Attempts to “bend the curve” on health-care costs appear sometimes to be a losing game. There are many reasons the nation’s health-care spending outstrips the inflation rate. Findings from ongoing audits of electronic billing records of hospitals and physician practices offer one more explanation for the seemingly intractable problem.
Digitizing medical records is simply an inevitable step to keep up with the revolution in technology. The appeal in health care is the high potential to reduce medical errors and duplication of services, improve patient safety, increase administrative efficiency in hospitals and doctor’s offices and help to lower costs overall. The Bush and Obama administrations both promoted electronic records for those reasons. The Obama White House included in the 2009 stimulus package about $27 billion as incentives to hospitals and physician practices that switched from paper to digital records.
But audits by the Centers for Medicare and Medicaid Services reveal an unfortunate downside: Cheating on documentation and overbilling are rising with increased use of electronic systems.
A New York Times analysis of Medicare billing records from 2006 to 2010 found a 47 percent increase in claims for services at higher payment levels among hospitals receiving the incentives for electronic records. In one hospital, billing for the highest-paying reimbursement codes rose 82 percent the year after it started electronic billing.
The analysis found doctors and hospitals, particularly emergency departments, were billing at higher payment levels than was justified by the services rendered and sometimes for services that were never performed.
Health-care providers cite the ease they have with the new technology to document more accurately and charge for all the services they perform. There is no question the digital system also makes it easier to manipulate billing codes to pump up revenues at the expense of Medicare. The rising expense may be considered an unintended consequence of innovation as early adopters in a transitional period discover ways to exploit any advantage. It is up to regulators to set clearer guidelines for billing and provide vigilant oversight.