Issue does not directly affect clinical laboratories and pathology groups, but puts spotlight on some hospitals and physicians who frequently use these codes.
Could increased use of electronic health records (EHR) systems be causing more hospitals and physicians to commit fraud because of upcoding? That’s the assertion of certain federal health officials. They attribute the increased proportion of Medicare claims for more complex and more expensive services by some providers to be, in some part, acts of fraud.
Most pathologists and clinical laboratory managers will notice the irony in these allegations that providers are upcoding services to Medicare patients in fraudulent ways. After all, the federal government is currently paying billions of dollars in financial incentives to encourage providers to implement and use certified EHR systems with the goal of lowering healthcare costs, while improving patient outcomes.
OIG Audit Findings Are Source of Fraud Allegations
Insinuations of provider fraud came after the public learned of findings of an audit done by Health and Human Services’ Office of Inspector General (OIG). The OIG determined that payments for more complex Level 5 E/M services increased by 21% between 2001 and 2010. During that same period, payments for medium-complexity patient services decreased by 11%.
For all of 2010, the Centers for Medicare and Medicaid Services (CMS) paid out $33.5 billion for E/M billings. This was about one-third of Medicare Part B payments for physician services. These numbers were part of a story published in Modern Healthcare.
Now that much larger numbers of physicians and hospitals are using electronic health record (EHR) systems, Medicare has noticed a steady increase in the proportion of claims submitted at higher and more complex codes, increasing reimbursement. In response to one federal government audit, Kathleen Sebellius, Secretary of Health and Human Services (r) and Attorney General Eric Holder (l) held a joint press conference to announce to healthcare providers that there would be stricter audits of providers who are using billing codes for complex patient visits with greater frequency. (Photo by Manuel Balce Ceneta, copyright Associated Press.)
Recent reports show why labs need more robust laboratory information systems (LIS), including a shrinking workforce, new requirements to connect to EMRs in hospitals and physicians’ offices, and the development of health information exchanges.
Clinical laboratories nationwide are realizing they need new and more powerful laboratory information systems (LIS) as they seek to process larger volumes of medical laboratory tests with a shrinking number of medical technologists and clinical laboratory scientists.
In response to the critical shortages of MTs, CLSs, and other laboratory scientists, most clinical laboratories are beefing up automation in all areas of the lab. From the high-volume core chemistry/hematology laboratory to microbiology and histology, laboratory automation systems are becoming ubiquitous. But all this lab automation increases the need to use information technologies to manage both automation and the flow of specimens through the laboratory.
A report published earlier this year by Kalorama Information of Rockville, Maryland, actually links the shortage of skilled medical laboratory staff as one of the most important factors in fostering growth in the LIS market. Researchers estimated the size of the LIS market at $800 million and predicted that it would grow about 6% annually for the next few years.
As pathologists and clinical laboratory managers know, labor accounts for more than 60% of the cost of producing medical laboratory test results. The Kalorama report stated that laboratory automation and better information management systems can reduce the number of manual procedures and tasks in the typical medical laboratory, In turn, this helps optimize labor efficiency, said the report titled, Laboratory Information Systems (LIS / LIMS) Markets. (more…)
In a growing number of cities around the United States, efforts are under way to organize a regional health information repository. Such a development has implications to change the long-standing relationships laboratories have with physicians, hospitals, patients, and payers.
Two acronyms are used to describe these regional informatics projects. One is RHIO, which stands for Regional Health Information Network. The other is HIE, which stands for Healthcare Information Exchange. Because of the potential for these organizations to change the way laboratories relate to the communities they serve, lab managers and pathologists may want to check out a report issued in recent months by the American Health Information and Management Association (AHIMA) detailing the Development of State-Level Health Information Exchange Initiatives (HIEs). The purpose of the report was “to gather information from existing state-level HIE initiatives to determine successful governance and legal, financial, and operational characteristics; to develop consensus on guidance for developing state-level HIE initiatives; and to disseminate these findings widely” (from the executive summary).
According to AHIMA, HIEs existing in 27 states and over 200 localities. Two key findings of AHIMA’s report were that most state-level HIE initiatives are still in an early stage of development and the mature ones are faced with challenges on how to expand their services in a financially sustainable way. One major problem in getting HIEs to align their form and function is that they have come into existence in a variety of ways and for varying purposes. Some have been founded in response to state legislation. Others were initiated by either the efforts of state agencies or through collective grass roots work by community healthcare stakeholders. AHIMA can find only eight states with an HIE that is more than two years old.
Funding seems to be a big impediment in HIE development and expansion. Some suggestions for financing include charging membership fees, transaction fees, fees for a software package, program or service fees, or some combination of such fees. Beyond financing, HIEs face problems that range from no consensus on the role of state government and lack of coordination among state agencies to minimal participation from private payers and inadequate plans for relating to similar HIE efforts in neighboring states.
Doctors, hospitals, and laboratories are each expected to benefit from the ability to transfer patient information seamlessly across city and state lines, but they must be prepared to pay for this convenience. Dark Daily predicts that, in order to successfully implement HIEs on a state-to-state basis, doctors, hospitals, and laboratories, can expect to pay, at the very least, a membership fee to get the ball rolling. Only time will determine whether HIEs and RHIOs will turn out to be either threats or opportunities for laboratories.
Because lab data represents the majority of information in a patient medical record, it is important for every laboratory to stay informed about efforts to pool clinical information and create regional repositories for health data. To help laboratory directors and pathologists stay up with the latest developments in RHIOS and HIEs, DARK Daily did some research. One good source was the American Health Information and Management Association (AHIMA). It released a report in September detailing the Development of State-Level Health Information Exchange Initiatives (HIEs) (often referred to as Regional Health Information Organizations or RHIOs). The purpose of the report was “to gather information from existing state-level HIE initiatives to determine successful governance and legal, financial, and operational characteristics; to develop consensus on guidance for developing state-level HIE initiatives; and to disseminate these findings widely” (from the executive summary).
Key findings of the AHIMA report were that most state-level HIE initiatives are still in an early stage of development, and the mature ones are faced with challenges on how to expand their services in a financially sustainable way. HIEs exist in 27 states and over 200 localities. One of the major problems in getting HIEs to align is that they have come into being in a variety of ways, including state legislation, state agency efforts, and grass roots work. Only 8 states have an HIE more than 2 years old.
The financial problems of HIE expansion have led to a number of suggestions for financing, such as charging member ship fess, transaction fees, fees for a software package, program or service fees, or some combination of those fees. Beyond financing, HIEs face problems such as lack of consensus on the role of state government, lack of coordination among state agencies, lack of participation from private payers, and lack of plans for relating to similar efforts in neighboring states.
HIEs and RHIOs, once successfully implemented, will have a significant impact on how clinical laboratories and pathologists interact with office-based physicians. For this reason, the December 18 Dark Report reports on the status of HIEs in Florida, and details how a pathologist, Philip Chen, MD, Vice President and Chief Medical Informatics Officer for Clinical Pathology Laboratories of Austin, TX and President of Cognoscenti Health Institute in Orlando, FL, has been elected to the Central Florida RHIO board of directors. According to Chen, “Participating in this project helps us understand the specific ways that healthcare IT will evolve in our community. This gives us a leg up in our own strategic planning. It helps us align our lab’s IT infrastructure to better meet the needs of the community we serve.” Labs and pathology groups that want to stay up-to-date on HIE / RHIO progress should take note of this story in The Dark Report and make an effort to become involved in RHIOs in their own communities.
The complete report from AHIMA can be downloaded at the State RHIO Consensus Project website