CEO SUMMARY: Hospital and health system lab managers say some vendors of electronic health record systems for independent physicians are aggressively raising the fees they charge labs. Labs serving outreach physicians now pay more in two ways, they say. First, they pay the price the vendor charges to implement an LIS-to-EHR interface. Second, they pay per-order fees each time a physician orders a lab test using the lab interface. These price increases are an unwelcome development.
AT ONE TIME, it typically cost only about $2,000 to create an electronic interface between a clinical laboratory’s information system (LIS) and the electronic medical record (EMR) or electronic health record (EHR) system of a client’s medical group or physician office.
That was in the early days after Congress passed the Health Information Technology for Economic and Clinical Health Act (the HITECH act) as part of the American Recovery and Reinvestment Act of 2009. The HITECH act was written to encourage what federal lawmakers call “the adoption and meaningful use” of health information technology.
One goal of meaningful use was to replace the paper documents and fax transmissions doctors were then using to share patients’ records with hospitals and other providers. Another goal was to enable electronic ordering and reporting among physicians, clinical labs, pharmacies, and other ancillary providers.
The days of the $2,000 LIS-to-physician-EHR interface are gone now, however, according to some clinical lab directors. The cost of connecting physicians using hospital lab outreach programs is rising to exorbitant levels, they say. One lab directory characterized the fees some EHR vendors charge as “price gouging.”
To be clear, the issue of high fees relates to connecting physicians who are not part of the hospital or health system and are sending outreach testing to the hospital or health system lab. On the other hand, physicians who are affiliated or employed within the hospital or health system typically do not need an interface because they’re already on the system.
Labs Pay Higher EHR Fees
The steady increase in the fees EHR vendors charge labs for these interfaces is a problem for two reasons. First, it increases the operational costs of a clinical lab when Medicare has been cutting what it pays for 1,300 tests on the Clinical Laboratory Fee Schedule, thus reducing lab revenue.
Second, as clinical labs grow their businesses and add new client physicians, the increased interface fees some EHR vendors charge substantially raises what it costs labs to serve these new client physicians.
This trend is not a new development. Year after year, some labs have seen some EHR vendors raise their interface fees significantly. What makes this trend particularly troubling today is that labs need to cut costs to offset declining revenue from the Medicare lab price cuts under the Protecting Access to Medicare Act of 2014 (PAMA).
In covering these developments, The Dark Report encountered lab managers who named three EHR vendors the managers considered to be aggressive at increasing the cost of their LIS-to-EHR interfaces. These lab managers asked not to be identified because they don’t want the EHR vendors to take punitive actions against their laboratories. The Dark Report is honoring those requests in order to help readers understand how certain EHR vendors are raising prices.
“Most hospitals or health systems like mine already have electronic bidirectional orders and results for the physicians they employ,” stated one laboratory administrator. “Therefore, each time the hospital lab wants to boost revenue by adding outreach volume, it needs to pay these high fees to some EHR firms, which adds to the cost of serving these new client physicians.”
EHR Vendors Raising Prices
In interviews with three hospital or health system lab managers, the managers identified three EHR vendors charging what they said were high prices.
“For example, athenahealth wants $1 per order for lab orders flowing through their system,” another lab director said in an email. “Our lab currently has one provider group with 230 providers. Even one lab test order for each of these physicians for 21 work days is $4,830 in fees for the month and many of them have 10 to 20 lab test orders each day!”
“Practice Fusion charges $10,000 for a hub, plus a transaction fee for every lab test order,” stated another lab director. “Greenway charges $18,500 for a bidirectional interface.” Athenahealth, Greenway, and Practice Fusion did not respond to multiple requests for comment.
This lab director has had no luck in his efforts to negotiate lower rates with each of these vendors, he said in an interview with The Dark Report.
Many hospitals and health systems face similar problems, said Michelle Del Guercio, Vice President, Marketing, at Sunquest Information Systems, in Tucson, Ariz. Over the past 10 years, Sunquest has seen this trend develop nationwide.
“For the past decade, hospitals and health systems have acquired physician group practices,” explained Del Guercio. “This often makes it costly for hospital outreach labs to set up and serve new physician groups.
“Each individual EHR vendor needs to establish a bidirectional interface to the hospital’s LIS for each doctor,” she noted. “Each connection requires an investment of time and money to make it function effectively.”
Some hospitals find the cost so high that they don’t require EHR vendors to make the connections in both directions, Del Guercio said. Instead, they connect electronically so that the lab can send test results back to physicians’ EHRs but not so the physicians can order tests electronically, she said.
“What these labs often don’t realize is that with the right technology in place, there is huge benefit in capturing orders electronically, such as to help reduce duplicate testing, ensure medical necessity validation, and even help routing test orders to other labs,” Del Guercio commented. “Labs need to weigh the benefit over the long-term versus the initial cost of the interface.”
To Del Guercio’s point, not receiving orders electronically is the opposite of what Congress intended when it passed the HITECH act.
“It’s not unusual that the cost of these LIS-EHR interfaces are higher than they were 10 years ago,” observed one lab director. “But these interfaces and per-order fees are happening when our lab is experiencing decreased reimbursement for two straight years. It’s like a perfect storm for health system labs running outreach programs.
“As cost keeps going up, our lab has less to work with, which means we can justify making these connections for fewer customers,” he added. This lab director is responsible for deciding which physician practices get bidirectional interfaces.
“When I was getting quotes for this work, I came across athenahealth’s fees and found they want a dollar for each requisition. That’s just outrageous,” he stated.
“The economics are obvious,” he added. “We serve a group of 150 physicians. If we have to pay a dollar to the EHR vendor for every requisition, that group alone will cost us many thousands of dollars a month. Our outreach lab cannot justify spending that amount.
“Such a big bill seems ridiculous in a time when reimbursement is going down but when EHR vendors want more,” he added.
Knowing that CMS planned to make the second round of steep cuts in payment under PAMA to start on Jan. 1, this lab director began working with EHR vendors last year. He asked each one to consider reducing its connection fees, and was rebuffed each time, he said.
“They’re very cavalier about these fees,” he explained. “These are the fees they’ve set, and they expect our clinical lab to pay them. The problem is that these interfaces for ordering and reporting lab tests are the crux of outreach. If you can’t do the interfaces, then you can’t do outreach, and that means you can’t compete.”
Middleware Vendors Offer EHR Solutions
ONE WAY TO SOLVE THE PROBLEM of connecting multiple physicians in out-reach programs is to use a middleware product, said Michelle Del Guercio, Vice President, Marketing, at Sunquest Information Systems, in Tucson, Ariz. Sunquest offers such products to clinical labs as a result of its acquisition in 2015 of Atlas Medical, a provider of clinical process and connectivity solutions.
As an example, she referred to a case study that Sunquest published last year about how when the clinical laboratory at the Henry Ford Health System(HFHS) needed to make such connections to its own physicians and to physicians outside of the health system, it contracted with Sunquest to do so.
At the time, test results of patients seeing physicians outside of the health system were not getting into the health system’s electronic health record (EHR) system, said J. Mark Tuthill, MD, Division Head of Pathology Informatics at HFHS. When patients who had previously seen physicians outside of the health system became inpatients, treating physicians had no access to their past lab test results.
“So, when patients came over to the inpatient side, we had a blank picture of what the patient looked like,” Tuthill said. “None of their lab work was going to the EHR.” The solution HFHS adopted helped to prevent missing lab orders and also helped improve revenue and turnaround time as a result of producing cleaner orders and claims, according to the case study.
“Labs looking at middleware to support LIS-EHR connectivity should look at the long-term benefit, such as more efficient order capture and specimen intake, and improved service to physicians,” commented Del Guercio.
Contact Michelle Del Guercio at 520-570- 2000 or firstname.lastname@example.org.