News: EHRs burdened by billing requirements, fail to cut costs

EHRs don’t reduce administrative costs, according to a study published in the Journal of the American Medical Association (JAMA).

The study looked at the amount of time it took to complete billing and insurance activities in the EHR at an academic healthcare system as well as the cost of personnel and overhead required to run those systems, Revenue Cycle Advisor reported..

The study determined the percentage of professional revenue the costs represent and found that both the estimated cost and the percentage of professional revenue represented by the cost varied greatly, according to Revenue Cycle Advisor.

A primary care visit cost $20.49 to process, with the physician’s billing activities accounting for $6.36 of the total and representing 14.5% of professional revenue, according to the study. An ED visit cost $61.54 to process, including $10.97 for the physician’s activities, representing 25.2% of professional revenue. An inpatient surgical procedure cost $215.10, with $51.20 for the physician’s activities, representing 3.1% of professional revenue.

In an editorial published in JAMA, the study authors also discussed how their findings contradicted the early belief that EHRs would reduce administrative costs for providers. Federal programs to encourage EHR adoption such as the EHR Incentive Program touted the ability of EHRs to ultimately reduce administrative costs. Even after widespread adoption of EHRs, the healthcare industry continues to see inordinately high costs related to billing activities as compared to other industries, Revenue Cycle Advisor reported.

The blame might not fall on the EHRs themselves, though, according to the study authors. Different payers have different requirements for billing and processing claims, making it difficult for provider organizations to implement efficient billing systems and eliminate duplicative processes.

Payers might also contribute to the cost of billing and wasteful processes with inefficient internal policies. The JAMA editorial noted that it’s common for payers to initially deny charges—a study cited in the editorial found that up to 12.6% of billed charges are initially denied—but that up to 81% of initially denied charges are later paid.

The study authors concluded that many provider organizations with EHRs have not fully mapped the actual costs of care, billing, and related EHR administrative costs, Revenue Cycle Advisor reported. More information on how billing activities contribute to administrative expenses could help guide future EHR policies.

Editor’s note: This article originally appeared in Revenue Cycle Advisor. To read the JAMA study, click here. To read about CMS’ recent call for new EHR incentive program measures, click here. To read about ways your EHR can be leveraged to improve patient safety, click here.