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Do Security and Privacy Concerns Drive Cloud Adoption?

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In one of my recent conversations with Dr. Andy Litt, Chief Medical Officer at Dell, he made a really interesting but possibly counter intuitive observation. While maybe not a direct quote from him, I took away this observation from Dr. Litt:

Security and privacy drives people to the cloud.

Talk about an ironic statement. I imagine if I were to talk to a dozen CIOs, they would be more concerned about the security and privacy implications of the cloud. I don’t imagine most would look at the cloud as the solution to some of their security and privacy problems.

However, Dr. Litt is right. Many times a cloud based EHR or other software is much more secure than a server hosted in a doctors office. The reality is that many healthcare organizations large or small just can’t invest the same money in securing their data as compared with a cloud provider.

It’s not for lack of desire to make sure the data is secure and private. However, if you’re a small doctor’s office, you can only apply so many resources to the problem. Even a small EHR vendor with a few hundred doctors can invest more money in the security and privacy of their data than a solo practice. Although, this is true for even very large practices and even many hospitals.

One reason why I think many will disagree with this notion is because there’s a difference between a cloud provider who can be more secure and private and one who actually executes on that possibility. It’s a fair question that everyone should ask. Although, this can be verified. You can audit your cloud provider and see that they’re indeed putting in security and privacy capabilities that are beyond what you’d be able to do on your own.

What do you think? Is hosting in the cloud a way to address security and privacy concerns?

April 24, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

Breaking News: Meaningful Use is Not Covering Costs

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In one of my recent interviews with a healthcare IT consulting company, they revealed some breaking news for those of us in the EHR world. They told me point blank that:

Meaningful Use is Not Covering Costs

Ok, so that’s not really breaking news. Although, it seems that very few people want to actually articulate this point. It almost feels like heresy that someone would “complain” about the fact that the government is spending $36 billion on EHR incentives and that the money isn’t enough to cover the implementation of these EHR systems.

Actually, I should clarify that last point. The EHR incentive money is covering the costs to purchase the systems. It’s not covering the costs of implementing those EHR systems and then poking, prodding and otherwise cajoling end users to show meaningful use of that system (not to be confused with meaningfully using the system).

Let me also be clear that I’m not complaining about the EHR incentive money. I’ve done enough of that previously. What I’m just trying to acknowledge is something that everyone who deals with the EHR budget already realizes, but no one seems to want to say it. Organizations are spending more money on EHR and meaningful use than they’re getting from the government.

I think this is important for a couple reasons. First, many organizations didn’t budget any EHR money beyond what the EHR incentive money. You can certainly argue this was a mistake on their part, but that’s going to leave a bunch of organizations in a lurch. We’re already seeing the fall out of this as news reports keep coming out about hospitals systems in financial trouble due to the costs of their EHR system. Plus, in each of these cases, it seems their costs continue to balloon out of control with no end in sight. It makes me wonder if the compressed meaningful use timeline is partially to blame for a rushed implementation and poor EHR implementation and cost planning.

Second, there is still a swash of providers and organizations that haven’t yet implemented their EHR. If you can’t support the cost of EHR with government money, how does that bode for those who won’t be getting any EHR incentive money? One could make the argument that they’ll actually be in a better position since they won’t have to worry about meaningful use and can just focus on getting value out of their EHR. Hopefully that’s the case, but many of the meaningful use functions are now hardcoded into the EHR systems. Even if an organization isn’t planning on attesting to meaningful use, that doesn’t mean they won’t be forced by their EHR software to do a bunch of things they wouldn’t have done otherwise.

What are you seeing from your perspective? Is the EHR incentive money covering the costs of an EHR implementation? What are the impacts if it doesn’t?

April 21, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

EMR Interfaces, MU vs Quality Care, and Data Outside EMR

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I’m not sure I agree completely with this tweet. I don’t know enough about Covery My Meds to say either way. Although, I wondered if many EMRs will integrate with Covery My Meds. From my experience, EMR vendors don’t want to interface with many outside software companies. A few embrace outside companies interfacing with them. We’ll see if that changes over time.


I haven’t had a chance to look at this study yet, but did anyone think that quality of care would improve because of MU?


No doubt we’ll eventually have outside data from wellness tracking apps incorporated in EMR, but I don’t think it will ever be a free for all. There are tens of thousands of wellness apps and I don’t see doctors wanting data from just any app. They’ll want to only get data from apps they trust. That’s a high bar for most apps. Plus, once you win the trust of one doctor, you still have to win the trust of all the other doctors. There’s not a trusted third party that doctors look to for apps.

April 20, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

ICD-10 Flight Delayed, But Keep Your Bags Packed – Breakaway Thinking

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The following is a guest blog post by Jennifer Bergeron, Learning and Development Manager at The Breakaway Group (A Xerox Company). Check out all of the blog posts in the Breakaway Thinking series.
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If you’ve ever traveled to a country that doesn’t speak your native tongue, you can appreciate the importance of basic communication. If you learn a second language to the degree that you’re adding nuance and colloquialisms, you’ve experienced how much easier it is to explain a point or to get answers you need. What if you’re expected to actually move to that foreign country under a strict timeline? The pressure is on to get up to speed. The same can be said for learning the detailed coding language of ICD-10.

The healthcare industry has been preparing in earnest to move from ICD-9 coding to the latest version of the international classification of diseases. People have been training, testing and updating information systems, essentially packing their bags to comply with the federal mandate to implement ICD-10 this October — but the trip was postponed. On April 1, President Barrack Obama signed into law a bill that includes an extension for converting to ICD-10 until at least Oct. 1, 2015. What does this mean for your ICD-10 travel plans?

Despite the unexpected delay, you’ll be living in ICD-10 country before you know it. With at least another year until the deadline, the timing is just right to start packing and hitting the books to learn the new codes and to prepare your systems. For those who have a head start, your time and focus has not gone to waste, so don’t throw your suitcases back into the closet. The planning, education and money involved in preparation for the ICD-10 transition doesn’t dissolve with the delay – you’ve collected valuable tools that will be put to use.

Although many people, including myself, are disappointed in the change, we need to continue making progress toward the conversion; learning and using ICD-10 will enable the United States to have more accurate, current and appropriate medical conversations with the rest of the world. Considering that it is almost four decades old, there is only so much communication that ICD-9 can handle; some categories are actually full as the number of new diagnoses continues to grow. ICD-9 uses three to five numeric characters for diagnosis coding, while ICD-10 uses three to seven alphanumeric characters. ICD-10 classifications will provide more specific information about medical conditions and procedures, allowing more depth and accuracy to conversations about a patient’s diagnosis and care.

Making the jump to ICD-10 fluency will be beneficial, albeit challenging. In order to study, understand and use ICD-10, healthcare organizations need to establish a learning system for their teams. The Breakaway Group, A Xerox Company, provides training for caregivers and coders that eases learning challenges, such as the expanded clinical documentation and new code set for ICD-10. Simply put, there are people can help with your entire ICD-10 travel itinerary, from creating a checklist of needs to planning a successful route.

ICD-10 is the international standard, so the journey from ICD-9 codes to ICD-10 codes will happen. Do not throw away your ICD-10 coding manuals and education materials just yet. All of these items will come in handy to reach the final destination: ICD-10.

Xerox is a sponsor of the Breakaway Thinking series of blog posts.

April 16, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

Taking a Second Look: Accessing Your Data beyond the PM or EMR

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Editor’s Note: The following is an update to a previous EMR and HIPAA blog post titled “EMR Companies Holding Practice Data for “Ransom”.” In this update, James Summerlin (aka “JamesNT”) offers an update on EHR vendors willingness to let providers access their EHR data.

Over the years I have been approached with questions by several solo docs and medical groups about things such as the following:

  • Migrating to a different PM or EMR system.
  • Merging PM’s or EMR’s such as when a practice buys out another practice.
  • Interfacing the EMR and PM.
  • Custom reports.
  • More custom reports.
  • LOTS MORE CUSTOM REPORTS!!!

And there have been plenty of times I’ve had to give answers to those questions that were not favorable.  In many cases, it was with some online EMR or PM and the fact that I could not get to the database and the vendor refused to export a copy to me or the vendor wanted thousands of dollars for the export.  With the on-premises PM and EMR systems, getting to the data was a matter of working my way around whatever database was being used and figuring out what table had what data.  Although working with an on-premises PM or EMR may sound easier, it too often isn’t.  The on-premises guys have some tricks up their sleeves to keep you away from your data such as password protecting the database and, in some cases, flat out threatening legal action.

A few years back, I wrote a post on a forum about my thoughts on how once you entered your data into a PM or EMR, you may never get it back.  You can see John Lynn’s blog post on that here.

My being critical of EMR and PM software vendors is nothing new.  I’ve written several posts on forums and blogs, even articles in BC Advantage Magazine, about how hard it can be to deal with various EMR and PM systems.  Much of the, at times, downright contemptuous attitudes many PM and EMR vendors have towards their own clients can be very harmful.  Let’s consider three aspects:

  • Customization.  Most of the PM/EMR vendors out there would love to charge mega-bucks to write custom reports and so forth for clients.  However, this isn’t all it’s cracked up to be.  First, most clients simply aren’t going to pay the kind of money many PM or EMR companies want to charge.  Second, custom reports have to be maintained.  Eventually, you have all these clients running around needing changes to their reports and the PM or EMR vendor simply can’t get to them all in a timely manner without hiring lots of technical (read: EXPENSIVE) staff which turns what was once a money-making ordeal into a money losing one.  And, of course, the client’s suffer since they can’t fine-tune their practice to the degree needed in today’s challenging economy.
  • Interfacing.  What happens if a client wants to interface encounters and demographics from their EMR to their PM system and then interface dollar amounts and so forth from the PM system with receivables and expenditures in Quickbooks or other financial software into a series of reports that give a total view of how the practice is doing?  We are talking about the ability to, day-by-day, forecast incoming receivables from carriers and patient payments (within certain limits, of course), with expected expenditures (payroll, taxes, etc.) from the accounting software to get a financial outlook for the practice for the next few weeks or even months for long-term planning.  A PM or EMR vendor, already dealing with HIPAA or meaningful use, may not want to get involved in that kind of hard-core number crunching, yet the practice is demanding it.
  • A second part to interfacing.  Getting the EMR and PM vendors to get along.  Often what you see is the EMR vendor has a certain way they do an HL7 interface and the PM vendor has a certain way they do an HL7 interface and if they don’t line up properly, you’re just out of luck.  Either it works with reduced functionality or it doesn’t work at all and neither vendor will budge to change anything.  And that’s assuming they both use HL7!

In situations like those above, the best way to resolution is for the practice to perhaps obtain its own technical talent and build its own tools to extend the capabilities of the data contained within the various databases and repositories it may have such as the databases of the PM and EMR.  Unfortunately, as I have reported before, most PM and EMR systems lock up the practice’s data such that it is unobtainable.

At long last; however, there appears to be a light at the end of the tunnel that doesn’t sound like a train.  Some of the EMR systems that doctors use are beginning to realize that creating a turtle shell around a client’s data, in the long run, doesn’t do the client nor the PM/EMR vendor any good.  One such EMR I’ve been working with for a long time is Amazing Charts.  Amazing Charts has found itself in a very unique situation in that many of its clients are actually quite technical themselves or have no problem obtaining the technical talent they need to bend the different systems in their practices to their will.  The idea of having three or four databases, each being an island unto itself, is not acceptable to this adventurous lot.  They want all this data pooled together so they can make real business decisions.

Amazing Charts; therefore, has decided to be more open regarding data access.  Read only access to the Amazing Charts database is soon to be considered a given by the company itself.  Write access, of course, is another matter.  Clients will have to prove, and rightly so, that they won’t go spelunking through the database making changes that do little more than rack up tech-support calls.  Even with the caution placed on write access this is a far jump above and beyond the flat out “NO” any other company will give you for access to their database.  I consider this to be a great leap forward for Amazing Charts and, I’m certain, will set them apart from competition that still considers lock-in and a stand-offish attitude the way to treat clients who pay them a lot of money.

Perhaps one day other PM and EMR vendors will see the light and realize the data belongs to the practice, not the vendor, and will stop taking people’s stuff only to rent access to it back to them or withhold it altogether.  Until then, Amazing Charts seems to be leading the way.

April 14, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

Lack of 2014 Certified EHRs

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I was asked recently by an EHR vendor about the disconnect between the number of 2011 Certified EHR and the number of 2014 Certified EHR. I haven’t looked through the ONC-CHPL site recently, but you can easily run the number of certified EHR vendors there. Of course, there’s a major difference in the number of 2011 certified EHR versus 2014 certified EHR. However, I don’t think it’s for the reason most people give.

Every EHR vendor that gets 2014 Certified likes to proclaim that they’re one of the few EHR vendors that was “able” to get 2014 Certified. They like to point to the vast number of EHR that haven’t bridged from being 2011 Certified to being 2014 Certified as a sign that their company is special because they were able to complete the “more advanced” certification. While no one would argue that the 2014 Certification takes a lot more work, I think it’s misleading for EHR companies to proclaim themselves victor because they’re “one of the few” EHR vendors to be 2014 Certified.

First of all, there are over 1000 2014 Certified EHR products on ONC-CPHL as of today and hundreds of them (223 to be exact – 29 inpatient and 194 ambulatory) are even certified as complete EHR. Plus, I’ve heard from EHR vendors and certifying bodies that there’s often a delay in ONC putting the certified EHR up on ONC-CPHL. So, how many more are 2014 Certified that aren’t on the list…yet.

Another issue with this number is that there is still time for EHR vendors to finish their 2014 EHR certification. Yes, we’re getting close, but no doubt we’ll see a wave of last minute EHR certifications from EHR vendors. It’s kind of like many of you reading this that are sitting on your taxes and we’ll have a rush of tax filings in the next few days. It’s not a perfect comparison since EHR certification is more complex and there are a limited number of EHR Certification slots from the ONC-ATCB’s, but be sure there are some waiting until the last minute.

It’s also worth considering that I saw one report that talked about the hundreds (or it might have been thousands) of 2011 Certified EHR that never actually had any doctors attest using their software. If none of your users actually attested using your EHR software, then would it make any business sense to go after the 2014 EHR certification? We can be sure those will drop out, but I expect that a large majority of these aren’t really “EHR” software in the true sense. They’re likely modularly certified and add-ons to EHR software.

To date, I only know of one EHR software that’s comes out and shunned 2014 Certified EHR status. I’m sure we’ll see more than just this one before the deadline, but my guess is that 90% of the market (ie. actual EHR users) already have 2014 Certified EHR software available to them and 99% of the market will have 2014 certified EHR available if they want by the deadline.

I don’t think 2014 EHR certification is going to be a differentiating factor for any of the major EHR players. All the major players realize that being 2014 Certified is essential to their livelihood and a cost of doing business.

Of course, the same can’t be said for doctors. There are plenty of ways for doctors to stay in business while shunning 2014 Certified EHR software and meaningful use stage 2. I’m still really interested to see how that plays out.

April 11, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

EHR Adoption Failure Is Not Always a Technology Failure

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In one of the LinkedIn threads I was participating, Cameron Collette offered this really interesting insight:

Secondly, there is a general unwillingness to change current work flow models in many health care facilities. Daily I hear, “we have never done it that way” or “that’s not the way do things”. So, we have what is currently a greater than 40% EMR adoption failure rate. In other words, it is not always a technology failure. The technology might work, but in order to make it work properly requires a significant change in processes. Sometimes this would be a good thing. Sometimes it would not be a good thing as a lot of EMR/EHR designs were developed with virtually no real input from the people that have to work with them every day.

He’s absolutely right. It is very often the case that the problem with your EHR has nothing to do with the EHR technology at all. Often, one of the biggest problems that’s faced during an EHR implementation is a change to culture.

I’ve said multiple times that an EHR implementation requires change. I know that many EHR companies will try and sell you that their product can be implemented with no change to your workflow. That’s just an outright lie. Sure, some of them can do a pretty good job modeling your current workflow in the EHR, but there is still plenty of change that’s required.

Change and EHR implementation go together. Organizations that deny this reality have issues in their EHR implementation.

This is why every EHR implementation I’ve seen has required some powerful leadership that drives the initiative. It’s why the $36+ billion in stimulus money has driven EHR adoption so much. That money makes leaders respond.

My best advice for healthcare leaders out there is to embrace the change that EHR and other technology is bringing. You shouldn’t accept mediocrity in a tech system, but you should expect and be ready to change when you implement an EHR. In fact, one of the best assets you can build into your company is the ability to adapt to change.

5 years from now, I’m pretty sure we’re going to look back and think that the next 5 years of technology caused more change for good than we’ve seen in the last 10 years. If your organization doesn’t have a culture of adapting to change, they’re going to be left behind.

April 10, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

O’Reilly Studies Health IT: The Information Technology Fix

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O’Reilly Media specializes in books, courses and online services in technical innovation. This week, it released a new, comprehensive study on IT in Healthcare: The Information Technology Fix for Health (PDF). It’s written by O’Reilly editor Andrew Oram, who frequently writes on healthcare IT’s trends and issues. Oram takes on four basic, health IT areas in this cogent review:

  • Devices, sensors, and patient monitoring
  • Using data: records, public data sets, and research
  • Coordinated care: teams and telehealth
  • Patient empowerment

In doing so, he brings a sound knowledge of health IT current technology and issues. He also brings a rare awareness that health IT often forgets its promise to combine modern tools with an intimate doctor patient relationship:

In earlier ages of medicine, we enjoyed a personal relationship with a doctor who knew everything about us and our families—but who couldn’t actually do much for us for lack of effective treatments. Beginning with the breakthroughs in manufacturing antibiotics and the mass vaccination programs of the mid-twentieth century, medicine has become increasingly effective but increasingly impersonal. Now we have medicines and machinery that would awe earlier generations, but we rarely develop the relationships that can help us overcome chronic conditions.

Health IT can restore the balance, allowing us to make better use of treatments while creating beneficial relationships. Ideally, health IT would bring the collective intelligence of the entire medical industry into the patient/clinician relationship and inform their decisions—but would do so in such a natural way that both patient and clinician would feel like it wasn’t there. P. 4-5.

Recommended reading.

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April 7, 2014 I Written By

When Carl Bergman’s not rooting for the Washington Nationals or searching for a Steeler bar, he’s Managing Partner of EHRSelector.com, a free service for matching users and EHRs. For the last dozen years, he’s concentrated on EHR consulting and writing. He spent the 80s and 90s as an itinerant project manger doing his small part for the dot com bubble. Prior to that, Bergman served a ten year stretch in the District of Columbia government as a policy and fiscal analyst.

Hospital Intern Time, Why ICD10?, and EHR Satisfaction Pre-MU

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Everyone that reads this immediately thinks that this is a terrible thing. It seems ghastly that a doctor that’s paid to treat patients would spend so much time with an EMR vs with patients. I agree with everyone that are highest paid resource should be using as much time as possible with and treating patients. However, this study would have a lot more meaning if it was paired with a previous study that showed how much time a hospital intern spent in a paper chart. Maybe they spent 400% more time with a paper chart than direct patient contact. Then, this stat would come off looking very different. You have to always remember that you have to take into account the previous status quo.


This article and the discussion around ICD-10 was phenomenal. Passionate viewpoints on each side. It fleshed out both sides of the arguments for me really well. Too bad no one will care too much for a while.


Oh…the good old days. When everyone love EHR, because they chose to do it and so they made the most of their choice. Ok, I’m being a little facetious, but I seem to remember a study I saw that showed how much more unsatisfied doctors are with EHR today versus pre-MU. I imagine it’s not all MU’s fault, but it certainly hasn’t helped with physician EHR satisfaction.

April 6, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 5000 articles with John having written over 2000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 9.3 million times. John also recently launched two new companies: InfluentialNetworks.com and Physia.com, and is an advisor to docBeat. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and Google Plus. Healthcare Scene can be found on Google+ as well.

Surviving 2014: The Toughest Year in Healthcare

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The following is a guest blog post by Ben Quirk, CEO of Quirk Healthcare Solutions.
Ben Quirk
How bad is 2014 for the healthcare industry? We’ve all read about ICD-10, EHR incentives, Medicare cuts, and the Affordable Care Act. But the most telling moment for me occurred during this year’s HIMSS conference in Orlando. There was quite a bit of B2B enthusiasm, but among the civilians it was mostly a lot of stunned looks and talk about how to get through the year. Here are some of my observations:

ICD-10. CMS has made it abundantly clear there will be no further delays to the October 1 deadline for ICD-10 implementation. This is possibly the most significant change to the healthcare industry in 35 years, affecting claims payment/billing systems, clearinghouses, and private and public software applications. Anyone who provides or receives healthcare in the US will be touched by this in some way.

In a recent poll of healthcare providers conducted by KPMG, less than half of the respondents said they had performed basic testing on ICD-10, and only a third had completed comprehensive tests. Moreover, about 3 out of 4 said they did not plan to conduct tests of any kind with entities outside their organizations.

Incorrect claims denial will be the most likely result. CMS will not process ICD-9 Medicare/Medicaid claims after October 1, and there is a high potential for faulty ICD-10 coding or bad mapping to ICD-9 codes. Error rates of 6 to 10 percent are anticipated, compared to an average of 3 percent under ICD-9. ICD-10 will result in a 100 to 200 percent increase in denial rates, with a related increase in receivable days of 20 to 40 percent. Cash flow problems could extend up to two years following implementation. This will be a costly issue for providers, and a very visible issue for patients.

We advise our clients to be proactive in their financial planning. This should include preparation for delayed claims adjudication and payments, adjustments to cash reserves, or even arranging for a new/increased line of credit. Having sufficient cash on hand to cover overhead during the final quarter of 2014 could be very important, as could future reserves to cover up to six months of payment delays. Companies not in a position to set aside reserves should consider working with lenders now before any issues arise.

Meaningful Use. As with ICD-10, CMS has stated there will be no delays to MU deadlines in 2014. That means providers who have never attested must do so by September 30, or else be subject to penalties in the form of Medicare payment adjustments starting in 2015. Providers who have attested in the past will have a bit longer (until December 31), but the penalties are the same.

There is much dissatisfaction with the government’s “all or nothing” approach to MU, where even the slightest misstep can invalidate an otherwise accurate attestation. While the ONC has proposed a more lenient model for EHR certification in coming years, everything will be measured against a hard deadline in 2014.  CMS is offering some mitigation through hardship exemptions, based on rules that are somewhat broad at this point. Providers should consider applying for an exemption if no other options are available.

We advise against taking shortcuts or rushing to beat the clock on MU. Up to ten percent of eligible professionals and hospitals will be subject to audit, and large hospitals may have millions of dollars at stake. Being prepared for an audit means more than just making sure an attestation is iron-clad; internal workflow and communication are also important. A mishandled audit notification can result in a late response and automatic failure.  Data security should also not be overlooked. Medical groups have failed audits due to lapsed security risk assessments as required under HIPAA.

Medicare Payment Cuts. Medicare Sustainable Growth Rate (SGR) cuts continue to hover over Medicare providers. Enacted by Congress in 1997, the SGR was intended to control costs by cutting reimbursements to providers based on prior year expenditures. But every year costs continue to rise, as do ever-worse SGR cuts (almost 24% in 2015). And every year Congress prevents the cuts via so-called “doc fix” legislation.

In early 2014 there was surprising bi-partisan agreement on a permanent doc fix, whereby Medicare reimbursements would be based on quality measures rather than overall expenditures. However, the legislation was derailed by linking it to a delay of the ACA’s individual mandate. As of mid-March there is still no permanent or temporary solution. Congress will almost certainly intervene to prevent SGR cuts, but by how much is uncertain.

The ACA. As the cost of insurance has increased over the past decade, high-deductible plans have become more and more common. Due to the Affordable Care Act, this trend has become the norm. Media outlets focus on the impact to consumers, and argue about whether more “skin in the game” leads to better choices or less care. What we’re hearing from the front lines is much more concrete: high deductibles are having a negative impact on revenues.

Very few people understand their liabilities under a typical health insurance plan. Last year George Loewenstein, a health-care economist with Carnegie Mellon University, published a survey showing that only 14 percent of respondents understood the basics of traditional insurance policies. At the same time, hospitals report that about 25 percent of bad debt originates from patients who are currently insured. With millions of new enrollees in high-deductible plans and an ongoing economic slump, the situation can only get worse.

The ACA had a further impact by reducing the amount of Disproportionate Share Hospital (DSH) charity funds available, based on a projected increase in insurance coverage.  But with some states not participating in Medicaid expansion, combined with an increase in patients lacking the knowledge or resources to manage large medical expenditures, the reduction in funds comes at exactly the wrong time.

Providers can cope by adjusting revenue cycle processes. For example, new programs should focus on estimating patient liabilities pre-arrival, educating the patient at check-in, and instituting proactive billing/collection at the point of service. In general, providers must pay more attention to the self-pay process, focusing on patient education and offering transparent, easy-to-use billing and payment methods.

Value Modifier. This program has not been a worry for most providers thus far. Not because it won’t have an impact on revenue, but because they don’t know about it. A little-known provision of the ACA, the Value-Based Payment Modifier mandates adjustments to Medicare reimbursement based on quality and cost measures. The program is being phased in, and so far has applied only to group practices of 100 or more Eligible Professionals (EPs). In 2014, smaller groups of 10 or more EPs will be subject to the legislation. These groups must apply and report to the program by October 1. Otherwise, they will be subject to a 2 percent cut in Medicare reimbursements starting in 2016.

One of the most important aspects of the program is its definition of “eligible professional” when defining the size of a group practice. For the purposes of Value Modifier, eligible professionals include not only physicians but also practitioners and therapists. That means that a practice with 8 physicians, a nurse practitioner, and a physical therapist would qualify as a practice with 10 EPs.

Value Modifier is part of the growing trend toward quality-based reimbursement. Even commercial payers are considering some version of the program. The scoring calculations are complex and poorly understood, so we advise clients to get up-to-speed as soon as possible. Groups with high quality and low cost will receive incentives rather than cuts, with additional upward adjustment for services to high-risk beneficiaries. Groups that are not paying attention may be surprised by an additional hit to revenue in 2016. In addition, quality scores will eventually be published to the general public on the Medicare.gov Physician Compare website.  Sub-par or missing scores could have a negative financial impact on a practice.

Conclusion

These are only the most high-profile impacts to the healthcare industry during the current year. Much else flows from them: changes to workflow, to computer systems, to financial expectations. Tremendous pressures are coming to bear within a limited timeframe.  We’re seeing an industry in the midst of tectonic change, with 2014 as the fault line. It’s unclear whether these disruptions will be for better or worse. But there certainly will be winners and losers, and those who plan ahead are most likely to survive.

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Ben Quirk is CEO of Quirk Healthcare Solutions, a consulting firm specializing in EHR strategic management, workflow optimization, systems development, and training. The company’s clients have enjoyed remarkable success, including award of the Medicare Advantage 5-star rating. Quirk Healthcare presents a weekly webinar series, Insights, to inform clients and the general public about government programs and industry trends. Mr. Quirk is also Executive Director of the Quirk Healthcare Foundation, a learning institution which fosters innovation in the healthcare industry.

March 26, 2014 I Written By