November 2014

The Cost of Doing ROI Business
By Mike Bassett
For The Record
Vol. 26 No. 11 P. 24

A wide range of rates often leaves hospitals, government, and patients at odds over what's a fair price for fulfilling medical record requests.

Last year, Gloria Aslanidis asked Medical University Hospital in Charleston, South Carolina, for a copy of her father's medical record. The hospital duly provided her with a CD—for the tidy sum of $3,801.30. The charges were based on a per-page rate of 65 cents for the first 30 pages and 50 cents each for the remaining pages, figures that South Carolina established in a 1992 law, which also allows a maximum $15 clerical fee plus shipping costs and sales tax. In this case, the requested record totaled just shy of an impressive 7,000 pages, leading to the princely fee.

In light of the costly charge, Aslanidis contacted South Carolina House Speaker Bobby Harrell, who proceeded to introduce legislation to update the state law regarding medical fees. "I think it's absurd in today's technological world that a patient would get charged 65 cents a page," Harrell said in an interview with the Charleston Post and Courier.

South Carolina isn't the only state that's been reexamining its medical fee rate structure. In 2013, the Vermont Association for Justice, formerly known as the Vermont Trial Lawyers Association, requested that a piece of state legislation include a study of the fees charged for copies of EMRs.

Vermont's law allows a custodian of health information to charge no more than a flat $5 fee or no more than 50 cents per page, whichever is greater, for providing copies of an individual's health care record. According to the Vermont Medical Society's Legislative Bulletin, the "trial lawyers believe that this amount is exorbitant when they receive a compact disc in response to a request for records."

Vermont's Green Mountain Care Board was tasked by the state legislature with studying the costs and fees associated with providing copies of medical records in a paperless format when requested by patients and others. The board researched various laws from different states, met with stakeholders to gather information from release of information (ROI) professionals in Vermont hospitals, and distributed surveys to provider organizations and attorneys in Vermont who request such information.

"If the question is whether the fee should be lowered because the introduction of electronic medical records has turned this [providing records] into a simple automated process, our findings didn't support that notion at all," says Michael Donofrio, general counsel of the Green Mountain Care Board.

According to the board's findings, most states, including Vermont, set specific base-fee and per-page limits on the fees providers can charge for producing copies of records. Vermont's statutory base-fee and per-page limits sit on the lower end of the spectrum.

"The provider survey results demonstrate that the great majority of provider organizations maintain their medical records in 'hybrid' systems, where records are stored both electronically and in paper form," the board's report stated. "The survey also indicates that these organizations typically store electronic information in more than one different system, and thus must often search multiple systems in responding to a request for information."

Consequently, the board concluded that "even with the presence of electronic medical records, it's still a difficult and labor-intensive task for a hospital or provider organization to provide a record to a patient," Donofrio says. In addition, provider survey responses suggested that EMR implementation doesn't make it easier or cheaper for providers to respond to ROI requests.

The survey also indicated that more than 90% of attorneys request paper documents, with two-thirds asking for electronic records as well. Most of the requests, the board found, span a timeframe of more than five years.

Fees "All Over the Board"
"What I see is a great discrepancy among the states in how much they charge," says Thomas J. Lamb, a North Carolina personal injury attorney who tracks medical record copying fees across the country. "Some states like Georgia, Michigan, and Illinois have these high 'open the envelope' fees. For example, I got an invoice the other day for one page of a prescription history and my charge was $26.85–$25.88 to open the envelope and the first page was 97 cents, which I really don't think is reasonable.

"So we see these things are all over the board," Lamb says, adding that some are reasonable while others stretch the limits. What is disconcerting, he says, is that some providers don't even know their states have statutes regarding fees.

Also, there are four states, as well as the District of Columbia, that have statutes allowing providers to charge fees based on the "reasonable costs" associated with releasing the records. Jan McDavid, general counsel and a compliance officer at HealthPort, a provider of ROI services and audit management and tracking technology, says leaving it up to providers to determine reasonable costs is "equivalent to going around a room and asking how much a hamburger should cost. You're going to get a different answer from every person you ask. Clearly that's not a good standard."

According to the Green Mountain Care Board report, 43 states, including Vermont, employ specific fee statutes for individuals and their representatives to obtain their medical records and—as Lamb points out—the rates are all over the board. The board found most of the specific-fee states allow a per-page charge, with the cost generally graduating downward as the number of pages increases. For example, in North Carolina, which permits a $10 minimum fee, allows 75 cents for the first 25 pages; 50 cents for pages 26 through 100; and 25 cents per page thereafter, a pricing structure deemed reasonable by Lamb.

In Indiana, ROI custodians can charge $20 for the first 10 pages of the record. Both attorneys and patients are charged 50 cents per page from pages 11 through 50, and then 25 cents per page thereafter. States such as New York and California charge flat per-page rates regardless of the number of pages needed to fill a request.

The highest base fee is found in Texas, where hospitals are permitted to charge attorneys approximately $44 for the first 10 pages of the medical record. Per-page rates range from 10 cents in California to $2 in Rhode Island.

In South Carolina, the new law sets an administrative fee at a maximum of $20 with a per page rate of 10 cents. It includes a cap of $150 for copies of a medical record in an electronic format regardless of the number of pages or the number of times the patient was admitted to the facility. The maximum amount providers can charge for a paper copy is $200 per hospital admission.

The variance in costs begs the question: Is there any rhyme or reason in how states established these rates? "I would like to believe that's the case, but experience says otherwise," McDavid says.

For example, Karen Farmer, RHIT, president of the South Carolina Health Information Management Association (SCHIMA), has "no idea" how the state legislature determined its latest fee structure, adding that the government moved so quickly that it didn't give groups such as the SCHIMA much of a chance to react. "The short-term facilities shouldn't get hurt too much [by the change in the fee structure], but the longer-term facilities are going to get hit hard," she says, pointing out that it's possible the legislature could revisit the issue next year.

The EMR Factor
The differences between the states are so vast, McDavid says, that it's likely that legislators simply don't have a real grasp of the issues involved when they're setting these rates. When setting fees, some states are beginning to differentiate between paper-based and electronic records "because they believe that [releasing electronic records] is so much easier," she notes, adding that that may make sense if one isn't completely informed about EMR systems.

According to the Green Mountain Care Board report, most health care organizations don't have single, unified electronic systems, "but rather multiple electronic systems that maintain records for different functional areas." In fact, just three of the survey respondents indicated they utilize a single electronic system, while 11 reported they access multiple electronic systems in order to gather records for specific requests for information.

"People think that their medical records are sitting there in a big Word file and that all you need to do is click on a name and hit print," McDavid says. "But of course that's not what it takes to even get to the record, never mind taking all the steps that are necessary to release the information."

The first problem, she points out, is that most hospitals work in a hybrid environment composed of paper and electronic records. McDavid says these systems may consist of multiple electronic components, paper files, and even microfilm, all of which complicates medical record searches. And because there's no guarantee that providers are going to scan past records into an electronic form, the situation is unlikely to change for the foreseeable future.

For example, McDavid relates an anecdote in which she visited her internist's office after it had automated its recordkeeping system. Oddly, she found herself answering a nurse's questions about past surgeries and medications. "I asked her, 'You gave me the meds, isn't it in your records?" recalls McDavid, who discovered the office opted not to transfer its paper records into electronic form, essentially beginning its documentation from scratch.

This seems to be a common occurrence in Vermont, according to the Green Mountain Care Board. "Based on current retention requirements, and the high cost and time requirements to back-scan historical paper records, many of Vermont's medical providers will continue to manage paper files in a hybrid system for the foreseeable future," the board noted.

"There are also electronic systems that—believe it or not—store records in such a way that it makes it harder to get to than it would be if they were on paper," McDavid says. For example, each time a patient presents at a hospital or a physician's office, it is considered to be an encounter and may be entered into the medical record as a separate file. As a result, when a patient authorizes the release of three years' worth of records, the provider must examine each individual encounter, which entails opening separate files to pull out information such as nurse's notes, diagnostics, and medication lists.

McDavid says that's not even the most onerous part of the process. To comply with privacy requirements, each piece of documentation must be reviewed to ensure no protected health information is being released without proper authorization. "This means having highly trained specialists out there on the front line who know about HIPAA and state laws," she says, noting that ROI professionals also must be well versed in how to handle requests that involve minors, HIV and sexually transmitted diseases, drug and alcohol addictions, and mental health. "There are many different aspects of what is involved in reviewing every page to determine whether it is responsive to what has been authorized," McDavid says.

The Green Mountain Care Board's survey of Vermont providers supports the notion that EMRs are not a panacea to cumbersome medical record requests. When asked whether the use of EMRs makes it easier to respond to record requests, more than one-half (eight of 14) of the respondents answered no. "Most of the responses indicate that because of the presence of hybrid systems … it takes more time to conduct an exhaustive search for all records responsive to a [request of information]," the board reported.

Yet, according to McDavid, the trend in some states seems to be lower fees for paperless records. For example, Illinois sets fees for paperless records at one-half the rate of paper-based records. The Green Mountain Care Board found that six states now have distinct rates for records delivered in a paperless or electronic format.

Whatever the rate, the evidence from the Vermont study suggests that the revenue from medical record fees—at least in that state—doesn't come close to covering the costs associated with fulfilling record requests. According to the Green Mountain Care Board, one provider reported that annual costs for fulfilling requests totaled $273,000, 93% of which was devoted to paying full-time HIT professionals. That total doesn't include service fees for its third-party ROI vendor. Conversely, the provider reported revenue of $97,578 for the period ending on June 30, 2013. Another provider estimated its total annual ROI costs at $242,000, with total revenue at $47,600.

A National Standard?
While ROI fees run the gamut across the country, does the possibility of a national rate exist? "It would make my life a lot easier," McDavid says. "We've actually met with the OCR [Office for Civil Rights] in the past about it, but I don't think they really have any appetite for putting something about it into federal law."

She points out that there have been many HIPAA iterations and the OCR has had many opportunities to name a price, but chosen not to. "So I don't think they will, and if they won't, I don't think there's any other agency that would do it," McDavid says.

In the meantime, states continue to deal individually with ROI fee structures. In Vermont, the state legislature hasn't moved on the issue despite the efforts of the Green Mountain Care Board, which submitted its study at the beginning of the year. The situation remains in flux as the industry tries to make the point that electronic tools don't necessarily translate to lower ROI costs.

— Mike Bassett is a freelance writer based in Holliston, Massachusetts.