In a November 2003 study, Spyglass Consulting estimated that health insurers ideny or reduce payments on nearly 40% of all claims they receive from physicians.

The same year, a pilot program at Brigham and Women’s Hospital in Boston found that the Department of Medicine was missing about 20% of the inpatient charges it should have been billing for.

No wonder Spyglass, a Calif.-based management consulting firm, suggested that charge capture may be the next killer application in healthcare, since it can directly impact both physician compensation and the financial health of provider organizations.

Capturing $13 million
Michael Saulich, CEO of University Physicians Associates in New Jersey, has no argument with that assessment. Saulich’s group installed a charge capture system from MedAptus that helped it add $13 million in billing the first year. “We feel we’ll have an ongoing benefit of around $6.7 million a year,” he said. “That’s compared to a cost of $806,000 per year for staffing and equipment to support the system.” According to Saulich, the system paid for itself within six months of initial rollout.

The initial impetus behind the purchase was to help the group’s 300 doctors comply with federal and state regulations controlling what can be billed. “We wanted to have a tool that would give the physicians indication, at the time of entry, that they were in compliance or there were compliance issues,” said Saulich.

He and his team looked at six products, choosing MedAptus for its flexibility in making changes. “MedAptus had the best set of edits for correct coding initiatives and the local medical review policies. It also updated the CPT codes that came from the government on a quarterly basis, so we were always current,” he said.

Saulich’s team began by introducing the product to 30 physicians, giving them individualized training and support. The pilot worked extremely well, and the group of 30 became advocates for a larger rollout that has now reached the 70% mark.

Unable to give the same individual attention during the larger rollout, Saulich’s team found that training in small groups was a good alternative. “They feed off each other,” Saulich said. “You get someone who’ll say, ‘Here’s a shortcut we can use that ties this CPT code to this diagnosis code.’”

Overall, resistance to the new system was minor, said Saulich, especially once physicians realized the potential gains. “We had a young orthopedic surgeon who fought this tooth and nail,” he said. “But he found that because his rounding lists, admission discharge and transfer data, and patient demographic data were in there, he was able to increase his personal charge levels by $300,000 a year.”

That surgeon became an advocate and the physician leader for the larger rollout, said Saulich. “It’s been a real boon to us that he was such an opponent and he’s been converted so completely.”

Eliminate lost charges
“What’s important is what happens to your revenue when you implement this,” agreed Dr. Doug Gentile, vice president for clinical consulting at Allscripts Healthcare Solutions, the Chicago-based maker of TouchWorks. Gentile said electronic charge capture has three major effects.

First, it helps hospitals and practices eliminate lost charges. This is particularly important for inpatient care because in a paper-based environment, physicians record charges on cards during their rounds and often do not turn in the cards to billing clerks right away. Electronic charge capture ensures that charges are entered immediately and reduces the chance that cards might get lost, Gentile said.

Second, if charge capture is part of a full EMR system, billings per patient encounter go up because the more complete documentation provided by an EMR helps justify an evaluation and management (E&M) code that a payer might otherwise question. “With a full EMR, it allows you to capture most of the billing information at the same time as the clinical notes,” Gentile said.

Even without an EMR, average charges do increase, although Gentile said some of the gain may be due to improved communication between doctors and nurses, who know right away if a charge has been entered.

The fast return on investment, easily quantifiable from E&M codes, makes charge capture particularly attractive to healthcare administrators. “We build a cost analysis for every bit of technology we purchase,” Fitch said. “We had to prove ROI.”

Because an electronic charge form is small enough to fit on a personal digital assistant, charge capture gives physicians more flexibility with hardware than some clinical applications offer, Fitch added.

Third, according to Gentile, the workflow analysis that must accompany any technology installation helps a charge-capture system create efficiencies within a practice, such as by eliminating dual data entry—a major source of error—by linking the clinical side with billing and administrative systems. “There is a significant reduction in lag time in getting charges out,” he said.

Documents still count
Bob Evola, product director for Misys CPR, the hospital EMR sold by Misys Healthcare Solutions in Raleigh, NC, said when healthcare
executives look for clinical records systems, they want something that not only addresses all necessary clinical functions, but also make sure there is an appropriate amount of documentation to support each claim.

“Payers rely on receiving the proper documentation,” Evola said. “You can’t generate a bill and expect reimbursement unless you have the proper documentation.”

Practitioners are equally satisfied, Evola said. “Charges are automatically captured. You don’t want to have clinicians thinking about [whether a procedure] is billable or not.” Nor do phys-
cians have to go through charts after patients are discharged because the computer records all charges at the point and time of care.

A charge-capture system also helps with coordination of care. For example, when a physician orders a radiology procedure, the order often includes prep work and possibly patient transport to another location. “Lots of little things may be billable,” Evola said. “We coordinate all that back to the billing system.”

Likewise, charge-capture applications identify instances when a diagnosis does not support an order. Evola said this can help doctors make more informed decisions, even without
full-fledged—and pricey—clinical decision support systems.

Neil Versel is a healthcare journalist based in Chicago. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it