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October 16, 2006
Using the Internet and other technologies, forward-looking companies hope to move the release of information into the electronic age. It was 1976 and John Smart needed a copy of his medical record from a California hospital. To his dismay, the facility’s HIM director informed him that it would take at least six weeks—even though he was more than willing to pay for the copy. He left but returned a short time later with a proposition: He’d bring back a photocopier and copy not only his own record but also the stacks of other records that had been requested and charge the hospital for his time to fulfill the outstanding requests. It was an offer the HIM director couldn’t refuse and a business deal that many credit with the birth of the outsourced release of information (ROI) industry. The industry has changed in many ways since Smart struck the deal that grew into Smart Document Solutions (SDS), which currently is the nation’s largest outsourced ROI provider. Fewer vendors are dragging portable copiers from one facility to the next (Smart’s original copier is enclosed in glass and on display at the company’s Alpharetta, Ga., headquarters); now they are armed with laptops and portable scanners used to collect and transmit the records to a centralized location for processing and billing. The adoption of electronic medical records (EMRs) and the development of Web-based technologies for requesting, transmitting, tracking, invoicing, and paying for information requests have made it possible for some vendors to eliminate field staff altogether, instead utilizing secure file transfer protocols and Web portals for transmitting documents between facility and requestor. But in many ways, the industry remains the same. Of the approximately 25,000 requests SDS manages each day, only approximately one half are delivered electronically for reasons ranging from requestor preference to hospitals that are still largely paper-based or have not yet converted historical records to an electronic format. “Nowadays, although very rare, you can have complete electronic medical record systems, or you can have paper-based and usually microfilm is involved as well. Most systems are hybrids of the three,” says Jonathan Arkin, vice president of business operations for SDS. “We’re not really seeing a large demand for remote services at this point. It may be a more viable strategy in the future, when information can be captured into the medical record either by scanning or through electronic data input in a more expedient manner. Currently, in most cases, we’re in the hospitals, where we are utilizing our technology to link directly to the electronic medical record and pull information and images that are requested without the need to print paper. We also have the ability to scan in any loose paper and attach it to the same file, thus accommodating the hybrid model we’re encountering at many facilities.” The ROI Challenge “The biggie is patient accounts, where it has an impact on unbilled revenue. It’s strange to think, but a 200-bed hospital has enough money sitting around waiting for documents to attach to bills to buy a house,” says Carl Cottrell, director of product marketing for ChartOne. When a payor requires proof of service before a bill is paid, a request is made of HIM to generate a copy of the test results or order. That information is then submitted to patient accounts, where it can be married with the bill and sent to the payor. “The time between the knowledge that the piece of paper is required by the payor [and] the time they actually receive it to attach to the bill is a long and winding road where a couple hundred thousand dollars in revenue is tied up,” says Cottrell. “Typically, about 10% of all bills require some substantiating document, which means about 10% of a hospital’s revenue is tied up for as many days as it takes to go from ‘I need this’ to ‘I have this in my hand.’ If it’s five days, that’s about $250,000. That’s a significant amount of money sitting around doing nothing while waiting for a piece of paper.” And it’s not just the brakes slow response puts on the revenue cycle that plagues the ROI process. It’s also the drain on productivity and lost revenues from uncollected requests. According to Stephen Hynes, vice president of sales and marketing for MRO Corporation, there are significant costs throughout the ROI process—costs exacerbated by the fact that much of the process is outside the scope of what HIM departments do. According to MRO’s white paper “The Future for Processing ROI In House,” providing a copy of the medical record itself is just one of many workflow and service issues associated with ROI. Others include the following: • understanding state-regulated fees and applying them to specific record sets for specific types of requestors; • calculating, tracking, and securing payment on invoices prior to release; • verification of addresses prior to mailing information; • checking pages and managing the entire postal process; and • handling calls from requesting parties and their record retrieval agents. “Hospitals struggle to put together a process that’s efficient enough to enable them to turn a profit because that’s not what they’re good at. The HIM department is not set up to perform an efficient billing process,” says Hynes. In fact, in many cases, securing payment prior to releasing the information is bypassed completely to put an end to follow-up calls from requestors and their agents, some of which will make at least two calls for every request sent to a facility—one to verify that the request was received and one to find out why it has not yet been fulfilled. The paper ROI process also increases the likelihood of errors, ranging from missing pages to records sent to the wrong address. It also takes up space that could otherwise be utilized for revenue-producing functions such as laboratories. “Space is definitely a hot item in hospitals right now,” says Cottrell. “HIM is not revenue-producing space for the most part … so if HIM can reduce the amount of space that it takes to produce paper, that means there is more space available for other information collection to use that space.” The eROI Solution Now, however, the outsourcing industry is taking advantage of the Internet and the latest technologies to provide electronic release of information (eROI) services. While eROI is still in the early adoption stage, it has proven its potential to eliminate the challenges created by a paper-based system. It has also given rise to a revenue-sharing business model that has turned a cost center into a small but important revenue center. eROI has also changed the face of the outsourced ROI industry. While many established vendors have introduced eROI services into their product mix, a new breed of provider has emerged that bypasses paper and on-site services altogether. For example, U-Control ROI from ScanSTAT Technologies, LLC provides its clients with free scanners and technology they need to scan the patient record and request letter, then transmit them back to ScanSTAT’s central processing center for printing, fulfillment, and distribution. ScanSTAT also handles the billing, collections, and customer service process and returns 51% of collected revenues back to the client facility. “Probably 95% of healthcare releases nationally are still done on paper. In our world, it’s 90% electronic, either electronic delivery or burned to CD-ROM,” says ScanSTAT CEO Glenn Andrews. “The Internet is gaining acceptance and our clients are looking at it as absolutely the efficient way to do things. If their records are completely electronic and if people request their medical records, they want to keep it electronic by using the Internet to ship them securely so they’re not killing trees or paying for postage. We have a free connection to most electronic medical record systems, so we are the conduit that makes that happen.” By providing client facilities with the free software and hardware they need to transmit electronic documents or scan paper documents and submit them over the Web for processing, ScanSTAT clients are able to retain control over the process, yet still benefit from the efficiencies and economies of scale that come from eROI. “If hospitals do it themselves, it’s a nightmare.… They do it all manually and pay for all paper, copier costs, and postage, so they tend to outsource it. But they still have a need to control the process,” says Andrews. “For security reasons, they don’t want … some stranger rummaging around in their very important documents, and they’re right. That’s where our model works perfectly. They’ve got the best medical records talent already in house, so we give them the best system and free services, so everybody wins. The requestors get their requests electronically and quicker; the client streamlines [its] operations from a labor standpoint by probably 70% to 80% and [it] collects more money than [it] ever would if [it was] were doing it 100% manually by [itself].” MRO also bypasses the need for on-site service by providing clients with the technology needed for eROI. With MRO’s ROI Online, client personnel receive the request, access the chart, and upload the requested information to the company, which then manages fulfillment, billing, collections, logging/tracking, distribution, and requestor communications. As with ScanSTAT, MRO shares collected revenues with the client facility. “There are typically three buying motives. One is financial. The second is control of the process. The third reason is improved process,” says Hynes. “There is a lot of workflow built into our technology that helps the medical records department run a more efficient and effective release of information process.… The money tends to not be the most important buying motive. It helps getting a revenue stream out of an area that typically has cost money and it is something that helps them justify implementing the system. But typically, it’s the process improvements and the control of the process that are of interest.” At the other end of the spectrum are outsourcing vendors that offer a combination of on-site and remote eROI services. For example, ChartOne’s Release of Information Services covers the full range of ROI activities, including release desk management, mail processing, phone reception, request logging, and management reporting. ChartOne will also assume responsibility for labor-intensive tasks such as pulling and reviewing charts, duplicating requested information, chart reassembly, and refiling. That ability to blend offerings to meet specific needs allows clients to gain as many benefits from eROI as possible and scale up or down as their information capabilities change. “The primary piece in all of this is the same: We are replacing transportation with communication. That’s it. It’s the simplest damn thing in the world. Think post office vs. e-mail,” says Cottrell. SDS also offers a range of ROI products to fit individual client needs, including on-site scanning and electronic delivery. Patient records are scanned at client facilities or pulled from EMRs, then sent to SDS for processing. ROI process management can be handled on site by SDS personnel or managed in house with SDS managing back-office functions. In the near future, SDS will also be releasing a portal where requestors can track requests and pay online. “From our standpoint, we have two bosses we report to: our members and their requestors,” says Arkin. “It’s very important that we provide service to both and a portal is a great way to connect them.” That service aspect is important with outsourced eROI, he adds, because until all the data is electronic, a significant component of the process is labor. “There are some outsourcers that provide a service approach with no technology and others that are so focused on technology they forget about the service.” Arkin says. “It’s very important to look at the technology aspects of what the company offers and how it will provide the tools needed for an efficient outsource program. But it’s also critical that they have a service and quality component, that they can provide the labor you need, because there’s still quite a bit of labor involved in this business. “It’s essential to look for a balanced outsourcer who can provide the necessary combination of service and technology to bridge the facility to the future of ROI. Each facility may have a different vision, so the outsourcer must be flexible and able to adjust,” he adds. “The proliferation of the electronic medical record, along with the software companies who have built their own ROI modules, have given many hospitals the impression they can do it themselves and be profitable. We have not found that to be the case at this stage. It’s still labor-intensive and there are many manual processes involved with the fulfillment, collections, and customer service components.” eROI Adoption Challenges “Many requestors still want paper,” says Cottrell. “The reason for that is that there is no universal interface and, unfortunately, these are not the kinds of documents you can put in an e-mail.” Adds Arkin: “It can be very hard for a facility to focus on building electronic connections with all the various requestors of records. It’s just not what they do. It’s fragmented and it’s administratively burdensome. You’ve got disparate parties requesting records from all over the country from different facilities, so it’s very difficult for one facility to build all those connections.” However, the push for eROI is gaining momentum. Already, the disability determination branch of the Social Security Administration is requiring eROI, and by 2008, payors will be as well. In fact, final rules are expected to be released later this year. “With the evolving technology, there are new players out there that have some very good solutions and the HIM world should really keep an open mind when looking at them,” says Hynes. “The way they’ve always done release of information isn’t necessarily the way they’re going to be able to do it in the future. We’re at a tipping point where new technology is starting to become more prevalent and facilities should keep an eye out for new or alternate solutions to what they’re used to.” — Elizabeth S. Roop is a Tampa, Fla.-based
freelance writer specializing in healthcare and HIT.
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