Free Hospital EMR and EHR Newsletter Want to receive the latest news on EMR, Meaningful Use, ARRA and Healthcare IT sent straight to your email? Join thousands of healthcare pros who subscribe to Hospital EMR and EHR for FREE!

Epic Mounts Clumsy Public Defense On False Claims Lawsuit

Posted on November 6, 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 former employee of a health system using Epic filed a False Claims Act whistleblower suit claiming that the vendor’s platform overbills for anesthesia services by default. The suit claims that Epic’s billing software double-bills both Medicare and Medicaid for anesthesia, as well as commercial payers.

At this point, let me be clear that I’m not accusing anyone of anything, but in theory, this could be a very big deal. One could certainly imagine a scenario in which multiple Epic customers colluded to permit this level of overbilling, which could generate staggering levels of overpayment. If so, one could imagine hospitals and health systems paying out judgments that add up to billions of dollars. To date, though, nobody’s made such a suggestion. In fact, Epic has said essentially the opposite and pointed to the need to understand how medical billing works, but we’ll get to that.

In the suit, which was filed in 2015 but unsealed this month, Geraldine Petrowski contended that Epic’s software was billing for both the base units of anesthesia for procedures and the time the procedure took.

Petrowski, a former employee with the compliance team at Raleigh, N.C.-based WakeMed Health & Hospitals, alleges that setting the billing to these defaults has resulted in “hundreds of millions of dollars in fraudulent bills” submitted to Medicare, Medicaid and other payers. (WakeMed is an Epic customer.)

According to an article appearing in Modern Healthcare, Petrowski developed these concerns when she worked with Epic as the provider’s liaison for its software implementation between 2012 and 2014. In the complaint, she says that she raised these concerns with Epic, but got a dismissive response. Eventually, after Petrowski kept up the pressure for a while, Epic fixed the billing issue — but only for WakeMed.

Apparently, the U.S. Department of Justice reviewed Petrowski’s case and decided not to intervene, a fact which Epic has not-surprisingly mentioned every chance it gets. Perhaps more tellingly, the vendor has suggested that Petrowski filed the suit largely because she’s clueless. “The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works,” Epic spokesperson Meghan Roh told the magazine.

Now, I don’t want to go off on a rant here, but if the best public defense Epic can mount in this case is to offer some mixture of “everybody’s doing it” and “you’re a big dummy,” you’ve got to wonder what it’s got to hide.

Not only that, trying to brush off the suit as the product of ignorance or inexperience makes no sense given what’s involved. While False Claims whistleblowers can collect a very large payoff, getting there can take many years of grueling work, and their odds of prevailing aren’t great even if they make it through the torturous litigation process.

No, I’m more inclined to think that Epic has tipped its hand already. I’d argue that fixing only the WakeMed billing system shows what the legal folks call mens rea – a guilty mind — or at least a willingness to ignore potential wrongdoing. Not only that, if the system was operating as expected, why would Epic have gotten involved in the first place? Its consulting services don’t come cheap, and I’m guessing that Petrowski didn’t have the authority to pay for them.

It doesn’t look good, people…it just doesn’t look good.

Sure, the hospitals and health systems using Epic’s billing solution are ultimately responsible for the results. Maybe Epic is completely blameless in the matter this case. Regardless, if Epic’s hands are clean, it could do a better job of acting like it.

A Primer on Medicaid/CHIP Managed Care Reform

Posted on May 27, 2016 I Written By

The following is a guest blog post by Megan Renfrew, Director in the Cognosante Solutions Lab.
Megan Renfrew - Cognosante
On May 6, 2016, the Centers for Medicare and Medicaid Services (CMS) published a final regulation in the Federal Register concerning managed care in Medicaid and the Children’s Health Insurance Program (CHIP).  The first overhaul of Medicaid and CHIP managed care regulations in more than a decade, the rule “updates how Medicaid works for the nearly two-thirds of beneficiaries who get coverage through private managed care plans,” wrote CMS Acting Administrator Andy Slavitt and Vikki Wachino, CMS Deputy Administrator and Director for the Center for Medicaid and CHIP Services, in a CMS blog post.

Approximately 72 percent of Medicaid enrollees in 39 states and the District of Columbia are served through managed care plans, up 14 percent since 2013.  Combined Federal and state spending on Medicaid managed care exceeds $150 billion annually.  Those figures will grow steadily as states continue to expand Medicaid managed care coverage to include larger geographic areas, additional populations, and services previously covered through fee-for-service Medicaid, such as inpatient and Long-Term Services and Support (LTSS).

While the medical loss ratio and other financial requirements received the lion’s share of attention throughout the rule-making process, the rule’s focus on improving the beneficiary experience and increased reporting and data requirements are equally important.  Beneficiaries will benefit from quality improvement requirements, stricter provider access requirements, and stronger care management programs.  Plans and states will need to adjust contracts and IT systems to meet new data, reporting, and analytics requirements that support CMS’s goals of increased program integrity and transparency.

Beneficiary Experience & Protections

To strengthen the experience of beneficiaries, the rule requires states to address disparities and individuals who need long term care or have special health needs in their quality plans for the Medicaid managed care rule.  The final rule, which will be phased in over several years, also creates the first quality rating system for Medicaid managed care plans, aligning Medicaid with Medicare Advantage and Qualified Health Plans rules.  This will allow beneficiaries to better compare plans before enrollment.

On the care management front, the rule includes standards for care coordination, health assessments for new plan enrollees, and treatment plans for enrollees with special healthcare needs or who receive LTSS.  These rules are designed to make sure that beneficiaries receive appropriate care in the appropriate setting, and are assisted in navigating the complex healthcare system.

The rule helps ensure that beneficiaries have sufficient access to providers by strengthening provider network adequacy requirements.  States must add time and distance standards to their state network adequacy rule (31 states already have time and distance standards in place for primary care providers).  Under the final rule, however, CMS spells out the provider types subject to network adequacy requirements in greater detail.  As a result, states must now create standards for more than seven different provider types.  Plans must also report provider network data at least annually, and maintain an up-to-date provider directory for plan members.

Additional changes focus on targeted beneficiary education and outreach.  States must implement systems that support beneficiaries prior to and after enrollment, a role that will likely be played by enrollment brokers.  Under these systems, beneficiaries are educated about managed care, including benefits covered and choice of plans, and their rights and responsibilities under Medicaid.  The beneficiary support system also provides a venue for current managed care enrollees, including assistance navigating the grievance and appeals process.

Enhanced Data and Systems Needs

Under the final rule, states and plans are required to meet stronger data submission and reporting requirements to support program oversight, program integrity, and increased transparency.  To meet these requirements, states and plans must have adequate IT systems to ensure accurate and timely data delivery and reporting.  Some states and managed care plans will likely need to increase their data collection and analytics capabilities to comply with the new rule.

The most important change is that federal payment for Medicaid managed care is tied to the submission of accurate, complete, and timely encounter data to CMS in a CMS-specified format, likely TMSIS.  Historically, some states have struggled to collect complete and accurate encounter data from managed care plans, and to manage that data in legacy systems designed for fee-for-service claims.  Both states and plans will need to examine their current IT systems, data collection and submission processes, and contract language to ensure that they are well positioned to meet these requirements.

In addition to the encounter data requirements, CMS is requiring that states post information on their Medicaid managed care plans on a public website, including enrollee handbooks, provider directories, and plan contracts.  Also required is information about plan performance, including finances, operational performance, quality indicators, measures of customer satisfaction, and the results of program integrity audits.

To meet the stricter provider network adequacy requirements, plans will need to have, at a minimum, accurate data on their provider network.  As states revise their network adequacy rules to meet the CMS requirements and monitor their plans for compliance, they may benefit from using GIS-based tools that automate network adequacy analysis and allow for easy evaluation of policy options and plan performance.

To support program integrity goals, the CMS rule requires all providers in Medicaid managed care plan networks to enroll with the state Medicaid agency.  Enrollment in Medicaid was previously required only of those providers participating in the Medicaid fee-for-service program.  States may find that they need more automated provider enrollment and verification systems to handle the increased workload that this requirement will generate for state Medicaid agencies.  Luckily, provider enrollment solutions are available in the market.

To help ease the burden of implementing the systems necessary to manage the robust data collection, analysis, exchange, and reporting necessary under Medicaid managed care reform, states can leverage CMS’s previously issued final rule extending 90 percent federal matching funds for Medicaid enterprise system development.  In addition to ensuring the permanent availability of this funding, that rule extends its use to commercial-off-the-shelf and software-as-a-service solutions.  This allows states to take advantage of previously developed and tested products in the marketplace.

21st Century Medicaid

CMS and its stakeholders devoted thousands of hours to crafting sweeping reform that brings Medicaid manage care into the 21st Century, including supporting data-driven decision-making and oversight, and allowing for state innovation in delivery system and payment reform. Doing so solidifies Medicaid’s place as a key driver of health innovation and plans’ roles supporting and implementing that innovation.

About Megan Renfrew
Megan Renfrew is a Director in the Cognosante Solutions Lab.  An accomplished health policy expert who spent more than five years drafting healthcare bills for the U.S. House of Representatives, she previously served as the technical director at CMS responsible for collecting and analyzing Medicaid and CHIP eligibility and enrollment data from states. 

EMR Vendors Slow To Integrate Telemedicine Options

Posted on August 27, 2015 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.

Despite the massive growth in demand for virtual medical services, major EMR vendors are still proving slow to support such options, seemingly ceding the market to more agile telemedicine startups.

Independent telemedicine vendors targeting consumers are growing like weeds. Players like Doctor on Demand, NowClinic, American Well and HealthTap are becoming household names, touted not only in healthcare blogs but on morning TV talk shows. These services, which typically hire physicians as consultants, offer little continuity of care but provide a level of easy access unheard of in other settings.

Part of what’s fueling this growth is that health insurers are finally starting to pay for virtual medical visits. For example, Medicare and nearly every state Medicaid plan also cover at least some telemedicine services. Meanwhile, 29 states require that private payers cover telehealth the same as in-person services.

Hospitals and health systems are also getting on board the telemedicine train. For example, Stanford Healthcare recently rolled out a mobile health app, connected to Apple HealthKit and its Epic EMR, which allows patients to participate in virtual medical appointments through its ClickWell Care clinic. Given how popular virtual doctor visits have become, I’m betting that most next-gen apps created by large providers will offer this option.

EMR vendors, for their part, are adding telemedicine support to their platforms, but they’re not doing much to publicize it. Take Epic, whose EpicCare Ambulatory EMR can be hooked up to a telemedicine module. The EpicCare page on its site mentions that telemedicine functionality is available, but certainly does little to convince buyers to select it. In fact, Epic has offered such options for years, but I never knew that, and lately I spend more time tracking telemedicine than I do any other HIT trend.

As I noted in my latest broadcast on Periscope (follow @ziegerhealth), EMR vendors are arguably the best-positioned tech vendors to offer telemedicine services. After all, EMRs are already integrated into a hospital or clinic’s infrastructure and workflow. And this would make storage and clinical classification of the consults easier, making the content of the videos more valuable. (Admittedly, developing a classification scheme — much less standards — probably isn’t trivial, but that’s a subject for another article.)

What’s more, rather than relying on the rudimentary information supplied by patient self-reports, clinicians could rely on full-bodied medical data stored in that EMR. I could even see next-gen video visit technology which exposes medical data to patients and allows patients to discuss it live with doctors.

But that’s not how things are evolving. Instead, it seems that providers are largely outsourcing telemedicine services, a respectable but far less robust way to get things done. I don’t know if this will end up being the default way they deliver virtual visits, but unless EMR vendors step up, they’ll certainly have to work harder to get a toehold in this market.

I don’t know why so few EMR companies are rolling out their own virtual visit options. To me, it seems like a no-brainer, particularly for smaller ambulatory vendors which still need to differentiate themselves. But if I were an investor in a lagging EMR venture, you can bet your bottom dollar I’d want to know the answer.

Erlanger Health System Takes A Chance On $100M Epic Plunge

Posted on May 11, 2015 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 seemingly eternal struggle between EMR giants Cerner and Epic Systems has ended in another win for Epic, which was the final choice of Chattanooga, TN-based Erlanger Health System. The health system’s CEO, Kevin Spiegel, who said that Cerner had been its other finalist, announced last week that Erlanger would spend about $100 million over 10 years for the Epic installation.

Erlanger, a four-facility public hospital system with about 800 total beds, is an academic medical system and serves as a campus of the University of Tennessee College of Medicine. The system also partners with UT to operate the UT Erlanger Physicians Group, a 170-member multispecialty practice.

The health system, which fell in financial trouble in 2012, only recently saved itself and positioned itself for the massive Epic investment. It closed out FY 2014 with $618M in total operating revenue and $18M in operating income.

Erlanger’s turnaround is all well and good. But that being said, these numbers suggest that Erlanger is making something of a gamble by agreeing to an approximately $10M a year health IT investment. After all, the health system itself concedes that its return to financial health came in large part due to $20 million in new Medicare and Medicaid funding from CMS, along with new funding from the state’s Public Hospital Supplemental Payment Pool. And politically-obtained funds can disappear with the stroke of a pen.

The risky nature of Erlanger’s investment seems even more apparent when you consider that the system has an aggressive building plan in place, including a new orthopedic center, a $68M expansion of one of its hospitals, a 100,00 square foot children’s & women’s ambulatory center and a new health sciences center. Particularly given that Erlanger just completed its turnaround last year, does it make sense to squeeze in Epic payments alongside of such a large capital investment in infrastructure?

What’s more, the health system has a bond rating to rehabilitate. Faced with financial hardships in 2013, its bond rating was downgraded by Moody’s to a Baa2 and the system’s outlook was rated “negative.” By 2014, Erlanger’s had managed to boost the Moody’s outlook to “stable,” in part due to the influx of state and federal funds obtained by Erlanger execs, but the Baa2 rating on its $148.4 million in bond debt stayed in place.

While I imagine the hospital will realize a return on its Epic spending at some point, it’s hard to see it happening quickly.  In fact, I’d guess that it’ll be years before Erlanger’s Epic install will be mature enough to be evaluated for ROI, given the level of effort it takes to build a mature install.

In the meantime, Erlanger leaders may be left wondering, from time to time at least, whether they really can afford their expensive new EMR.

GAO Wants To See Tougher Meaningful Use Audits

Posted on May 18, 2012 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.

Here’s some scary news. A new report from the Government Accountability Office (GAO), the federal government’s watchdog agency, has recommended that the MU program do more to verify that providers actually qualify for incentive payments.  Given that CMS already plans to begin auditing already-certified providers after they get their incentives, we could be looking at some disasters in the making.

The GAO, which conducted a review of the first year of Meaningful Use, looked at both the Medicare and Medicaid EMR incentive programs. It analyzed Medicare MU attestation data from last year, as well as looking at the verification processes used by Medicaid programs in four states and interviewing subject matter experts.

Along the way, the study picked up some interesting data points. For example, the agency found that 80 percent of hospitals and 72 percent of eligible professionals decided not to report on at least one mandatory MU measure, a loophole allowed by the program. (Hospitals can dodge up to three measures, and professionals six, if the measures aren’t relevant to their clinical practice or patient population.)

The bottom line is that the GAO recommends that CMS increase the number of prepayment verifications it does; set up timelines which will speed the process of evaluating audit effectiveness; offer states the option of having CMS collect MU data for both Medicare and Medicaid; and (the big one) collect additional MU verification information from providers from Medicare providers seeking the MU bucks.

As it is, CMS plans to start a “post payment audit” program this year which sounds as if it could involve clawbacks of already approved moneys.  It’s hardly a new trick for CMS, which already does this already happens when our friends the Recovery Audit Contractors think you’ve made Medicare claims mistakes.

HHS To Look At How EMR/EHR Use May Violate Fraud & Abuse Laws

Posted on October 17, 2011 I Written By

Katherine Rourke 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.

Thought you had your hands full merely installing a multi-million dollar EHR, bringing it up to top performance, training staff members, winning over doctors and bickering with vendors?  Well, guess again.

It seems that HHS’s Office of the Inspector General now plans to look closely at whether EHR use violates fraud and abuse laws in any way.  To me, this sounds like a bit of an institutional turf war — given how long HHS had to get Meaningful Use and other standards developed, wouldn’t someone there have thought this through already? — but it’s nothing to ignore nonetheless.

The news comes with the release of the OIG’s 2012 work plan, in which the agency promises to “identify fraud and abuse vulnerabilities” in EHRs, as well as finding out how certified EHR systems address such vulnerabilities. The OIG also plans to review Medicare and Medicaid EHR incentive payments to make sure they were doled out only to providers meeting Meaningful Use criteria.

One detail worth noting is that the OIG will be looking to find EHR documentation practices that might be associated with improper payments, something the HHS agency had targeted last year as well.

It seems the OIG has noticed, as have many doctors, a growing number of medical records with “identical documentation across services,” rather than documentation specific to the service provided. That is a definite no-no, the OIG reminds one and all.

Pressures on Critical Access Hospitals – IT Budgets, Competition and IT Talent Retention

Posted on September 15, 2011 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.

The acquisition and implementation of enterprise solutions is a daunting process for any healthcare provider. Critical access hospitals usually find the task even more nuanced given unique pressures, some of which include:

  • Constrained budgets: Compared to other facilities, critical access hospitals typically have the smallest IT budget, as a percentage of overall hospital budget and in gross numbers. Budget constraints are also exacerbated by low volumes, rising number of uninsured, recession related unemployment, and a patient mix with a high Medicare/Medicaid presence typically found in rural geographies.
  • Increased competition from larger IDNs: Competition can come in the form of IDNs opening/acquiring rural clinics, as well as from Federally Qualified Health Centers (FQHC) which often have greater access to grant funding and better medical liability coverage. This makes future growth plans hazy given that critical access hospitals can be challenged in projecting consistent market share given the changing competitive landscape.
  • IT talent retention: Attracting and retaining talented IT personnel is one of the prime concerns for critical access facilities. Some have turned to IT outsourcing, but this also carries its own risks and costs.

In effect, critical access hospitals are feeling fiscal pressures from all sides – in changes to federal reimbursements, a patient population hit hard by recession, rising labor and structural costs, as well as from legislation which requires a higher level of IT adoption within an arbitrary timeline.

In our next post, we’ll look at which Health IT trends working in favor of small hospitals

Chris O’Neal is Managing Partner at KATALUS Advisors. KATALUS Advisors is a strategic consulting firm focused on the healthcare vertical. We serve healthcare technology vendors, hospitals, and private equity groups in North America, Europe, and the Middle East. Our services span growth strategies in new and existing markets, M&A due diligence, market analysis, and advisory services. www.KATALUSadvisors.com