Electronic Medical Records Allowing Increased Billing, Abuses

Published November 16, 2012

The Obama administration maintains that pushing hospitals and physicians to adopt electronic medical records will improve efficiency, increase patient safety, and reduce health care costs. But as more providers transition to EMRs, there has been an unexpected consequence: Billions of dollars in higher costs for Medicare, private insurers, and patients.

EMRs may ultimately make health care provision easier, but they also makes the process simpler for hospitals and physicians to bill more for their services, regardless of whether they provide additional care. According to the Centers for Medicare and Medicaid Services, cloning, upcoding, and overcoding from template-generated records are some of the abuses that have resulted from the change to EMRs.

Peter Kongstvedt, a Virginia-based health care consultant, says he’s not surprised there’s been an increase in billing. He notes that in 2010, hospitals received $1 billion more in Medicare reimbursements than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms.

“They’ve been predicting that increase in billing ever since they’ve been talking about updating the medical records to an electronic system,” said Kongstvedt. “In this case, I think the increased billing is a reflection that the doctors had previously been underbilling. Of course there’s a challenge with doctors upcoding, but that’s more of a problem with Medicare not paying doctors enough.”

Saves Time, Costs Taxpayers

Joshua Archambault, director of health care policy at the Pioneer Institute, says the potential benefits of EMRs include better-coordinated care and the avoidance of duplicative tests and procedures, which should save time and money. However, there is also a risk of misuse.

“No one knows for sure the amount of waste or abuse. However, early anecdotal evidence provides reason for concern. Academic research has also added to this concern,” said Archambault.

Archambault points to a recent survey of available research conducted by academics at McMaster University who reviewed more than 36,000 studies on EMRs. The authors found, “the most rigorous studies to date contradict the widely broadcast claims that the national investment in health IT—some $1 trillion will be spent, by our estimate—will pay off in reducing medical costs.”

“EMRs are not inherently bad, but the research questions their promised savings,” Archambault noted.

Increasing Billing Under Medicare

Jonathan Ingram, Director of Health Policy and Pension Reform at the Illinois Policy Institute, says that evidence seems to indicate that the aggressive push to implement electronic medical records is influencing Medicare billing practices. Because medical providers are paid on a fee-for-service basis, they can get paid more by billing for more procedures.

“The Congressional Budget Office has noted numerous times that the perverse incentives in Medicare’s fee-for-service system is a substantial roadblock to reducing federal spending. There’s no reason to think that simply moving to electronic medical records, which make it easier to capitalize on those incentives, will make Medicare solvent,” said Ingram.

Easier to Bill

Dr. Roger Stark, a physician and health care policy analyst at the Washington Policy Center, says an expected increase in velocity under electronic billing is analogous to email.

“It is much easier to push a computer button than to submit a written or typed form. It is no surprise that more billing would take place with a simpler submission method,” says Stark.

Ultimately, Kongstvedt says EMRs are an inevitable shift, but “the potential for fraud is outweighed by the benefits.”

“EMR makes all aspects of billing easier. When you do it by hand, you have much more of a potential to check the wrong box,” said Kongstvedt. “Everything is always changing, and this is just another example of a new way of doing things. Eventually there will be more standardization and it will be easier to exchange the electronic records when all the different agencies start learning how to work together. It shouldn’t be surprising that there are some growing pains to adopt something new.”


Internet Resources:

“The Economics of Health Information Technology in Medication Management: A Systematic Review of Economic Evaluations,” Journal of the American Medical Information Association: