Hospitals Not Using EHRs to Upcode: Study

Ken Terry

July 09, 2014

There is no evidence that hospitals are using EHRs to inflate charges to Medicare, according to a new study published in the July issue of Health Affairs.

The researchers analyzed Medicare data for 393 hospitals that had adopted 10 key EHR functions by 2010. They also looked at data for 782 control hospitals that did not adopt EHRs during the study period.

The study focused on changes in patient acuity in diagnosis-related group codes and on changes in Medicare payments to the hospitals. There were no significant differences between the 2 groups of hospitals in these areas, the researchers found. Study and control hospitals that were for-profit and those in the most competitive markets had similar results. Likewise, hospitals that had adopted electronic clinical notes and computerized physician order entry did not have higher coding or Medicare payments than did hospitals without EHRs.

The study results run counter to previous media reports, including one published in the New York Times in 2012. Right after that article appeared, the federal government warned hospitals that they had better not use EHRs to commit billing fraud.

The New York Times article was based, in part, on an analysis of Medicare data by the newspaper. That analysis indicated that hospitals that had received government incentive payments for adopting EHRs had had a 47% increase in Medicare payments from 2006 to 2010 compared with a 32% increase during those years for hospitals that had not received any government incentives.

The Health Affairs study, unlike the New York Times analysis, compared all the hospitals that had adopted EHRs from 2008 to 2010 with hospitals that had similar characteristics but had not adopted EHRs. The authors, Julia Adler Milstein, PhD, assistant professor in the School of Information and in the Department of Health Management and Policy, School of Public Health, University of Michigan, Ann Arbor, and Ashish K. Jha, MD, MPH, professor of health policy and management at the Harvard School of Public Health, Boston, Massachusetts, note that the matched-control design of their study likely accounted for the difference between their results and those of the New York Times.

The hospitals that implemented EHRs, the authors explain, tended to make more sophisticated use of information technology than other facilities did. This included the use of advanced billing software to maximize coding and, thereby, revenues. When these institutions were compared with non-EHR-adopters that were similar to them, the increase in Medicare payments to both cohorts was about the same.

The more sophisticated hospitals were the ones in the best position to improve their billing, whether they had EHRs or not, Dr. Adler-Milstein explained to Medscape Medical News. "That's exactly what we found: the control hospitals increased their billing to Medicare, but they weren't doing that with an EHR."

The EHR adopters during the study period were predominantly nonteaching, for-profit, and medium-sized hospitals. Although the profile of adopters expanded in subsequent years, Dr. Adler-Milstein said she has no reason to believe that the results of the study would not hold for later adopters as well.

The study does not take a position on whether or not the hospitals in the study and control groups were "upcoding," or charging more than the facts of the case warranted. The hospitals might well have been upcoding, she said, "but they may have been able to figure out how to do that using paper charts. There was nothing about the EHR itself that enabled them to do that."

Payers are concerned not only about EHR-enabled upcoding in hospitals but also about physicians' ability to inflate their charges by using this technology.

In a January 2014 report, the Office of the Inspector General in the Department of Health and Human Services said the Centers for Medicare & Medicaid Services needed to train its auditors better on how to look for EHR-enabled fraud, and it referred to the use of "note-cloning" by some physicians.

Dr. Adler-Milstein said that the Medicare data used in their study included both diagnosis-related group codes used in hospital payment and current procedural terminology codes for physician services. "So, in theory, there should be an opportunity for us to observe EHRs leading to upcoding for both types of services." However, none of that was observed.

What effect might this study have on the increasingly rancorous debate over the allegations that providers are using EHRs to pump up their charges? "I hope it puts to bed the hypothesis that EHRs necessarily lead to upcoding and inappropriate coding practices," Sue Bowman, senior director of coding policy and compliance for the American Health Information Management Association, told Medscape Medical News. "But of course a single study alone may not end the debate. There will be those who disagree and challenge it."

Bowman, who calls the study's methodology "reasonable," said that upcoding in hospitals "probably happens, but not as often as some people have suggested." Noting that many hospitals have implemented rigorous clinical documentation and coding improvement strategies, she said, "[t]he goal is not to seek reimbursement to which hospitals are not entitled, but to ensure that documentation and coding are completely accurate and representative of the care of the patient. I think that's what most hospitals are striving to do."

The authors and Bowman have disclosed no relevant financial relationships.

Health Aff. 2014;33:1271-1277. Abstract

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