In reality, the “electronic health record” is a lot more than a clinical tool. Embodied in the clinical tool are all the touch points and data elements that ensure the hospital or medical practice is paid for seeing the patient—registration, scheduling, insurance eligibility and, critically, what was done to the patient during and as a result of the clinical encounter.
When one implements a comprehensive clinical IT system, the traditional separation between finance and IT dissolves, as does the wall between clinical operations and revenue cycle.
The manual handoffs under the old paper documentation regime were expensive, because they required an elaborate chain of unit clerks, clinic coordinators and nurses repurposed as billing assistants. Replacing this clerical overlay effectively generates two classes of savings: reduced clerical overburden in the clinic and hospital unit and reduced rework in the back office due to inadequate or inaccurate documentation.
Yet, many installations fail because of poor communication between finance and IT, and between the clinical front lines and the back office. Many poorly managed EHR installs actually increase back office workload because the information needed to generate a clean claim never reaches the billing system, resulting in a pileup of unbilled accounts, or flawed claims that end up being denied and often written off. Cash disappears, and the return on investment on the installation turns negative.
In an effectively managed installation, as a clinician documents what care is taking place, charge capture takes place automatically in the background. Diagnoses can be applied to allow for rapid claim generation with minimal back-end review and even less clinician follow-up.
Many mature EHR users have succeeded in actually improving clinician productivity while still shifting revenue-cycle processes from the business office to the patient bed.
Unfortunately, many times the initial implementation is rushed and key efficiency drivers are put off. Often what results is simply automating current manual processes, essentially duplicative documentation. You pay twice for this mistake: Clinicians revolt against their participation in the revenue cycle, and revenue simply isn't captured.
Here is an example of what is possible: Some IT platforms allow the IT system to calculate a Medicare evaluation and management code for a patient visit based on documentation. If used, normal clinical documentation in the platform can suggest the appropriate level charge for the visit. When not used, physicians are left scratching their heads to decide what the right level was for a particular visit. In the past, these would have been entered by a coder after the visit.
With the EHR, coding depends on how the physician documents the encounter. Often we see physicians default to a particular level (usually level 2 or 3) to get around it. It is very likely there are certain individuals in your organizations that are either overcharging or undercharging—both a compliance and revenue risk. The system can take the coding burden off the clinician if it has the right information about the clinical encounter.
To realize an ROI, organizations must prepare for the cultural revolution of merging clinical operations, revenue-cycle operations and information technology. For those just beginning the implementation journey, be sure management is demanding automation and efficiency-driven design and not accepting workarounds just to meet your installation timeline. In many cases delaying is more cost-effective than failing.
Also, management should not accept a “vanilla” installation. Best practices should come from mature EHR users that streamline clinical documentation rather than standard vendor implementation plans. Thoughtful managers need to not only protect their institutions from cash flow interruptions and clinician revolt, but achieve significant cash-flow improvements to help pay the considerable cost of clinical automation.
Jeff Goldsmith is national adviser at Navigant Healthcare and associate professor of Public Health Sciences at the University of Virginia. Erick McKesson is director of revenue cycle at Navigant.