leave the facilities without a connection to each other.

Given the broad outline provided in the article, these numbers seem reasonable, perhaps even modest given what execs are trying to accomplish. And that would be all most hospital executives would need to win the approval of their board and steam ahead with the project, particularly if they were gunning for value-based contracts.

But clearly, this doesn’t necessarily mean that such investments aren’t risky, or don’t stand a chance of triggering a financial meltdown. For example, there’s countless examples of health systems which have faced major financial problems (like this and this),  operational problems (particularly in this case) or have been forced to make difficult tradeoffs (such as this). And their health IT decisions can have a major impact on the rest of the marketplace, which sometimes bears the indirect costs of any mistakes they make.

Given these concerns, I think there’s an argument to be made for requiring hospitals to get CONs for major health IT investments. If there’s any case to be made for CON programs make any sense, I can’t see why it doesn’t apply here. After all, the idea behind them is to look at the big picture rather than incremental successes of one organization. If investment in, say, MRIs can increase costs needlessly, the big bucks dropped on health IT systems certainly could.

Part of the reason I sympathize with these requirements is I believe that healthcare IS fundamentally different than any other industry, and that as a public good, should face oversight that other industries do not. Simply put, healthcare costs are everybody’s costs, and that’s unique.

What’s more, I’m all too familiar with the bubble in which hospital execs and board members often live. Because they are compelled to generate the maximum profit (or excess) they can, there’s little room for analyzing how such investments impact their communities over the long term. Yes, the trend toward ACOs and population health may mitigate this effect to some degree, but probably not enough.

Of course, there’s lots of arguments against CONs, and ultimately against government intervention in the marketplace generally. If nothing else, it’s obvious that CON board members aren’t necessarily impartial arbiters of truth. (I once knew a consultant who pushed CONs through for a healthcare chain, who said that whichever competitor presented the last – not the best — statistics to the room almost always won.)

Regardless, I’d be interested in studying the results of health IT CON requirements in five or ten years and see if they had any measurable impact on healthcare competition and costs.  We’d learn a lot about health IT market dynamics, don’t you think?

Value Based Reimbursement: Another Challenge for HIM Professionals

Posted on August 3, 2016 I Written By

Erin Head is the Director of Health Information Management (HIM) and Quality for an acute care hospital in Titusville, FL. She is a renowned speaker on a variety of healthcare and social media topics and currently serves as CCHIIM Commissioner for AHIMA. She is heavily involved in many HIM and HIT initiatives such as information governance, health data analytics, and ICD-10 advocacy. She is active on social media on Twitter @ErinHead_HIM and LinkedIn. Subscribe to Erin's latest HIM Scene posts here.

How many times have you heard something along these lines: “HIM professionals must stay relevant and current with the continuous healthcare changes.” I must sound like a broken record to my team but it is absolutely true! HIM professionals provide the bridge between clinical data and reimbursement methodologies through CDI, coding, documentation integrity, and health data analytics to name a few. It has been proven time and time again that these HIM skills are vital to healthcare organizations but these skills must also be adapted and be put to good use each time a new guideline or rule is introduced.

Value-Based Reimbursement is an area that continues to grow with the push for quality patient outcomes and healthcare savings with potential penalties for excessive costs and poor quality of care. Reimbursement incentives that are tied to quality of care make perfect sense and HIM professionals need to take the plunge into these initiatives. By marrying departments and cross-functioning teams, we are able to generate proactive data and improve performance.

At my facility, I oversee the HIM department as well as the Quality department because we work closely together and will continue to have an even closer relationship throughout healthcare reform. This is becoming very common in the industry.

In this roundtable article for the Journal of AHIMA, we each outlined how we are bringing HIM to the table for Value Based Reimbursement initiatives and maximizing the tried and true skills of HIM professionals.

I have said it before and I will continue to say it: Always keep your finger on the pulse of healthcare and stay relevant by taking on these new challenges!

If you’d like to receive future HIM posts by Erin in your inbox, you can subscribe to future HIM Scene posts here.

Are We Outgrowing HIM Systems?

Posted on July 15, 2016 I Written By

Erin Head is the Director of Health Information Management (HIM) and Quality for an acute care hospital in Titusville, FL. She is a renowned speaker on a variety of healthcare and social media topics and currently serves as CCHIIM Commissioner for AHIMA. She is heavily involved in many HIM and HIT initiatives such as information governance, health data analytics, and ICD-10 advocacy. She is active on social media on Twitter @ErinHead_HIM and LinkedIn. Subscribe to Erin's latest HIM Scene posts here.

We have changed and adapted to a rapid influx of electronic medical records and data over the last several years and it’s no surprise that some systems have struggled to keep the pace. Electronic medical records (EMRs) are in a state of constant revision to make sure patient care, clinical functionality, and data security measures are keeping up with our needs. It seems there are software application solutions or enhancements to almost every task we do in healthcare and these systems are also constantly evolving.

I don’t know of any healthcare application system or workflow that has remained static year over year and because of this, it is important for us to stay on top of vendors and keep an eye on current and future needs of HIM workflows. Clinical Documentation Improvement (CDI) is one of those areas that has been evolving since it first came on the scene and it is currently undergoing yet another face-lift. We realized there were many revenue opportunities hiding within inpatient clinical documentation and found that we could maximize reimbursement with a little detective work and physician education along with sophisticated software tools. Many are exploring the idea of CDI for outpatient levels of care. This means we will need software applications, interfaces, and expanded CDI workflows to extend these opportunities to outpatient documentation. Have you thought about what you will need from your vendors to adapt or upgrade current systems and how much will need to be budgeted for?

As we work to implement computer assisted coding (CAC) programs, we see opportunities to increase coder and CDI productivity and capture even more quality documentation by using discrete EMR data to our advantage. But are these CAC systems ready to be pushed to the limits to enter unchartered waters? I personally do not have a CAC success story to tell as of yet, but I am exploring the options and hoping that these systems have matured more than when we first explored them a few years ago.

That’s the beauty of technology in healthcare; if a product does not meet your needs, there may be other options already on the market or rapidly developing new technologies on the horizon. A vast amount of data may be held hostage in our systems if we do not maximize our EMRs and applications and set our standards high in a quest for knowledge. We can’t rely 100% on technology to dictate what we do which is why we need to be the visionaries and demand more from our systems in order to accomplish new and exciting things in HIM.

If you’d like to receive future HIM posts by Erin in your inbox, you can subscribe to future HIM Scene posts here.

A Humorous Look at Healthcare as #HFMA2016ANI Begins

Posted on June 27, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

As part of RelayHealth’s (Part of McKesson) announcement during ANI 2016, they put out some cartoons that look at some of the challenges that continue to plague healthcare. I’m sure they’ll be posting a bunch of them on Twitter @McKesson_MHS and @RelayHealth, but these two really gave me a good laugh.

Healthcare Sticky Notes Cartoon

Don’t underestimate the power of sticky notes!

Healthcare Claims Cleanup Cartoon

Looks like it’s going to be another banner year for HFMA’s ANI conference. It’s a unique venue where so much money is flowing since there’s so much financial waste in healthcare. Don’t believe me? I saw one company advertise that they were giving away a Harley Davidson or $15,000. Chew on the ROI of that investment. Says a lot about the type of deals that are signed at ANI.

Hospitals’ Progress Towards Value Based Reimbursement

Posted on June 17, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

After posting the value based reimbursement research results that were shared by McKesson Health Solutions in anticipation of the AHIP Institute, I came across this infographic from Health Catalyst about hospitals participation in value based reimbursement.

This infographic illustrates a slower adoption of value based reimbursement, but it does illustrate that pretty much every hospital is participating in value based reimbursement. The other thing that stood out to me in this infographic was how small hospitals are going to have a hard time accessing the capital they need to manage this shift. This should be troubling to those of us in healthcare. Those smaller hospitals play an important role in our healthcare system.

Hospitals Progress to Value Based Reimbursement

Creating Alliances with Large Health IT Vendors – Benefits and Challenges

Posted on June 13, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Healthcare Scene recently sat down with Nancy Hannan, Philips Relationship Director at Augusta University Health System (formerly known as Georgia Regents) to talk about their alliance with Philips Healthcare and the impact it’s had on their healthcare organization.

Along with talking about the benefits and challenges of creating a long term contract with a healthcare IT vendor, we also dive into the details of how medical device standardization has impacted their organization. Not to be left out, we also talk about how this relationship has impacted patients and doctors. If your organization is looking at how to standardize your medical equipment, this interview will give you some insight into creating a long term alliance with your vendor.

In the second part of my interview with Nancy Hannan, Philips Relationship Director at Augusta University Health System (formerly known as Georgia Regents) we discuss how they’re taking the lessons learned from the Philips alliance and applying them to their agreement with Cerner. We also talk about how cybersecurity is better having a vendor representative on site like they have with Philips.

Epic Install Triggers Loss At MD Anderson

Posted on May 31, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Surprising pretty much no one, another healthcare organization has attributed adverse financial outcomes largely to its Epic installation. In this case, the complaining party is the University of Texas MD Anderson Cancer Center, which attributes its recent shortfall to both EMR costs and lower revenues. The news follows a long series of cost overruns, losses and budget crises by other healthcare providers implementing Epic of late.

According to Becker’s Hospital CFO, MD Anderson reported adjusted income of $122.9 million during that period a 56.6% drop over the seven-month period ending March 31. During that period, the cancer center’s wages and salaries climbed, and Epic-related consulting costs were climbed as well. This follows a $9.9 million operating loss for the first quarter of the 2016 fiscal year, which the University of Texas attributed to higher-than-expected EMR expenses.

MD Anderson announced its choice of Epic in spring 2013, and went live on the system in March of this year as anticipated. The cancer center’s rollout was guided by Epic veteran Chris Belmont, the center’s CIO, who implemented Epic across 10 hospitals and more than three dozen clinics for New Orleans-based Ochsner Health System.

The organization didn’t announce what it was spending on the Epic install, but we all know it doesn’t come cheap. However, one would think the University of Texas health system could afford the investment. According to EHR Intelligence, the Texas health system ranks in the 99th percentile for net patient revenue in the US, with total revenue topping $5.58 billion.

And UT leaders seem to have been prepared for the bump, reporting that they’d planned for a material impact to revenues and expenses as a result of the Epic implementation. The system didn’t announce any staff cuts, hiring freezes or other budget-trimming moves resulting from these financial issues.

Having said all this, however, no organization wants to see its income drop. So what actually happened?

For example, when the UT system reports that a drop in patient revenues contributed to the drop in income, what does that mean? Does this refer to scheduled drops in patient volume, planned for ahead of time, or problems billing for services? I’d be interested to know if the center managed to keep on top of revenue cycle management during the transition.

Another question I have is what caused the unanticipated expenses. Did they come from contract disputes with Epic? Unexpected technical problems? Markups on consulting services? Or did the organization have to pour money into the project to meet its go-live deadline? There’s a lot of ways to generate costs, and I’d love to get some granular information on what happened.

Also, I wonder what steps UT leaders will take to avoid unexpected expenses in the future. While it may have learned some lessons from the problems it’s had so far, there’s no guarantee that it won’t face of the costly problems going forward.

If, perchance, and the system has figured out how to stay in the black with its Epic investment, it could sell that secret to cover its IT expenses for years. I’m betting other systems would pay good money for that information!