Do Electronic Medical Records Increase Revenues?

Does EMR increase revenues?associated with purchasing, copying, management,
The economy has been in a recessionary trendstoring or destroying paper charts can be
for more than a year now. Whilst the economiceliminated. Additionally, the space typically used for
conditions are challenging, the insurance companiesstoring patient charts can be utilized to create
are applying a squeeze on physicians to acceptadditional patient exam rooms, or increased office
lower reimbursements. Funding by way ofspace, resulting in a more profitable use of
donations from private contributions is alsoresources. It is estimated that the total cost
reducing thereby adversely impacting availability ofassociated with maintaining a paper record
cash to implement an EMR / EHR system.average $3 per medical chart.
Any investment in EMR is justified only if it canA case study revealed that a 12-physician
help in increasing revenues, decreasing costs orpractice saved $5,000 a year in storage space
overheads, improving patient care or anyafter converting to EMR. In another study, a
combination of the above resulting in maximizationmajor medical center in Boston seeing 750,000
of reimbursements, collections and customerpatients a year, estimated they will save $6 million
goodwill.annually by reducing their dependence on paper
How does EMR/EHR increase revenues?records. At this saving rate, a practice seeing
5,000 patients annually could potentially save
1. Improves charge capture: When traditional$40,000. In another case study, EMR
paper charts are used, many services performedimplementation resulted in a reduction in office
in a physician’s office are lost and never billed.supplies expense by 50% with the elimination of
The billing staff may either completely leave outpaper charts.
an E&M Code or may erroneously enter3. Reduces liability and malpractice insurance
fewer units, all resulting in lower billing andpremiums: Improved documentation, audit trails,
therefore lower reimbursements to a physician.and accuracy not only reduce incidents of medical
EMR software can increase revenues byerrors, but also improve the chances of physicians
facilitating capturing of charges for all servicesreceiving discounts from insurers. The cost of
provided by the physician thereby avoiding lostmalpractice insurance has been showing a
revenues. In a case study (Nick Fabrizio, Julyconstant upward trend. A good EMR system
2005, QIO Presentation quote), a family medicineleads to reduction in costs associated with poor
physician while seeing same number of patientsdocumentation that otherwise generally means
increased revenues by $3000 per month due tohigher malpractice premiums.a.    In a 2005
timely visit documentation and automated chargesurvey by the Medical Liability Monitor, a
capture.four-state average of the highest liability rates for
2. Maximizes Billing: When using paper charts, to beOB/GYN was $230,919. With a two to five
on the safe side of the law, many physicianspercent credit from malpractice insurance
down code (use a lower billing code), rather thancompanies, clinics would save $4,600 to $11,500
use an appropriate level of code. Providers whoper provider, per year, if they implemented an
use EMR software can increase revenues byEMR.b.    In another example, the Midwest
using System recommended E&M billingMedical Insurance Company (MMIC) is offered a
codes that are based on the service accuratelytwo to five percent credit to physician groups
documented within the EMR, without the fear ofthat used an EMR in 2008.
an audit.  Medical Economics magazine has4. Self-service by Patients lowers data entry
estimated that physicians, who routinelycosts: The Patient Portal module of an EMR allows
down-code to avoid audits, lose an average ofpatients to enter much of their own
$40,000 annually.demographics, even before they arrive to the
3. Optimizes reimbursement process: EMRPhysicians office, including health insurance
software allows physicians to produce adequateinformation, medical, family, and social history, and
supporting documentation that complies with CMSother pertinent data and this can save office staff
guidelines and supports the appropriate level ofa lot of data entry time. It can even allow
service to be billed. Accurate coding speeds uppatients to view certain information from their
the reimbursement process and results in fewermedical electronic file, and schedule appointments.
rejected claims from insurance companies. Even5. Saves time and increases efficiency: Staff and
better, an EMR helps produce clean claims thephysician time is often ill spent due to:i. Waiting: If
first time, significantly reducing the number ofa pharmacy calls while the chart is being used, or
rejected claims!waiting to be filed, the staff receiving the call
4. Increases Physician productivity: Whencannot access the information in a timely manner.
physicians do not use EMR, they have to spendEMR Systems allow multi-use access that enables
several minutes per encounter, first dictating andstaff to access and update patient records
then reviewing the transcript before signing thesimultaneously – this saves time that would
same. With an EMR, progress notes areotherwise be spent in waiting for access to
automatically generated which can be signedpatient records.ii. Time spent in pulling Medical
electronically from home or work, with no pullingRecords: It is estimated that the cost of pulling
or filing of charts. The time saved can be used toand handling paper charts averages $5 to $12. In
see a few more patients each day. Further, thean EMR deployed Practice, Medical Records are
medical records storage space released as aaccessible 24 x 7 from any web-enabled device
result of implementing an EMR System can beor web access point, and this is done, securely.iii.
used to add more consultation rooms. As a result,Data entry for billing purposes: When the EMR
practices are able to generate more revenue withSystem interfaces or integrates with the Practice
the same fixed costs in the same amount ofManagement or Billing System, data entry
time.workload reduces significantly while maintaining
billing accuracy.
5. Increases Services with Health MaintenanceIn a recent case study, a Practice reduced labor
Reminders: EMR Systems provide computerizedcosts by 10% in the first year after implementing
checks and reminders which enable reminders toan EMR solution due to more efficient workflow
be sent to all patients who are overdue forand, the reduction of filing, coding, and data entry
recommended services, or who are coming up onstaff, while reducing time spent to complete clinical
their annual check-ups. This helps the physician totasks such as Rx refills, referrals, lab, and
deliver enhanced patient care, while at the samediagnostic orders.
time increasing service volume and revenue.Revenue Acceleration and Denial Management
6. Increases sources of income: Electronic MedicalEMR implementation can help increase revenues
Records (EMR) software can allow providers tobut a physician practice must not forget to look
apply for enhanced sources of revenue fromat two other important and often neglected
various payers associated with higher quality ofaspects:
care, such as:1.    How can revenues be accelerated by
(i) DOQ-IT (Doctors’ Officeproactive AR Follow-ups?
Quality-Information Technology is one of the2.    How can we manage denials efficiently and
Physician-focused Quality Initiatives sponsored byexpeditiously?
the Centers for Medicare & MedicaidRevenue Acceleration
Services (CMS).Experts believe that effective Account
(ii) Healthcare Pay-for-Performance (P4P)Receivables (AR) Follow up and AR Management
programs like Medicare Care Managementare the most important areas requiring attention
Performance (MCMP), which is a 3-year, pilot P4Pto ensure optimum revenue recovery. The
program that encourages physicians to followaverage profit margin of US hospitals is less than
strict quality-control guidelines for treating2% of Net Revenue while lost revenue due to
chronically ill patients.  During the first year ofdenials accounts for an average of 6% to10% of
treatment, physicians receive bonuses fornet revenue, nationwide.  In fact, take a look at
reporting data on quality measures and in thethese powerful facts:
second and third years, participating clinics receive•    14% of all claims submitted to payers
an extra annual performance-based bonus ofare denied and have to be resubmitted, appealed,
$10,000 per clinician plus, an additional 25% rewardor written off by Providers.
for using a CCHIT Certified EMR.•    50% of denied claims are never re-filed.
To participate in a P4P program, a physician will•    90% of denials are preventable.
need to track and measure care, and monitor the•    50-70% of denied claims are
efficiency of delivering quality care at an optimalrecoverable.
cost. One must also document the patients’This can cost a clinic or practice thousands of
experiences using post-exam surveys. Most EMRdollars every year. Aside from the direct impact
systems are capable of meeting thesefrom the loss of revenue, there’s an
requirements while simplifying the process.additional impact on resources because of the
How does it decrease administrative costs /expense associated with reprocessing denied
overhead?claims. A judicious combination of process,
A typical medical office employs a transcriptionist,technology and people skills must be effectively
billing and clerical staff such as appointmentused to follow up with the payers to identify,
schedulers, medical billers, collectors, file clerks andaddress and rectify the identified problem and
others. As a Practice grows, EMRs significantlyaccelerate your revenues so that you can get
reduce the need for more personnel to providemoney in your bank – faster.
these functions, while at the same time, reducingDenials Processing
existing office staff time that will no longer beAccurate coding speeds up the reimbursement
needed spending valuable time hunting downprocess and results in fewer rejected claims from
records or filing patient charts. EMR-enabledinsurance companies. Sophisticated denial
medical offices mean fewer bodies in the office,processing solutions can captures claims,
generating greater efficiencies and accomplishingpayments, and denials and addresses your denial
more.management issues with an effective denial
1. Reduces transcription cost: Many physicians paymanagement plan.
hefty fees for transcription of their medicalHere are some of the tools used to achieve high
charts. EMRs ‘virtually’ eliminaterates of denial reversals:
transcription costs since medical charts are•    Continuously update denials database
created electronically at the time of the•    Immediate identification of the root
patient’s visit itself.  According to Medicalcauses of denials, and use the experience and
Economics (March 2002), physicians spendknowledge to address each denial trend
between $15,000 and $25,000 over the course of•    Utilize denial data to generate custom
a year for transcription-related services.reports
Implementation of an EMR eliminates the need to•    Better feedback to the coding and billing
use in-house or outsourced transcriptionists. team
Integration of voice recognition software withConclusion
EMR Systems also plays an important role for theThe many benefits enumerated in this article can
people who want to have free formatted notesbe experienced by all Physicians, however, the
or for some providers who are not comfortablepayback period (ROI) will vary from Practice to
using mouse and keyboard.Practice. In most cases, Practices experience
Assuming an average of 25 visits per day and aincreased cost in Year 1, and then, begin seeing
conservative average of $2 per chart, an EMRincreased revenues and, decreased administrative
brings instant savings of $50 per day percosts and overhead from the second year
physician. Assuming that a physician works foronward.  The key ingredient for success lies in
240 days in a year, this translates into potentialthe willingness of the Practice to critically examine
savings of $12,000 per physician. Even if some ortheir existing workflow and make recommended
all of a practice's physicians continue to useadjustments to optimize workflow efficiency. If
transcription, there is no doubt that these coststhese efforts can be supplemented with other
can be reduced significantly.revenue acceleration and denial management
2. Reduces costs associated with storing papertechniques, the Practice can see significant
charts: Once a medical office successfullyimprovements in each and every revenue cycle
converts to electronic medical records, all costsKey Performance Indicator (KPI).