Wednesday, December 4, 2019

13 December 2019: Do Electronic Health Records systems inflate insurance costs?: A study of Medicare Reimbursements

Kartik Ganju
McGill University, Canada

Organised by
National Institute of Public Finance and Policy, New Delhi

Electronic health record (EHR) systems allow physicians to automate the process of entering patient data relative to manual entry in traditional paper-based records. However, such automated data entry may be exploited by hospitals to inflate reimbursement requests from Medicare by overstating the true complexity of patients’ diagnoses (termed “upcoding”). The primary EHR module that has been alleged to facilitate upcoding is the computerized physician order entry (CPOE) system, which populates patient charts with default templates and allows physicians to copy and paste data from other patients’ records. To combat upcoding, the Centers for Medicare and Medicaid Services implemented the Recovery Audit Program, first as a pilot program in six states between 2005 and 2009, and then nationwide in the entire United States in 2010. We examine whether the adoption of CPOE systems by hospitals is associated with a proliferation in reported patient complexity to Medicare, and if the Recovery Audit Program helped to attenuate this relationship. We find that the adoption of CPOE systems significantly increased patient complexity reported by hospitals, corresponding to an estimate of $2 Billion inflation in Medicare reimbursements per year, until they were regulated by the Recovery Audit Program that helped to mitigate upcoding. Notably, those auditors who developed the ability to identify the use of default templates, copied-and-pasted data, and cloned records were the most effective in reducing upcoding. This implies that these IT auditors likely use the same data created by the CPOE systems to identify and combat upcoding. These findings have implications how to combat inflated Medicare reimbursements paid by taxpayer dollars with the Recovery Audit Program and how IT audit can prevent the misuse of information systems to create artificial business value from IT. Contributions to Information Systems and Healthcare research, practice, and public policy are discussed.

Date: December 13, 2019
Time: 03:30 P.M.

Auditorium, Ground Floor
Main Building
National Institute of Public Finance and Policy,
18/2 Satsang Vihar Marg, Special Institutional Area,
New Delhi-110067(INDIA)

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