Report Finds More Flaws in Digitizing Patient Files

Although the federal government is spending more than $22 billion to encourage hospitals and doctors to adopt electronic health records, it has failed to put safeguards in place to prevent the technology from being used for inflating costs and overbilling, according to a new report by a federal oversight agency.

The report, released on Wednesday by the Office of the Inspector General for the Health and Human Services Department, is the second in two months to warn about flaws in the oversight of the ambitious federal program aimed at converting patient records from paper to electronic. It comes as the Obama administration continues to face broad criticism over the troubled rollout of its health care law — especially the HealthCare.gov site.

Despite spending "considerable resources to promote widespread adoption of E.H.R.'s," or electronic health records, the government has "directed less attention to addressing potential fraud and abuse," according to the report. Medicare has not changed the way it tries to detect fraud and has provided its contractors "with limited guidance," the report said.

The report was especially critical of the lack of guidelines around the widely used copy-and-paste function, also known as cloning, available in many of the largest electronic health record systems. The technique, which allows information to be quickly copied from one document to another, can reduce the time a doctor spends inputting patient data. But it can also be used to indicate more extensive — and expensive — patient exams or treatment than actually occurred. The result, some critics say, is that hospitals and doctors are overcharging Medicare for the care they are providing. While the report did not estimate the amount of fraud that may be occurring, earlier government estimates have said it could run in the hundreds of millions of dollars. Although the amount is a fraction of the trillions of dollars spent annually on health care, the lack of safeguards at a time when the new technology is becoming pervasive could allow the fraud to balloon.

"As E.H.R. adoption has increased, so has its involvement in our cases," said Michael Cohen, an inspector at the oversight agency's investigations office, which is charged with investigating health care fraud in government programs.

In a separate analysis released last month, the inspector general's office found that three-quarters of the hospitals it surveyed had no formal policy surrounding the use of copy-and-paste for electronic health records. Its latest report faults Medicare for failing to provide guidance to the contractors who actually handle the payments on how to ferret out fraud stemming from the digital transformation. The office plans to make the scrutiny of cloning a priority for the coming year.

In a statement, Medicare officials called preventing fraud "a top priority" and said, "We are working to create strong standards for validating electronic health records to ensure that we allow beneficiaries to receive the care they need and at the same time protect taxpayers from fraud waste and abuse."

They also said they were developing better instructions for their contractors, but argued that the agency's specific recommendation about how contractors should detect fraud — by closely reviewing changes to specific patient documents — would not be appropriate for every situation. Hospitals say they are already carefully monitoring the use of electronic records.

"Hospitals already have strong safeguards," said Linda E. Fishman, a senior executive for public policy at the American Hospital Association. But, she said, they are also being pushed to adopt the new systems as quickly as possible. Federal officials "don't want providers to take their foot off their gas pedal," she said.

In addition, some experts say, doctors and hospitals are overloaded with demands to input electronic data and are copying some routine information from one file to another to save precious time.

"We're continuing to see the use of cut-and-paste in health care organizations because clinicians find it is one of the only ways they can manage the documentation process," said Michelle Dougherty, the senior director of research and development at the American Health Information Management Association, a group that focuses on improving the quality of health information. "But there is the potential that there is information being copied that is not relevant or even erroneous," she added.

Proponents of electronic records say the administration's goal of propelling more hospitals and doctors into the digital age has been successful and is critical to providing better, more coordinated patient care. The percentage of hospitals adopting a basic electronic system has nearly tripled since 2009 to 44 percent of all institutions.

Under a 2009 law, Congress enacted a program to provide billions of dollars in incentive payments for physicians and hospitals to install electronic health records. If they fail to meet the deadline, they will start to see reductions in their Medicare reimbursements by 2015.

But the rapid, vast metamorphosis in health care — like transformations of industries before — has been difficult, expensive and controversial. Hospitals have spent tens of billions of dollars buying systems that many have discovered are complicated to use, and critics have raised serious concerns about both patient privacy and safety. A study released last fall found that emergency-room physicians in a community hospital spent 43 percent of their time entering data, clicking up to 4,000 times during a 10-hour shift, compared with only 28 percent directly caring for patients.

As much as electronic records have the potential to provide better care, many are disappointed in the current technology. The boosters of electronic health records "spent a lot of years overhyping and overselling it," said Dr. Ashish K. Jha, professor of health policy at the Harvard School of Public Health.

One of the biggest questions around electronic health records is whether doctors and hospitals are using the technology to "upcode," or charge for services that were not provided. An analysis in September 2012 by The New York Times found a surge in Medicare spending on the most costly services at hospitals that had received money to put into place the new record systems. Hospitals said the increase reflected more accurate documentation of visits.

Administration officials and others then issued stern warnings against doctors and hospitals using digital records to overbill.

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Report Finds More Flaws in Digitizing Patient Files

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