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April 11, 2011

Copy Fees: The Battle Continues
By David Yeager
For The Record
Vol. 23 No. 7 P. 14

After a brief ceasefire, the federal push to adopt electronic records has spurred a new round of fighting as hospitals, ROI vendors, and lawyers tussle over pricing.

It could be said that the more things change, the more they stay the same. While rapid advancements in technology have revolutionized the way many people do business, perhaps a more profound change has occurred in the perception that now anything is possible. Unfortunately, perception often lags behind reality.

For example, in the medical records industry, technology is changing the notion of what constitutes reasonable fees for copies. The problem, many in the industry say, is that technology’s capabilities haven’t yet caught up to expectations. This difference is stirring up some old arguments about how release-of-information (ROI) fees should be calculated.

“There was peace in the land over ROI fees for a decent amount of time, and now this has become a contentious issue again because the trial bar is making a push in a lot [of] states saying, ‘If you have an electronic medical record, you should basically be charging us nothing to give out copies of records,’” says Steve Hynes, president of MRO, an ROI outsourcing provider. “It’s what they call ‘push-button ROI,’ and that’s not [how it works].”

A Little Background
Patients are charged for their medical records only in situations where they want a copy for record-keeping purposes, such as if they’re moving out of state. If a patient needs medical records as a result of ongoing treatment, those records are provided with no charge. Insurance companies and trial lawyers who want medical records have to pay.

Trial lawyers play a large role in this debate because rather than one or two medical events, they are likely to request every record that a patient has ever generated, which can lead to sizable fees. In the early 1990s, this led to a push from trial lawyers for cost control, which was met with a push back from medical facilities and ROI providers that have to pay staff to process the records.

Since then, the battle over medical record fees has become the ROI version of the Hatfield-McCoy feud, and it’s not likely to end soon. Trial lawyers say the costs of medical record copies are prohibitive. Medical facilities counter that ROI is a labor-intensive process. At times, the debates have been heated, fueled by the well-established lobbies backing each side. For this reason, medical record fees are legislated in most states.

“The states that have done a more comprehensive job in defining actual costs, where they’ve looked at wages and benefits and the time and materials scenarios of the process, have done a better job with the lobbying of defining what the actual costs are,” says Mike Wickman, CEO of IOD, an ROI outsourcing provider. “[But] even when providers have done a comprehensive job delivering costing models, in some areas it’s fallen on deaf ears because whoever has had the strongest lobby has been able to drive for the least cost.”

If this process seems disjointed, that’s because it is. But without an overarching cost structure, the only way to fight these battles is state by state, which increases the cost of following the rules for companies that do business in multiple states. The patchwork of state laws is only part of the problem, though. HIPAA adds another layer of rules.

Rather than preempt state laws, HIPAA provides only an additional framework for fees. Section 164.524(c)(4) stipulates that states can charge “a reasonable, cost-based fee” that may include the cost of supplies and labor for copying, postage, and costs associated with preparing an explanation or summary. Since it does not actually set fees, what constitutes a reasonable fee is open to interpretation.

“For a provider with a hospital system that operates in multiple jurisdictions, they have to figure out what those requirements are in each of those states and model their policies and procedures after them, which is difficult to do. There’s no consistency. There’s no simplification of how that is set out,” says Robert L. Coffield, an attorney with Flaherty Sensabaugh Bonasso, PLLC in Charleston, W.Va., who specializes in medical malpractice defense cases. “So, in my mind, a better approach would be to have a federal law that would set out what these charges are.”

A federal law would help ROI entities by simplifying fee regulations, while trial lawyers would benefit by gaining cost certainty. However, it doesn’t seem likely to happen. Part of the problem with that approach is that labor costs vary across the map.

“Personally, I think it would be easier if you had one national rate, but we all know that costs differ from region to region,” says Richard Logan, executive director of the Association of Health Information Outsourcing Services (AHIOS). “Certainly, the labor costs in New England and places like Pennsylvania, where your compensation levels for employees are higher, would require a more substantial charge than if you were in a state that didn’t have those kinds of costs for employees.”

The New Frontier
While the existing legal structures are nothing new, what is new is the growing adoption of EMRs. With the HITECH Act, the federal government put a premium on electronic storage and transfer of medical data, touting its potential to improve patient care, reduce duplication of services and, most importantly from an ROI perspective, reduce paperwork and the costs associated with storing and tracking it. However, that potential remains largely untapped. Most facilities are still feeling their way around EMRs and are mainly concerned with integrating the new technology into their workflow rather than being ROI friendly.

“The EMRs are really designed to facilitate clinical care; they’re not designed to be a legal health record and facilitate release of information and those sorts of things,” says George Abatjoglou, IOD’s chief operating officer. “So, in some cases, [when] gleaning the different components of the record necessary for release in an EMR, [it] can be cumbersome to work your way through the various strings in a report as opposed to poring through paper records.”

Some outside the industry has seen the move away from paper as a harbinger of easier processing and lower costs. But the savings from eliminating paper are not substantial; Logan estimates they’re about a penny per page. Switching to digital doesn’t save time either.

“It changes the delivery method, but that’s about it,” says Jan P. McDavid, general counsel for HealthPort, an ROI outsourcing provider. “All of the work that has to be done prior to actually duplicating the record is the same. There are 30 or 40 steps that have to be followed in terms of verification, authorization, and the application of various statutes and regulations to every request.

“For example, there are federal laws such as HIPAA that govern patient records. There are federal substance abuse laws,” McDavid continues. “But then there are … condition-specific laws in many states that govern things like HIV/AIDS, pregnancy, genetic information, mental health, and so forth. So a person really has to be involved to be able to identify, in a request, what the issues are and then know where to go to apply each statute to it.”

It is possible that EMRs may make ROI faster and cheaper one day, but Wickman says that day is far in the future. For the short to medium term, digital record keeping may increase ROI’s degree of difficulty. One reason for this is the digital landscape of most hospitals. Logan points out that for various reasons, hospitals have chosen to spread digital records across multiple databases. There may be different repositories for lab reports, order entries, physician summaries, or any number of records relating to a single patient. And when hybrid environments—the most prevalent among institutions—are factored in, the process becomes more time-consuming and costly.

Hynes says the cost of hybrid records can be represented by a bell curve. Facilities that use paper only are at one end, and facilities that are completely paperless are at the other. In between, various combinations of paper and digital data combine to make the ROI process more labor intensive. The fluid nature of moving from one stage to the next means that tiered pricing would be cumbersome.

“One of the reasons that fee legislation was put in place was so that requesters could have some cost certainty,” says Hynes. “In [a tiered] model, the price you’re going to pay is going to vary widely from facility to facility depending on where they are on the continuum.”

Food for Thought
Although labor is the biggest driver of medical record fees, there are other considerations that need to be sorted out. Coffield says that as a defense attorney representing hospitals, any costs he incurs are billed to the hospital. So, essentially, the hospitals are billing themselves for medical records when they defend malpractice claims. Whether this warrants a change in policies is something hospitals may want to consider.

Another question for hospitals is how to handle PHRs. Although hospitals are allowed to charge patients for copies of their records that aren’t related to ongoing care, should they? The HITECH Act’s consumer-driven agenda puts a new variable into the equation: Charging patients for records could slow down PHR adoption.

“My opinion is that hospitals and healthcare organizations really should look at whether or not they want to use the fees to provide copies [as] a barrier to patients gathering information to establish their personal health record,” says Kim Murphy-Abdouch, MPH, RHIA, FACHE, a clinical assistant professor in the HIM department at Texas State University. “If I were a decision maker in an organization, I would elect not to charge patients for copies of records they might be using to build their personal health record.”

And while digital technology has not reduced labor costs, it has already changed workflow. Coffield believes lawyers will eventually start asking for records in the original digital format so they can see the data as they looked during the patient encounter. He says the technology isn’t ready yet, but when it is, the requests are sure to follow.

How the HITECH Act’s changes are reconciled with the HIPAA requirement to provide patients with a copy of their records will be an important factor in how this plays out. The Office of the National Coordinator for Health Information Technology and the Office of Civil Rights are expected to release rules later this year that clarify how access to digital records should be handled.

“What does that [HIPAA] requirement actually mean [as it relates to the HITECH Act]? Does it mean that you have to give the record to me on a thumb drive? Does it mean you have to give it to me on a CD? Does it mean you have to give it to me with the actual program?” says Coffield. “So once those changes occur, I think we’re going to see more change within the industry on how medical records are requested.”

Although digital technology will undoubtedly change the rules for ROI, it will probably be less of a factor in determining fees. Whether completely eliminating paper will eventually bring down costs is anybody’s guess. But no matter how the records are delivered, there are steps in the process that can’t be automated.

“About the only way I think that anybody can determine what those fees should be is to look at it on a page-by-page basis. Whether it’s a digital page or a paper page, you’ve got to have some unit of measure,” says Logan. “Until somebody can create a program that says, ‘You can’t release this page because you’ve got a key word on there’ and even in most instances, it’s not a key word—there are a variety of terms that comprise why something can’t be released—you’re going to continue to have that labor-intensive effort to review the record.”

— David Yeager is a freelance writer and editor based in Royersford, Pa.