News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Clinical laboratories and pathology groups are likely to need LIS upgrades

Clinical laboratories and anatomic pathology groups may soon face the need to upgrade or switch their laboratory information system (LIS) to a version that is HIPAA 5010 and ICD-10 capable. This is likely to be an overlooked consequence of the mass adoption of electronic medical record (EMR) systems by physicians across the country.

Between 2011 and 2015, it is predicted that 350,000 or more physicians will implement an EMR and use it in their daily practice. This is happening because of the federal incentives provided by the HITECH Act. The scale of the coming tidal wave of EMR adoption is revealed in a recent Frost & Sullivan report .

EMR Sales will Double by 2012

EMR System Sales Predicted to Double by 2012

Frost & Sullivan predicts a doubling of revenue in the ambulatory electronic health records (EHR) market between now and the end of 2012! Current annual sales of ambulatory EHR products will go from the current $1.3 billion per year to $2.6 billion by 2012. Annual sales are projected to peak at $3 billion by 2013. Then, because almost all of the nation’s physicians will be using EMRs, Frost & Sullivan estimates that, by 2016, the EMR market will shrink back to just $1.4 billion.

This rapid and widespread adoption of EMRs by both hospitals and physician practices is unprecedented in our nation’s history. Clinical laboratory managers and pathologists already see a pick up in the number of requests by client physicians to interface their LIS to the client EMR to enable seamless lab test orders and lab test reporting.

This creates several challenges for clinical labs and pathology groups. First, at a minimum, they must spend money to pay for that LIS-to-EMR interface. Second, physicians may also ask their laboratory provider to donate up to 85% of the cost of the new EMR. Third, laboratories will need to hire adequate information technology staff to provide the manpower needed to deliver the large number of LIS-to-EMR interfaces that clients require. But that leaves medical laboratories with another challenge, which Dark Daily and The Dark Report are first to identify. The majority of newly-installed EMR systems will feature latest generation information technology that will include the capability to support HIPAA 5010 and ICD-10. Yet many of the nation’s laboratories continue to use LIS products that were purchased and installed many years ago

For some clinical laboratories, it will not be easy, nor cheap, to make these long-serving—and oft-patched—LIS products capable of handling HIPAA 5010 and ICD-10. For that reason, medical laboratories with LIS products that lag in this capability might find themselves out in the cold as physicians turn to labs that do. Physicians need that support from their laboratory provider in order to close the PHI (patient health information) data exchange loop, prove meaningful use, and get reimbursed.

“I think the number one driver [of ambulatory EHR adoption] is the change in reimbursement, the fact that it is becoming so complicated to document the process of care to get paid by the government as well as commercial payers,” said Nancy Fabozzi, a senior industry analyst at Frost & Sullivan in an interview for InformationWeek. “Everybody thinks that fee-for-service is doomed and we have to have a new system of reimbursing physicians for the quality of care instead of the quantity of care because costs are exploding.”

Clinical laboratory managers and pathologists should come to terms with the game-changing consequences of EMR adoption by physicians. Those laboratories that can upgrade their LIS in appropriate ways are likely to find that they have a considerable advantage in the competitive lab testing marketplace. Those LIS upgrades should include the capability of handling HIPAA 510 and ICD-10.

Related Information:

Frost & Sullivan report brochure: “U.S. Ambulatory EHR Market”

InformationWeek: “EHR Revenue to Hit $3 Billion in 2013”

CMS: Standards for Electronic Transactions-New Versions, New Standard and New Code Set – Final Rules

American Clinical Laboratory Association: ICD-10

LIVE Audio Conference: How Meaningful Use and EMR Adoption Will Reshape Your Lab’s Competitive Future—and Its Profitability