Audit helps curb misuse of hospital patient record systems
Wednesday, May 4, 2022
Time is crucial in a hospital. Electronic health record systems are designed to help doctors save precious minutes as they update patients’ charts. But what if the system intended to save time contributed to a billion-dollar mistake?
Research, published in Management Science, suggests misuse of electronic health record systems in the 2000s led to an estimated $1 billion increase in yearly Medicare reimbursements to hospitals, and a government-issued audit played an important role in reducing overspending.
“The way data is created is often opaque,” said Carlson School of Management Assistant Professor Kartik Ganju, the paper’s lead researcher. “It may not truly capture exactly what’s happening and because of that, it’s important to have checks and balances in place.”
In the 2000s, there was a push in the United States for hospitals to start tracking patient data digitally in order to reduce costs and improve efficiency. Following the adoption of the Computerized Physician Order Entry (CPOE) system, hospitals reported large increases in patient complexity – those having multiple ailments – leading to significant increases in Medicare reimbursements. In response, The Centers for Medicare and Medicaid Services created the Recovery Audit Program, which went nationwide in 2010, to investigate.
To identify the CPOE’s role in inflating Medicare reimbursements and the effectiveness of the audit program, Ganju and his colleagues analyzed health IT systems databases, government data, and state inpatient data for four states from 2004 to 2013.
The researchers learned the CPOE system allowed physicians to use default templates or copy-paste information into patients’ records based on their diagnosis. However, the templates could include other common conditions that didn’t apply to the patient. For example, a doctor could use the CPOE’s template to fill the patient’s chart for a tuberculosis diagnosis, but the tuberculosis template may also include heart disease as a co-morbidity, which the patient may not have. If that inapplicable data from the template didn’t get removed, the patient would get “upcoded” as a more complex patient, which meant they qualified for a larger Medicare reimbursement to the hospital.
“By using these default templates, the CPOE is basically creating a value that may not reflect exactly what’s happening in the hospital and is instead creating data that benefits some of the stakeholders,” said Ganju. “It’s indicating they’re treating a sicker patient pool when that isn’t actually the case.”
While it is unclear whether the upcoding occurred due to fraudulent practices or simple input errors, Ganju says the Recovery Audit Program found how CPOE could be misused to manipulate data to create artificial business value from information technology systems. He says the study highlights how effective an audit can be in finding misuse.
“It’s important to have oversight of IT systems,” said Ganju. “These systems hold the promise of reducing cost and improving efficiency. We’re finding that is definitely possible. But, it’s also possible for hospitals to use these systems strategically to increase their own reimbursements.”
Ganju worked with Rutgers Business School Assistant Professor Hilal Atasoy and University of Houston Bauer College of Business Dean and Professor Paul A. Pavlou to conduct this research.
This article appeared in the Spring 2022 Discovery magazine
In this issue, new Carlson School research explores how greater connectivity leads to change, and evaluates the efficiency of health records systems and government spending.