Does EHR Use Lead to Lower or Higher Costs? Part 2




By Michael Zaroukian, MD, PhD, FACP, FHIMSS and Peter Basch, MD, FACP

Incorrect Assumptions Lead to Incorrect Conclusions That Misinform Policy

Please refer to Part 1 of this post for our comments on the recent Wall Street Journal op-ed questioning the policy behind the EHR incentive program.

The Center for Public Integrity report (recently summarized in the New York Times) does not question the rationale behind the EHR incentive program, but instead presents the “unexpected” finding that whatever policy makers were hoping for, there is current evidence that doctors and hospitals using EHRs are in fact billing for more and higher complexity services – and are thus increasing costs.  The article suggests that much of the higher billing is the result of electronic ‘science fiction’ in which medical scientists (doctors) electronically record findings without actually ascertaining them, raising the specter of EHRs as a new and significant cause of billing fraud. 

We wish to make it clear from the outset, medical billing fraud is a criminal activity that illegally diverts dollars out of our healthcare system; and by doing so, hurts everyone.  We thus applaud the speed and clarity with which Attorney General Holder and Health and Human Services Secretary Sebelius have made it clear that such fraud will be vigorously sought out and prosecuted.  That said, we submit that the loaded term “billing fraud” means different things to different people, and it is that lack of clarity that explains the intense reaction to this report.  We offer the following two as examples of billing fraud, and instances that the warrant the swift and appropriate action, as announced by Attorney General Holder and Secretary Sebelius:

  1. The patient doesn’t exist, or the patient exists but did not have the services that were billed for on that day.  This group does not include patients where there is question as to the appropriate level of service.  This type of fraud is almost always criminal behavior or a gross and negligent error.  This existed prior to EHR systems and electronic billing and is not cured by them; indeed, it can be made worse with electronic charge capture and billing systems.
  2. The patient exists and had a billable service with a provider in which the provider deliberately and intentionally over-documented elements of history, examination, medical decision making or time-based services. This can be done efficiently in a paper-based charting system (paper forms with checkboxes that are ‘pencil-whipped’), templated dictation and transcription services that are fictional, or in an EHR.  In such cases, the hallmark behavior is the documentation of findings or actions that did not actually occur or were not medically necessary given the patient’s conditions, and were done solely and effectively to justifying a higher billing code for the encounter than would otherwise have been justified.  This too is clearly unethical and unprofessional, and while it is not unique to documentation using EHRs, it has likely been further enabled by the technology.

So indeed we can all agree that these instances would most likely represent criminal, negligent, unethical, or unprofessional behavior.  That said, what exactly was uncovered by the Center for Public Integrity?  In calendar 2010, the Office of the Inspector General (OIG) found that 1,669 (0.38%) of 442,000 physicians had Medicare billing profiles that differed significantly from their colleagues, billing at the highest two E&M codes 98% of the time (with total payments of nearly $108 million), compared to others who billed these codes 53% of the time; these physicians were found primarily in the specialties of emergency medicine, family medicine, and internal medicine.  The OIG report did not look at the EHR and billing software use by physicians so we cannot know if there is any relationship between the use of such software systems and disproportionate use of higher billing codes from these data.

This does not mean that the report could not be used to draw disturbing inferences in this regard, even if such conclusions require the use of conflated logic.  For example, in both the New York Times article and the Center for Public Integrity report, it was stated correctly that many of the physicians in this extremely small fraction of billing outliers were emergency medicine physicians.  The New York Times reporters then correlated Baptist Hospital in Nashville’s 82 percent increase in use of highest level coding in 2010 with its recent implementation of “a software system for its emergency room records”, although the reporters did not specify whether the software system was an EHR, an electronic coding system, or something else. 

The reporters also appeared to attempt correlate the government EHR incentive program as being temporally or causatively associated with the increased use of higher billing codes, reporting that “hospitals that received government incentives to adopt electronic records showed a 47 percent rise in Medicare payments at higher levels from 2006 to 2010”.  What they failed to mention is that any such correlation would be spurious because this timeframe predated the CMS Meaningful Use Incentive Program; the Final Rule for Meaningful Use Stage 1 was not released until the summer of 2010, and 2011 was the first year of incentive payments.  There was also no attempt to explain the finding that hospitals that have not yet received any Meaningful Use incentive payments also had a significant increase (32%) in use of higher billing codes. Finally, the 47 percent statistic was nonspecific about the types of payments that were included.  This matters not only because Medicare Part A hospital payments dwarf Part B physician payments – making the maximal overall contribution of any inappropriately higher physician E/M payments small – but also that if Medicare Part A hospital charges are included, they would be unrelated to physician billing practices and may or may not have any relationship to the presence or absence of EHR systems.

So while we would agree with the OIG report statement that “E/M services have been vulnerable to fraud and abuse” (as are virtually all payment transactions), we feel it is scientifically irresponsible to combine its findings with anecdotal stories and pessimistic views about how possible and “widespread” it “might” be that such systems are used for illegal purposes by a significant but largely invisible population of unscrupulous physicians using EHR systems that specifically encourage providers to document what wasn’t done or wasn’t necessary. 

It bears restating, neither we nor any other responsible provider or healthcare organization condones intentional billing fraud.  The OIG report did not suggest that these aberrant billing profiles had anything to do with EHR use and the OIG cannot even know yet whether the higher billing codes used were inappropriate.  But for the sake of argument, let’s assume there was an association (as many of the interviewees assumed) between EHR use with E/M coding decision support and higher billing levels.  Are there legitimate and even expected reasons why billing levels might increase and those short-term increases may actually be associated with longer-term savings?

Please continue to Part 3 for our comments on EHR use and increased short term costs.


About Michael H. Zaroukian, MD

Chief Medical Information Officer, Professor of Medicine, Michigan State University
Medical Director, Clinical Informatics and Care Transformation, Sparrow Health System

Lansing, MI

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