Does Electronic Medical Record Software increase revenues?
The economy has been in a recessionary trend for some time now and while the economic conditions are challenging, the insurance companies are applying a squeeze on physicians to accept lower reimbursements. Funding by way of donations from private contributions is also reducing thereby adversely impacting availability of cash to implement an EMR / EHR software.
Any investment in Electronic Medical Record Software is justified only if it can help in increasing revenues, decreasing costs or overheads, improving patient care or any combination of the above resulting in maximization of reimbursements, collections and customer goodwill.
How does Electronic Medical Record Software increase revenues?
- Electronic Medical Record Software improves charge capture: When traditional paper charts are used, many services performed in a physician’s office are lost and never billed. The billing staff may either completely leave out an E&M Code or may erroneously enter fewer units, all resulting in lower billing and therefore lower reimbursements to a physician. Electronid Medical Record software can increase revenues by facilitating capturing of charges for all services provided by the physician thereby avoiding lost revenues. In a case study (Nick Fabrizio, July 2005, QIO Presentation quote), a family medicine physician while seeing same number of patients increased revenues by $3000 per month due to timely visit documentation and automated charge capture.
- Electronic Medical Record Software maximizes Billing: When using paper charts, to be on the safe side of the law, many physicians down code (use a lower billing code), rather than use an appropriate level of code. Providers who use EMR software can increase revenues by using System recommended E&M billing codes that are based on the service accurately documented within the EMR, without the fear of an audit. Medical Economics magazine has estimated that physicians, who routinely down-code to avoid audits, lose an average of $40,000 annually.
- Electronic Medical Record Software optimizes reimbursement process: EMR software allows physicians to produce adequate supporting documentation that complies with CMS guidelines and supports the appropriate level of service to be billed. Accurate coding speeds up the reimbursement process and results in fewer rejected claims from insurance companies. Even better, an EMR Software helps produce clean claims the first time, significantly reducing the number of rejected claims!
- Electronic Medical Record Software increases Physician productivity: When physicians do not use EMR, they have to spend several minutes per encounter, first dictating and then reviewing the transcript before signing the same. With an EMR Software, progress notes are automatically generated which can be signed electronically from home or work, with no pulling or filing of charts. The time saved can be used to see a few more patients each day. Further, the medical records storage space released as a result of implementing an EMR Softwarecan be used to add more consultation rooms. As a result, practices are able to generate more revenue with the same fixed costs in the same amount of time.
- Electronic Medical Software increases services with Health Maintenance Reminders: EMR Software Systems provide computerized checks and reminders which enable reminders to be sent to all patients who are overdue for recommended services, or who are coming up on their annual check-ups. This helps the physician to deliver enhanced patient care, while at the same time increasing service volume and revenue.
- Electronic Medical Record Software increases sources of income: EMR software can allow providers to apply for enhanced sources of revenue from various payers associated with higher quality of care, such as:
- DOQ-IT (Doctors’ Office Quality-Information Technology is one of the Physician-focused Quality Initiatives sponsored by the Centers for Medicare & Medicaid Services (CMS).
- Healthcare Pay-for-Performance (P4P) programs like Medicare Care Management Performance (MCMP), which is a 3-year, pilot P4P program that encourages physicians to follow strict quality-control guidelines for treating chronically ill patients. During the first year of treatment, physicians receive bonuses for reporting data on quality measures and in the second and third years, participating clinics receive an extra annual performance-based bonus of $10,000 per clinician plus, an additional 25% reward for using a CCHIT Certified EMR.
- To participate in a P4P program, a physician will need to track and measure care, and monitor the efficiency of delivering quality care at an optimal cost. One must also document the patients’ experiences using post-exam surveys. Most EMR systems are capable of meeting these requirements while simplifying the process.
Electronic Medical Record Software decreases administrative costs / overhead
A typical medical office employs a transcriptionist, billing and clerical staff such as appointment schedulers, medical billers, collectors, file clerks and others. As a Practice grows, EMR Software systems significantly reduce the need for more personnel to provide these functions, while at the same time, reducing existing office staff time that will no longer be needed spending valuable time hunting down records or filing patient charts. EMR Software enabled medical offices mean fewer bodies in the office, generating greater efficiencies and accomplishing more.
- Electronic Medical Record Software reduces transcription cost: Many physicians pay hefty fees for transcription of their medical charts. EMR Software systems ‘virtually’ eliminate transcription costs since medical charts are created electronically at the time of the patient’s visit itself. According to Medical Economics (March 2002), physicians spend between $15,000 and $25,000 over the course of a year for transcription-related services. Implementation of an EMR eliminates the need to use in-house or outsourced transcriptionists. Integration of voice recognition software with EMR Software Systems also plays an important role for the people who want to have free formatted notes or for some providers who are not comfortable using mouse and keyboard.
Assuming an average of 25 visits per day and a conservative average of $2 per chart, an EMR Software System brings instant savings of $50 per day per physician. Assuming that a physician works for 240 days in a year, this translates into potential savings of $12,000 per physician. Even if some or all of a practice's physicians continue to use transcription, there is no doubt that these costs can be reduced significantly.
- Electronic Medical Record Software reduces costs associated with storing paper charts: Once a medical office successfully converts to electronic medical records, all costs associated with purchasing, copying, management, storing or destroying paper charts can be eliminated. Additionally, the space typically used for storing patient charts can be utilized to create additional patient exam rooms, or increased office space, resulting in a more profitable use of resources. It is estimated that the total cost associated with maintaining a paper record average $3 per medical chart.
A case study revealed that a 12-physician practice saved $5,000 a year in storage space after converting to EMR. In another study, a major medical center in Boston seeing 750,000 patients a year, estimated they will save $6 million annually by reducing their dependence on paper records. At this saving rate, a practice seeing 5,000 patients annually could potentially save $40,000. In another case study, EMR Software implementation resulted in a reduction in office supplies expense by 50% with the elimination of paper charts.
- Electronic Medical Record Sotware reduces liability and malpractice insurance premiums: Improved documentation, audit trails, and accuracy not only reduce incidents of medical errors, but also improve the chances of physicians receiving discounts from insurers. The cost of malpractice insurance has been showing a constant upward trend. A good EMR system leads to reduction in costs associated with poor documentation that otherwise generally means higher malpractice premiums.
- In a 2005 survey by the Medical Liability Monitor, a four-state average of the highest liability rates for OB/GYN was $230,919. With a two to five percent credit from malpractice insurance companies, clinics would save $4,600 to $11,500 per provider, per year, if they implemented an EMR.
- In another example, the Midwest Medical Insurance Company (MMIC) is offered a two to five percent credit to physician groups that used an EMR in 2008.
- Electonic Medical Record Software enables self-service by patients and lowers data entry costs: The Patient Portal module of an EMR allows patients to enter much of their own demographics, even before they arrive to the Physicians office, including health insurance information, medical, family, and social history, and other pertinent data and this can save office staff a lot of data entry time. It can even allow patients to view certain information from their medical electronic file, and schedule appointments.
- Electronic Medical Record Software saves time and increases efficiency: Staff and physician time is often ill spent due to:
- Waiting: If a pharmacy calls while the chart is being used, or waiting to be filed, the staff receiving the call cannot access the information in a timely manner. EMR Systems allow multi-use access that enables staff to access and update patient records simultaneously – this saves time that would otherwise be spent in waiting for access to patient records.
- Time spent in pulling Medical Records: It is estimated that the cost of pulling and handling paper charts averages $5 to $12. In an EMR deployed Practice, Medical Records are accessible 24 x 7 from any web-enabled device or web access point, and this is done, securely.
- Data entry for billing purposes: When the EMR System interfaces or integrates with the Practice Management or Billing System, data entry workload reduces significantly while maintaining billing accuracy.
In a recent case study, a Practice reduced labor costs by 10% in the first year after implementing an EMR solution due to more efficient workflow and, the reduction of filing, coding, and data entry staff, while reducing time spent to complete clinical tasks such as Rx refills, referrals, lab, and diagnostic orders.
EMR implementation can help increase revenues but a physician practice must not forget to look at two other important and often neglected aspects:
- How can revenues be accelerated by proactive AR Follow-ups?
- How can we manage denials efficiently and expeditiously?
Account Receivable Management (AR Follow-up)
Experts believe that effective Account Receivables (AR) Follow up and AR Management are the most important areas requiring attention to ensure optimum revenue recovery. The average profit margin of US hospitals is less than 2% of Net Revenue while lost revenue due to denials accounts for an average of 6% to10% of net revenue, nationwide. In fact, take a look at these powerful facts:
- 14% of all claims submitted to payers are denied and have to be resubmitted, appealed, or written off by Providers.
- 50% of denied claims are never re-filed.
- 90% of denials are preventable.
- 50-70% of denied claims are recoverable.
This can cost a clinic or practice thousands of dollars every year. Aside from the direct impact from the loss of revenue, there’s an additional impact on resources because of the expense associated with reprocessing denied claims. A judicious combination of process, technology and people skills must be effectively used to follow up with the payers to identify, address and rectify the identified problem and accelerate your revenues so that you can get money in your bank – faster.
Accurate coding speeds up the reimbursement process and results in fewer rejected claims from insurance companies. Sophisticated denial processing solutions can captures claims, payments, and denials and addresses your denial management issues with an effective denial management plan.
Here are some of the tools used to achieve high rates of denial reversals:
- Continuously update denials database
- Immediate identification of the root causes of denials, and use the experience and knowledge to address each denial trend
- Utilize denial data to generate custom reports
- Better feedback to the coding and billing team
The many benefits enumerated in this article can be experienced by all Physicians, however, the payback period (ROI) will vary from Practice to Practice. In most cases, Practices experience increased cost in Year 1, and then, begin seeing increased revenues and, decreased administrative costs and overhead from the second year onward. The key ingredient for success lies in the willingness of the Practice to critically examine their existing workflow and make recommended adjustments to optimize workflow efficiency. If these efforts can be supplemented with other revenue acceleration and denial management techniques, the Practice can see significant improvements in each and every revenue cycle Key Performance Indicator (KPI).
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