The Centers for Medicare & Medicaid Services (CMS) recently released new documentation detailing the number of files and records containing personal health information that have been sent through its electronic submission of medical documentation (esMD) program since 2011, when health systems were allowed to begin electronically exchanging information through health information handlers (HIH) and Medicare. 

As you may know, CMS defines a health information handler as “any organization that handles health information on behalf of a provider.” Providers and hospitals usually engage in relationships with health information handlers as third-party vendors, so they, the providers, are able to electronically submit claims data and health record attachments to payers and Medicare contractors in support of claim adjudication. These health information handlers also are often called claim clearinghouses, release-of-information vendors, and health information exchanges. Most also offer esMD gateway services. Spearheaded by CMS to support electronic exchange of information between health systems and Medicare audit contractors, prior to esMD, providers had just two ways in which to respond to documentation requests from Medicare review audit contractors: mail or fax. esMD fixed that problem. 

CMS says that since esMD’s inception, hospitals have electronically exchanged more than 1,199,000 medical records. Of the 24 approved HIH vendors, MEA|NEA – a provider of electronic attachment solutions, health information exchange, and secure cloud storage – has exchanged more records than any other firm, having sent more than 425,000 unique medical records, according to CMS.

According to Nicole Smith, vice president of government services at MEA|NEA, the number of records exchanged electronically via esMD shows the clear and present need of health systems to further reduce their dependency on paper (the former need to print, ship, and track physical documents) and to improve their ability to keep information safe from breach or theft – and to improve their revenue cycles. For example, Smith points the success of Boca Raton Regional Hospital, an early adopter of esMD capabilities. 

Just five years ago, this facility faced a variety of Medicare audits and penalties. Now, the not-for-profit, with 400 beds, more than 2,100 employees, and more than 800 primary and specialty physicians on staff, is seeing a complete financial turnaround. One significant change was in how the hospital now manages its responses to Medicare audits. Recent changes Medicare made to its audit program allows for the processing of documents electronically, meaning now hospitals can easily, automatically, and securely exchange health record documentation and medical attachments when responding to third-party auditors. Prior to 2011, again, the response process was entirely paper-based.  

Many hospitals are still printing, sorting, packaging, and mailing documents to support original claims to Medicare to adjudicate their bills because they are not using an electronic attachment solution. Since one patient record can fill a box or more, hospitals are left paying for all materials, labor, and shipping involved, which can amount to an enormous annual cost. From a revenue cycle management standpoint, electronic attachment submission ultimately helps hospitals save millions. Because of improved processes and electronic attachment submission, Boca Raton Regional Hospital has seen a dramatic decrease in negative outcomes of audits since it began making these changes in 2012.

According to administrators at the hospital, Smith said, the Medicare audit process has drastically improved because of the hospital being able to submit documents electronically, and denials related to untimely submission of records has disappeared entirely. Medicare allows 45 days from the date of a request for hospitals to respond, but Medicare still sends documentation requests by paper. Typically, by the time the request gets to the proper department in the hospital, more than 10 days have elapsed. Managing the entire process requires very strict time management, and hospitals often fail to return records to Medicare on time, which means hospitals can no longer appeal. By automating the process and securely depositing electronic attachments to Medicare’s official information portal, Boca Raton Regional Hospital has prevented the loss of at least $350,000.

“While the RAC program still has some kinks to work out and health systems continue to face pressure from Medicare auditors, esMD and the ability to respond to information requests electronically at least is helping make the process more efficient, secure, and, in some cases, in relation to claims paid and penalties levied for failing to respond to audits, (it) is making a difference financially for hospitals,” Smith said.

About the Author

Lindy Benton has worked in the healthcare information technology field for more than 20 years and is currently the CEO of EA Holdings, which includes MEA and NEA. Before joining MEA/NEA, Lindy served as divisional executive at The Sage Group, managing a $350 million division with 1,400 employees. Prior to working at Sage, Lindy worked at Cerner Corporation for 15 years. She held various leadership positions, wherein she achieved double-digit revenue growth while building high-performing teams that were consistently recognized year after year with outstanding achievement awards.

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