Revenue Cycle Management in Healthcare27

REVENUE CYCLE MANAGEMENT
IN HEALTHCARE
Sub Code 414
Developed by
Vedprakash R. Barai
MBA (International Business, SMU)
PGDMT (K.C. College Of Management)
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe 2. Dr. B.P. Sabale 3. Prof. Dr. Vijay Khole 4. Prof. Anuradha Deshmukh
Group Director Chancellor, D.Y. Patil University, Former Vice-Chancellor Former Director
Welingkar Institute of Navi Mumbai (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant
Prof. Kanu Doshi Prof. B.N. Chatterjee

Dean – Finance Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Dean – Management Development Programs Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ
Prof. B.N. Chatterjee Prof. Vineel Bhurke

Dean – Marketing Faculty – Rural Management
Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai
Prof. Dr. Swapna Pradhan Course Editor

Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai
Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai
Mr. Ajay Prabhu Ms. Kirti Sampat

Faculty – International Business Assistant Manager – PGDM (HB)
Corporate Consultant Welingkar Institute of Management, Mumbai
Mr. A.S. Pillai Mr. Kishor Tamhankar

Faculty – Services Excellence Manager (Diploma Division)
Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai
COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

Printed and Published on behalf of Prin. L.N. Welingkar Institute of Management Development & Research, L.N. Road, Matunga (CR), Mumbai - 400 019.
ALL RIGHTS RESERVED. No part of this work covered by the copyright here on may be reproduced or used in any form or by any means – graphic,
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permission of the publisher.
"NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.
1st Edition (July,2014) 2nd Edition (Jan,2015) 3rd Edition, February 2022
CONTENTS
Contents
Chapter No. Chapter Name Page No.
1 Medical Records Management 4-47
2 Medical Transcription 48-110
3 Challenges In Medical Transcription 111-146
4 Medical Coding 147-208
5 Medical Billing 209-270
6 Revenue Cycle Management 271-319
7 PHR-EMR-EHR 320-366
8 HIPAA 367-421
9 Healthcare Outsourcing And Offshoring 422-455
10 Application of IT in Healthcare 456-487
3
MEDICAL RECORDS MANAGEMENT
Chapter 1
Medical Records Management
CHAPTER OBJECTIVES:
After studying this chapter, the student will be able to understand:
• Definition of medical records

• History of medical records
• Need for medical records
• Uses of medical records
• Destruction and Retention period
• Guidelines for preparing medical records
• Functions of a medical record department
• Different types of medical records
• Different format of medical records
• Different forms of medical records
• Ownership of medical records
• Reconstruction
4
STRUCTURE:
1.1 Introduction
1.2 History
1.3 Definition
1.4 Need for maintenance of medical record
1.5 Medical Records -- Retention and Destruction
1.6 Guidelines for medical record
1.7 Master patient index
1.8 Functions of medical record department
1.9 Types of medical record
1.10 Format of medical records
1.11 Different Forms of Medical Records
1.12 Ownership
1.13 Release of patient information
1.14 Uses of the raw medical data
1.15 Reconstruction of medical records.
1.16 Summary
1.17 Glossary
1.18 Self Assessment Questions
1.19 Multiple Choice Questions
5
1.1 INTRODUCTION
Everyone loves systematic and methodological arrangement of just about

everything as simple as shoes in the shoe rack, clothing in the cupboard,
and items in a departmental store or as intricate as books in a library.
Different people may have different views about arranging these items in
order which can range from as innocent as "it looks presentable” to 'it
shows a sense of discipline" to "it is informatory" to "it provides ease of
access."Whatever maybe the reason, but surely proper placement of items
in a categorized manner helps in managing the resources efficiently,
providing timely services, easy retrieval by reducing the downtime in
searching of haphazardly placed items, and much more.
If a person is visiting a mall to purchase an item and comes across a scene

where all the items in the mall are placed in a random or unsystematic
manner, what would be his reaction to the sight?
Oh, that is gross! How undisciplined?
How will I search for the items I need?
How much time will I have to spend to search?
On the contrary, while visiting a mall, departmental store, or a library

which has all the items categorized neatly under different heads and
systematically arranged in different shelves is a delightful sight to the eye.
Hence systematic arrangement of items or objects is not only arranging
everything in order but also following a good naming or marking system so
that files and documents can be easily located and retrieved.
Similarly, proper management of a patient's medical data is required both

for the patient as well as the physician to obtain and provide better
healthcare service respectively. Medical record management though has
not evolved over night but has undergone a series of transformation
starting from the late nineteenth century before its transition to the
modern day, structured, and accurate form of medical records
management.
6
India is proving itself as a major player in the digital economy. By any

number of metrics, from internet connections, smartphone users to app
downloads, both the volume and the growth of India’s digital economy
now exceed those of most other developing countries.
But what does this increased connectivity and digital revolution mean to
Indian Healthcare system? A decade down the line, will health records be
accessible as easily as social media?
1.2 HISTORY
Preparation and maintenance of medical records dates as back as to the

nineteenth century. In those old days, only a few hospitals around the
world, if any, kept the medical records. Even those few hospitals kept
medical records exclusively for those patients who were admitted to the
hospital as in-house patients and these medical records were especially
kept at the bedside of the patient for ease of accessibility to the treating
physician.
To deal with the increasing volumes of patients over the years, medical
records departments hired more medical record staff and in certain cases
medical records were produced in duplicate or triplicate by means of
carbon copy. Somewhere during the line, typewriters were introduced to
produce legible medical reports and reduce the amount of medical errors
due to illegible handwriting. These handwritten or typed medical reports
were consolidated into respective patient's medical reports and stored
along with thousands of other patients' reports in filing cabinets in the
medical records department. These medical reports would then be
retrieved at any later time from the medical records department and given
to the respective physician in-charge of delivering care to the patient or
any other authorized personnel. This whole process was manual and quite
laborious. Successively the preparation and organization of the medical
records have undergone a great deal of change paving the way for the
new generation medical records structure and management. One
significant change was the way these records were prepared, previously
administrative staff would prepare these reports by hand under the
supervision of healthcare professional, later on due to increased workload,
help of several machines were sought such as typewriters,
Dictaphones, computers, etc., which led to speedy processing of patient's
health information from one department to the other and to the physicians.
7
Another significant change was the maintenance of all types of medical

records for all the patient encounters, whether it is admission, OPD,
emergency room, etc. as opposed to earlier where only the medical records
of hospital admission were prepared and maintained. Also the filing
cabinets were replaced by computers, which were used to transcribe and
store medical reports of the patients. One the best feature of the electronic
records was it had the capability of retrieval of patient medical information
on-the-fly to the treating physician which is of essence in case of an
emergency.
Also in earlier days, there were no defined guidelines or framework for

making the medical records and every institution or hospitals followed their
own set of rules for preparation of medical records, though this is still the
case of some hospitals; mostly those hospitals which follow the paper-
based medical record system, but in general a set of rules and guidelines
are laid down for preparation of proper and accurate medical records. Full
credit of a well-organised documentation of medical records goes to Dr.
Lawrence Weed, fondly known as "The father of the problem-oriented
medical record (POMR)" who in the early 1960s introduced the SOAP
format. This format emphasizes on lucid yet organized corroboration of
findings followed by the assessment and the initial plan of action.
Fig 1.1: Metamorphosis of paper records to electronic records
8
1.3 DEFINITION
Medical record is a systematic documentation of information about a

patient's past medical history and treatment. It is used basically for the
present and continued care of the patient. There are also various other
terms used in place of medical record such as medical report, patient's
chart, health record, or medical chart.
Gone are those days when the medical records used to be entered by the
hospital clerk with little or no knowledge about medical terminology, now
medical records management itself has developed into a science. With the
need to manage accurate and timely medical records to provide better
service to the patients and to avoid any medicolegal issues, it was
proposed that a person having sound medical knowledge and able to
resolve any medical record discrepancies by analyzing information and
discussing with the medical professionals should be entitled to enter the
medical records. A person who maintains the medical record by entering,
compiling, reviewing, and filing appropriately into a computer or on paper
is termed as a medical record technician. Several other names given to
medical record technician may be medical record keeper, health record
technician, etc. The department which is entrusted with the safe-keep and
maintenance of the medical records is known as the medical records
department (MRD). Medical records department generally has minimum-to-
no contact with patients but still plays a very vital role in the healthcare
systems.
As a general rule, physicians are required to maintain record of any

event of patient encounter. It is even mandatory for medical
practitioners and hospitals to have a database of each patient visit
and the treatments.
Most developing countries pay little or no attention to properly or

accurately document the medical record of the patient in a healthcare
setting. In developing countries like India with absence of strict law or
professional accountability, many medical practitioners are either not
bothered and mostly neglect maintenance of proper medical records.
9
1.4 NEED FOR MAINTENANCE OF MEDICAL RECORD
Medical record maintenance forms an inherent part in the management of

the patient's health care and the healthcare system. Medical records are
needed in every stage of healthcare system for medical, legal, research,
and educational purposes. Systematic management of medical records is
really important, as these are the only evidence for the doctor to prove
that appropriate treatment was provided to the patient.
1. Accurate medical records help in easy insurance claim or mediclaim

settlements.
2. Medical records act as legal documentary evidence in medicolegal cases

and needs to be presented in the court as and when required.
3. Medical records are the only documentary evidence with the physician
to prove that the treatment given to the patient was proper. These
records act as important evidence in defending an allegation of
substandard care or medical negligence.
4. On the contrary, medical records will also be helpful to those patients
who are victim of medical negligence.
5. Medical records are used for on-going record review or closed-record

review by healthcare professionals. It is done in order to ensure that the
hospital's medical records documentation procedures meet the relevant
standards set by the regulatory bodies.
6. Medical records helps in compilation of statistical information and

reports (monthly or annually as the case may be) such as:
• Morbidity and mortality rate

• Malnutrition index
• Infectious or communicable disease report
• Population census
• Fertility rate
• Measures of health and nutrition.
10
Fig 1.2: Uses of Medical Records
1.5 MEDICAL RECORDS RETENTION AND DESTRUCTION
Not only countries have their own sets of rule and regulations pertaining to
the period of retention of medical records, even the states in different
countries have their laws governing the retention and destruction.
To give an overview of some of the rule and regulations about retention

period of medical records,
Every physician shall maintain the medical records pertaining to his/her

indoor patients for a period of 3 years from the date of commencement of
the treatment in a standard proforma laid down by the Medical Council of
India. (Source http://www.mciindia.org accessed on June 19,
2014)
In UK, the general practitioners are required to keep the medical records
for a minimum of 10 years.
11
In USA, different states have different rule but in general the duration of
keeping the medical records is as follows:
For inpatient records 7 years.

For outpatient records 5 years
For medicolegal cases 15 to 30 years or until final court hearing (in
instances where the cases are sub judice).
In case of a minor patient Maintain record until patient reaches age 23
(18 +5 years) or 10 years from last date of
treatment whichever is greater.
Some National Accreditation Board for Hospitals & Health care Providers
(NABH) accredited hospitals in India follow the same retention period of
medical records as above, though The Medical Council of India guidelines
insist on preserving the inpatient records in a standard format for a period
of 3 years from the date of the patient encounter or treatment.
Generally medical practitioners and hospitals retain medical records longer

than the retention period either for research purpose or to avoid any
medicolegal issues that may arise in the foreseeable future. In the process
of retaining the medical records of patients for prolonged periods, they
have to deal with the impact of secure storage costs of the records. Since
the medical records contain sensitive protected health information (PHI),
they need to be stored securely, need to be protected from any kind of
damage due to water, termites, dust, etc. (in case of paper medical
records), and prevent them from being exposed to fire or water.
Depending upon the volume of the medical records, it can be stored either
onsite, that is, within the hospital premises or offsite, that is, at a remote
location separate from the current facility. The creation, transportation, and
security of the medical records would be an expensive affair to the hospital
and to avoid such high maintenance costs to store safely the medical
records, many hospitals opt to destroy or purge the medical records after
the completion of the retention period.
12
Creation
(During initial Patient Visit)
Utilization
(For Patient Healthcare and
Research Purpose)
Retention
(For Specified Duration in
Storage Area)
Destruction
Purge Shred Incinerate
Fig 1.3: Medical Record Cycle
13
Destruction of medical records can be done in different ways. However,

there are certain steps that need to be taken before destroying any kind of
medical records. In certain countries as a good practice, the medical facility
or hospital needs to publish an advertisement in a regional and a national
newspaper giving the details about the period of medical records to be
destroyed and during the interim period between publishing of the
advertisement and its destruction the patient can stake their claim of the
records. One has to carefully choose which kind of method is appropriate
for destroying the medical records in their possession. Choosing a wrong
method of destruction would defeat the sole purpose of protecting the
confidential protected health information and in some cases may cause the
healthcare provider to be legally prosecuted under the law of either
intentional or unintentional data breach.
In case of paper-based medical records, the older records should be

destroyed either by incinerating or shredding the medical records with the
help of a paper shredder.
In case of electronic media which contains sensitive medical information

like a magnetic tape, microfilm, floppy disk, CD, or DVD, they have to be
either incinerated or shredded by a CD/DVD shredder to completely
destroy the sensitive data.
In case of physical drives which contain sensitive medical information like a

pen drive, hard disk drive (HDD), or solid state drive (SSD), use of a good
data destruction tool to securely wipe the drive of any medical data is
advocated.
Recent studies have shown that it is not possible to securely delete the
data file using data-erasing softwares. It suggests that even when you
delete a file from the computer the file's data is still there on the hard disk
which can be recovered by data thieves or land in the hands of
unauthorized personnel and may lead to medicolegal issues. So in order to
securely and permanently destroy the electronic records purging of hard
disk drive (HDD) or solid state drive (SSD) is encouraged.
Purging is to permanently delete unneeded sensitive data from HDD and

SDD. It is sometimes possible to recover deleted or erased data, but
purged objects are permanently deleted and cannot be recovered.
14
Before the destruction of the medical records, the authorized person has to
verify that the retention period of the medical records have been expired.
Upon verification that the retention period of the medical records has been
expired, a medical record destruction form needs to be filled. A medical
record destruction form is a permanent log created and maintained about
the destroyed medical records for reference in the future.
In general, a simple medical record destruction form would contain the

following heads:
• Name of the authorizer

• Period for which the records are destroyed or purged
• Patient medical record number
• Date of destruction
• Method of destruction
• Description of the disposed records
• Name of the destroyer and witnesses if any
15
Fig 1.4: Sample medical record destruction form
16
1.6 GUIDELINES FOR MEDICAL RECORD
There are a general set of guidelines laid down for preparation of proper
medical record. In absence of any global statutory body governing the rule
of medical record management, there is no conformation in the medical
records of different medical facilities. There exists a difference in medical
records from one country to another, from one state to another, and in
some cases from one medical facility to another.
Some of the worldwide accepted guidelines followed in preparation of

medical record are as follows:
• As soon as a patient walks into the medical facility, collection of the

patient's demographics or identification data should be done and a
medical record number (MRN) should be assigned. The medical record
number (MRN) is an unique number given to the patient for identification
within a hospital setting. It will differ from one medical facility to another
medical facility.
• If the medical records are prepared by hand, in such cases the details
entered in the patient's medical record should be legible, and in case an
entry is illegible or needs to be amended, it should be rewritten by the
physician and the reason for rewriting should be specified as well along
with the signature.
• The basic structure of the any medical record remains the same and
constitutes of the following details:
Patient's Name
Date of Birth (DOB)
Gender
Patient Contact information (Physical address, Email, Phone, etc.)
Date of visit or Date of admission
Medical Record Number (MRN)
Primary Care Provider (PCP)
Admitting or Treating Facility
Facility Contact information (Physical address, Email, Phone, etc.)
17
The above information should be repeated on each and every page of the
medical record of the patient and at the same place of the page.
• Every medical facility needs to maintain a list of medical abbreviations

and acronyms along with their meanings approved by the recognized
national or global medical body that can be used into the medical
records.
• All the different types of forms used by the medical records department
should be of the same size.
• All the papers in a particular patient's medical report folder should be

clipped or stapled properly to avoid missing of any important paper.
Activity 1
Go to at least five local hospitals in your area and gather the following
information: Does the hospital maintain medical records?
Are medical record numbers given to patients in the hospital?
Does the hospital have a retention policy for medical records? If no, what
do they do about the storage space and inactive medical records?
Does the hospital destroy inactive medical records? If yes, do they have a
written procedure and how are they destroyed?
1.7 MASTER PATIENT INDEX
Issuing a medical record number to a patient visiting the hospital or

medical facility is one of the basic functions of medical records department.
Medical record number (MRN) is the unique number given to the patient for
identification within a hospital setting. It will differ from one medical facility
to another medical facility.
Using medical record number to identify a patient is basically followed by

all the healthcare organization around the globe that maintains the medical
records of patients. An index is created utilizing this unique medical record
number called as the master patient index (MPI). The MPI is prepared by
the medical records department and is used to identify a patient and that
patient's medical information. Since medical record number is unique to a
patient in a hospital, this master patient index prepared using the medical
18
record number as the basics is also specific to that respective hospital and
will differ from one hospital to another.
The MPI generally should contain only that information which is required to
identify the patient and locate that patient's medical record.
Master patient index (MPI) information typically includes,

Patient's full name
Date of birth
Gender
Mailing address
Medical record number (MRN)
At least patient's one unique characteristic: Different countries may

use different characteristic to identify the patient such as social security
number (SSN) - USA, mother's first/maiden name, health card number,
date of birth etc.
For Example - In India, Aadhar card number or PAN card number

can be used to prepare a master patient index in the future though
at present mostly date of birth, and father's or mother's first name
is used for the index.
Fig 1.5: Health Card
19
Master patient index prepared for both the manual (where a physical
master patient index card is prepared and filed) as well as the
computerized (where an electronic physical master patient index card is
created in the computer) system master patient index follow the same set
of principles as follows:
• Filing of the master patient index in both the manual and automated
system should strictly follow the alphabetical order. Titles such as Mr.,
Ms., Dr. or any other titles are excluded and alphabetical ordering should
start in the order from SURNAME, FIRST NAME, MIDDLE INITIAL.
• If in any case, SURNAME, FIRST NAME, MIDDLE INITIAL are same for
any two patients then date of birth needs to be consider, filing from the
oldest to the youngest.
• There has to be a uniform size of the manual master patient index card
and information written on it should be decipherable.
• The master patient index card of a computerized master patient index

should have the ability to be modified as needed.
• Master patient index should NOT contain any clinical information

pertaining to the patient's disease or treatment.
• Computerized master patient index should have the capability of

generating medical record numbers for new patients automatically in a
predefined order.
20
1.8 FUNCTIONS OF MEDICAL RECORD DEPARTMENT
Like any other department, medical record department also has a host of
functions to be performed. While the functions of a medical record
department may significantly vary from one part of the world to the other,
certain general functions of the medical records department (MRD) are
given below.
The general major functions of a Medical Record Department (MRD)

include:
• Overseeing the registration and admission process and the maintenance

of the patient record.
• Creation of a Master Patient Index (MPI) for easy location of the medical
records. Master Patient Index should include the list of all active,
inactive, and destroyed patient records. This index is to be maintained
permanently for any future reference.
• Allotment of a medical record number (MRN) for patient identification in

future.
• Ensuring that all patient records and consent forms related to the
medical care of a specific patient are in that respective patient's medical
record and it is complete.
• Arrange and permanent filing of patient's medical records in

chronological order after the patient has been discharged or expired for
easy visualization and accessibility in future.
• Retrieval of medical records for follow-up patient care and research

studies. If medical records are arranged and organized properly, it
significantly reduces the retrieval time in cases of emergency.
• Online/offline registration of number of births and deaths.
• Issuance of birth and death certificates, though in some places the birth
certificates are issued by the local ward offices.
21
• Preparation and reporting of various kinds of statistical reports as

required by the health department on a daily, monthly, or annual basis.
• Attending and resolving all medico-legal issues relating to the release of

patient information and other judicial matters.
• Accurately coding of various kinds of diseases and clinical procedures for

proper and speedy healthcare claims as well as to send to local health
department for analysis.
• Providing assistance to the administration in any other day-to-day

matters as necessary.
1.9 TYPES OF MEDICAL RECORD
There are generally two different types of medical records inpatient

medical record and outpatient medical record. These two kinds of
medical records usually arise from the way the patients are seen in the
medical facility, viz, inpatient (a patient who is admitted to the hospital for
treatment and is hospitalized until discharged) and outpatient (a patient
who is treated in the hospital but is not hospitalized).
Types of Medical
Records
Inpatient Medical Outpatient

Record Medical Record
Fig 1.6: Types of Medical Records
22
The patients are categorized into inpatient and outpatient depending upon
the seriousness of the illness or the injury. If the physician feels that the
patient is not suffering from a grave disease or injury and can be treated
without being hospitalized, then the treatment is given as an outpatient
and the patient can leave the hospital right after consulting the physician.
Outpatient treatment or surgery may be provided in a physician's office,
clinic, or hospital.
Examples of outpatient treatments are as follows:
• Emergency room visit or urgent care visits for infection of eye, ear,
stomach, limbs which are not severe.
• Same-day surgery or outpatient surgery such as are rhinoplasty, breast

implants, tonsillectomy, tummy tucks, pacemaker implantations, etc.
• Dialysis or blood transfusions
• Various laboratory tests
• Imaging studies and x-rays.
On the contrary, if the physician feels that the patient is suffering from a
serious disease or injury and has to be hospitalized, then the patient is
admitted and treatment is given as an inpatient. Admitted patients can
only leave the hospital after their discharge by the physician when the
illness or the injury is either cured or subsided. Inpatient treatment is
provided only in a hospital setting.
Inpatient Medical Record

Inpatient Medical Record is the record of the patient who is admitted to the
hospital and remains hospitalized until discharged. Inpatient medical record
documents the treatment received by a patient during the course of the
hospital stay. While the patient is in the hospital, the record is typically
located at the bedside or with the nursing department which is entrusted
with the care of the patient. This record contains the patient's
demographics, physician's findings, record of the clinical data or tests
conducted on the patient by the medical staff, and treatment course during
the hospital stay. Once the patient is discharged the medical record is
shifted to a more secure location. If it is paper-based medical record, it is
23
alphabetically filed into the appropriate cabinets and in case of electronic-

based record, it is stored securely onto the central server.
Outpatient Medical Record

Outpatient Medical Record is the record of the patient who has not been
admitted to the hospital and leaves the hospital setting after consulting the
physician. It is also known as ambulatory care record. The outpatient
record contains also the patient's demographics, physician's findings,
record of the laboratory tests, x-rays, and imaging studies conducted on
the patient by the hospital, and treatment course. The outpatient medical
record is also stored by the medical records department of the hospital but
in certain cases many medical facility do not store the outpatient medical
record and hand it over to the patient for its safekeeping.
In recent years, there has been a significant surge in the outpatient

services as compared to inpatient services and the major factors
contributing to the increase is,
1. Rise in medical cost. The rise in the medical treatments have been
affecting both the inpatient and outpatient setting, but due to the
substantial increase in facility costs under inpatient treatments, patients
are now opting for outpatient treatments for manageable healthcare
ailments.
2. Advancement in healthcare treatments and technology. Due to the

advances in healthcare treatments and technology many diagnostic
tests and operative procedures that previously required a patient to be
admitted to the hospital can now be performed in a physician's office.
Owing to these factors, the ratio of outpatient care is growing more

significantly than the ratio of inpatient care.
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1.10 FORMAT OF MEDICAL RECORDS
There are different formats of paper-based medical records used to

document the medical history of a patient. The basic formats which are
used to maintain the paper-based medical records include the source-
oriented medical record (SOMR), problem-oriented medical record (POMR),
and integrated records.
Source-oriented medical record (SOMR): Source-oriented medical

record is the conventional form of documenting the patient record. In the
SOMR format, the information about a patient's illness and treatments is
organized mostly chronologically according to the source of documentation
of the information. For example, if it is recorded by the nurse it will be
located in the section demarcated for nursing department, if it is recorded
by the physician, it will be located in the physician section, if it is a
laboratory tests, it will be kept under the laboratory section, and if it is a
radiologic test such as an x-ray, it will be placed under the radiology
section. Hence the source of the information signifies in which section the
data will be stored and derives its name from the same. This type of
format for medical records are easy to create and locate and is the
traditional way of creating records still followed by some medical facilities.
For creation of the SOMR, one would have to find the date and analyze
where the report was documented (source) and file in that source section.
For location, if a physician needs to look at an x-ray report of a patient, it
can be located in the radiology section of the medical records department,
but if a physician wants to get a full clinical picture of the patient's medical
history, several sections of the source-oriented medical records needs to be
examined which would not only be a time- consuming affair but also would
make it difficult to gather accurately all the information for that patient.
Let us look at some of the merits and demerits of the source-oriented

medical record (SOMR) format.
Merits:
Creation and filing of reports are easy. Only needed information is the date
and the source of information.
Reports are easy to maintain.
Finding the information of a source is simple.
25
Demerits:
Difficult to find information about full clinical picture of a patient since it
would entail searching through various sections of SOMR.
Creates many sections and subsections in the medical records department.
If a facility has many departments, it will have even more sections and
subsections in the records department.
Problem-oriented medical record (POMR): The concept of problem-

oriented medical record was introduced by Dr. Lawrence Weed in the late
1960s in which he described the systematic approach for medical record
organization as against the conventional form of documenting the patient's
record, the source-oriented medical record (SOMR). The problem-oriented
medical record is arranged according to each of the patient's problem/
illness and its relevant medical history. In this format, a unique number is
assigned to each problem or illness and the problems are organized mostly
in reverse chronological order.
The POMR format usually consists of four components:
Database of information: Collection of information.

Problem list: Creating a list of all problems.
Initial plan: Formulation of care for each problem.
Progress note: SOAP note for each problem.
Database of information: As the name implies, this section stores the

complete medical history information available to the nurse or the
physician at the time of admitting the patient irrespective of the patient's
current problem. It contains details such as chief complaint, past medical
history, physical examination, laboratory data, family history, social history,
review of systems, etc.
Problem list: This section contains a list of the problems which needs
attention. This problem list is created by the admitting physician after
reviewing the above database of information and examining the patient by
performing a history and physical examination. The problem list is mostly
present at the start of the record. This list should include both active and
inactive problems. Active problem is something that the patient has
presented with and it needs current attention, management, or diagnostic
workup. Inactive problems or resolved problems are usually resolved
medical problems.
26
Two important facts to be noted while creating a problem list is that the
problem list has to be accompanied with dates of the problems and the
problems should be defined as accurately as possible to the highest level.
The problem list has to be updated periodically as it keeps on changing
with time.
Initial Plan of action for each problem: Once the list of problems is
created, the next step would be to devise a plan of action that specifies
what needs to be done with respect to each problem. The initial plan of
action constitutes of three parts, viz, diagnostic, therapeutic, and
informational.
• Diagnostic Plan: The diagnostic plan is about collecting more

information about the patient's problem and its management by
performing all the diagnostic workup which the admitting physician may
deem necessary.
• Therapeutic Plan: The therapeutic plan details all therapies that have
been initiated such as medications, procedures, or treatments and
reasoning for the same.
• Informational Plan/Patient Education Plan: The patient education

plan deals with informing the patient about the problems, treatments
initiated, and ways to cope with the problem in the future verbally or
through medical literatures.
Progress notes on each problem: This is the final step of POMR which
documents the process of following up each problem in detail.
Formation of progress notes follows the SOAP format and contains four
parts:
(S): Subjective section includes the description of the problem by the

patient's or the accompanying kith or kin.
(O): Objective section describes the examining physician's observation and
any test results performed on the patient.
(A): Assessment section is the opinion of the physician about what the
patient's problem.
(P): Plan lastly includes the probable course of treatment or therapy.
27
Let us look at some of the merits and demerits of the problem-oriented

medical record (POMR) format.
Merits:
POMR makes it easier to follow full clinical picture of a patient for a specific
problem.
It facilitates for easy patient treatment and progress as it is more

informational.
POMR has a structured approach and hence provides high degree of

organization as all the data to a specific problem are arranged in logical
sequence.
Demerits:
Creation of a new report is time consuming leading to insufficient time to
provide care for patients. Creation and filing of POMR requires some initial
training to the structure of organization. Repeated documentation of
medical data related to more than one problem.
Integrated medical record format (IMR): This type of medical record

format has reports from all the available sources and integrated into one
hence the name integrated medical record format. It can be arranged in
chronological order or reverse chronological order. This format makes it
easy for the physician to observe how the patient is progressing depending
on the tests and how the patient is responding to the treatments. Let us
look at some of the merits and demerits of the integrated medical record
(IMR) format.
Merits:
IMR is less time consuming while filing a report.
All instances of a specific diagnosis and treatment are filed together so
easily accessible.
Demerits:
In IMR, it is difficult to compare information related to same subject and
time consuming. Similarly retrieval of the related information will also be
hard and time consuming.
28
1.11 DIFFERENT FORMS OF MEDICAL RECORDS
There are various forms in which medical records are stored nowadays in a
medical facility. Though many medical facility still use paper-based medical
records some have transitioned to electronic medical records and there are
some who are in the process of transitioning from paper-based medical
records to electronic medical records hence they are currently having part
of the medical records in paper form and part of electronic medical records.
Forms of Medical
Records
Paper Hybrid
Electronic
Fig 1.7: Forms of Medical Records
With the advent of new and advanced technology, more and more medical
facilities are opting for electronic medical records though the debate over
whether to store medical records on paper or electronically still continue to
haunt the healthcare industry. The reason for this debate is all the three
forms of medical reports have their own merits and demerits.
29
Paper-based medical records: It has been ages since the medical

facilities have been using paper-based medical records. Majority of
healthcare professionals feel that paper- based medical records are more
reliable than electronic medical records and it has become the biggest
argument of many physicians and hospitals. One deterrent of phasing out
the paper-based medical records for some medical facilities is the
humungous cost associated with the transition, since years or rather
decades of paper-based medical records are present in the facility which
will need to be scanned and converted into electronic format. Another
inhibiting factor is that the medical fraternity feel the process of conversion
of medical records from paper form to electronic form is a time-consuming
affair and offers very less or no value in return. Owing to these factors,
vast majority of medical records are still on paper all over the globe.
Hospitals utilize advanced diagnostic equipments to diagnose the disease
and make use of the latest technologies to treat the patient, but when it
comes to the maintenance of medical records, they still tend to keep them
on paper.
Electronic medical records: Electronic medical records are digital version

of the paper- based medical record and it contains all of a patient's medical
history from one medical facility. It can also be designed to include
information from all medical facilities and all providers involved in a
patient's care in which case it is referred to as Electronic health record and
can be accessed by more than one provider or facility. Progressively,
physicians are slowly starting to realize the benefits of switching from
paper-based medical records to electronic medical records some of them
being overall increased productivity, easy accessibility, or improved
security. In times to come, electronic record system will eventually phase
out paper-based records to provide easy access of health information to
physicians and efficient healthcare delivery to patients.
Hybrid medical records: In these form of medical records, part of the

medical records are in paper form while the rest is in electronic form.
Hybrid medical records usually exist in a medical facility which is in the
process of transitioning from paper-based medical records to electronic
medical records. Also, there are certain hospitals which prefer to keep
some of the records in paper form and some of the records in electronic
form. Locating a medical record in hybrid system can sometimes be time
consuming and difficult task as the healthcare professional has to look for
it both in the manual as well as in the electronic medical records.
30
Comparison between paper, electronic, and hybrid forms of medical

records.
31
Activity 2
Go to at least two local hospitals in your area and gather the

following information:
What format is used in the hospital to store the medical records of

the patients?
If the hospital uses the electronic format, find out the impact on
the productivity of the medical staff owing to the implementation
of electronic software.
1.12 OWNERSHIP OF MEDICAL RECORDS
There is always a sense of pride in owning an asset, but that is not the
case with owning a medical record. With the ownership of medical records
comes a great responsibility of its safe custody and fear of the sensitive
medical data being destroyed, stolen, or rendered inaccessible leading to
medicolegal case.
So who actually owns the medical record of the patient,
Is the treating physician or the hospital the owner of the medical records of
the patient?
OR
Is the patient himself/herself owner of the medical report?
Fig 1.8: Ownership of Medical Records
32
Every country has their own set of rules for the ownership of the medical
records but in a general sense the treating physician or the hospital is the
true owner of the medical records and it is their duty to protect the medical
information of the patient and maintains its confidentiality.
In India, there is a total different perspective about the ownership of

medical records. Here all the medical records of the patients remain at all
times with the patient or the family member and the patient becomes the
owner of the medical records. There is a small exception to this in case of
government-funded hospitals where the medical records are kept in the
medical records department of the hospital and only a brief summary of
the treatment provided is handed over to the patient or the family member.
In this case, the patient is charged with the responsibility of the
safekeeping of the medical records.
In any case, whether the medical records are with the physician, hospital,
or the patient, the medical information in the medical record is believed to
be the sole property of the patient and the patient has every legal right to
ask for a copy of the medical records or access the medical information on
an as-needed basis.
1.13 RELEASE OF PATIENT INFORMATION
As discussed earlier, all medical records information are deemed to be

strictly confidential, and it cannot be disclosed or shared with any
unauthorized personnel or institution under any circumstances without
proper authorization. There are certain cases which require the physicians
or hospitals to either share the medical report or even in some cases
release the medical report of a patient.
Medical fraternity around the world follows a series of policies and

procedures in order to release the patient's medical information, but any
release of medical information about a patient is to be effected only after
the consent of the patient, except in medicolegal cases. If a physician or
hospital denies access to the medical information after the due process to
obtain the medical information is followed, then that physician or hospital
can be sued for professional misconduct. Some medical facilities charge a
nominal amount to handover the medical information requested by the
patient. A medical record release form is to be undertaken from the patient
before releasing or sharing the medical records and a court order in case of
33
medicolegal cases is to be obtained before handing over the medical

records of the patient to any other authorized personnel.
Below mentioned is a list of instances where medical record information

can and must be released or shared:
• If the medical record needs to be shared with a different physician or
hospital in order to gain good insight in the diagnosis and provide better
medical treatment of the patient, it can be shared or handed over to
another physician.
• Medical records need to be handed over the concerned official if a court

order for its release is obtained in medicolegal cases such as accidents,
medical negligence, etc.
• The patient can also ask for copies of the medical records to seek second
opinion from another physician.
• A health care power of attorney of the patient has the right to access the
medical records as long as patient has signed a release of records to but
the extent of access will be limited to those information which will be
required to make an informed decision.
• In certain instances, medical records need to be provided to health

insurance companies.
• Parents of a minor patient have the right to access or seek copies of the
child's medical records.
After learning about the laws governing the confidentiality of medical

records of patients all around the world, one can definitely sleep like a
baby, but there is more to this than what meets the eye. Certain sections
of your medical records might have been released without your knowledge
and as far as your consent is concerned, either you have already given it to
the hospitals while filling up one of the several forms (patient consent form
for treatment) during your visit or stay at the hospital or it is not needed at
all in this case. These are those sections of the medical information which
can even be released by the hospitals without the consent of the patient.
The contention behind it is that this information does not share the identity
of the patient and is termed as generic or raw information. In addition,
patients taking part in clinical trials are aware that their medical
34
information will be used for research purpose. The purpose of conducting

these types of research is to provide improved and affordable medical care
for the general public.
1.14 USES OF THE RAW MEDICAL DATA
1. It is used by government agencies and medical researchers to construct

various types of indexes and statistical reports which would play an
important role in the public health.
• Morbidity and mortality rate

• Malnutrition index
• Population census
• Immunization rate
2. It is used by medical researchers to make a comparison between

different types of medical treatments/procedures for the same malady
provided by different physicians and hospitals in different parts of the
country and to come up with the most effective and affordable
treatment plan.
Every one of us must have heard about hemorrhoids at some time

or the other. A large number of people in their old age suffer from
this condition. Hemorrhoids are varicose condition of the external
hemorrhoidal veins causing painful swellings at the anus,
alternatively known as piles. They are of two types, viz, external
hemorrhoids and internal hemorrhoids. Depending on the location,
severity, and complexity of the problem, there remains a multitude
of treatment:
35
Treatments
Home remedy: Includes (1) Increasing consumption of high-fiber foods

include beans, wheat, oat, whole-grain foods, and fresh fruits. (2)
Exercising. (3) Sitz bath: A sitz bath is a warm water bath for the buttocks
and hips. (4) Topical treatments: Use of smooth wipes or local anesthetic
creams to soothe the pain. (5) Use of a soft surface for sitting.
Medications: Medications are also used for the treatment of hemorrhoids,

example, suppositories containing hydrocortisone.
Clinic procedures: There are several procedures that can be performed in

the clinic setting each with their own sets of advantages and
disadvantages, for example, rubber band ligation, laser or infrared
coagulation, sclerotherapy injection, and cryosurgery.
Surgery procedures: Two main surgical techniques for removal of

hemorrhoids are hemorrhoidectomy and stapled hemorrhoidopexy.
Research is now under way comparing stapled hemorrhoidopexy with

rubber band ligation and hemorrhoidectomy as a first-line treatment for
internal hemorrhoids.
Medical researchers in the above-mentioned case will gather all the

information available from clinical trials, clinics, and hospitals regarding
hemorrhoids. The information may be such as number of patients suffering
from the disease, number of patients opting for home remedies or taking
medical treatments, number of patients that have undergone office
procedures and surgical procedures, number of patients that have
undergone hemorrhoidectomy and stapled hemorrhoidopexy and their
outcomes such as remission or resolution. After analyzing these huge
volumes of data, they will try to come up with the most efficient treatment
for different kinds of hemorrhoids such as internal and external
hemorrhoids and moderate-to-severe kind of hemorrhoids.
3. Also there lies a concern of several physicians prescribing or ordering

unnecessary drugs and treatments/procedures to monetarily benefit the
hospital they are attached with or to receive a "cut." A cut is any
amount of extra money charged to the patient by the hospitals or the
diagnostic centers, which is then returned to the referring physician in
36
the form of a commission. This type of practice also exists between

several pharmaceutical companies and physicians where certain amount
in the form of commission, holiday trips, or gifts is bestowed upon the
physician. This kickbacks or incentives can range anywhere from 10% to
40% which inflates the medical cost for the patient. Researchers believe
that the finding of the most effective and affordable treatment for a
certain disease and conveying them to the medical fraternity along with
better governance and transparency will go a long way to curb or bring
an end to this type of abuse.
Previously, the raw data gathered by medical researchers were less in

volume owing to inability to process large amounts of data and the manual
process involved in segregating the personal identity information from the
raw medical data. Growth in the technology both in terms of faster
computing machines and better data management softwares have
revolutionized the medical research. Researchers are now able to inspect
huge volumes of raw data and at the same time examine complex medical
data resulting in far better outcomes. Many developed countries have even
started building massive national medical database using this raw medical
information to better understand the epidemiological characteristics of a
disease and to better serve the general public.
Whatever may be the reason, still the use of the medical records in this
manner by researchers appears to be a point of debate as many scholars
believe that there needs to be regularization for the use of medical records
in research. The major problem in this process is the de-identification of
the patient. Appropriate steps needs to be taken to ensure that the
personal and non-personal medical information are segregated and also
ensure that there is not the slightest chance of the non-personal
information to be traced back to the original patient. Several developed
countries have committees or organization that examine that the de-
identification process is in place, but as far as developing countries are
concerned, there is no such body to govern and keep a track of the proper
de- identification process.
37
1.15 RECONSTRUCTION OF MEDICAL RECORDS
On July 12, 1973, a disastrous fire at the National Personnel Records

Center (NPRC), St. Louis, MO, USA destroyed approximately 16-18 million
Official Military Personnel Files (OMPF). http://www.archives.gov
Fire breaks out at Agra medical officer's office, records destroyed (http://
www.ndtv.com) May 26, 2012.
Hurricanes and/or floods destroy thousands of medical records.
Once in a blue moon, news like these appears on the news channels or can
be seen in the newspaper. Although the occurrence of these events is very
rare, the aftermath of it is more gruesome than the tragedy itself. Since
medical record is one of the most important piece of documentary evidence
it has be preserved at all cost, but in the event of any catastrophic event
such as fire, flood, hurricane, earthquakes, etc., every attempt has to be
for its salvation and reconstruction.
The medical records storage facility is built to be sturdy and durable but
sometimes they too fail to withstand the brunt of the natural or manmade
disasters. In case of the failure of the medical records department to
preserve the records of the patient, a disaster recovery plan is critical and
needs to be put in place in every healthcare setting.
38
These include the following:
• If the medical facility or hospital is outsourcing its medical records

storage to a different provider, it has to make sure that the third-party
contractor provides a secure and compliant patient medical record
storage service. The hospital should enter into an agreement with the
third-party contractor clearly stating that all the services provided by
them are in accordance with the rules and regulations of that country's
statutory healthcare bodies.
• If the hospital maintains and stores the medical records on its own either
onsite or at an offsite location, it is the sole responsibility of the hospital
to ensure that the medical records are well-preserved for the duration of
its retention period. To remember the important steps that need to be
taken to safeguard the medical records is 4S, that is, salvage, search,
start reconstruction, and scribe. All these steps need to be performed in
an orderly manner.
SALVAGE: In an unforeseen circumstance where an imminent danger

looms on the safety of the medical records, all necessary steps should be
taken to salvage the medical records.
SEARCH: In case of a missing, lost, or destroyed medical document,

exhaustive search needs to be carried on with the help of hospital staff
and/or damage restoration company to locate the record. If the record
gets discovered, then ascertain that it is complete and it has not been
tampered. Also if possible try to find out the reason that led to the missing
or losing of the document in the first place and ensure proper system to
avoid reoccurrence. If any office staff was involved in the process, take
strict disciplinary actions against the concerned staff.
START RECONSTRUCTION: If a document is permanently lost, attempts

for reconstruction needs to be considered such as reprinting the documents
from any of the database that exists and are available such as a central
server, pharmacy, laboratory, or radiology databases. Retranscribing of the
documents from a dictation system if available since dictation systems are
at an offsite location from the hospital and there is every chance that it has
not been affected. Reorganize or obtain copies of any medical documents
available from other hospitals, clinics, or other healthcare facilities.
39
SCRIBE: In case all the above steps are unfruitful and it is not possible to
recover the medical record, then the facility or provider should make a
documentation of the date on which the disaster took place, number of
patient medical records lost, natural or manmade disaster that caused the
loss, and possible efforts made to salvage or recover the records.
Having said that hospitals own the medical records of the patient and are
obliged for the safety and maintenance of the records, let us face the fact
that they do sometimes fail to keep up the promise and the medical
records of the patient is lost and impossible to be recovered.
What happens in the case a medical release form is received for disclosure
of medical record which has been destroyed?
In this case, the documentation prepared as the last step (4S - Scribe) of
preservation of the medical records comes in handy. The hospital needs to
send the documentation mentioning the date of disaster, type of disaster,
and possible efforts made to recover the records.
40
1.16 SUMMARY
Let us recapitulate the important concepts discussed in this unit:

patient's past medical history and treatment.
A person who maintains the medical record by entering, compiling,

reviewing, and filing appropriately into a computer or on paper is termed
as a medical record technician.
The department which is entrusted with the safe-keep and maintenance of

the medical records is known as the medical records department
(MRD).
Maintenance of medical record forms an important aspect of the healthcare

system. Medical records are needed in every stage of healthcare system
for medical, legal, research, and educational purposes. They are needed for
compilation of various types of statistical reports.
Medical records should be retained by the hospital facility for a specified

period of time before it is appropriately destroyed.
Preparation of medical records should follow a certain set of rules laid down
by the statutory bodies, but still there exists a difference in medical records
from one country to another, from one state to another, and in some cases
from one medical facility to another.
Medical record number (MRN) is the unique number given to the patient for
identification within a hospital setting. It will differs from one medical
facility to another medical facility.
There are a host of functions of a medical record department right from

registration, creation, maintenance, and destruction of records to preparing
reports and issuing appropriate certificates.
There are two types of medical record, inpatient medical record and
outpatient medical record.
41
There are three formats of medical records, source-oriented medical record

(SOMR), problem- oriented medical record (POMR), and integrated records.
Dr. Lawrence Weed, fondly known as "The father of the problem-oriented
medical record (POMR).
Paper, electronic, and hybrid are three different forms of medical records.
Ownership of medical records differs from country to country but in general

the treating physician or the hospital is the true owner of the medical
records.
Medical records information are confidential patient information, and it

cannot be disclosed or shared with any unauthorized personnel or
institution without proper medical release form.
In case of any natural disaster, necessary steps need to be taken to

reconstruct the medical records.
1.17 GLOSSARY & ACRONYMS

patient's past medical history and treatment.
Purging is to permanently delete unneeded sensitive data from HDD and

SDD.
MRD Medical records department.
PHI Protected health information
MRN Medical Record Number
MPI Master patient index
PCP Primary Care Provider
HDD Hard disk drive
SSD Solid state drive
42
OPD Outpatient department.
SOMR Source-oriented medical record
POMR Problem-oriented medical record.
IMR Integrated medical record
EMR Electronic medical record
1.18 TERMINAL QUESTIONS
1. Explain the following:

a. Medical record
b. Master patient index
c. Purging
d. Medical record technician
2. Explain any 10 functions of medical records department?
3. Describe the need to maintain medical records?
4. Discuss the retention and destruction period of medical records?
5. Explain in detail guidelines to be followed for proper medical record?
6. What are the two different types of medical records, explain?
7. Discuss the different formats of medical records?
8. Distinguish between paper and electronic medical records?
9. Distinguish between hybrid and electronic medical records?
10.Ownership of medical records, explain?
11.Give any five instances in which release of patient information is

justified?
12.What are the uses of raw medical data and explain the concerns?
43
13.Explain the 4S in reconstruction of medical records?
References
AHIMA. "Enterprise Content and Record Management for Healthcare."

Journal of AHIMA 79, no. 10 (2008): 91-98
Medical Council of India Regulations (www.mciindia.org)
Medical Record Management by Edna K. Huffman
www.wpro.who.int/publications/docs/MedicalRecordsManual.pdf
Video of Dr Steve Walsh, specialist physician at Tygerberg Hospital in the

Western Cape (South Africa), and also a senior lecturer at Stellenbosch
University Faculty of Health Sciences, Tygerberg, Cape Town, South Africa
Video of Dr. Larry Weed discussing the problem-oriented medical record

and clinical decision-making (http://www.youtube.com/watch?
v=qMsPXSMTpFI).
44
1.19 MULTIPLE CHOICE QUESTIONS
1. Which of the following is the full form of IMR?

a) Integrated Medical Record Format
b) Integrated Management Record
c) Intensive Medical Record
d) None of them
2. The basic formats which are used to maintain the paper-based medical
records include:
a) Problem Oriented medical record (POMR)
b) Source -oriented medical record
c) Integrated records
d) All of them
3. Physicians are required to maintain record of any event of patient

encounter.
a) True
b) False
4. Which of the following statements are true with respect to medical

records?
a) Preparation and maintenance of medical records date as back as
the nineteenth century
b) A few hospitals kept medical records exclusively for those patients
who were admitted to the hospital as in-house patients
c) The medical records were especially kept at the bedside of the
patient for ease of accessibility to the treating physician
d) All of them
5. The Medical Council of India insists on preserving the inpatient records

in a standard format for a period of:
a) 3 years
b) 7 years
c) 10 years
d) None of them
45
6. Find the correct order of the stages in the Medical Record Cycle:
a) Retention Utilization Creation Destruction
b) Creation Utilization Retention Destruction
c) Creation Utilization Retention Destruction
d) None of them
[Answer: 1 (a), 2 (d), 3 (a), 4 (d), 5 (a), 6 (c)]
46
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
47
MEDICAL TRANSCRIPTION
Chapter 2
Medical Transcription
CHAPTER OBJECTIVES:
• Transcription and its types.
• Medical transcriptionist - skills and responsibilities.
• File transfer protocol.
• Medical transcription process and medical transcription workflow.
• Advantages and disadvantages of medical transcription.
• Prevalent pricing standards in medical transcription industry.
• Types of errors.
• Types of medical reports.
48
STRUCTURE:
2.1 Introduction
2.2 Types of transcription
2.3 Medical transcription
2.4 Skills of a medical transcriptionist
2.5 Responsibilities of a medical transcriptionist
2.6 Degrees
2.7 Medical transcription process
2.8 Recording a dictation
2.9 Hardware requirements
2.10 Software requirements
2.11 Advantages and disadvantages of medical transcription
2.12 Medical transcription workflow
2.13 File transfer protocol
2.14 Advantages of using an FTP
2.15 Medical transcription - offline and online
Offline medical transcription
Online medical transcription
2.16 Medical transcription workflow management software
2.17 Benefits of using medical transcription workflow management
software
2.18 Pricing
2.19 Types of errors
2.20 Types of medical reports
2.21 Summary
2.22 Glossary
2.25 Case Study
49
2.1 INTRODUCTION
We all have visited a hospital at some time or the other either for our own
treatment or to visit an ailing friend or relative. If one tries to remember
back those hospital moments, then it would not be hard to recollect the
image of a writing pad hanging down from the hospital bed or a medical
file containing dozens of paper scribbled by the physician about the
demographics of the patient, i.e., name, date of birth, gender, etc., what
the patient is suffering from, what are the treatments and
recommendations given to the patient and so on. This paper basically gives
a systematic documentation of the patient's medical history over time and
is termed as the medical record of the patient. Medical record plays a vital
role in insurance reimbursement or mediclaim reimbursement, hence the
necessity of maintaining a proper medical record is of utmost importance.
Alternatively, there are various other terms used in place of medical record
such as medical report, patient's chart, or medical chart though all signify
the same thing.
Fig 2.1: Paper Medical Records
The preparation of medical record is common practice followed by all the

physicians in clinic, polyclinic, or hospitals and is even mandatory. For a
clinic physician whose sees a few number of patients preparing the medical
records of his patients on his own may not be a big issue, but imagine a
doctor or physician treating hundreds of patients at various clinics,
polyclinics, and hospitals, here it will become a time-consuming affair for
the physician and the physician will have to put in a great deal of his time
in preparing these medical records which will in turn affect his core
50
competency of treating the patient. To overcome this problem,

transcription came into picture.
Transcription is the act or the process of conversion of dictation or audio
into text by a person with the assistance of a computer for word
processing. The person who does the transcription is termed as the
transcriptionist and the text or the written document produced is called the
transcript.
Medical transcription is a $12 billion industry, and qualified medical

transcriptionists (MTs) are in short supply. Employment of medical
transcriptionists is projected to grow 8 percent from 2012 to 2022, about
as fast as the average for all occupations. The growing volume of
healthcare services is expected to continue to increase demand for
transcription services. However, employment growth will be limited due to
increased productivity stemming from technological advances. Bureau of
Labor Statistics, U.S. Department of Labor, Occupational Outlook
Handbook, 2014-15 Edition.
Transcription is one of the fastest growing legitimate jobs in the US as well

as over the globe. Transcription work can be a good choice for people who
want to work from home or who want to earn extra income by utilizing
their free time.
In India, medical transcription is still to pick up and has not been able to
grow at a rate such as its western counterparts especially US, Canada, UK,
Australia, or Middle East where the healthcare industry is vastly dependent
on speedy processing of insurance claims and at the same time it is
mandatory to have elaborate and accurate medical records of each patient
encounter. Still in India, there are certain major hospitals which an effort to
provide an efficient and consistent quality of service both to promote
customer satisfaction as well to provide better service as set by the global
healthcare industry standards have started to tidy up the medical records
department by implementing medical records management softwares and
making use of medical transcription for maintaining accurate medical
records and creating a paperless environment. Some of the hospitals which
have in-house/on-site medical transcription department in place are Dr. L.
H. Hiranandani Hospital, Lilavati Hospital, Jupiter Hospital, Apollo Hospital,
Prince Aly Khan Hospital, and Hinduja Hospital to name a few.
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2.2 TYPES OF TRANSCRIPTION
Transcription services are categorized into the different types based on the
domain or field they cater, viz:
i. Medical Transcription: Medical Transcription commonly termed as MT

is an allied health profession which deals in the process of transcribing
or converting voice- recorded reports dictated by physicians or other
healthcare professionals into text format.
ii. Business/Financial Transcription: Business Transcription commonly

termed as BT deals in the process of transcribing recordings of AGMs,
investor meetings and presentations, press releases, interviews,
seminars and speeches, etc. For a business transcription excerpt refer to
the website www.moneycontrol.com. This website has various kinds of
business transcripts of one-on-one interviews or monologues, etc.
iii. Legal Transcription: Legal Transcription is the process of transcribing

recordings of attorneys, court hearings, and other legal professionals
into legal documents.
iv. General Transcription: General Transcription deals with the rest of the
transcriptions apart from the above and comprises of transcribing the
academic lectures, speeches, etc.
2.3 MEDICAL TRANSCRIPTION
A person who does transcription is termed as a transcriptionist and a

person who does medical transcription is known as a medical
transcriptionist. The job of a medical transcriptionist is to listen to the
audio recording or dictation of physicians and transcribes them into report
or document. This report or document is the name of the electronic copy or
hard copy which results from the medical transcription process and is
record of a physician's encounter with the patient. This report is more
commonly called as a "medical record or medical report."It may sometimes
be called as the patient's chart in a hospital setting. This report also serves
as an official record. This medical report can act as a legal defense against
any medical malpractice suit in the future.
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A Medical Transcription Service Organization or an MTSO is basically a

medical transcription company providing transcription services to clinics or
hospitals. In older days most of clinics and hospitals employed in-house
transcriptionist to transcribe the medical report, but with advancement in
technology the transcription work started getting outsourced to offsite
medical transcription companies nationally or internationally. These
medical transcription companies are termed as MTSO.
Medical transcriptionist with a couple of years of experience and sound

knowledge of the domain can work from home and are called as home-
based medical transcriptionist (HBT). Home-based medical
transcriptionist has also become a lucrative option in transcription industry
as the working hours are flexible and work is done from the comfort of the
home. There is no need to travel, thereby saving both time and money.
MTSOs prefer home- based medical transcriptionist as they save on staff
welfare expenses and the HBTs are available to work 24x7.
Medical transcriptionist makes use of a headphone to listen to the

dictation, a computer with word processing capability to transcribe the
dictation, and a foot pedal to play and pause the dictation as needed.
Medical transcriptionist who works in the physician's clinic may also be
sometimes required to perform various administrative duties like
scheduling appointments, checking in patients, and answering phone calls.
Apart from transcribing the report, medical transcriptionist needs to

perform certain other functions such as to rectify any inconsistencies in the
report and edit the report for any grammatical errors. Assume a medical
transcriptionist is transcribing a medical record and types something such
as the following:
1. Typed: The patient was admitted under the car of Dr. Patel.
(Typographical error) Corrected: The patient was admitted under the
care of Dr. Patel.
2. Typed: The patient was given Viagra for allergic rhinitis. (Drug error)
Corrected: The patient was given Allegra for allergic rhinitis.
3. Typed: The patient went to knee high. (Medical error)

Corrected: The patient went to NEHI (New England Heart Institute).
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4. Typed: The patient's blood sugar is 120/80 mmHg. (Doctor error)

Corrected: The patient's blood pressure is 120/80 mmHg.
The above examples list certain types of errors which generally occur which
transcribing a medical report. There are various reasons for these errors to
take place. These errors tend to occur if the audio file is not dictated clearly
or the audio file is garbled or distorted. It can also occur if the medical
transcriptionist is inexperienced and does not possess a sound knowledge
of English, medical terminology, and drugs. Likewise, since the physicians
are so much overburdened with work, exhausted, short of time, or in the
emergency room and they need to dictate the reports as soon as possible,
they might happen to dictate something wrong. One other possibility is
that certain physicians may have a heavy accent, nasal twang,
colloquialism, or arbitrary sentences which the medical transcriptionist is
unable to decipher accurately.
A gold standard is that if the medical transcriptionist is unable to hear

something or he is in doubt, he should leave a "flag." A "flag" in a report
requires the physician to fill in the "blank/flag" to finish up the
report. Unless the "blank/flag" in the medical report is filled in by the
physician, it cannot be finalized. Medical transcriptionist needs to avoid
such errors and to avoid them a medical transcriptionist needs to have a
certain skill sets to perform the job effectively.
2.4 SKILLS OF A MEDICAL TRANSCRIPTIONIST
i. In-depth knowledge of human anatomy and physiology.
ii. Good knowledge of English spelling, idioms, and phrases.
iii. Well-versed with operation of computer (especially work processing

softwares).
iv. Good eye, hand, and foot coordination.
v. Sound knowledge of disease processes and medical terminology.
vi. Sound knowledge of drugs and their side effects.
vii.Excellent typing skills.
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viii.Very good knowledge of formal writing, grammar, use of correct

punctuation, and capitalization rules.
ix. Ability to rectify any inconsistencies in the medical report.
x. Creative enough to research quickly for new medical devices or new

medications that have come in the market. Remember it or create a
repository to quickly enable the insertion of the correct spelling of the
new device or drug in the future.
xi. Thorough knowledge of HIPAA compliance or medicolegal issues.
2.5 RESPONSIBILITIES OF MEDICAL TRANSCRIPTIONIST
i. Download audio files and accurately transcribe various types of medical

reports for different medical specialities and subspecialities that include
history and physical, SOAP note, emergency room (ER) note, operative
report, discharge summary, radiology report, etc.
ii. Edit the medical reports accurately, utilizing correct punctuation,

grammar, and spelling.
iii. Check for completeness of the medical report.
iv. Accurately enter the patients demographics such as name, date of birth
(DOB), date of visit/service, gender, medical record number (MRN),
social security number (SSN), address, etc.
v. Maintain a record or log of all the audio files received and reports
completed.
vi. Compare the finalized report of quality analyst (QA) or physician with
own medical reports to perform quality checks.
vii.Maintain a repository for new medical devices and drugs for reference in
the future.
viii.In some hospitals, medical transcriptionists may also be needed to

maintain medical file records and charts, though maintaining medical
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file records is specifically a job responsibility of medical records

technician.
ix. Medical transcriptionists may also be sometimes required to perform

various administrative duties like scheduling appointments, checking in
patients, and answering phone calls.
NOTE: In India, major part of medical transcription is done through visual

medical transcription. This is somewhat different than the traditional
medical transcription in the sense that here the medical transcriptionist
does not listen to the dictated audio but looks at the handwritten medical
report of the physician and types the medical report. Since in India, the
doctors are not used to dictating medical reports but rather are used to
writing down the medical chart on their own, this medical chart is referred
by the medical transcriptionist to prepare the electronic medical report.
2.6 DEGREES
Professional degrees and certifications can be found in almost every

industry today, and certification in healthcare industry though not
mandatory does make a difference. The Association for Healthcare
Documentation Integrity (AHDI), formerly the American Association for
Medical Transcription, whose purpose is to set standards for education and
practice in the field of healthcare information management advocates for
workforce development and credentialing in allied health services. It offers
two types of certification exams:
i. Registered Healthcare Documentation Specialist (RHDS) - Level 1

formerly known as Registered Medical Transcriptionist (RMT).
ii. Certified Healthcare Documentation Specialist (CHDS) - Level 2 formerly

known as Certified Medical Transcriptionist (CMT).
Both these certification exams can be administered through AHDI testing

partner Kryterion, and candidates willing to take these exams have the
option to take the exam either on site at a Kryterion testing center or
online via secure online proctor. Both these certification exams have
validity of 3 years and candidates need to re-take the exams to maintain
with their certification.
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2.7 MEDICAL TRANSCRIPTION PROCESS
One estimate suggests that about 47 per cent of US hospitals

outsourced medical transcription work to India in 2006. (The Hindu
Businessline)
Medical transcription process starts right from the time the patient sets his
foot into the doctor's office or the hospital setting. The doctor and the
patient discuss about patient's current medical problems, past medical
history, allergies, and other things of importance. The physician then
examines the patient by performing physical examination and may also
request some laboratory tests if he feels necessary in order to diagnose the
medical condition of the patient and will go ahead to make a diagnosis if
possible or wait for the laboratory tests to make a diagnosis. Based on the
diagnosis, the physician will chalk out a line of treatment for the patient
and appropriate recommendations will be given to the patient. Once the
patient has left the doctor's office or the hospital setting, the physician
then uses a voice-recording device to record the medical information about
the patient's visit. The process of recording the dictation has evolved from
physician's dictation to audio cassettes to today's advanced technology
which allows physicians to dictate via hand-held Dictaphone or use regular
telephone or mobile phone to connect to a central phone-in or call-in
dictation system located in the hospital or medical transcription service
organization (MTSO) or co-located to a different server elsewhere. Call-in
dictation system is a computer which allows one to record their dictations
over the regular phone or mobile phone. The physician dials the phone
number of the call-in dictation system and starts speaking.
The dictation system records the physician's dictation and stores it as an

audio file in one of the many digital formats available most common being
the mp3, wma, wav, etc. The audio file located at one of the above
mentioned locations is accessible by the medical transcriptionist. The audio
file can then be downloaded or accessed online as the case may be by the
medical transcriptionist, who will listen to the dictation and transcribe it
into a particular report format. This typed report is then checked for
accuracy and consistency by the quality analyst in the medical transcription
department who will rectify the document of any errors or any redundant
words or phrases and also check for the formatting. It is the quality
analyst's responsibility to make sure that the medical record document
transcribed is devoid of any errors and is perfectly formatted. Once all
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aspects of the quality checks are performed, the medical report is sent to
the physician's office or hospital.
Shown below is a simple image of transcription process
Fig 2.2: Medical Transcription Process
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2.8 PROCESS OF RECORDING A DICTATION
In this process, the physician creates an audio file or dictation which he

can do by either of the following three ways:
i. Recording the dictation with the help of hand-held Dictaphone.
ii. Recording the dictation with the help of a regular telephone or mobile
phone.
iii. Recording the dictation with the help of a microphone of the computer.
This process of recording the dictation is seldom used.
i. Recording the dictation with the help of Dictaphone: In this process of

recording the dictation, the physician makes use of a recording
instrument called Dictaphone. See image below.
Fig 2.3: Olympus Dictaphone
A Dictaphone is a hand-held device used for recording a person's voice so

that it can be listened or transcribed at any later point. Most commonly
used Dictaphones are from the manufactures such as Olympus, Phillips,
Sanyo, Grundig, and Sony. It is powered by a battery. To make the
recording process user friendly, Dictaphones consist of easily accessible
navigation buttons. Most common buttons that are present would be
power, play/pause, stop, rewind, fast forward, delete, and menu. It also
has a 3.5-mm headset port which can be used to listen to the recordings
saved on the Dictaphone instrument.
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Dictaphone comes with a USB port with the help of which it can be
connected to a PC or a laptop in order to download the recorded dictation
files onto a PC or a laptop so that the dictation files can be uploaded onto a
central computer/server for transcription purpose.
The audio file recorded with the help of a Dictaphone is digital in nature,
that is, it can be in the following formats mp3, dss, wav, vox, etc.
Advantages:
• Since Dictaphones are hand-held devices, the physicians have the option
of recording their dictation at any time and at any place while they are
examining the patient, while traveling, sitting in the cafeteria, at their
home, etc. In this way, physicians can turn their unproductive
time to finish off an important aspect of their revenue cycle
management service.
• If due to some reason the physician needs to delete a specific dictation,

he may do so before uploading it onto the server as it is present on the
Dictaphone.
Disadvantages:
• This process involves one extra step of downloading the audio files onto
the PC or laptop and then uploading it the central server or dictation
system from where it is accessible to the medical transcriptionist for
transcription purpose.
• As the Dictaphone is a hand-held device, there is always a fear of losing

it and in the process losing the sensitive PHI (patient health information)
contents recorded in it.
• Sometimes due to low recorder batteries, the dictation gets distorted or

garbled.
• The dictations recorded on the Dictaphones remain in it for days until

they are transferred to a PC or laptop, so there is always a chance of it
getting accidentally erased from the Dictaphone while recording other
dictations.
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ii. Recording the dictation with the help of a regular telephone or mobile
phone.
Fig 2.4: Physician Dictating on Phone
This process of recording the dictation is called as phone-in or dial-in or

call-in, all signifying that the physician has to dial a number from the
regular telephone or the mobile phone before starting to dictate the patient
report. Physicians dial a toll-free number or a local number to connect to
phone-in or call-in dictation system. Once connected to the dictation
system, they have to follow simple voice prompts to complete their
dictation. Each physician is provided with a unique physician ID which a 4-
or 5-digit numeric ID (example 4441, 28295, 1026, etc.) which helps in
proper identification and association of the dictation file to the respective
physician who dictates it.
With the help of the telephone or mobile phone keypad, physicians are able
to control the dictation session, that is, dictating, rewinding, editing,
deleting, and moving to other dictations without any difficulty and with
ease. Once the dictation for the day is completed, the physician has to
simply disconnect the phone. The dictation is saved onto a central server
either in the hospital or a third-party location. For proper identification, the
dictation saved on the server will have either the physician name or the
unique numeric physician ID.
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Advantages:
• As the physician has dialed-in the dictation system, the audio file is
accessible to the medical transcriptionist or the MTSOs the minute
physician disconnects the phone and there is no extra step involved of
uploading the audio file on the server as is required with the Dictaphone.
• There is no fear of losing the sensitive PHI (patient health information)

contents or inadvertently erasing the dictations because it is directly
recorded and stored on the secure dictation server.
Disadvantages:
• In some cases after the physician has finished off with dictating the
medical report, he needs to either add something to that dictation or
cancel it all together due to having been dictated some wrong
information, in such cases he has to either notify the MTSOs or the
medical transcriptionist as he will not be able to make any changes to the
dictation once it is recorded on the server.
• If there is any technical issue in the telephone line, the dictation may be
distorted or garbled.
iii. Recording the dictation with the help of a microphone of the computer.
In this process of recording the dictation, the physician makes use of
the microphone attached to the computer to record the dictation. This
method of recording is rarely used as it requires the physician to sit at
his computer desk to finish his dictations.
Activity 1
• Record a two-minute audio file using computer microphone and type it

with the help of online foot pedal software (www.nch.com.au) and MS
word.
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Requirements of a medical transcriptionist
Now that the audio file or the dictation has been recorded by the physician
and uploaded onto the dictation system or server, it is ready to be accessed
by the medical transcriptionist for transcription purpose. We will first see
the software and hardware requirements of a computer used by the
medical transcriptionist.
2.9 HARDWARE REQUIREMENTS
From a hardware point of view to successfully perform the job of

transcribing the audio file recorded by the physician, a medical
transcriptionist should have the following:
• A computer with word processing capability like MS Word, Open Office, or

any other text processing software.
• A foot pedal, to play/pause, rewind, and fast forward the dictation using
the foot.
• A headphone to listen to the dictation.
Foot Pedal
As the name signifies, a foot pedal is a device which is used to control the
dictation the medical transcriptionist is transcribing using the foot. There
are various makes and models of foot pedals depending on how many
buttons it has and in which of the computer slots it fits in.
On the basis of the slots in which the foot pedal fits in the computer, it is of
two types:
i. USB foot pedal. These are the most common types of foot pedals
available in the transcription industry these days. It fits into any of the
USB ports in the computer. See image below
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Fig 2.5: USB Foot Pedal
ii. 15-pin foot pedal. These types of foot pedals fits into the 15-pin game
port provided at the back panel of the computers. Some computers or
laptops do not have this game port leaving with the option of only using
the USB foot pedal.
There are also various models available on the basis of the number of
buttons it has, 2, 3, or 4. Foot pedals which are most commonly used have
only three pedals: a large PLAY/ PAUSE button in the center, with a small
REWIND button on the left side, and a small FORWARD button on the right
side.
Fig 2.6: 15-Pin Foot Pedal
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2.10 SOFTWARE REQUIREMENTS
As far as the software requirements of the computer used by the medical

transcriptionist are concerned, it should have the following softwares.
• A word processing software, like MS Word, Open Office for transcribing

the medical report.
• An audio player software which can be configured with the foot pedal so
that the common functions of play/stop, rewind, and forward can be
performed using the foot and the hands are free to type the report
thereby increasing the productivity of the medical transcriptionist. (PS:
One can purchase the softwares or use the free softwares available
online at www.nch.com for transcription purpose).
• Electronic Dictionaries.
• A medical dictionary to be used as a reference by the medical

transcriptionist as and when a medical query arises. Example Stedman's
Medical Dictionary, Oxford Medical Dictionary, etc.
• An English dictionary as a reference for searching meaning of any English

word, synonym, antonym, idioms, or phrases. Example WordWeb,
Merriam Webster Dictionary, etc.
• A drug reference dictionary to look up for any drugs, their dosages,

interactions with other drugs, route of delivery of the drugs, various
forms in which they are available, viz, tablet, capsule, elixir, nebulizer,
etc. Example Quick Look Electronic Drug Reference.
All the above mentioned dictionaries can either be purchased and

installed on the computer for offline usage or you can search the
words/drugs online without purchasing the softwares from various
websites like www.wordweb.com, www.stedmans.com,
www.drugs.com, www.healthkartplus.com, etc. The process of
looking for words/drugs online requires live Internet connection
and also takes more time as it depends on the Internet speed and
response time from the respective website.
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The medical transcriptionist with the help of the above-mentioned

softwares and hardware will be able to listen to the dictation recorded by
the physician and type it out into a word document called medical report
and send it back to the physician.
2.11 ADVANTAGES AND DISADVANTAGES OF MEDICAL

TRANSCRIPTION
As is the case with most of the process, medical transcription process too
has certain advantages and disadvantages. Discussed below are some of
the advantages and disadvantages of medical transcription.
Advantages:
• The foremost advantage of a medical transcription department is to bring

down the costs.
• As dictating is 3 to 4 times faster than typing, medical transcription

allows the physician to get ample free time which can be utilized to serve
the patient promptly and manage the healthcare setting efficiently.
• It streamlines the data in a systematic manner and facilitates easy

processing of information and accessibility of reports.
• It reduces the burden of filing paper medical charts and storing it in huge
cabinets.
• The database is not only user friendly but also helps to do away with
unwanted ambiguity.
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Disadvantages:
• Since many medical transcriptionists are not healthcare professionals,

there is a chance of an error creeping in the medical report of the patient
which may lead to medical negligence.
• When the medical transcription work is outsourced to an offsite location

or at an MTSO, in such cases the protected health information of patients
are at the behest of the administrative staff or the medical
transcriptionist and there is always a risk of it being stolen, lost, or
misused. See below,
On August 8, 2013, Cogent Healthcare based in Brentwood, Tennessee,

USA made public that it had learned that M2ComSys, a medical
transcription company, was not storing PHI (protected health information)
securely. The online system that stored the notes could be accessed easily
because the firewall protection was down for a month. The protected
health information included information such as physician's name, patients'
date of birth, diagnosis descriptions, summaries of treatments provided,
medical histories, and medical record numbers. The public access to these
notes was from May 5, 2013 through June 24, 2013, according to a public
notice from Cogent. This breach exposed 32,000 patients' data across 48
states in the county. In some cases, the physician notes were indexed by
Google. (www.phiprivacy.net)
An Economic Times report published in October 2009 in India reported a

successful sting operation by a UK agency in which some health related
data was bought from a medical transcription company. (EconomicTimes,
October 2009)
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2.12 MEDICAL TRANSCRIPTION WORKFLOW
With the advancement in the Internet technology, medical transcription

which used to function primarily within the closed walls of the clinic and
hospital set-up making use of in- house (working in the clinic or hospital
full time) medical transcriptionist have now been able to be outsourced or
sent to offsite locations either locally or globally for transcription.
With the audio file or the dictation being recorded by the physician and the
medical transcriptionist or MTSO ready to access the audio file for
transcription, there has to be some way, a single point of contact, so that
the medical transcriptionist or MTSO can download the audio file and
upload the typed medical report whereas and the physician can upload the
audio file and download the typed medical report with ease.
Fig 2.7: FTP Server and Client
One such way is to transfer the files through Email which was followed
previously. There are still some physicians or clinics especially small clinics
that transfer the audio files through Emails which is a cumbersome process
and also poses a security risk of exposing sensitive patient health
information to cyber thieves or general public. There are certain limitations
to the use of Email accounts such as Yahoo, Gmail, etc., which are as
follows:
• Slow download and upload.

• Downloads interrupted in between cannot be resumed.
• File size limitation for upload and download.
• Most important is the security risk, that is, the PHI data being stolen or
misused.
To overcome the above-mentioned issues, FTP hosting is used.
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2.13 FILE TRANSFER PROTOCOL (FTP)
What is FTP?
FTP is an acronym for File Transfer Protocol. As the name suggests, FTP is
a standard network protocol used to easily transfer files between
computers via the Internet.
What is FTP hosting?

An FTP server software is a software application installed on the server that
wishes to host the FTP. After installation of this software, the server is able
to support file transfer using the File Transfer Protocol. In simple words,
the central server, which the physician and medical transcriptionist or
MTSOs utilize to store the audio files and the medical reports, when
installed with an FTP server software is termed as an FTP server.
This FTP server can be used to transfer the files efficiently and securely to
and fro from the physician's computer and medical transcriptionist's
computer via the Internet while making use of the File Transfer Protocol
(FTP). Different FTP accounts are created for different users (different
physicians and different medical transcriptionists) so that a user only has
access to a specific folder of his interest rendering other users' directories
inaccessible. This FTP server is said to be hosting FTP account.
FTP client software

An FTP client is a software application designed for transferring files back-
and-forth between two computers via the Internet. This FTP client needs to
be installed onto the physician's computer/laptop and also on the medical
transcriptionist's computer or MTSOs computer.
FTP clients' interface is usually divided in two panes. The pane on the left
shows the files and folders on the local computer (Desktop, Documents,
etc.) and the pane on the right displays the files on the remote server or
FTP server.
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Fig 2.8: Screenshot of Core FTP Client
There are many FTP clients which are free and can be downloaded from the
Internet and there are some FTP clients which are paid as they have the
ability to perform some special function such as automated file transfer,
synchronization, etc.
Some of the free FTP clients: WinSCP, Core FTP, FileZilla, and WS_FTP
for Windows.
Some of the paid FTP clients: CuteFTP, SmartFTP, WS_FTP for Windows
and Fetch for the Mac.
To transfer the files with the use of File Transfer Protocol (FTP), you need
to establish an FTP connection between the two computers, one of which is
referred as the FTP server (central server) and the other FTP client
(physician's or medical transcriptionist's computer), that is,
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a. FTP connection between the physician's computer/laptop (FTP Client)

and server/ FTP server.
b. FTP connection between the medical transcriptionist's or MTSOs
computer/laptop (FTP Client) and server/FTP server.
There are two ways to make the FTP connection:
1. Make an FTP connection between the computers using a standard web

browser (Internet Explorer, Mozilla Firefox, Google Chrome, etc.) which
is rarely done. When using a web browser for an FTP connection, FTP
uploads are sometimes very slow and downloads are not secure (not
recommended for uploading or downloading of large files).
2. Make an FTP connection between the computers using FTP client

software. This method is more reliable and efficient and is a common
practice all over the world for transferring large files over the Internet.
To transfer a file with FTP, the physician or medical transcriptionist needs to

connect to the FTP server using the FTP client via the Internet to the
specific FTP accounts.
There are two types of FTP accounts or log-ins:
1. Anonymous FTP accounts/Public FTP accounts. In this type of FTP

accounts, users typically logs into the service with an "anonymous"
account when prompted for user name. Some users might be asked to
provide their Email address instead of a password, but no verification is
actually performed on the Email address. This type of anonymous FTP
access is NEVER used in the healthcare industry because of security
risks and HIPAA violation. It is used by companies whose purpose is to
provide software updates or distribute files to a large number of users.
2. Secure access FTP accounts: For secure transmission of the data/files,

secure access FTP accounts are setup. It protects the username and
password and encrypts the content that is transferred over the Internet.
These types of FTPs are often secured with SSL/TLS (FTPS) or SSH File
Transfer Protocol (SFTP).
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Securing FTP transfers is accomplished by one of the several methods

listed below which has to be specified in the protocol field while inputting
the log-in information into the FTP client.
❖ FTPS
Explicit FTPS is an extension to the FTP standard that allows clients to
request that the FTP session be encrypted. This is done by sending a
command "AUTH TLS." Implicit FTPS is an older style service that required
the use of a SSL or TLS connection.
❖ SFTP
The SSH File Transfer Protocol or secure FTP (SFTP) also transfers files but
is built on a different software technology. SFTP uses the Secure Shell
Protocol (SSH) to transfer files. As opposed to FTP, SFTP encrypts the
passwords as well as data thereby preventing sensitive information from
being transmitted openly over the Internet.
❖ FTP over SSH

FTP over SSH is the practice of tunneling a normal FTP session over a
Secure Shell connection.
No matter how the physician or medical transcriptionist is connecting to the

server, they will need to use the certain specific log-in information to
connect to the FTP server.
• Host Name/Address: ftp.exavault.com, ftp.simpleftp.net.

• Port: 21, 22, 222, 2500.
• Protocol: FTP/SFTP/FTP with SSL/TLS (FTPS)
• Host/Logon Type: Automatic Detect/Private/Anonymous/Normal
• User ID: FTP username
• Password: FTP password
IMPORTANT NOTE:
i. One thing of note is that the FTP connection can only be used with a live
connection to the Internet.
ii. Plain FTP is not secure. It has to be secured by application of

various encryption methods such as SFTP or SSL/TLS (FTPS).
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2.14 ADVANTAGES OF USING AN FTP
1. Simple dragging and dropping of files for uploading and downloading

from FTP server to computer and vice versa of larger or bulkier files.
2. Multiple file transfers at a time.
3. Auto-resuming of the interrupted transfer. FTP can resume a download/

upload that did not finish successfully from the point it was interrupted.
This is a very nice feature for file transfer when using a slower Internet
connection as the interruption is quite frequent.
4. File queuing. With the help of this function, the FTP client queues files,
which will be transferred after the existing file transfer which is taking
place is completed.
5. Automated transfer. This feature allows for standing instructions set on

the machine so that at a particular time the computer will automatically
connect to the specified FTP server and start downloading or uploading
the specified files or folders.
6. Synchronization. As the name suggests, it is a process in which local

files in the specified folder are updated and matched to the content of
FTP server account without any manual intervention in a timely manner.
Activity 2
Activity 2Activity using a free ftp client CoreFTP Lite or FileZilla try to log
into a FTP server using the following information and try to upload and
download some files.Host Name/Address: ftp.simpleftp.netPort:
21Username: demoPassword: demo
73
2.15 MEDICAL TRANSCRIPTION OFFLINE AND ONLINE
Medical transcription workflow starts right from the physician recording the
dictation (either through Dictaphone or regular telephone), to uploading
the digital audio files to secure FTP server, to medical transcriptionist
downloading the files and transcribing the medical reports, to quality
analyst checking the typed reports for errors by proofreading, to delivery of
typed medical report back to the physician or the hospital setup.
Depending on the requirement of an Internet connection to distribute the

files, medical transcription workflow is categorized into two types,
i. Offline Medical transcription

ii. Online Medical transcription
i. Offline medical transcription:

In offline medical transcription, the physicians dictate the audio files
through Dictaphone or telephone and upload them on the FTP server. The
MTSOs or medical transcriptionist connects to the FTP server using the FTP
client and downloads all the files for the day. After downloading all the
files, the administrative staff calculates the amount of workload received
for the day and allocates them to the medical transcriptionists (MTs) and
quality analysts (QAs) by posting the audio files into their respective
folders depending on the work distribution standards set by the medical
transcription department. To calculate the volume of the work and
allocation to the MTs and QAs, the administrative personnel may make use
of an audio file length calculation utility, a spreadsheet, and the preset
standards set by the medical transcription department or a workflow
management software. The medical transcriptionists then access the
folders via the local area network (LAN) and transcribe the reports. These
reports are then allocated to the quality analysts who then check for
formatting, grammatical errors, medical errors overlooked by the medical
transcriptionist and do visual proofing to ensure that the quality of the files
meets the service-level agreement (SLA) requirements defined in the
contract.
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Fig 2.9: Workflow Process of Offline Medical Transcription
75
The final medical report is then sent to the physician or the hospital in any
one of the following ways. The delivery methods of medical reports are
chronologically arranged from most common to the least common ones.
a. Uploaded on the FTP server.

b. Uploaded in the EMR/EHR.
c. Sent via encrypted Email.
d. Directly routed to the hospital printer.
ii. Online medical transcription
In online medical transcription, the physicians dictate the audio files

through Dictaphone or telephone and upload them to the electronic
medical records/electronic health records (EMR/EHR). WE WILL DISCUSS
IN DETAIL ABOUT THE EMR/EHR IN FOLLOWING CHAPTERS.
EMR/EHR has the capability to assign workload to respective medical

transcriptionists and quality analysts using preset standards or conditions
thereby eliminating the need of an administrative staff to allocate the
workload. The medical transcriptionist connects to the EMR/EHR using the
provided secure log-in username/ID and password.
On successful log-in, a list of the audio files or the workload allotted for the
day appears on the screen. The medical transcriptionist then types the
medical reports in the word processing software which is in-built in the
EMR/EHR and the finished reports are automatically routed to the quality
analyst who then checks for formatting, grammatical errors, medical errors
overlooked by the medical transcriptionist and does visual proofing to
ensure that the quality of the files meets the service-level agreement (SLA)
requirements defined in the contract. The final medical report is then ready
in the EMR/EHR for access to the physician or the hospital or sent to the
physician in any one of the following below- mentioned ways.
The delivery methods of medical reports are chronologically arranged from

most common to the least common ones.
a. Saved in the EMR/EHR which the physician can access using his
secure log-in user ID and password information.
b. Directly routed to the hospital printer.
c. Faxed to the respective physician or hospital.
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Fig 2.10: Workflow Process of Online Medical Transcription
77
2.16 MEDICAL TRANSCRIPTION WORKFLOW MANAGEMENT

SOFTWARE
Imagine a physician uploading a dictation or audio file on the server for

transcription. A medical transcriptionist connects to the server and
downloads the audio file on his computer, transcribes it, and uploads the
document file to the physician. This process is followed for each and every
patient visit with each and every physician. Consider a hospital set-up of
25 to 50 physicians and each physician servicing at least 20 to 25 patients,
so in all there would be approximately 500 to 1250 audio files to be
transcribed. To handle this workload several medical transcriptionists and
quality analysts are required and to distribute the files and coordinate
between them to make sure that all the files are delivered in a timely
fashion and none of it are missed will be a Herculean task. There is bound
to be some error when this task is performed on a day-to-day basis. To
avoid this complexity and the possibility of an error, MTSO make use of
workflow management software.
There are certain softwares which streamline the workflow of the medical
transcription organization in an efficient and error-free manner. The use of
this software eliminates the need of any administrative personnel, audio
file length calculation utility, or any spreadsheet. It also eliminates the
process of posting the audio files into the respective folders of the medical
transcriptionists and quality analysts. All these steps and softwares are
integrated into the medical transcription workflow management software
thereby giving it an edge over the traditional way of handling and
distribution of the files. (The term file here represents both audio file
as well as the typed medical report file)
Workflow management software efficiently handles the workflow of

dictation files and the medical reports between the physician's office and
the medical transcriptionist and allows for monitoring the status of the
work in real time. Some of these workflow management softwares have
the capability to route/distribute work through the Internet. This is an
important feature when it comes to allocating the work to home-based
medical transcriptionist or medical transcriptionist and quality analyst
located in different locations to seamlessly automate the transcription
workflow. The system can be accessed simultaneously by unlimited number
of users through HIPAA-compliant encryption technology.
78
These workflow management softwares are basically used for

offline medical transcription as an EMR/EHR does the same
function of workflow management in online medical transcription
and also provides some extra features over the offline workflow
management software.
The workflow management softwares are available in two product types -

Desktop softwares (in-house solution) and web-based softwares (hosted
solution). The desktop software is a software program that is installed on
the computer of the hospital or the MTSO whereas the web-based software
is the same exact program but installed on the software provider's server
and can be accessed from anywhere via Internet.
Some of the workflow management softwares are named below:
Nuance Clinic 360, WebChartMD, ScribeSuite, Transcription Manager 2.0,

and MBScript.
2.17 BENEFITS OF USING MEDICAL TRANSCRIPTION

WORKFLOW MANAGEMENT SOFTWARE
i. Automated and error-free distribution of files so that no staff is

overburdened or under utilized.
ii. Real time monitoring of the status of the work and track files that are
stat/rush dictation.
iii. Automatically assign work to medical transcriptionist and quality analyst

staff based on their skill level and preset standards.
iv. Extraction and auto-population of certain information fields (file name,

date of visit, MT and QA IDs, etc.) in the medical report template
thereby making the report information error-free.
v. Easy search engine within the software to search on reference files.
vi. Summary in the dashboard section that shows important client

specification of the account the medical transcriptionist or quality
analyst is working on.
79
vii.System administrator has the ability to re-route and change the status
of the dictation at any later period of time if required.
viii.Different types of reports that can be generated using the softwares

and exported to excel or pdf are as follows:
Turn-Around-Time (TAT) Performance report of each employee.

Line counts - For each physician or hospital account.
Client invoice.
Every audio file or dictation received for transcription has a particular turn-
around-time (TAT) in which it has to be transcribed and sent back to the
physician's office. This turn- around-time varies from 12 hours, 24 hours,
48 hours, etc. Sometimes in case of emergency, a dictation is needed as
soon as possible preferably within 2 to 4 hours, these dictations are termed
as stat dictation or rush dictation.
2.18 PRICING
Pricing in medical transcription is done in various formats to suit all types

of customers’ needs. To start with, the medical transcription industry had
mostly the FTE (Full-time equivalents) and somewhere down the line to
cater to the outsourcing community, per line rate was introduced. As the
medical transcription industry grew over in the past one to two decades
and outsourcing became an eminent tool for the industry many other
pricing standards were devised to cater to different types of customers.
Competition between the outsourcing vendors also led to price war and
different pricing standards.
Below is a list of the most commonly followed pricing standards in the

medical transcription industry:
A. Full-time equivalents (FTE): An FTE is the equivalent of one medical

transcriptionist who has been hired as a full-time employee and works
full time, that is, 8 hours per day and 5 days per week. FTEs do not
represent the number of employees. It just represents a unit that
indicates the total number of labor hours put in by an employee.
An "FTE of 1" or "1 FTE" is equivalent to one employee working full time.
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Explanation: 8 hours of work per day X 5 days per week (Saturday and
Sunday off) X 52 weeks per year = 2080 man hours per year. If one
employee works full time, then he does 2080 hours of work per year.
If the total number of man hours for one year is available, then divide it
with 2080 to get the FTEs.
Total number of man hours for medical transcription department for year
2013-2014 was 93600.
FTE calculation: 93600 ÷ 2080 = 45 FTEs.
If the total number of man hours for one month is available, then divide it
with 173.33 to get the FTEs.
Total number of man hours for medical transcription department for the
month of November 2013 was 2775.
FTE calculation: 2775 ÷ 173.33 = 16.009 FTEs.
If the total number of man hours for one day is available, then divide it
with 8 to get the FTEs.
Total number of man hours for medical transcription department for May 5,
2014 was 160. FTE calculation: 160 ÷ 8 = 20 FTEs.
In this type of pricing model, a fixed number of FTEs is agreed upon prior
to signing the business contract, and at the end of the month or the billing
cycle, the vendor will be paid according to the agreed number of FTEs
irrespective of the volume of the work sent to the vendor. It is the outlook
of the clinic or hospital to make sure that enough volume of work for the
agreed number FTEs are sent to the vendor. Since the volume of the
patients fluctuates depending on the period of the year or any other
unforeseen circumstances, this type of pricing model is not adopted by all
the clinics or hospitals and they opt for other pricing models listed below.
81
B. Per page pricing: This type of pricing offers to quote rate for one
page. This rate varies between $3 and $5 per page, though can differ in
certain special circumstances. However, there is chance for this pricing
standard to be easily manipulated by fidgeting with the formatting of
the page, example, the margin setup, the line spacing (single line
spacing or double line spacing), the font type and size chosen. Also if
any report is only half a page in length, it will have to be counted as one
page, leading to unnecessary cost to the hospital, hence this pricing
method is seldom used.
C. Per report pricing: This pricing option is a different version of per

page pricing. In per report pricing, as the name suggests, the price is
quoted for transcribing one report. This pricing methodology is again
quite ambiguous as the length of the medical report varies from
physician to physician and can be anywhere from 1 page to 6 pages or
even more. Due to its limitation of having specific number of pages per
report, this pricing strategy is also followed by few physicians or
hospitals.
D. Per line pricing: This is one of the most commonly used pricing
standard in medical transcription and probably one of the best pricing
methods available till date. This pricing method is based on setting up a
rate for one line transcribed by the medical transcriptionist. Healthcare
companies have myriad definition of a line, thus it is crucial to
understand the line definition before entering into a business contract
with per line pricing. There are numerous ways to count a line and that
in turn leads to different types of pricing options in per line pricing
system.
Some companies tend to use 55-character per line, 60-character per line,
65-character per line, or 70-character per line, but the general practice is
to use a 65-character per line method. The usage of different characters to
define a line in turn leads to difference in the billing amount. Lets us
consider the following text example:
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Dear Dr. Patel:
Thank you for referring the below-mentioned patient.
The patient states on May 15, 2014 he was driving a car. He was wearing a
seatbelt. He states the load shifted and the car swerved over on the
passenger side. The patient hit the frontal region of his head against the
steering wheel and an object hit the back of the head. He lost
consciousness. He recalls being taking out of the car. He was taken to the
Prince Medical Center. He had a laceration sutured on the head. He was
having headaches, shoulder pain, and leg pain. He was discharged from
the emergency room. He then went for follow-up five days later. Orthopedic
exam was recommended. He saw his primary care physician, Dr. Mehta. He
was given analgesics. He then saw Dr. Pascal for the shoulder pain. He has
continued evaluation with him. He has been undergoing physical therapy
for his shoulder. He continues to have headaches. He describes it as a
sharp pain in the frontal region of the head. It occurs on a daily basis and
tends to be intermittent throughout the day. It is not improving.
The above text contains total 1089 characters with spaces.
Number of lines = Total number of characters/Characters per line
Company Characters Number of Rate Per Invoice

Per Line Lines Line Amount
A 55 19.8 10 198
B 60 18.15 10 181.5
C 65 16.75 10 167.5
D 70 15.55 10 155.5
A quick glance at the above table explains the amount of discrepancy that
can take place due to difference in setting up the characters per line.
In practice today, healthcare industry follows a 65-character per line billing

method, but this practice also is quite tricky and manipulative as there are
different ways to calculate a 65-character line. For this, the most important
aspect is to understand how a character is defined.
83
Lets us focus on the four different ways to calculate a 65-character line. We

will take a small text example for illustration purpose.
Laboratory Data:
CBC normal.
Electrolytes normal.
Urinalysis yellow and hazy.
a. A 65-character Microsoft Word line count. This type of method counts all
lines, irrespective of the line length or blank lines. The line count is
obtained on the Microsoft Word by pressing the key (Ctrl+Shift+G), so
according to it the above given example has 5 billable lines.
b. A 65-character line count with keystrokes: In this line counting

method, all keystrokes and characters are counted and the total is
divided by 65. If you look at the word "Health" it has 6 characters but 7
keystrokes because it takes 2 keystrokes to make a capital letter.
Similarly, Tab and the Enter each count as 1 keystroke, so according to
this formula, there are 86 characters in the above illustration yielding
1.32 lines.
c. A 65-character line count with characters and spaces: This is the

most widely used line counting method all across the globe in practice
today in which characters and spaces are counted and the total is
divided by 65. In the above example, there are 74 characters yielding
1.13 lines.
d. A 65-character line count with characters without spaces: In this

type of counting method only the visible black characters are counted
and the total is divided by 65. Using this formula for the above example,
there are 68 characters yielding 1.04 lines.
84
65- Character 65- Character 65- Character 65- Character

Microsoft word Line Count Line Count Line Count
line count with Key with Character with Character
Stroke and space without space
Number of 5 1.35 1.13 1.04

Lines
Rate Per Line 10 10 10 10
Invoice 50 13.5 11.3 10.4

Amount
2.19 TYPES OF ERRORS
"TO ERR IS HUMANE, to forgive, divine." Alexander Pope
Philosophers may think that it is divine to forgive a mistake but that is not
the case in the service industry where quality is of utmost importance and
the image and business of the vendor is at stake and it is certainly not the
case in the healthcare industry because a gross medical error can even be
fatal to the patient.
Every medical transcription department functions with the main aim of

adhering strictly to the goal of achieving close to 100% accuracy. To
achieve that goal constant monitoring of performance of transcriptionists
are performed as well as regular in-house trainings are conducted to
update about the new processes and common errors spotted by the quality
assurance department. Even though a systematic approach is followed by
the medical transcription department to avoid instances of errors, they still
creep in the medical report and may sometimes be fatal to the patient.
In this section, we will focus on different kinds of errors that typically occur
in a medical report. These errors can be categorized into the following
types:
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1. Typographical error or typo error. This type of error happens when a

medical transcriptionist makes mistake in the typing process. If a word
or alphabet is inadvertently missed out or added extra, it may give an
all together different meaning to the context of the sentence. In some
instances, the spellchecker cannot find the misspelt word as it is a
proper word but different from the one intended.
Typed: Diagnosis of prostrate cancer was made.

Correct: Diagnosis of prostate cancer was made.
Prostrate lying flat on the ground. Prostate a male gland.
Typed: The wound was tapped to avoid further drainage. Correct: The
wound was taped to avoid further drainage.
Tapped - strike repeatedly. Tape - to bind with cloth.
Typed: The patient's husband works as a manger.

Correct: The patient's husband works as a manager.
Manger a container for cattle or horse feed. Manager someone who
manages.
Typed: The ER physician will asses the patient for any complaint.
Correct: The ER physician will assess the patient for any complaint.
Asses - plural of ass. Assess to determine the nature, value, quality, or
extent.
2. English word error. An inefficiency to identify the correct English word

to be used in the context leads to an English usage error. When a
medical transcriptionist does not possess a sound knowledge of English
vocabulary, there is a very good chance that this type of error will be
prevalent in the medical report.
Typed: Prenatal vitamins will compliment the nutrition and prevent birth
defects in baby. Correct: Prenatal vitamins will complement the nutrition
and prevent birth defects in baby.
Compliment - expressing praise and admiration. Complement - added

to complete or make perfect.
Typed: The patient will see us back if he starts to loose weight.

Correct: The patient will see us back if he starts to lose weight.
86
Loose - Not tight. Lose - fail to maintain.
Typed: Two large distal sigmoid polyps with significant stock size were
found.
Correct: Two large distal sigmoid polyps with significant stalk size were
found.
Stock merchandise of a shop. Stalk structure that supports a plant or
fungus.
Typed: Dr. Rounseville, thank you for interesting me with the care of this
nice lady. Correct: Dr. Rounseville, thank you for entrusting me with the
care of this nice lady.
Interesting - something of interest. Entrusting confer trust.
3. Medical word error. The error in transcribing correct medical word

constitutes medical error. These types of error highlight the inadequate
medical terminology knowledge of the medical transcriptionist. To avoid
these kinds of errors the transcriptionist will have to imbibe as much as
human anatomy and physiology information as possible.
Typed: Past medical history includes labial hypertension.

Correct: Past medical history includes labile hypertension.
Labial - relating to lips. Labile imbalanced
Typed: Ms. Dave complains of pain in the intercardiac region.

Correct: Ms. Dave complains of pain in the intracardiac region.
Intracardiac region is proper usage, NEVER intercardiac.
Typed: He has got severe lymph threatening disease.

Correct: He has got severe limb threatening disease.
Lymph - lymphatic vessel fluid. Limb - arm or leg.
Typed: Biopsies were negative for villous blunting, dysphagia, or

malignancy.
Correct: Biopsies were negative for villous blunting, dysplasia, or
malignancy.
Dysphagia - difficulty swallowing. Dysplasia abnormal development of
cells.
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4. Drug error/medication error. Usage of wrong drug (usually similar

sounding drug) in the place of one intended for the particular disease is
drug error. There are some dangerously close sounding drug names
which lead to medication drug name mix- ups. Based on a conservative
figure, 10 to 15 per cent of healthcare errors occur due to medication
error. These errors can sometimes be fatal to the patient.
Typed: The patient was prescribed Viagra for allergic rhinitis.

Correct: The patient was prescribed Allegra for allergic rhinitis.
Viagra is used to treat erectile dysfunction in men. Allegra treats
symptoms of allergies.
Typed: The patient was instructed to apply Baclofen cream on the

affected area.
Correct: The patient was instructed to apply Bactroban cream on the
affected area.
Baclofen is used to treat muscle spasms. Bactroban is used to treat
certain skin infections.
Typed: To treat the patient's sleep difficulty, he was given Zolet one at
night.
Correct: To treat the patient's sleep difficulty, he was given Zolep one
at night.
Zolet is used treat early breast cancer. Zolep is used to treat
insomnia.
Typed: Blood pressure was brought under control with a dose of

Darvon. Correct: Blood pressure was brought under control with a
dose of Diovan.
Darvon is prescribed for the relief of pain. Diovan is used to treat
high blood pressure.
5. Doctor's dictation error. It may sound absurd but physicians when

overburdened with work of examining the patients throughout the day
tend to sometimes commit a gross mistake while dictating the medical
report. These types of errors constitute doctor's dictation error. A
competent medical transcriptionist should be able to spot these errors
and rectify them.
88
Typed: Levothyroxine 125 mg was prescribed for his hypothyroidism.

Correct: Levothyroxine 125 mcg was prescribed for his hypothyroidism.
Levothyroxine dosage is in mcg (125 mcg).
Typed: Laboratory data showed hemoglobin and hematocrit of 37 and 14

respectively.
Correct: Laboratory data showed hemoglobin and hematocrit of 14 and
37 respectively.
Hemoglobin normal range is 12 to 17 g/dl. Hematocrit normal range is
36% to 50%.
Typed: Urinalysis showed a specific gravity of 10.16.

Correct: Urinalysis showed a specific gravity of 1.016.
Specific gravity of urine range 1.015 to 1.024.
Typed: Blood pressure is usually in the range of 90s.

Correct: Blood sugar is usually in the range of 90s.
Blood sugar normal range is 70 to 100 mg/dl. Blood pressure
normal range is 120/80 mmHg.
6. Punctuation error. Punctuation plays a very important role in formal

medical report writing. Punctuation error occurs if the rules of
punctuation are not meticulously followed resulting in the report not
conveying the correct meaning intended by the physician.
Typed: Nebulizer was given and she was instructed on it's use.
Correct: Nebulizer was given and she was instructed on its use.
"It's" - contraction "it is" or "it has". Its is a possessive pronoun.
Typed: He released the apartment for one year.

Correct: He re-leased the apartment for one year.
Release - set free. Re-lease - lease again.
Typed: The patient is married with two children.

Correct: The patient is married, with two children.
Without the comma, it implies that the patient is married to
children.
Typed: The laceration was result of dogs' bite.

Correct: The laceration was result of dog's bite.
89
Dogs' - possessive form of more than one dog. ∫ - possessive form of

one dog.
7. Malapropism error or similar sounding words error. Unintentional

misuse of a word by confusion with one that sounds similar is a
malapropism error. It needs an eye for detail to spot these kinds of
errors and fix them.
Typed: Studies show that excellent traits show up more in males than
females.
Correct: Studies show that X-linked traits show up more in males than
females.
Excellent - very good. X-linked trait - Related to genes on X
chromosomes.
Typed: The patient's right eye site is 20/20.

Correct: The patient's right eye sight is 20/20.
Site - place. Sight - vision.
Typed: He was caring a 10-pound bag of dog food.

Correct: He was carrying a 10-pound bag of dog food.
Caring - to care for. Carrying - to lift.
Typed: Rachel has declined cystic fibrosis carrier screening through her
obese office.
Correct: Rachel has declined cystic fibrosis carrier screening through
her OB's office.
Obese - excessively fat. OB's - short for obstetrician.
The medical transcriptionist and quality analyst need to constantly keep

themselves updated with old and new English, medical, drugs, and devices
terms as well as grammar rules to avoid any of the above-mentioned
errors. There are certain errors which may have a huge negative impact on
the patient's quality of care and in other cases may also prove to be fatal.
Persistent errors may lead to deterioration in quality of the service
provided by the MTSO and may in turn lead to losing the clients. Medical
transcriptionist department provides regular training sessions and other
informational resources (spreadsheets, documents, online resources, etc.)
for their employees in an endeavor to ensure best quality service to
physicians and hospitals.
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2.20 TYPES OF MEDICAL REPORTS
Medical reports include numerous types of note formats dictated over time
by the physicians at different setting.
Each type of report serves a specific purpose and is used for a specific
event. There are a variety of medical reports a medical transcriptionist
needs to be familiar with while working in a clinic or hospital setting.
Some major types of reports are as follows: Letters, History and Physical,
SOAP note, Emergency Room (ER) note, Operative Report, Discharge
Summary, Radiology Report, etc.
Examples of some commonly used medical report types are shown below
followed by a small description of their usage.
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LETTER
May 3, 2013
Prakash Dave, MD
1500 Parish Avenue, Suite 201
St. Louis, MO 63110
RE: Geeta Espino

Date of Birth: 01/30/1935
Date of Exam: 05/03/2013
Dear Dr. Dave:
This letter is to inform you of a recent visit that I had with a mutual
patient, Ms. Geeta Espino, on May 3, 2013. She presents with some vague
complaints of acute visual loss in the evening. She states that this is new
and has not happened before. Her description is somewhat suspicious for
amaurosis fugax. We are therefore recommending a carotid Doppler and
2D echocardiogram to further assess her peripheral vascular disease. She
is undergoing treatment for exudative macular degenerative disease with
intravitreal Avastin in the right eye. Currently, she receives no treatment in
the left eye due to advanced disease. I certainly appreciate your input and
assessment of this situation.
If you have any questions or concerns, please do not hesitate to contact

me.
My best regards,
Sincerely,
__________
Steven Fernandez, MD
USAGE: Physicians usually dictate letters to communicate patient

information to patient, other physicians, or insurance companies.
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SOAP NOTE
DATE: 01/05/2013
PATIENT: ALBERT PINTO DOB: 02/23/1945
SUBJECTIVE: The patient is here for results of his ultrasound. He was

seen by Dr. Patel for a complaint in his right groin. He states that this
area still remains painful.
OBJECTIVE:
GENERAL: This is a 67-year-old male, nontoxic appearing.
VITAL SIGNS: Respiratory rate is 16. Temperature is 98.6 degrees. Pulse

is 88. Blood pressure is 112/72. Weight is 199 pounds. Height is 5 feet 8
inches. BMI is 30. Room air sat is 91%. Blood sugar is 94%.
HEENT: Deferred.
NECK: There is no enlargement of lymph nodes in the neck,

supraclavicular, or axillary areas.
LUNGS: Clear to auscultation, anteriorly and posteriorly.
HEART: Rate and rhythm was regular.
ABDOMEN: Benign. On examination of the groin, there is a painful small

mass in the right groin consistent with his report and consistent with the
ultrasound reports. However, there is no other enlargement of lymph nodes
in that area.
ASSESSMENT: Enlarged painful lymph node in the groin area.
PLAN: Enlarged painful lymph node in the groin area. I discussed with Dr.
Patel. We will treat him with Keflex 500 mg b.i.d. for the next 10 days and
see him back. If he does not improve, I will consider options such as
biopsy.
_______________
Deepak Mehta, MD
Ultimate Care Hospital
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NOTE: SOAP is the acronym of the following headings:

• Subjective
• Objective
• Assessment
• Plan
USAGE: SOAP note is usually dictated by the physician after examining the
patient's progress either in an outpatient or an inpatient setting. It is also
called as progress note, chart note, or follow-up note.
94
OPERATIVE REPORT
PATIENT NAME : Ruby Mascarenas

DATE OF BIRTH : 10/09/1973
MEDICAL RECORD NUMBER : 23159
DATE OF SURGERY : 10/10/2014
SURGEON : Sunil Pai, MD
ASSISTANT SURGEON : None.
ANESTHESIA : General.
ANESTHESIOLOGIST : John Gonzales, MD
ESTIMATED BLOOD LOSS : Minimal.
COMPLICATIONS : None.
SPONGE & NEEDLE COUNTS : Correct.
DRAINS : One Jackson Pratt drain.
PREOPERATIVE DIAGNOSIS : MICROMASTIA.
POSTOPERATIVE DIAGNOSIS : MICROMASTIA.
OPERATIONS PERFORMED : BILATERAL AUGMENTATION
MAMMOPLASTY WITH SILICONE
GEL IMPLANT.
OPERATIVE PROCEDURE IN DETAIL: Under satisfactory general

anesthesia, the patient's chest was widely prepped and draped in the usual
fashion. The bilateral inframammary incisions were made. Dissection was
carried down under the pectoralis major muscle plane. The muscle layer
was elevated. Meticulous hemostasis was achieved. The medial and
inferior aspects of the muscle layer were partially released. The hemostasis
was obtained. The antibiotic irrigation was placed inside the pocket and
then followed by 10 cc of Marcaine solution. The patient had received
intravenous antibiotics preoperatively. The silicone gel implants were then
bathed in antibiotic solution and then inserted to each pocket. They
achieved satisfactory appearance. The incisions were closed in layers with
3-0 and 4-0 Vicryl sutures followed by Steri-Strips. The patient tolerated
the procedure very well. Dressing was applied and she was transferred to
recovery room in stable condition.
_________________
Sunil Pai, MD
95
USAGE: Operative reports are dictated by the surgeon who performs the
surgery and contains detailed information about the operation performed
on the patient.
DISCHARGE SUMMARY
PATIENT : Rita Ponte

DATE OF BIRTH : 01/10/1955
DATE OF ADMISSION : 08/07/2013
DATE OF DISCHARGE : 08/10/2013
DISCHARGE DIAGNOSES:
1. Status asthmaticus.
2. Bronchiolitis, empirically treated.
PROCEDURES: None.
BRIEF HISTORY: The patient is a 58-year-old female with known history

of asthma since infancy, possible environmental allergies, who presented
with progressive wheezing and respiratory distress for the past two days.
However, just previous to admission, the patient was exposed to dust and
other particles after moving into a new house. After conservative treatment
at home, the patient was brought into the emergency room where she did
not improve on albuterol. Initial examination showed tachycardia of 128,
rest tachypnea of about 35-40, inspiratory and expiratory wheezes and
rhonchi on lung examination. The patient was referred for admission for
evaluation of worsening asthma and possible pneumonia.
STUDIES: The admission chest x-ray showed clear lungs. Clean catch
urine culture showed only mixed skin flora.
96
HOSPITAL COURSE:
1. Status asthmaticus: The patient responded to albuterol treatment and

within one day was transferred to the regular medical floor. Before
discharge, she received asthma education and social counselling along
with the family.
2. Empiric respiratory infection treatment: The patient's initial

physical examination showed possible pneumonia. She was started on
oral antibiotics before discharge.
DISCHARGE DISPOSITION: To home.

DISCHARGE INSTRUCTIONS:
ACTIVITY: Ad lib.
DIET: Regular, as appropriate for age.
MEDICATIONS: Albuterol one dose nebulizer treatment q.i.d. and p.r.n.
FOLLOW-UP: Follow up with primary care physician in one week.
______________
Deepak Mehta, MD
USAGE: Discharge summary is dictated by the physician at the end of the

patient's stay in the hospital when he is about to be discharged from the
hospital.
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RADIOLOGY REPORT
Patient : Raymond Baca

DOB : 04/12/1981
Date of Exam : 01/12/2012
PROCEDURE: CT of chest with contrast.
HISTORY: Abnormal chest x-ray, which demonstrated a region of

consolidation versus mass in the right upper lobe.
TECHNIQUE: Post contrast-enhanced spiral images were obtained through

the chest.
FINDINGS: There are several, discrete, patchy air-space opacities in the

right upper lobe, which have the appearance most compatible with
infiltrates. The remainder of the lung parenchyma is clear. There is no
pneumothorax or effusion.
The heart size and pulmonary vessels appear unremarkable. There was no
axillary, hilar or mediastinal lymphadenopathy.
Images of the upper abdomen are unremarkable.
Osseous windows are without acute pathology.
IMPRESSION: Several discrete patchy air-space opacities in the right

upper lobe, compatible with pneumonia.
_______________
Deepak Mehta, MD
USAGE: The radiologist dictates these types of reports for a diagnostic

procedure performed on the patient and it includes the findings and
impression.
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HISTORY AND PHYSICAL
NAME : Neil Sharma

DOB : 01/08/1973
MR# : 120132
DATE : 02/03/2012
VITAL SIGNS: Blood pressure is 121/56. Temperature is 98.2 degrees.

Pulse is 80. Respiratory rate is 22.
CHIEF COMPLAINT: Dyspnea.
HISTORY OF PRESENT ILLNESS: Mr. Sharma is a 38-year-old man who

was presented to acute care emergency room department after he had
become increasingly dyspneic for little over a week. He had been on
antibiotic therapy for treatment of pneumonia, but he had been
experiencing tachy palpitations with associated lower extremity edema. In
the emergency room, he was given intravenous furosemide and developed
hypotension. Review of his EKGs show that he was experiencing atrial
fibrillation and flutter with a current rate of 125 beats per minute. He did
not realize that he had had any cardiac arrhythmias in the past and had
never been diagnosed. He was then admitted and managed for his cardiac
dysfunction and when he stabilized, he was discharged to Prince Medical
Center for continued medical management of his atrial fibrillation and
flutter.
PAST MEDICAL HISTORY: Includes his bipolar type 1 disorder,

pneumonia, hypertension, COPD.
ALLERGIES: The patient is allergic to TETRACYCLINE.
FAMILY HISTORY: Noncontributory.
SOCIAL HISTORY: The patient lives with his wife who is to be his
caregiver after discharge.
MEDICATIONS: Flomax 0.4 mg p.o. q.h.s., Lasix 20 mg p.o. daily,

lisinopril 2.5 mg p.o. daily, warfarin 2.5 mg p.o. daily, aspirin 81 mg p.o.
daily.
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REVIEW OF SYSTEMS: All systems were reviewed with the patient and
they are negative with the exception of respiratory that is positive for
cough and some shortness of breath.
PHYSICAL EXAMINATION:
GENERAL: Mr. Sharma is alert and oriented times three, cooperative with
the exam and no acute distress noted.
HEENT: Normocephalic. Extraocular movements are intact.
NECK: Supple.
LUNGS: Clear to auscultation bilaterally. No rales, rhonchi, or wheezes

noted.
CARDIOVASCULAR: Regular rate and rhythm. S1 and S2 noted. No

murmurs, rubs, or gallops noted.
ABDOMEN: Soft, nontender. Bowel sounds are active times four

quadrants.
MUSCULOSKELETAL: 2+ pitting edema to the bilateral lower extremities.

No calf tenderness elicited.
NEUROLOGICAL: Oriented times three. Cranial nerves II through XII are

intact.
100
ASSESSMENT AND PLAN:
1. New-onset atrial fibrillation and flutter. We will continue to monitor the

patient. We will continue his medications as ordered.
2. Congestive heart failure new onset, controlled at the current time. We

will order oxygen p.r.n. to maintain his SpO2 greater than 92%.
3. Hypertension, managed at the current time with his current medication

schedule.
4. DVT prophylaxis, secondary stroke prevention. Currently, he is

asymptomatic.
5. Bipolar, type 1. He is oriented three times today and cooperative with

the exam. We will observe him as therapy activity increases.
_______________
Deepak Mehta, MD
USAGE: History and physical report is usually dictated by the physician

when a patient is admitted to the hospital. It has detailed medical history
of the patient.
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2.21 SUMMARY
Medical Transcription commonly termed as MT is an allied health profession

which deals in the process of transcribing physician's dictation or audio into
text. A medical transcriptionist needs to avoid English, medical, drugs,
typographical, or grammatical errors and should possess an eye for detail
to perform the job effectively.
Medical Transcription Service Organization or an MTSO is basically a

medical transcription company providing transcription services to clinics or
hospitals. Medical transcriptionist working from home is known as home-
based medical transcriptionist (HBT).
Medical transcription process involves recording of the dictation by the

physician, transcribing of the report by the medical transcriptionist,
proofing of the report by the quality analyst, and sending the report back
to physician.
Physician can record the dictation either through Dictaphone, telephone, or

microphone.
Important hardware equipments required for transcription process are

computer, headphone, and foot pedal and important softwares required are
word processor, audio player, and dictionaries.
Benefits of medical transcription includes saving time and cost of the

physician and hospital as well as systematically maintaining medical
records, but at the same time, may possess security risk to the protected
health information of patients.
File Transfer Protocol (FTP) is a standard network protocol used to easily

transfer files between computers via the Internet. FTP connection can be
made either through web browser or through FTP client. An FTP client is a
software application designed for transferring files back-and-forth between
two computers via the Internet. FTP accounts are mainly of two types:
Anonymous and Private/Secure.
102
Medical transcription workflow can be divided into offline and online

depending on the requirement of an Internet connection to perform the
process. Medical transcription workflow management softwares are
applications which streamline the workflow of the medical transcription
organization in an efficient and error-free manner.
Pricing structure in medical transcription industry are of myriad types such

as full-time equivalents (FTE), per page pricing, per report pricing, and per
line pricing.
Different types of errors that typically occur in a medical report can be

classified into the following. Typographical error, English word error,
medical word error, medication error, Doctor's dictation error, punctuation
error, and malapropism error.
Some of the most commonly used medical reports in the hospital setting
are letter, SOAP note, history and physical, discharge summary, operative,
report, and radiology report.
Medical record is systematic documentation of the patient's medical

history. This report also serves as an official record.

into text.
A "flag" is a blank left out by the medical transcriptionist when he is

unable to hear something in the report.
Dictaphone is a hand-held device used for recording a person's voice.
Call-in dictation system is a computer which allows one to record their

dictations over the regular phone or mobile phone.
Foot pedal is a device used to play/pause the dictation using the foot.
An electronic dictionary is a dictionary whose data exists in digital form

and can be installed on a computer.
103
Secure FTP protects the username and password and encrypts the
content that is transferred over the Internet
Stat dictation or rush dictation are dictations needed to be typed and sent
as soon as possible preferably within 2 to 4 hours.
Turn-around-time (TAT) is the time specified for transcribing the report

and sending back to the physician.
MT Medical transcriptionist.
QA Quality analyst.
MTSO Medical Transcription Service Organization.
HBT Home-based medical transcriptionist.
HIPAA Health Insurance Portability and Accountability Act.
ER Emergency room.
SSN Social security number. MRN Medical record number. DOB Date of
birth.
AHDI Association for Healthcare Documentation Integrity.
RHDS Registered Healthcare Documentation Specialist formerly known as

Registered Medical Transcriptionist (RMT)
CHDS Certified Healthcare Documentation Specialist formerly known as

Certified Medical Transcriptionist (CMT).
PHI Patient health information.
FTP File Transfer Protocol.
SLA Service-level agreement.
LAN Local area network.
104
EMR/EHR Electronic medical records/electronic health records.
FTE Full-time equivalents.
2.23 SELF ASSESSMENT QUESTIONS
1. What is transcription and what are its types?
2. Define MTSO.
3. What are the skills required for a medical transcriptionist?
4. Mention five responsibilities of a medical transcriptionist.
5. Explain visual medical transcription.
6. Explain different types of recording dictation.
7. Advantages and disadvantages of using a Dictaphone for recording

dictation.
8. Explain foot pedal and its types.
9. Which electronic dictionaries are required for medical transcription?
10.Advantages and disadvantages of medical transcription.
11.What are the limitations to the use of Email accounts for medical
transcription.
12.Explain FTP and different types of FTP accounts.
13.Advantages of FTP.
14.Explain with diagram offline medical transcription.
15.Explain with diagram online medical transcription.
16.Benefits of using medical transcription workflow management software.
105
17.Explain the pricing structure in medical transcription industry.
18.State with example at least 4 types of errors in medical transcription.
19.Give the full forms of the following: o SOAP

• HIPAA
• MTSO
• SSN
• PHI
• FTE
• EMR/HER
1. Transcription is the act or the process of conversion of dictation or audio

processing.
a) True
b) False
2. Which of the following is not a type of transcription?

a) Medical Transcription
b) Business/Financial Transcription
c) Legal Transcription
d) Motor Transcription
3. A Dictaphone is a hand-held device used for recording a person's voice

so that it can be listened or transcribed at any later point.
(a) True
(b) False
4. A “flag” in a report requires the physician to fill in the “blank/flag” to

finish up the report.
a) True
b) False
5. Skills of a medical transcriptionist include thorough knowledge of HIPPA

compliance or medicolegal issues.
a) True
b) False
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6. In India, major part of medical transcription is done through visual

medical transcription.
a) True
b) False
[Answer: 1. (a), 2. (d), 3. (a), 4 (a), 5(a), 6 (a)]
2.25 CASE STUDY
ORTHOPAEDIC & SPORTS MEDICINE OF ERIE SEES 20% SAVINGS

IN TRANSCRIPTION COST
I've never had an endeavor that went as seamlessly, smoothly and

perfectly as the transition to Clinic 360 | Transcription. There isn't a person
here who doesn't like it. It's entirely hands-off. It was that way from day
one. Our physicians picked up their personal phones
and started dictating." Charlene Kellerman, Practice Administrator
Orthopaedic & Sports Medicine of Erie, PC
Summary
Orthopaedic & Sports Medicine of Erie is comprised of a team of board-

certified and board-eligible orthopaedic surgeons. Over two facilities, the
team of 16 physicians serves 200-250 patients per day. It is the largest
orthopaedic group in Northwest Pennsylvania.
In 2009, the team of physicians doubled based on the needs of the local
community. The three part-time off-site transcriptionists started falling
behind. Turnaround time was slow. Despite this, the practice did not want
to add staff. Shortly after, the practice administrator proposed moving
transcription to a full-service provider.
107
Choosing Nuance
The practice administrator began the process of exploring transcription

providers as well as voice recognition solutions. Although voice recognition
was explored, it was eliminated relatively early in the process. The practice
leaders did not feel it would be a good fit for the way their physicians
prefer to work. The physicians at Orthopaedic & Sports Medicine of Erie do
not want to type and edit; they like to walk around the 17,000 square feet
of the practice's main facility as they dictate.
The practice administrator met with Nuance's general manager and one of
its engineers. The team assured Orthopaedic & Sports Medicine of Erie that
they would do whatever was necessary to put a solution in place quickly
and customize their services to the practice's needs. The practice
administrator liked Nuance's strong transcription background and
understanding of workflow. She also appreciated that Nuance had
experience with Orthopad and the ability to automatically load information
into patients' charts on their new electronic medical records system.
Making The Change
When the practice was ready to make the change, Nuance hosted two
meetings with the practice and their subcontracted IT team before flying in
for the implementation. The transcription solution launched in less than a
week and within four hours, the practice administrator remarked that the
change had already proved itself.
Working With Nuance
By making the switch, the practice has saved 20% annually on

transcription services.
Working with Nuance has even enhanced the practice's billing system. In
the past, EMR notes were not available to Workers' Compensation carriers
as quickly as requested. With Nuance, the practice can send out an
approved note within 24 hours. The time it takes to collect claims
payments for Workers' Compensation and auto insurance have been cut in
half.
108
In addition, the solution gives the practice a much better tracking system
for missed or incomplete dictation. Reports are now available online, and
the Nuance team tracks and alerts the practice to any discrepancies or
inconsistencies. The practice has regained staff time as there is no need to
file paper charts or track dictation.
About Nuance Communications, Inc.

Nuance Communications, Inc. is the market leader in creating clinical
understanding solutions that drive smart, efficient decisions across
healthcare. As the largest clinical documentation provider in the U.S.,
Nuance provides intelligent systems and services that improve the entire
clinical documentation process-from the capture of the complete patient
record to clinical documentation improvement, coding, compliance and
appropriate reimbursement. More than 500,000 physicians and 10,000
healthcare facilities worldwide leverage Nuance's award-winning, voice-
enabled clinical documentation and analytics solutions to support the
physician in any clinical workflow and on any device.
Challenge
• Rapid Practice Growth
• Containing transcription costs
• Maintaining turnaround time
• Physician mobility
Solution
• Clinic 360 | Transcription
• Mobile dictation application for iPhone
• Integration with Orthopad EMR
Results
• 20% savings in transcription costs
• Guaranteed turnaround time reduced time to bill
• Elimination of paper charts
(Source http://www.nuance.com/products/clinic-360-transcription/L-3696-
Orthopaedic- CS1013-r6.pdf)
109
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
110
CHALLENGES IN MEDICAL TRANSCRIPTION
Chapter 3
Challenges In Medical Transcription
CHAPTER OBJECTIVES:
• Challenges in medical transcription
• Speech Recognition
• Development of Speech Recognition
• Speech Recognition versus Speaker Recognition
• Front-End Speech Recognition
• Back-End Speech Recognition
• Echo Scribe
• Challenges in United States
• Challenges in India
STRUCTURE:
3.1 Introduction
3.2 Speech Recognition
3.3 Development of Speech Recognition
3.4 Speech Recognition versus Speaker Recognition
3.5 Speech Recognition Technology in Medical Transcription
Front-End Speech Recognition
Back-End Speech Recognition
3.6 Speech Recognition The Challenge
3.7 Echo Scribe
3.8 Challenges in United States
3.9 Challenges in India
3.10 Summary
3.11 Glossary & Acronyms
3.12 Terminal Questions
3.13 Case Study
111
3.1 INTRODUCTION
“A challenge only becomes an obstacle when you bow to it”. Ray Davis
The above quote encourages us to face challenges, and believe it or not,

everyone loves a good challenge, only exception being when the challenge
is for the survival of the fittest. A healthy challenge is the one that does
not in any way pose the danger of exterminating the very existence of the
opposite class. Many healthcare professionals feel medical transcription is
facing such extermination. They have developed a preconception that
medical transcription service would slowly and steadily become extinct and
will become a thing of the passé.
In this chapter, we will try to highlight some of those challenges faced by

the medical transcription service organizations (MTSOs) in the form of
voice recognition softwares and electronic health records.

processing. The person who does the transcription is termed as the
transcriptionist and the text or the written document produced is called the
transcript. Medical Transcription (MT) is an allied health profession
which deals in the process of transcribing or converting voice-recorded
reports dictated by physicians or other healthcare professionals into text
format.
Medical transcription industry since its evolution allegedly in the 1960s

have undergone a series of changes ranging from using the typewriters to
computers, from cassettes to digital recordings, from the job being done
in-house to outsourcing or offshoring, and the most recent and the most
significant change is the integration of speech recognition engine for the
medical transcription service. Speech recognition, which earlier was
thought of as an assistive device for the medical transcriptionist has now
developed so much in itself that it is threatening the very existence of the
human transcription. While the medical transcription has seen confluence
of challenge, speech recognition has transpired into one of the most
difficult challenges faced by the industry all over the globe. In this chapter,
we will try to explore the key challenges looming over the medical
transcription industry around the globe.
112
3.2 SPEECH RECOGNITION
Speech recognition (SR) is the translation of spoken words into text also
known as speech- to-text.
"Call Maria.”
"Search the web for Welingkar’s."
"Email to Maria Pedro"
"When is Raymond's birthday?" "When is my next meeting?”
No, I am not asking these questions to you, in fact, these are the
instructions I am giving to my cell phone to perform the functions and I am
sure it will perform that without any error. The reason I am so sure is
because it has a speech recognition engine in it.
Nowadays almost all smartphones whether it is the iPhone, Android Phone,

or Windows Phone come with the inbuilt voice commands to perform some
of the basic repetitive functions in day-to-day life. The applications that run
in all these phones (Siri for iPhone, Google Now for Android Phone, and
Cortana for Windows Phone) are built on the same basic principle, the
speech recognition. Speech recognition has been rapidly gaining
momentum in all the domains that would otherwise require a human
being. One very ideal example for it would be the interactive voice
response or IVR. IVR is a technology that allows a computer to interact
with humans through the use of simple commands (speech recognition)
and/or DTMF tones input through the keypad of the phone. We all have
used such services while utilizing the services of telephone banking, mobile
phone services, weather report, credit card services, etc.
Recently, All India Institute of Medical Sciences (AIIMS) launched a pilot

project of an interactive voice response (IVR) service to fix up
appointments with its doctors over the phone. A patient who needs to
setup an appointment needs to call a particular number and will get
connected to an IVR system. The patient then through the keypad of the
phone will have to select the required hospital department, preference of
the physician, date, and time according to the availability.
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Speech recognition is used in the educational sector for narration,

pronunciation, and assisting physically challenged students to help in
writing (speech-to-text softwares), reading (text-to-speech), browsing,
etc.
Speech recognition is used in cars and aircrafts to automate many features

such as commands to initiate phone call, select particular radio frequency,
commanding an autopilot system, and controlling display.
Similarly, speech recognition is increasingly being used in the healthcare

domain mainly to assist with the medical documentation process. Swiftly
changing rules and regulations of the healthcare industry, stricter penalties
on non-compliance, requirement of detailed documentation are some of the
things that enlighten the importance of medical documentation.
Shortage of skilled labor to perform the job of transcription, rising cost of

the transcription services, and shorter turn-around-time all bespeak of the
speech recognition software as the best possible solution.
3.3 DEVELOPMENT OF SPEECH RECOGNITION
The foundation of the speech recognition engine was laid in the 1936 by
Homer Dudley of Bell Laboratories New Jersey, United States with the
vision of developing a model which would be able to understand speech
that resulted in a device called "The Voder" which was demonstrated at the
1939 World's Fair. Since then, institutes and labs all over the world have
contributed significantly in the research and development of applications
that gave rise to the existing speech recognition technology.
Going back to the period between 1950 and 1960, Bell Laboratories
developed a system called Audrey which was able to understand only the
numbers 0 through 9, and 0 was spoken as "oh" not zero. Later in 1962,
IBM developed its own system called Shoebox machine which was an
improvement over the Audrey as it could understand 16 spoken words
including the ten digits from "0" through "9," and six arithmetic functions
such as "plus," "minus," and "total." It also had the function of instructing
another machine to calculate and print answers to simple arithmetic
problems. During the same period, two researchers named Toshiyuki Sakai
and Shuji Doshita from Kyoto University, Japan developed a hardware
114
known as phoneme recognizer which marked the advent of the automatic

speech recognition system.
It was in the 1970s when the speech recognition research got the much
needed push in terms of the funding for research from the Defense
Advanced Research Projects Agency (DARPA), United States. After the U.S.
Department of Defense decision to fund the speech recognition program,
many researchers and institutes started working on development of speech
recognition system and one of them was the "Harpy" System developed by
Carnegie Mellon University's which had the capability to understand speech
from a preapproved list of 1,011 words with reasonable accuracy
equivalent to the vocabulary of a 3-year-old toddler.
During the 1980s, along with the lack of advanced speech recognition
engines, the absence of processing speed of the computer was the greatest
obstacle faced by the researchers. In the 1982, Dragon Systems,
Massachusetts was founded by James Baker and Janet Baker to
commercialize speech recognition technology. The softwares during this
period performed accurately when words or sentences were spoken with a
little pause, i.e., discontinuous speech. The vocabulary of the speech
recognition softwares has also climbed from 1011 words to 5000 to 6000
words.
With the evolution of fast computers in the 1990s, the speech recognition
got the much awaited boost by being able to harness the faster processing
power of the computers and a wave of development of the commercial
applications for specialized industry including medical set into motion.
Dragon Systems was the company that brought about a revolution in the
medical transcription industry by developing the Dragon Dictate. Dragon
Dictation was the first consumer speech recognition to come into the
market. Now, the speech recognition softwares were able to handle
continuous speech (natural spoken full sentences) with a vocabulary of
several thousand words and fair amount of accuracy. This is termed as
continuous speech recognition (CSR) or automatic speech recognition
(ASR) which powers most of the speech recognition softwares.
It was only in the 21st century that speech recognition made its headway
into the common people's hands through the development of ViaVoice (now
Dragon Naturally Speaking), Speakeasy, Google Voice Search, Siri, Google
Now, and Cortana for their personalized use with improved accuracy.
115
Nuance Communications, Inc. (ScanSoft) with its basket of products such

as PowerScribe 360, Dragon NaturallySpeaking, etc. to suit the need for
small, medium, and large size hospitals is currently the market leader in
providing speech recognition solutions followed by M*Modal and Dolbey.
After achieving these milestones, all companies have now directed their
focus specifically towards developmental of natural language processing
(NLP) which is a step ahead than CSR/ASR and will make the machine
capable of understanding longer and ambiguous sentences which may have
many possible outcomes.
Fig 3.1: Development of Speech Recognition
116
Coming back to the topic of continuous speech recognition being applied in

the field of medical transcription, this evolution had initially caused quite
a stir within the transcription industry owing to the fact that some scholars
believed it would completely wipe out the transcription service or MTSOs as
a whole, but there was another dimension to it. The current CSR/ASR
systems, as of now, still are not able to definitively identify ambiguous
words or sentences from continuous speech, thereby leading to potentially
dangerous errors when it comes to the medical report transcription. For
example, it is hard or almost impossible for speech recognition softwares to
detect a malapropism error.
Malapropism error or similar sounding words error is an unintentional

misuse of a word by confusion with the one that sounds similar.
"I want to remind you all that in order to fight and win the war, it requires
an expenditure of money that is commiserate with keeping a promise to
our troops to make sure that they are well-paid, well-trained, well-
equipped." Former US President, George W. Bush in Washington D.C. on
December 15, 2003.
Dictated (commiserate meaning to feel or express sympathy or

compassion)
Intended (commensurate meaning corresponding in size, degree or

extent) This was the apt word to be used in the above context.
If the above speech of George W. Bush in Washington D.C. on December

15, 2003 was to be transcribed by speech recognition software, it would
transcribe the word commiserate although that was a malapropism and the
intended word was commensurate, but a machine would not be able to
identify it, is it?
How would a speech recognition engine be able to differentiate between

the following words or phrases?
117
Fig 3.2: Examples of Malapropism
These are just a few illustrations from a very long list of such examples.
Over a period of the using of speech recognition, it was understood that

even with the help of speech recognition, there will be the necessity of
medical transcription service to perform the editorial service in case any
blunder creeps into the document while conversion from speech-to-text
with the help of speech recognition.
3.4 SPEECH RECOGNITION VERSUS SPEAKER

RECOGNITION/VOICE RECOGNITION
Although both the terms speech recognition and voice recognition are often
used interchangeably, there exists a fine line which differentiates the two
that is what and who. While speech recognition (SR) is the translation of
spoken words into text also known as speech-to-text, voice recognition/
speaker recognition tries to identify the speaker utilizing the uniqueness
of the speaker's accent, pitch, speed, style, etc. In simple terms, we can
say that speech recognition is all about what is being spoken and voice
recognition/ speaker recognition is all about who is speaking. Voice
recognition is employed to ascertain a speaker's identify as it is believed
that a speaker's voice is as unique as a fingerprint and therefore
sometimes termed as vocal fingerprint.
The application of voice recognition/speaker recognition is in two

disciplines. One is in the form of authentication and other in the form of
identification.
118
Authentication is basically to verify the identity of a specific individual such

as identifying a customer of an organization or identifying an eminent
personality of the State or the Country.
Is the speaker, the individual they say they are?
Speaker verification is implemented in places where secure access to the

intended recipient is of essence and the services thereof are restricted for
the use of the intended recipient only. Recently Barclays, the British
multinational banking and financial services company, London, unveiled a
voice recognition system to identify their customers. When the customer
calls the bank, their unique speech patterns will be compared against the
initial recording (usually known as voice model or voice template). If the
voice sample matches the original, Barclays' staff will get a notification
verifying the caller's identity. In the verification process, one-to-one match
is done with the speaker's voice and the database template to see if their
voice matches their claimed identity.
Identification is the process of determining the identity of an unknown

speaker.
Who is the speaker?
Speaker identification is implemented in places where an individual needs

to be identified from millions of individuals. Identification is generally used
(especially in developed countries) to identify criminals where a sample of
their voice is compared against a database of criminals' voices to look for a
possible match. In 2007, United States intelligence agency confirmed the
identity of Juan Carlos Ramirez Abadia (Colombia's drug kingpin) using the
speaker identification since he had altered his facial appearance with the
help of extensive plastic surgery making it impossible to recognize him
visually.
One common thing about speaker verification and speaker identification is

that they both require a voice template or voice model which would work
as a guide to verify or identify the sample voice at hand.
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3.5 SPEECH RECOGNITION TECHNOLOGY IN MEDICAL

TRANSCRIPTION
Speech Recognition Technology is based on the fact that each and every
individual has a specific vocal fingerprint. It tries to exploit that concept by
analyzing the unique characteristics of individual's speech pattern which
forms the basics of all the continuous speech recognition softwares. For the
software to accurately analyze the speech pattern, an individual has to
train the software by reading a few pages of text provided by the software
company. This exercise ensures that the software gets accustomed to the
speaker's environment (background noise) and speaking style such as type
of accents, pronunciation, and jargons. This is a one-time process and a
unique profile for the speaker is created based on the unique
characteristics. This training process needs to be completed before using
the speech recognition software or the software will behave like speaker-
independent speech recognition and will not be able to deliver good enough
accuracy.
With respect to the usage of speech recognition technology in the field of

medicine and more specifically in the area of medical transcription, there
are two different ways in which it is used, namely, front-end speech
recognition and back-end speech recognition. The basic difference between
the two is that in front-end speech recognition the speech- to-text
conversion takes place simultaneously when the speaker is dictating, while
in the back-end speech recognition the speech-to-text conversion takes
place after the speaker has dictated.
Front-End Speech Recognition
Front-end speech recognition is where the speaker (in our case the
healthcare provider) dictates into a computer microphone and the speech
gets converted into text in real time. The converted text is presented in a
word processing application on-screen which the healthcare provider has to
instantly edit before being able to finalize it. The software does not save
the audio dictated by the provider but just processes the audio and types
the medical report. In absence of any audio, the medical report cannot be
sent to a medical transcriptionist for proofing, and hence, editing of the
converted text produced by the front-end speech recognition is mandatory
for the healthcare provider. One other reason for the report to be edited
immediately is that the software does not deliver 100% accuracy,
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and if the physician returns to edit the document after a couple of day,
then there is a good chance he/she may forget the exact details of the
patient encounter. The front-end speech recognition is preferably used by
those healthcare providers who would intend to spare some time to edit
the speech-to-text converted document and who are comfortable and
proficient with the use of the application on their own.
Front-end speech recognition can be used in a medical setting where the

healthcare provider is not hard-pressed for time and the reports are
generally repetitive in nature. For example, in a radiology department,
where majority of the findings in a report is normal barring a few
exceptions, can utilize the front-end speech recognition to generate the
report and the healthcare provider can make the required changes (any
deviation from normal findings) on-screen in real time to print the finalized
report. In order to generate the best possible accuracy, the healthcare
provider must train the software one time before the first use and on an
ongoing basis should correct any errors made by the software on-screen in
real time while using the software. This will help the software to
understand refinements of the provider's speech pattern and in turn will
lead to a better accuracy. Since the training and rectifying of errors
requires a fair amount of time, healthcare providers feel it is easier to
dictate rather than being overburdened with editing process instead of
caring for the patients which is their forte.
If the provider is a good speaker and spends considerable time in training

and rectifying the errors of the software on-screen instantly, it is observed
that it can effectively eliminate the need for a medical transcriptionist, but
that generally is not the case, and hence only a handful of healthcare
providers use front-end speech recognition.
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Physician Dictating in
Speech recognition
Software
Front-End Speech Recognition workflow
Fig 3.3: Front-End Speech Recognition
Back-End Speech Recognition
Back-end speech recognition, as opposed to front-end speech recognition,

works in the background. It is also termed as computer-assisted
transcription or deferred speech recognition. The healthcare provider would
dictate the medical report in any of the preferred way, that is, using a call-
in dictation system (telephone/mobile phone), hand held Dictaphone, or PC
microphone. This dictation would be sent to the server which has the
capability to perform the back-end speech recognition. The server then
processes each audio file in the background and generates the
corresponding text file. For the generated report to have the expected
100% accuracy, it is edited by the medical transcriptionist or quality
analyst depending on the quality of the file generated by the software.
The back-end speech-to-text conversion is usually done in batches, and the

transcriptionist is presented with the transcribed report which is linked to
the original audio file dictated by the physician. The medical transcriptionist
now instead of having to type the whole report has to provide the editorial
service such as looking for errors in the report and rectifying the same. Use
of even the best speech recognition technology is not devoid of errors and
any error in the medical report can be fatal for the patient, therefore, a
human interference in terms of editing the machine transcribed report is
and will always be needed. Back-end speech recognition is far more widely
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accepted as compared to the front-end speech recognition for transcription

of medical reports by most of the large hospitals, clinics, and MTSOs.
Some of the reasons why back-end speech recognition has been more
successful in the healthcare industry as compared to the front-end speech
recognition are that it does not require any change in the healthcare
provider's style of dictating and it can be seamlessly integrated into any
existing IT infrastructure of the medical practice. Of recent, there are many
companies which have started providing both the service to the vendors
and the vendors can now decide which service is apt for a specific
department or provider.
To unlock the actual potential of the speech recognition in medical

transcription it is crucial for each medical practice irrespective of the size
not to imitate the implementation of speech recognition of any other
medical practice but to conduct their own analysis and choose what best
suits to the users (healthcare provider). Depending on the research, the
medical practice should decide whether it has to opt for the front-end
speech recognition, back-end speech recognition, or a mix-and-match of
both the technologies. The rationale for conducting own research is as
discussed earlier the speech pattern of each individual is unique, and the
medical practice will need to keep a unique, behavior-based approach
before zeroing in on any speech recognition software in order to gain the
optimum benefit.
Fig 3.4: Back-End Speech Recognition
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3.6 SPEECH RECOGNITION THE CHALLENGE
Speech recognition technology has the potential to overcome the greatest

roadblock in the implementation of fully computerized medical
documentation system. Comparatively, back-end speech recognition is
more widely applied in the field of medical transcription as compared to
front-end speech recognition. One of the most important reasons for this
wide acceptance, apart from being cost effective, is that while using the
back-end speech recognition, the physician does not have to alter the
speaking style. Physician can go ahead and dictate in their usual way
through the telephone, cellular phone, Dictaphone, and microphone, in
their own unique speaking pattern, and the back-end speech recognition
system which is setup on a server at an offsite location will perform the
task of conversion from speech-to-text. The medical documentation system
powered by the speech recognition software will generate the medical
reports by capturing the dictations directly from the physicians. Since the
physician dictate in their usual style, there are instances where the speech
may be fast, garbled, poorly enunciated speech, high level of background
noise, and all other sorts of issues all leading to possibility of errors in the
machine-typed report. Therefore, the machine-typed report always need to
go through a team of transcriptionist who would perform the job of
proofing and editing the files to ensure that the report is 100% accurate
and devoid of any errors.
New-age back-end speech recognition does a whole lot than just speech-
to-text conversion, for example, it seamlessly integrates into the existing
medical practice's EMR/EHR thereby being totally transparent to the
physician who would sometimes not even notice the difference between a
traditional transcription and the machine transcription as the back- end
speech recognition handles the transcription flow very smoothly and
efficiently. It formats the medical report according to the specification set
by the hospital administrator, it spell checks the report for any spelling
mistakes, and also correctly interprets specific jargon used in the medical
field.
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With all these characteristics, back-end speech recognition boasts of a full-

fledged feature- packed application able to handle loads of transcription
swiftly with considerable amount of cost saving for the medical practice. It
has increased the medical transcription productivity by reducing the turn-
around-time required for the generation of the medical report which in turn
assists in the initiation of the reimbursement cycle thereby helping to
decrease the billing period. Use of back-end speech recognition has been
cost effective for small and large healthcare practices most of which save
several thousand dollars annually. (Refer to the case study.)
Medical transcription is a $12 billion industry, and qualified medical

transcriptionists (MTs) are in short supply. Employment of medical
transcriptionists is projected to grow 8 percent from 2012 to 2022, about
as fast as the average for all occupations. The growing volume of
healthcare services is expected to continue to increase demand for
transcription services. However, employment growth will be limited due to
increased productivity stemming from technological advances. Bureau of
Labor Statistics, U.S. Department of Labor, Occupational Outlook
Handbook, 2014-15 Edition.
The above statistics provided has more or less factored the impact of
speech recognition onto the medical transcription industry and thereafter
released a conservative growth figure. In the absence of computer-assisted
transcription, the statisticians would have been much more liberal in
computing the growth rate because of the inclusion of the millions of
Americans who have got health insurance coverage under The Patient
Protection and Affordable Care Act (PPACA) commonly known as the
Obamacare.
Speech recognition has definitely made a major dent into the job outlook of
the medical transcription all over the globe but will never be able to totally
root out the manual transcription for the reason that it is nowhere near the
traditional medical transcriptionist in completely understanding the
nuances of the healthcare provider. According to reports, if we consider the
most technologically apt hospitals that employ all kinds advanced hardware
and software, they too transcribe more than 60% of their medical reports
using the manual medical transcription. The reason being many speech
recognition softwares produce an accuracy of 60% to 80% out-of-the box.
With proper training and altering the natural speech pattern so as to
dictate slowly and clearly, rectifying any errors made by the recognition
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software in order to improve the quality in future medical reports, it is

observed that these softwares can reach up to the accuracy of 95% to
98%, although only a few healthcare providers are able to reach up to that
accuracy level. It produces the best results only for those physicians who
are clear, concise, and complete.
Since medical documentation is an integral part of the healthcare system,

an incorrect medical report will not be helpful for the provider in making
informed clinical decision, and at the same time, would prove to be fatal for
the patient and causing legal issues for the healthcare provider, therefore,
even the reports with 95% to 98% have to be reviewed by a medical
transcriptionist. Hence wherever there is speech recognition, there will
always be the need for reevaluation process. This changes the role of the
medical transcriptionist from the one who transcribes the report to the one
who proofs or edits the report for any inconsistency. Since the role
undergoes a change, so will the skill set, and the job profile will change
towards being more mentally demanding requiring more focus and
concentration.
Speech recognition technology can be a boon for the medical practice or

MTSOs in terms of leveraging it to tackle the issue of medical
transcriptionist shortage, but at the same time, it would turn out to be a
bane for those small medical transcription companies who would be out of
jobs as speech recognition technology penetrates deeper into the
healthcare system. Whatever the MTSOs and speech solution development
companies may claim, speech recognition is not an alternative to
traditional medical transcription. Instead speech recognition, if
implemented properly will decrease the costs associated with the
transcription process and reduce the turn-around-time in creating the
transcribed documents but will always act as an aid in transcription process
similar to any other efficiency tool and would NEVER replace the traditional
medical transcriptionist. It will just change the role of the medical
transcriptionist to medical editor/quality analyst.
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3.7 ECHO SCRIBE
As discussed earlier, the accuracy of any medical report relies heavily on

the speech pattern of the provider and it implies even more so for the
speech recognition than manual medical transcription. Likewise the swift
operation of the speech recognition softwares requires knowledge of
hundreds of commands to navigate through the application because still
many EMRs cannot be seamlessly integrated with speech recognition
software to take its full advantage. Lack of the knowledge of those
commands can result in delayed report generation and will beat the whole
purpose of implementing the speech recognition software. Both these
factors together act as major deterrents in the adoption of the speech
recognition softwares by the physicians, on the other hand, hospitals in
their bid to employ any cost cutting measure are too impatient for
implementing the speech recognition into their healthcare system.
Similarly MTSOs who want to harness the power of speech recognition but
were not in a position to buy the costly speech recognition software for
each of their medical transcriptionist workstation were also in a fix.
Therefore, to collaboratively address the needs of the conservative MTSOs,
impatient hospitals, and reluctant physicians, echo dictate or echo scribe
came into existence.
Echo dictate or echo scribe is the process of listening to the audio and
dictating into speech recognition software. The speech recognition software
is trained on a particular medical transcriptionist’s speech and the medical
transcriptionist is trained on all the commands useful for swift navigation
through the application. In this way, the physician does not need to alter
the speech pattern and dictate as usual. The audio is transferred to the
medical transcriptionist who would listen to it by playing through an audio
player controlled by a foot pedal but instead of typing the report, the
medical transcriptionist would dictate into the speech recognition software.
If there is any error by the software while converting the speech- to-text,
the medical transcriptionist would instantly rectify it. The software also
learns from this instant rectification and will automatically inculcate the
changes in the future medical reports.
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Echo dictate or echo scribe is also being used by MTSOs as they need to
only purchase a single user license for a particular medical transcriptionist
workstation. The medical transcriptionist then using the echo dictation
process can transcribe reports of several dictators with the help of the
speech recognition software.
The competitive advantage of echo dictate/echo scribe is that it provides

the best of both the worlds, on one hand it equips the hospital or MTSOs
with the fast computer-assisted transcription and on the other hand, the
medical transcriptionist takes care of accuracy by instantly rectifying any
erroneous entry made by the speech recognition engine.
Case studies show that provider productivity and satisfaction improves

dramatically when they switch to Scribe’s charting solutions. In addition,
the quality of documentation improves, allowing organizations to improve
coding and billing, reduce denials, successfully pass audits, and improve
patient outcomes.
Item Scribe SRTs
Anywhere, anytime via

Dictation ScribeMobile – iPhone,
Tethered to computer
Method Android, iPad, telephone, or
Live Scribe
We can record the entire Provider must interact

encounter while the provider with computer and
focuses on the patient. The interrupt the patient
Dictation provider can leave the room encounter and/or
Type without further work. Or, our spend additional time
LiveScribe can securely listen after the patient visit
and document the encounter making edits to the
in real time dictation.
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Complete encounter,
Narrative – only what
including the ability to use
Dictation the provider speaks
shortcuts (macros), pull
Content and/or manually
content from prior encounters
corrects.
(meds, exams, etc)
Completed document(s)
Dictation available for provider review Provider and/or other
Editing and able to make edits if staff resource
necessary.
Any documentation that is

required is completed in
Output & addition to completing the Provider and/or other
Distribution EMR record – letters to staff resource
referring MDs, faxes to them,
etc.
EMR Specialist completes Provider and/or other

Coding
forProvider Review staff resource
End to end integration – the Provider must click and

narrative is broken into pick and enter
discrete components that information via Dragon
EMR
allows our system (or EMR (or similar software) or
Integration
specialist) to complete the type themselves or
encounter for the provider to have an assistant enter
review and sign for them.
Results
Longer, more accurate
Documentati Limited narrative
documentation
on
Results
Less repetitive Limited narrative
Auditing
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More thorough
Results documentation to accurately N/A – only if provider
Coding support proper coding of the completes
encounter
Results Highest cost data due

Lowest cost data entry
Productivity to entry by provider
3.8 CHALLENGES IN UNITED STATES
Prior to the 1995, the medical transcription industry in the United States
was pretty much unorganized, but after the enactment of the HIPAA law,
emphasize was laid on the protected health information security which in
turn led to reviewing and renewing of the policies followed by the medical
documentation process. Earlier, healthcare practices would outsource the
overflow work of transcription to any MTSO without even bothering to
confirm whether the MTSO is maintaining confidentiality of the PHI or not
and whether the MTSO is doing the work in-house or is again sub-
contracting to some other vendor, but with the changes in the law brought
about by the HIPAA and HITECH, things have changed and healthcare
practices now try to outsource as less work as possible to MTSO and in
case they do outsource, an agreement between both the parties is signed
mentioning the detailed terms and conditions of service.
The medical transcription industry in United States is facing two

challenges, viz, (1) shortage of medical transcriptionists and (2) high cost
of medical documentation.
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1. Shortage of medical transcriptionists:
An average medical transcriptionist salary in United States is around

$34,000 per annum. When compared this salary with the skill set involved
to be a successful medical transcriptionist, that is, good English (written
and verbal), in-depth medical knowledge (human anatomy and physiology,
diseases, drugs, etc.), good listening skill, good eye-to-hand coordination,
being able to be focused for long periods of time, the salary seems too low.
It is due to this reason that many medical transcriptionists are shifting
their career to some other more rewarding or less stressful profession and
newer graduates are reluctant to enter the field. All this has led to a
shortage of medical transcriptionist in United States.
2. High cost of medical documentation:
On the other hand, declining reimbursement rate and increasing

operational costs have put a question mark on the growth prospect of the
healthcare practices and allocating budgets to any department has become
more critical than ever for the hospital management. A hospital that does
its medical documentation in-house has to hire a team of medical
transcriptionists and quality analysts and has to provide for their salary in
addition to other employee benefits like health insurance, paid holidays,
sick leave, 401(k), etc. With the passing of the new Patient Protection and
Affordable Care Act (PPACA) bill that mandates that all medical records
must be documented into electronic medical record systems, there would
be a huge surge in the volume of the work needing more medical
transcriptionists to handle which will in turn burn holes in the pockets of
the healthcare practices. To tackle this high cost of medical documentation,
hospital administrators are looking into other avenues of cost cutting like
outsourcing, implementation of speech recognition system, EMR/EHR, etc.
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3.9 CHALLENGES IN INDIA
High medical documentation costs and dearth of manpower in the United

States have proved to be a blessing in disguise for the Indian medical
transcription industry. In the 1990s, the development in the field of
Internet and FTP applications astonishingly shrunk different continents and
converted them into several off-location offices. India was and still is the
preferred destination for medical practices and MTSOs to outsource the
work. Over the period the medical transcription industry witnessed good
growth with several hospitals and MTSOs were either offshoring the work
to the Indian offshore vendors or were busy acquiring the smaller Indian
offshore vendors to perform the job for them.
Although set to grow faster than the US medical transcription industry, the
medical transcription industry in India was not without problems. It had its
own share of problems which started presenting themselves in various
forms and sizes over the ensuing period. The challenges faced by the
Indian medical transcription industry are (1) Quality and (2)
Compensation.
1. Quality:
Many medical transcription companies mushroomed during the period

between 1995 and 2005 in India, all of them wanting to have a significant
share out of the outsourcing industry. Since it was a new profession in
India skilled medical transcriptionists were in scarce, therefore companies
started offering training to the individuals on the condition that the
individual would work with the company for a certain period of time usually
termed as an employment bond. In the bid to succeed over their
counterparts, companies started inducting individuals into their training
program plenteously without proper selection criteria, only a handful of
companies followed the strict criteria of selection process for the trainees.
This led to induction of several individuals into the training program who
were not good at English. Owing to the lack of sound English proficiency
and English being a second language, substandard medical transcriptionist
were produced in abundance. The reports generated by these medical
transcriptionists were laden with errors and blunders which had all the
more possibility to be missed by a medical proofer. Over time these kinds
of errors and blunders have created a dismal picture of Indian medical
transcriptionist in the eyes of the US healthcare providers. Although the
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Indian medical transcriptionists have to face challenges in terms of English

being the second language, having to deal with a gamut of various accents
(Americian, European, Australian, Asian, etc.) because of the employment
of the non-native English speaking immigrant in United States, they have
performed a stupendous job and the situation is not as grim as is projected
by the Western media.
2. Compensation:
The two basic intentions of outsourcing are to tackle the lack of resources
locally and enforce cost cutting. Hospitals and MTSOs across the United
States outsource the transcription work to the vendors in India at a
predetermined rate which will be well within their set budget towards
medical documentation far less than the cost they would incur if they were
to get the services done locally. These vendors in India sometimes further
sub-contract the work to subvendors after keeping their profit margin.
This whole process of contracting and subcontracting leads to taking away

the cream of the revenue, and thereafter, whatever is left goes to pay the
salary of the medical transcriptionist/medical proofer. This salary is meagre
as compared to the skill and hardwork involved in accurately documenting
a medical report, therefore, the younger generation of the talent pool in
India is pretty much reluctant to dedicate itself to this profession and is
looking towards other lucrative professions to develop the life-long career.
Similarly, the experienced medical transcriptionists/medical proofers are
also migrating towards medical coding and billing domain which offers
comparatively more stability and salary. As a consequence of all these
events, there will be a severe shortage of good and experienced medical
transcriptionist in the future.
The Indian medical transcription industry in order to make its strong

presence in the global outsourcing industry and surpass its Asian peers will
need to focus on developing quality medical transcriptionist selected
through a rigorous training process and paying them at par in the industry
to as to retain them and encourage them to choose medical transcription
as the life-long career and prove their worthiness.
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Every industry time and again has had to face some obstacles and it needs
to overcome these obstacles in order to grow. Similarly, though medical
transcription industry all over the globe is facing various challenges in
terms of speech recognition, shortage of labor force, and dismal
compensation, experts still believe that speech recognition would provide a
significant cost saving avenue but cannot substitute the manual
transcription and medical transcription industry is here to stay.
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3.10 SUMMARY
Speech recognition has transpired into one of the most difficult challenges
faced by the medical transcription industry all over the globe.
IVR is a technology that allows a computer to interact with humans

through the use of simple commands (speech recognition) and/or DTMF
tones input through the keypad of the phone.
One common thing about speaker verification and speaker identification is

that they both require a voice template or voice model which would work
as a guide to verify or identify the sample voice at hand.
The foundation of the speech recognition engine was laid in the 1936 by
Homer Dudley of Bell Laboratories New Jersey, United States with the
vision of developing a model which would be able to understand speech
that resulted in a device called "The Voder" which was demonstrated at the
1939 World's Fair. In the 1982, Dragon Systems, Massachusetts was
founded by James Baker and Janet Baker to commercialize speech
recognition technology.
Natural language processing (NLP) is a step ahead of CSR/ASR and will

make the machine capable of understanding longer and ambiguous
sentences which may have many possible outcomes.
Speech recognition is all about what is being spoken and voice recognition/
speaker recognition is all about who is speaking. It has definitely made a
major dent into the job
outlook of the medical transcription all over the globe.
Speech recognition technology is used in the field of medical transcription

in two different ways, namely, front-end speech recognition and back-end
speech recognition. Immediate editing of the converted text produced by
the front-end speech recognition is mandatory for the healthcare provider.
Reasons back-end speech recognition has been more successful as

compared to the front-end speech recognition are that it does not require
any change in the healthcare provider's style of dictating and it can be
seamlessly integrated into any existing IT infrastructure of the medical
practice.
135
The competitive advantage of echo dictate/echo scribe is that it provides

the best of both the worlds, on one hand it equips the hospital or MTSOs
with the fast computer-assisted transcription and on the other hand, the
medical transcriptionist takes care of accuracy by instantly rectifying any
erroneous entry made by the speech recognition engine.
The medical transcription industry in United States is facing two

challenges, shortage of medical transcriptionists and high cost of medical
documentation.
The challenges faced by the Indian medical transcription industry are

quality and compensation.
Medical Transcription (MT) is an allied health profession which deals in

the process of transcribing or converting voice-recorded reports dictated by
physicians or other healthcare professionals into text format.
Speech recognition (SR) is the translation of spoken words into text also
known as speech- to-text.
Malapropism error is an unintentional misuse of a word by confusion with

the one that sounds similar.
While speech recognition (SR) is the translation of spoken words into

text also known as speech-to-text, voice recognition/speaker
recognition tries to identify the speaker utilizing the uniqueness of the
speaker's accent, pitch, speed, style, etc.
Front-end speech recognition is where the speaker (in our case the
healthcare provider) dictates into a computer microphone and the speech
gets converted into text in real time.
Echo dictate or echo scribe is the process of listening to the audio and
dictating into speech recognition software.
MTSO Medical Transcription Service Organization
SR Speech Recognition
136
IVR Interactive Voice Response
AIIMS All India Institute of Medical Sciences
DARPA Defense Advanced Research Projects Agency
CSR Continuous Speech Recognition ASR Automatic Speech Recognition
NLP Natural Language Processing
PPACA The Patient Protection and Affordable Care Act

• Medical Transcription
• Speech Recognition
• Malapropism Error
• Front-End Speech Recognition
• Echo Dictate
2. Define Speech Recognition and explain some of its uses in different

domains.
3. Match the following:

i. Homer Dudley (a) Phoneme Recognizer
ii. IBM (b) Dragon Systems
iii. Kyoto University (c) Harpy
iv. Carnegie Mellon University (d) The Voder
v. James Baker (e) Shoebox
4. Explain malapropism with examples.
5. Differentiate between speech recognition and voice recognition.
6. Discuss in detail the application of speech recognition technology in

medical transcription?
7. Differentiate between front-end speech recognition and back-end speech

recognition.
137
8. What is echo scribe?
9. Explain the challenges faced by medical transcription industry in United

States?
10.Explain the challenges faced by medical transcription industry in India?
11.Give the full forms of the following:

• SR
• AIIMS
• DARPA
• CSR
• NLP
1. To perform medical transcription you must be detail oriented and well

versed in medical terminology and proper spelling, grammar, and
punctuation.
a) True
b) False
2. Speech recognition tries to identify the speaker utilizing the uniqueness

of the speaker’s accent, pitch, speed, style, etc.
a) True
b) false
3. An intentional misuse of a word by confusion with the one that sounds

similar is:
a) Mondegreen
b) Eggcorn
c) Malapropism error
d) None of them
4. The process of listening to the audio and dictating into speech

recognition software is known as Echo dictate.
a) True
b) False
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5. What does MTSO stand for?

a) Medical Transcription Service Organization
b) Medical Telephone Service Organization
c) Medical Transport Service Organization
[Answers: 1(a), 2 (b), 3(c), 4 (a), 5 (a)]
3.14 CASE STUDY
COST SAVINGS WITH COMPUTER AIDED MEDICAL TRANSCRIPTION
The Million Dollar Question
On the television game show "Who Wants To Be A Millionaire," Meredith

Vieira often asks her contestants what they would do with the million
dollars if they were to win it. Would they travel? Quit their job? Buy a new
house?
A similar question might be asked of a hospital or clinic. If your healthcare

organization could save a million dollars on its transcription costs, how else
might the money be spent? On facility construction? Updating medical
equipment? Hiring additional staff? The possibilities are intriguing.
The Dragon® Medical 360 | eScription® on-demand platform for computer

aided medical transcription (CAMT) has helped hundreds of hospitals and
clinics do just that: drastically reduce their transcription costs. When
healthcare organizations save money, the inevitable result is improved
patient care, so everyone benefits. As many organizations operate on small
margins, saving a million dollars can represent a significant portion of their
profit or loss.
Over 20% of customers who have had the Dragon Medical 360 | eScription
platform installed for two or more years have saved over $1 million. The
million dollar question is, how did they accomplish this?
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Dollars And Sense: How Computer Aided Medical Transcription

Helps Healthcare Organizations Cut Costs
In the traditional transcription model, a clinician dictates and a Medical

Transcriptionist (MT) listens to the dictation and types up the clinician's
notes. In computer aided medical transcription, intelligent, background
speech recognition software creates a draft document from the dictation
which an MT then reviews and edits, rather than typing from scratch.
Because it is faster to edit than it is to type, computer aided medical

transcription results in significantly more productive MTs. This phenomenon
has important cost savings implications for healthcare organizations,
whether they have an in-house transcription team, rely primarily on
outsourced Medical Transcription Service Organizations (MTSOs), or a
combination of the two.
From an in-house perspective, gains in transcriptionist productivity

translate into greater resource capacity. This means doing "more for less"
or reducing the need for additional outsourcing expenses for overflow
work. The better the software is at creating increasingly accurate,
formatted drafts, the greater the volume of documents that can be
processed by internal MTs, at an increasingly faster rate over time.
Some healthcare organizations opt for outsourcing transcription services.

MTSOs that are primarily editing can charge less for the service they
provide, saving their transcription customers even more.
This white paper demonstrates how three different healthcare

organizations saved substantial amounts of money by working with
Nuance® and using the Dragon Medical 360 | eScription platform for
computer aided medical transcription. Understanding where the cost
savings came from in each case may help you determine how the Dragon
Medical 360 | eScription platform can do the same for your healthcare
organization.
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MAINE MEDICAL CENTER
Background
Maine Medical Center, located in Portland, is Maine's largest hospital. This
606-bed facility is a major referral center for northern New England. It is
both a teaching hospital and an active research center, providing
comprehensive services in a wide array of medical specialties.
Challenge
In 2000, transcription volumes at Maine Medical were steadily growing
across medical groups in its multi-location campus. The existing manual
transcription system was spread out across four different platforms which
were expensive and not integrated with one another. There was increasing
pressure from administration to control costs and reduce the transcription
budget while simultaneously handling the increased demand.
There were also challenges on the workforce side of the equation. Rising
labor costs and increasing competition for the most highly skilled MTs
meant that it was not practical to hire additional MTs as a response to
rising transcription volume and the resulting backlogs.
Goal: Increase Productivity

Given the labor situation, Maine Medical might have chosen to outsource a
larger portion of their transcription volume to MTSOs. However, after
weighing the options, it instead chose to concentrate on improving the
productivity of its existing in-house MTs. Administration viewed outsourcing
more as an intermittent stopgap measure rather than a long-term solution
to reducing transcription backlogs.
In the organization's view, this approach had several advantages: more

work could be produced without having to increase staffing levels; less
outsourcing would be required; transcription quality and turnaround time
would be improved; and employees would feel more highly valued by the
organization, thereby creating a more cohesive team.
141
Results
Maine Medical selected the Dragon Medical 360 | eScription platform as its
exclusive transcription platform in order to realize these benefits. HIM
Director John Avedian, MPH, RHIA, CHPS, stated, "If our transcriptionists
are more productive, the cost savings will follow. This will benefit not only
the HIM department but also the entire organization." In addition, Maine
Medical would be able to achieve economies of scale by using a single,
web-based transcription platform rather than four separate systems.
Using the Dragon Medical 360 | eScription platform as its computer aided
medical transcription solution, Maine Medical achieved the following results
between 2002 and 2005:
• Additional in-house capacity due to increased productivity meant less

outsourcing was required, thereby avoiding the associated costs. (Cost
Avoidance: $641,631.)
• Lower cost of outsourcing compared with previous platforms. (Cost

Savings: $324,965.)
• Web-based solution eliminated software purchases and allowed replacing

on-site staff with remote MTs. This eliminated the need to hire temp
agency MTs to cover vacationing staff and lowered overhead and
recruitment costs. (Cost Avoidance: $42,535.)
The Bottom Line

By maximizing the productivity of its in-house MTs, by paying a lower rate
for the outsourcing still needed, and by deploying a web-based enterprise-
wide solution that is less expensive to operate than previous systems, the
Dragon Medical 360 | eScription platform saved Maine Medical Center over
$1 million over a three-year period.
Your Bottom Line

How can you evaluate your healthcare organization's transcription system
to determine how to cut costs in this area? Here are some steps you might
want to take to begin the process:
142
Evaluate your current transcription system
• What challenges in medical transcription is your organization facing?
• If you use in-house MTs, what is the labor market like in your area?
• Are your MTs as productive as they can be?
• Do you have enough MTs on hand to handle the required volume? Are
your backlog levels acceptable?
• Will your system scale to the growth of your organization?
• If you outsource, how pleased are you with the results in terms of
quality, turnaround time, and cost?
Evaluate your current transcription costs
• What kinds of pressures exist to cut transcription costs within your

organization?
• Calculate the cost of hardware and software required for your present
system.
• If you use in-house MTs, consider all costs including salaries, benefits,
facilities overhead, temp sub fees, training costs, and recruitment costs.
• If you outsource, consider your outsourced volume and the current costs
using your present transcription system.
143
Evaluate the projected cost of Computer Aided Medical

Transcription
• If you use in-house MTs, determine how much additional capacity they
could handle at substantially increased productivity levels. As a
benchmark, consider that Dragon Medical 360 | eScription platform
customers with in-house teams typically experience a 70% increase in
capacity after one year. This means that the same team that could
produce 10 million lines per year prior to using the Dragon Medical 360 |
eScription platform can handle 17 million lines with the same resources
one year later.
• Determine whether you'll still need to outsource and, if so, what volume
would be required.
• If you plan to outsource, compare the MTSO cost per line between
traditional transcription on your old system, and editing documents on a
new one.
After you complete your own assessment, Nuance would welcome the
opportunity to help you evaluate the cost savings potential of computer
aided medical transcription at your organization. As in the case studies
presented, we expect that your organization will also be able to realize
substantial cost savings, whether you currently use in-house MTs,
outsourced MTs, or a combination of the two for your transcription needs.
Several years ago, the Dragon Medical 360 | eScription team within
Nuance established a Million Dollar Award. This award is given to those
organizations that have achieved a new level of "million dollar cost savings"
through using the Dragon Medical 360 | eScription platform, starting with
$1 million. As of May 2012, the 47 members of the Million Dollar Club have
collectively saved more than $190 million in transcription costs. By
choosing the Dragon Medical 360 | eScription platform, your healthcare
organization will be well positioned to enjoy similar levels of savings in
medical transcription.
(Source):
http://www.nuance.com/search-
resultsCostSaving_eScription_WhitePaper.pdf
144
References
Automatic Speech Recognition - A Brief History of the Technology

Development B.H. Juang# & Lawrence R. Rabiner*
# Georgia Institute of Technology, Atlanta
* Rutgers University and the University of California, Santa Barbara
http://www.wavelink.com/blog/the-history-of-voice-from-audrey-to-siri/
en.wikipedia.org/wiki/Speaker_recognition
http://www.lumenvox.com/resources/tips/types-of-speech-
recognition.aspx
h t t p : / / w w w . n u a n c e . c o m / s e a r c h - r e s u l t s /
CostSaving_eScription_WhitePaper.pdf
http://www.dolbey.com
145
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
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MEDICAL CODING
Chapter 4
Medical Coding
CHAPTER OBJECTIVES:

• Medical Coding
• Skills of Medical Coder
• How coding relates to revenue cycle management
• How medical coding influences revenue cycle management
• Certifying bodies
• Medical Code Sets and its types
• CPT, HCPCS, NDC, CDT, and ICD
• Difference between ICD-9-CM & ICD-10-CM/PCS
• General Equivalence Mappings (GEMs)
• Ways to improve coding quality for high performance revenue cycle
management
• Errors in Medical Coding
• Pricing
• Electronic software for coding
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MEDICAL CODING
STRUCTURE:
4.4.1 Introduction
4.4.2 Medical Coding
4.4.3 Need for Medical Coding
4.4.3 Skills of a Medical Coder
4.5 Coding relates to RCM
4.6 Medical coding influences RCM
4.7 Certification AAPC & AHIMA
4.8 Medical Code Sets
4.9 Current Procedural Terminology (CPT)
4.10 Healthcare Common Procedure Coding System (HCPCS)
4.11 National Drug Codes (NDC)
4.12 Current Dental Terminology (CDT)
4.13 International Classification of Diseases (ICD)
ICD-9 & ICD-10
4.14 Difference between ICD-9-CM & ICD-10-CM/PCS
4.15 General Equivalence Mappings (GEMs)
4.16 Ways to improve coding quality for a high performance RCM
4.17 Errors in Medical Coding
4.18 Pricing
4.19 Electronic Software for Coding
4.20 Summary
4.23 Case Study
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MEDICAL CODING
4.1 INTRODUCTION
On December 2, 1941, the message "Niitaka yama nobore" (Climb Mount

Niitaka) was sent from Tokyo to Japanese planes. This was the code to
launch the dreaded attack on Pearl Harbour.
A police dispatcher transmitting to the police officers "A Two Eleven (211)
is in progress at Park Avenue. This transmission tries to convey to the
patrolling police officers that a robbery is in progress at Park Avenue, as
211 is the code for a robbery in U.S.
Mankind has been obsessed with secret codes since the evolution of the
human intellect. As a kid even we all have been from time to time involved
into coding and decoding messages using special symbols to write notes
that nobody else except your friend would be able to understand. The most
significant periods for the extensive use of codes have been throughout the
World War I and II with the invention of the Trench code and Enigma code.
We have been mesmerized by the codes used in the fiction and thriller
movies and novels. The basic principle on which the codes are developed is
secrecy, but in this chapter, we will be discussing some codes which are an
exception to the case of secrecy. We will be studying about codes that will
be or must be known to most of the healthcare professionals and are to be
scrupulously used to efficiently perform their job responsibilities.
4.2 MEDICAL CODING
Code is a system used for transmitting messages requiring brevity or

secrecy.
Medical code characterizes a medical diagnosis or procedure/treatment

rendered by a healthcare provider and is used for the sake of brevity and
uniformity. Brevity and uniformity are two important functions of
medical coding.
Medical coding is the process of transforming descriptions of medical

diagnosis or procedure/treatment into universally standard medical codes.
These medical codes are maintained by professional societies and public
health organizations entrusted with developing and implementing
universally standard medical codes. These uniform medical codes are
required for smooth and speedy processing of standardized electronic
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transactions between healthcare entities. In the absence of standard

medical codes, it will be difficult for any clearing agency or payer to
process different types of electronic transactions or formats received from
various healthcare entities.
Medical coder is the person who transforms the medical diagnosis and
procedure/treatment into an appropriate numeric or alphanumeric medical
code. There are codes for each and every disease entity, each and every
procedure or treatment performed for any diagnosis, drugs, etc. The
medical coder should be able to decipher these codes accurately. They also
act as a liaison between the healthcare provider and the billing
department.
We have seen in earlier chapter of medical transcription that when a

patient walks into a doctor's office with a specific complaint, the doctor
examines the patient and makes an initial diagnosis. Once the diagnosis is
made, the doctor prescribes some medication and may order some tests
for final diagnosis. This whole encounter of the doctor and patient
interaction is documented into a clinic note. There are different types of
notes such as SOAP note, history and physical, emergency note, operative
note, discharge note, etc., depending on the situation of the doctor and
patient encounter.
One thing that is common in all of these notes is loads of medical

information about the patient's symptoms, diagnosis, and treatment plan.
The medical coder's job is to glean the vital information from these loads
of medical information present in the doctor's report/ note, assign
appropriate numeric and alphanumeric codes. These codes are entered into
the specific claim forms (CMS-1500 or UB-04) depending on the facility
where the medical service or treatment is delivered and send to the billing
department to create the claim.
Medical coding in India is presently confined to coding of specific disease

for epidemiological and statistical purposes only. Healthcare payers do not
play a role in the medical coding process of India as is the case in U.S.
where the healthcare providers are paid by the healthcare plans and hence
medical coding is to be performed in order to process the claim and
reimburse the healthcare provider. In India, coding of certain disease
entities is done for research purpose to study the widespread of the
disease and effectiveness of a particular treatment or vaccination over the
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disease. Healthcare scholars believe it will take some time for India to
adopt the medical coding in the way it is currently being adopted in
developed countries.
At present in United States, there exists scarcity of medical coders. Some

believe the gap between the demand and supply side of the medical coders
is around 30% to 40%. According to the reports of The Bureau of Labor
Statistics (BLS), it expects jobs in the medical coding and billing sector to
grow by around 22% between 2012 and 2022.
Hence, there is a growing demand for certified medical coders across the
globe especially in US, Middle East, and India.
4.3 NEED FOR MEDICAL CODING
One visit to any healthcare facility, small or big, and you are faced with a
large number of patients waiting to seek healthcare service for problems
ranging from mild-to-moderate and moderate-to-severe ailments. The
amount of medical data being prepared and stored in clinic and hospitals
for current and future use in the form of clinic notes, laboratory data,
clinical images, etc., is unfathomable. It will run from Petabyte through
Exabyte through Zettabyte.
Just to quantify these terms in figures let us have a look at the following
table
Data Storage Capacity
1000 Kilobytes (KB) is equivalent to 1 Megabyte (MB)
1000 Megabytes (MB) is equivalent to 1 Gigabyte (GB)
1000 Gigabytes (GB) is equivalent to 1 Terabyte (TB)
1000 Terabytes (TB) is equivalent to 1 Petabyte (PB)
1000 Petabytes (PB) is equivalent to 1 Exabyte (EB)
1000 Exabytes (EB) is equivalent to 1 Zettabyte (ZB)
1000 Zettabytes (ZB) is equivalent to 1 Yottabyte (YB)
Fig 4.1: Data Storage Capacity
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MEDICAL CODING
One petabyte could hold 500 billion pages of standard printed text. Many
experts feel that the healthcare data is running in Zettabytes. It is growing
everyday by leaps and bounds. Transferring all these data to and from the
physician to clearing houses to payers will be unimaginable over the
coming years.
When a report/note is generated by the medical transcription department it

may range from single to multiple pages for a single patient encounter. If
these reports are sent to the clearing houses or payer to process the claims
it will be impossible to assess all the reports and provide speedy claims.
The clearing houses or payers would have bunches of reports pending to be
processed and would create a bottleneck in the payment process.
In order to avoid this bottlenecking, medical coding department performs a

critical job of translating each and every important piece of information
from the medical report into a medical code. This aspect of medical coding
corresponds with the brevity function as it reduces the multiple-page notes
into codes.
The medical codes used for the coding purposes are unique and uniform
numeric or alphanumeric codes. There is a specific medical code for all
types of patient encounters, diseases, diagnostic tests, laboratory tests,
procedures, and drugs. This aspect of medical coding corresponds with the
uniformity function as the code for diabetes mellitus all over the world is
250.
For example consider the following medical report:
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MEDICAL CODING
RADIOLOGY REPORT
EXAM: Two-view left elbow radiograph.
INDICATION: Pain.
FINDINGS: No fracture, dislocation or soft tissue abnormality noted in the

left elbow. No effusion or edema noted. The radial head and capitellum
appear normal. There is no displacement of fat pads.
IMPRESSION: Negative for any acute bony abnormality of the left elbow.
CODES
CPT: 73070
ICD: 719.42
Now, the following radiology note prepared by the medical transcriptionist

will be sent to the medical coding department and the medical coder
utilizing the coding skills and techniques will code for the radiology note.
Medical coder will read the whole report and glean the billable services
from the note for which the provider will be paid. Of the above note, two
billable services are diagnosis of pain in joint, upper arm, code 719.42
which is an ICD code and diagnostic x-ray of the elbow performed, code
73070 which is a CPT code. Once the medical coder has finished coding the
report, the appropriate codes will be entered into a specific software and
sent to the billing department. So instead of sending the whole radiology
report, the medical coder will just send the below-mentioned codes to the
medical biller who will go ahead to submit the claim to the clearing house
or the payer.
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MEDICAL CODING
4.4 SKILLS OF A MEDICAL CODER
Medical coder has to exercise extreme caution to ensure that the codes are
accurate and justify the diagnosis. If there are inaccuracies in the codes,
the provider will not be reimbursed by the health plans leading to loss to
the practice. Hence employing an experienced and knowledgeable medical
coder is very crucial for any healthcare facility.
Medical coders need to have a thorough knowledge of human anatomy and

physiology, medical terminology, and coding guidelines. If the medical
coder does not have a sound medical knowledge, he/she will not be able to
decipher the billable services present in the medical documentation and
this in turn may lead to revenue loss of the healthcare provider.
If we talk about the number of codes, the ICD-10-CM alone has close to
69,101 codes, then we have the HCPCS, CPT, CDT, and NDC codes.
Imagine a medical coder requiring to remember all these codes, it would
literally be impossible. Hence the medical coder’s best friends are the
respective manuals for ICD, HCPCS, CPT, CDT, and NDC to find out the
appropriate codes.
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Fig 4.2: Medical Coding Flow Chart
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MEDICAL CODING
With years of experience and coding the routine diagnosis and procedures,
many medical coders become familiar with certain common codes used by
the respective healthcare provider. For example, a medical coder working
for a physical therapist would become very familiar with the physical
therapy evaluation code that is 97001 and a medical coder working for an
optometrist would become very familiar with the routine eye examination
code that is V72.0. Even though there are manuals and certain computer
programs to assist the medical coders in coding accurately, some of the
coding guidelines are complex and needs in-depth knowledge of codes or
even help from colleagues or other experienced coders.
Listed below are some of the prominent skills required for a

medical coder:
1. Medical skill: Thorough knowledge of medical terminology and human

anatomy and physiology is a must as the coder has to extract the
information to derive the codes from the medical reports.
2. Comprehensive skill: A medical coder has to read and understand

several pages of medical reports in order to winnow the billable
services, hence a good comprehensive skill is a mandatory requirement
for any successful medical coder.
3. Technical skill: As nowadays the usage of computer softwares to

search for a particular code is gaining importance as against searching
for codes in the coding manuals, the medical coder should be skillful
enough to learn and handle various new softwares.
4. Eye-for-detail skill: Coding is complex and ambiguous and sometimes

it becomes imperative to focus on smaller details when coding medical
reports. Hence this is another skill set that is required for a medical
coder in order to distinguish as a good coder.
5. Analytical skill: The medical reports contain large volume of
information and it is very crucial to analysis all the medical information
and logically isolate the vital information from the report. Any mistake
in properly analyzing the diagnosis or procedures may lead to inaccurate
coding.
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MEDICAL CODING
6. Interpersonal skill: Medical coders in case of uncertainty may have to

discuss with the healthcare providers, coder colleagues, or the billing
department to resolve the issues, hence good interpersonal skills will go
a long way to improve the accuracy of the coding.
7. Transformative skill: Codes keep on adding and changing owing to

the new rules and regulations laid by the governing body, therefore it
essential for a medical coder to be ready to embrace any transformation
in the coding system and be ready to learn new things.
8. Concealment skill: Since the medical reports as protected health

information, it is very important for the medical coder to respect the
privacy of the patient information and not to divulge any part of the
medical report to any unauthorized personnel.
4.5 HOW CODING RELATES TO REVENUE CYCLE

MANAGEMENT
At the core of the healthcare industry, doctors, nurses, and clinical

personnel are at the front lines when it comes to treating patients, and
saving lives. But, without revenue management, these hospitals and
healthcare facilities would not be able to operate. That’s where Coding and
Revenue Cycle Management comes in.
Coding and Revenue Cycle Management is the process that facilities use to
manage the administrative and financial functions associated with patient
registration, benefit verification, coding, claims processing, and payment
and collection, all integral aspects of revenue generation. The Coding and
Revenue Cycle Management process, encompasses all the elements that
complete the “cycle” of the patient visit, making it a versatile career
choice.
The key elements that make up the Coding and Revenue Cycle field
include:
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MEDICAL CODING
• Patient Pre-authorization Before a patient is seen they must go

through pre-authorization process where insurance providers determine
whether they will cover a medication, service, or procedure.
• Insurance Eligibility and Verification Medical office software can
include automatic checking of patient eligibility via the Internet over
secure channels. Using dedicated Revenue Cycle Management software
can speed up the process in verifying if a patient is entitled to a
particular benefit. Revenue cycle management personnel are always at
the forefront of this.
• Charge and Code Coding is at the heart of physician reimbursement,
hospital payments, quality review, benchmarking measurement and the
collection of general medical statistical data. Coding the patient visit
properly and in compliance with the individual payer requirements makes
this element key to successful generation of revenue.
• Claim Filing and Submission The submission of claims is the vital
stage in the overall process because the reimbursement directly depends
on it being done properly. Coding and revenue cycle management
personnel help ensure the payer reimburses in a timely manner and any
potential errors are resolved quickly and efficiently.
• Denial Management In the case where a claim is rejected, the revenue
cycle management professional steps in and resolves the errors and
ensures that the claim is scrubbed for coding errors and resubmitted in a
timely manner.
• Collections When there is reduced reimbursement from the payers
meaning the health plan did not cover all the services. It is the duty of a
Revenue cycle professional; to follow up with the Insurance Company,
make adjustments as needed or document the errors for future
consideration when billing.
The role revenue cycle staff and managers is undeniable. The revenue
cycle process ensures that hospitals and clinics receive proper payment for
services to keep facilities running smoothly and always prepared to receive
new patients.
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MEDICAL CODING
4.6 HOW MEDICAL CODING INFLUENCES REVENUE CYCLE
If you could assign a noise level to each area of your revenue cycle, in
what decibel range would medical coding fall? Often overlooked and
sometimes not even recognized as part of the process, coding is usually
“quiet” — when it’s done right and there is a solid strategy in place, that is.
However, with continuous regulatory changes and staffing pressures — and
sometimes a lack of top-down focus — coding can begin to look like a
cluttered desk. At first you don’t notice the extra papers, but as they
accumulate into stacks and your visible surface space disappears, the time-
consuming task of dealing with the backlog and finding a workable solution
going forward is simply overwhelming.
That’s why leaders who are looking to optimize performance and maximize
efficiency overall should never turn a blind eye to coding.
Medical Coding is Vital to Your Revenue Cycle
Coding lives mid-cycle, pretty much smack-dab between scheduling and

receipt of payment for the care rendered. It’s not patient-facing, and it’s
not particularly glamorous (that is, unless you hire rock star coders). But,
accurate coding leads to a clean claim, which results in prompt
reimbursement, and that’s why coding impacts your bottom line
profoundly.
Point blank, good quality coding means charges get out the door
correctly and quickly. And that results in prompt and accurate
payment for the services you provide.
It’s quizzical, then, that some healthcare organizations throughout the

nation — even the prestigious ones — don’t think of coding as part of
revenue cycle operations. Often coding answers to an HIM or compliance
director rather than to a financial leader, which only perpetuates the
communication gap and lack of collaboration between coding and billing.
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MEDICAL CODING
To understand why coding and billing need to learn to speak the same
language, consider preventive versus diagnostic care. Under the Affordable
Care Act, insurance plans cover preventive care without patient cost
sharing (that is, without co-pays, coinsurance, or deductibles), but services
that are not classified as preventive care are subject to cost sharing. It is
important for physicians and their coding and billing staff to differentiate
between the two — and to catch each other’s errors — in order to avoid
blindsiding patients and avoid experiencing a revenue loss.
When coding is revered as part of your revenue cycle, efficiency and

communication improve, and that’s a sure win.
Medical Coding May be Slowing Down Your Process
Bottlenecks can occur anywhere in your revenue cycle, and coding is no

exception. Your volume of charts to code might be large and ominous. You
might be understaffed. Your coder productivity may suffer as the result of
inefficient workflows.
When the pace of coding slows, revenue cycle performance is

impacted.
If you have a backlog of charts to code, you risk missing the timely filing
deadlines set by payers. The issue here is almost always understaffing in
the coding department. Coders today come at a premium price, and hiring,
training and retaining the good ones have associated costs, too.
Most information systems allow customizable edits to stop claims with

errors from going out the door. They can drive automation with solutions
like coding crosswalks for specific requirements. But sometimes, a
crosswalk is mapped to the wrong code, resulting in denials. It takes an
eagle-eyed coder to discover errors of this nature so that they can be
corrected within the system. Straight up, not every coding department
takes time, or enough time, for system edits.
Working denials is a time-consuming, multi-step process that includes

determining the reason, researching, re-coding, and re-submitting, all
under yet another deadline. And honestly, few coders love to work denials,
especially when they are already busy with new charges, which always hold
the priority. Further, many coding operations are so focused on “working”
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denials that they miss opportunities to prevent them by identifying trends

and putting in place proper solutions. Are new system edits required? Is
there a coder-education opportunity to prevent repeat errors?
Coding might not be the first thing that comes to mind when you have
problems in your revenue cycle, but we assure you, after partnering with
dozens of healthcare organizations of every size and shape across the
nation, that having competent, efficient coders whose work blends
seamlessly into the revenue cycle will result in fewer denials and quicker,
more accurate adjudication. Big-picture thinking about how to prevent
errors is a must, and it goes way beyond just correcting and re-submitting
them.
4.7 CERTIFICATION
Certification is the key for a successful career in medical coding. If you

want to pursue medical coding as your career, then you have to consider
getting certified from a recognized institute. Coding is a difficult job and
requires high level of dedication and certification indicates that you have
the applicable experience and knowledge of the domain to perform the job
duties with the required speed and accuracy.
Certification is not mandatory for the medical coding field and one can also
derive it from the fact that almost 80% to 90% of the medical coders
working in India are not certified. Having said that, certification plays a
very important role in career growth and better salary package. Being a
certified coder implies that one is committed to make a long- term career
in healthcare domain by imbibing quality information. Medical coding is a
responsible position and certification projects the coder as a more
appealing candidate than the competitors and is one of the prime
qualifications any employer looks for when considering a potential
candidate for the job. On an average, certified medical coders earn 20% to
25% more than the non-certified medical coders and are also preferred by
the healthcare KPOs for management roles in case of an internal job
posting (IJP). Certification also becomes an added advantage in terms of
negotiating a salary or a promotion. Certain healthcare facilities insist their
vendors on hiring a certified medical coder.
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Medical coding certification is offered by two professional organizations

namely AAPC (American Academy of Professional Coders) and AHIMA
(American Health Information Management Association) offers certification
both based in U.S. If a person needs to obtain any type of certification in
the medical coding field, he needs to appear for one of the exams
conducted by any of these two professional bodies, viz, AAPC and AHIMA at
their respective exam centers. There are various other institutions offering
certifications but certification from AAPC and AHIMA are most widely
accepted all around the globe.
While getting certified is of importance it is equally necessary to know

which certification to be obtained as both of these organization offers a
host of certification to serve different job profiles. While on one hand AAPC
is more focused towards physician-based coding, AHIMA on the other hand
is more focused towards hospital-based coding. Hence the onus lies on the
medical coder to decide which certification he wants to opt for as different
certifications will have different training protocols.
Fig 4.3: Medical Coding Certification Institutes
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American Association of Professional Coders (AAPC):
The American Association of Professional Coders (AAPC) was established in

1988 to provide certification and credentialing usually for medical coders in
physicians' office. It is a national group that is dedicated to advancing
the medical coding profession. It is the largest organization of professional
medical coders. Since its inception, AAPC has also started offering hospital-
based coding but still the Certified Professional Coder (CPC) exam
conducted by the AAPC remains the most popular among budding medical
coders both in U.S. and in India. Let us in brief look at some of the
certifications offered by American Academy of Professional Coders (AAPC).
There are basically four certifications provided by the AAPC.
These certifications are as follows:
1. Certified Professional Coder (CPC®): AAPC's Certified Professional

Coder (CPC®) credential is the most sought after certification for
medical coding in physician office setting. There are over 80,000 CPC
certified professionals all over the globe.
A CPC is proficient in assigning accurate medical codes for diagnoses

(ICD), procedures (CPT), and services (HCPCS) in the inpatient setting.
Despite being an open book exam, that is, one is allowed to use AMA
approved standard or professional version CPT coding manual, it needs
in-depth medical terminology and coding knowledge to clear the exam.
2. Certified Professional Coder-Hospital Outpatient (CPC-H®): A

CPC-H professional is proficient in assigning accurate medical codes for
diagnoses (ICD), procedures (CPT), and services (HCPCS) in the
outpatient or hospital setting. In addition, CPC-H is able to effectively
complete CMS 1500 for Ambulatory Surgery Center (ASC) services and
UB04 for outpatient services, including the appropriate application of
modifiers.
3. Certified Professional Coder-Payer (CPC-P®): The CPC-P exam is

undertaken by coders who wish to work for insurance payers. They
d e m o n s t ra t e a s o u n d k n o w l e d g e o f c o d i n g g u i d e l i n e s a n d
reimbursement methodologies for all types of services from the payer's
perspective.
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4. Certified Inpatient Coder (CIC™): CIC is the latest certification

awarded by AAPC and a CIC professional is proficient in reviewing
medical records and code accurately for inpatient facility.
If an inexperienced person appears for any of the above exams and passes
out, he is awarded an apprentice degree. This apprenticeship is designated
by a "-A" on their certificate, that is, CPC-A. Upon completion of two years
in the medical coding field, an apprentice gets upgraded to a full-time
coder (CPC) and the "-A" from the degree is removed away.
Apart from the above certifications, AAPC also provides speciality

certification. Since the medical coding field is so vast, it is hard to master
all the specialties, therefore, medical coders tend to choose a particular
speciality and improve their coding skill with respect to that specific field of
coding. These specialty certifications are meant to cater to those coders
who intend to make career in these medical specialties.
Some of the speciality certifications offered by AAPC are as listed below:
Ambulatory Surgical Center - (CASCC™)
Anesthesia and Pain Management - (CANPC™)
Cardiology - (CCC™)
Cardiovascular and Thoracic Surgery - (CCVTC™)
Chiropractic - (CCPC™)
Dermatology - (CPCD™)
Emergency Department - (CEDC™)
Evaluation and Management - (CEMC™)
Family Practice - (CFPC™)
Gastroenterology - (CGIC™)
General Surgery - (CGSC™)
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Hematology and Oncology - (CHONC™)
Internal Medicine - (CIMC™)
Interventional Radiology and Cardiovascular - (CIRCC®)
Obstetrics Gynecology - (COBGC™)
Orthopaedic Surgery - (COSC™)
Otolaryngology - (CENTC™) Pediatrics - (CPEDC™)
Plastics and Reconstructive Surgery - (CPRC™)
Rheumatology - (CRHC™)
Surgical Foot & Ankle - (CSFAC™)
Urology - (CUC™)
American Health Information Management Association (AHIMA):
American Health Information Management Association (AHIMA) formerly

known as the Association of Record Librarians of North America was
founded by the American College of Surgeons in 1928. AHIMA is the
second largest organization for professional coders. Unlike AAPC, the
AHIMA's certifications are more focused towards hospital-based coding.
Let us in brief look at some of the certifications offered by American Health

Information Management Association (AHIMA).
There are basically three certifications provided by the AHIMA. These

certifications are as follows:
1. Certified Coding Assistant (CCA): CCA certification signifies that

the coder is expert in both settings inpatient and outpatient setting. It
is a general certification but does not provide any specialization.
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2. Certified Coding Specialist (CCS): CCA certification demonstrates that

the coder's high level of competency for hospital coding. It is the
specialized certification developed for coders who wish to pursue jobs in
the hospital setting.
3. Certified Coding Specialist - Physician Based (CCS-P): CCS-P

certification is for coders who wish to enhance their expertise in
physician-based settings such as physician offices or clinics. The CCS-P
is also an expert in health information documentation and data integrity.
NOTE: The CCA, CCS, and CCS-P are the only coding certifications that are
currently accredited by the National Commission for Certifying Agencies
(NCCA).
Previously, AAPC used to offer certification pertaining to physician-based

setup and AHIMA used to offer certification pertaining to hospital-based
setup, but lately, both the organizations have started offering courses for
both settings which is clear from CCS-P offered by AHIMA and CPC-H
offered by AAPC.
4.8 MEDICAL CODE SETS
Facing challenge in transitioning from ICD9 to ICD10?

What are these ICD9 and ICD10? These are code sets or in plain English
these are codes used for encoding medical data.
Medical code sef defines a standardized medical condition, treatment, or
service. It consists of unique numeric or alphanumeric code for the
specified diagnosis and services performed by the physician. Covered
entities make use of these uniform codes to carry out any kind of electronic
transactions. They are values that are used in the data fields of electronic
transaction form to identify a specific medical condition, procedure, or
other service. These medical code sets are usually developed and
maintained by professional societies and public health organizations and is
a requirement to carry out any standardized electronic transactions.
A medical coder takes the help of approved coding manuals to look for the
required codes. Nowadays, there are several softwares available for
medical coders to lookup the codes but still sometimes the traditional tried
and tested method of using the coding manuals remains fit for the job.
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There are different coding manuals available such as ICD-9, CPT, HCPCS,
etc.
The code set rule defined by HIPAA requires use of the following medical
code sets for any electronic transactions: CPT, ICD, HCPCS, CDT, and
NDC.
International
Classification of
Diseases
(ICD)
Healthcare
Common National Drug
Procedure Codes
Coding System (NDC)
(HCPCS) Medical
Data Code
Sets
Codes on
Current
Dental
Procedural
Procedures and
Terminology
Nomenclature
(CPT)
(CDT)
Different types of medical code sets

Fig 4.4: Types of Medical Code Sets
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4.9 CURRENT PROCEDURAL TERMINOLOGY (CPT) CODES:
The CPT-4 codes are used to describe medical, surgical, and diagnostic
services performed in physician's office. The "-4" in the CPT-4 signifies that
it is the fourth edition. These are 5-digit numeric or alphanumeric codes.
The CPT codes are maintained and distributed by the American Medical
Association (AMA). AMA holds the copyright for the CPT coding system and
updates it annually. All the service providers need to pay a license fee in
order to access these CPT codes.
CPT-4 codes are again bifurcated into three main categories:
Category I:
Category I of the CPT-4 codes is the one which are most widely used. It is
divided into six different sections as follows:
Sections Description Range

One Evaluation and Management 99201 to 99499
Two Anesthesiology 00100 to 01999 and 99100 to
99150
Three Surgery 10021 to 69990
Four Radiology 70010 to 79999
Five Pathology and Laboratory 80047 to 89398
Six Medicine 90281 to 99099 and 99151 to
99199 and 99500 to 99607
Fig 4.5: Category I of CPT-4 codes
Category II:
Category II of the CPT-4 codes corresponds to clinical components usually
included in performance management or clinical services. It intends to
provide some extra information related to the Category I codes. These
codes consist of four digits followed by the character F, example, 3006F.
These codes are optional but provide important information that is in
performance management and future patient care. It is billed with a zero-
dollar charge amount.
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Category II is divided into the following groups:

Codes Description Range
Composite These codes combine a group of procedures 0001F through 0015F
usually occurring in conjunction with the
main procedure
Patient Management This section includes codes for patient care 0500F through 0575F
Patient History This group contains codes for Patient history 1000F through 1220F
Physical Examination Physical examination codes are listed in this 2000F through 2050F
category
Diagnostic or Screening This group contains codes for laboratory and 3006F through 3573F
Processes or Results diagnostic tests
Therapeutic, Preventive Codes for pharmacologic, procedural or 4000F through 4306F

or Other Interventions behavioural therapies are listed in this
section
Follow-up or Other This section includes codes for patient 5005F through 5100F
Outcomes functional status, morbidity or mortality and
communicating test results to patient
Patient Safety Codes of precautionary measures for patient 6005F through 6045F
safety are present in this section
Structural Measures It consists of codes describing the setting of 7010F through 7025F
the delivered care
Fig 4.6: Category II of CPT-4 codes
Category III (0016T-0207T):

Category III of the CPT-4 codes represents the new and emerging medical
technology, procedures, and services. It has been created to allow for data
collection of new services and procedures. These codes consist of four
digits followed by a letter, example, 0207T. Category III codes are
temporary codes, and once approved by American Medical Association
(AMA), they become Category I code.
CPT Modifiers:
CPT modifiers are two digit numeric codes. Modifiers are added at the end
of the parent CPT code in order to provide detailed information about the
procedure or service. Sometimes the parent CPT code is unable to convey
the whole information about the procedure or healthcare service in such
cases this two-digit modifier is placed at the end of the parent CPT code
separated by a hyphen.
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Example 1:
Consider a case where a surgeon is performing a procedure on two
different patients for the same ailment. Both the operation time may vary
owing to different complications encountered during the actual operation
and remedial action taken by the surgeon for the same. Each operation has
an expected range of complexity, length, risk, and difficulty. When the
operation provided exceeds these normal ranges (it is more complicated,
complex, difficult, or requires more time than usual), a modifier is added to
denote the same.
Now, it would be unfair to reimburse the same amount to the surgeon in

both these procedures just because the operation was same, the reason
being the surgeon had to put in extra time for the second operation. Hence
a two-digit code called CPT modifier is placed at the end of the main CPT
code to signify that the surgeon has spent some extra time in performing
the operation. In this case, modifier "-22" will be placed at the end of the
CPT code. This basically conveys to the payer that the surgeon did some
additional work and needs to be paid accordingly.
Example 2:
Consider another case where the treating physician has to refer the patient
to an outside laboratory to perform some laboratory testing. This may
happen when physician's facility does not have the capability to perform
laboratory work in their setting. In this case, the physician bills for the
laboratory work performed by using a modifier "-90," denoting that the
laboratory work was performed by an outside laboratory. The physician
bills the patient's insurance company and the laboratory bills the physician
for payment and not the patient's insurance company.
There is provision for adding up to four different types of CPT modifiers

arranged in the order of the modifier that will directly affect the
reimbursement process.
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4.10 HEALTHCARE COMMON PROCEDURE CODING SYSTEM

(HCPCS) CODES:
Commonly pronounced as "hick-picks." The Healthcare Common

Procedure Coding System (HCPCS) was established in 1978 to provide a
standardized coding system for describing medical procedures and services
when healthcare is delivered.
The HCPCS code system was developed by the Centers for Medicare and
Medicaid (CMS) and in most cases is similar to the CPT code maintained
and distributed by the American Medical Association (AMA) which we have
learned earlier. The reason for this similarity between the HCPCS and CPT
is that the HCPCS codes are based on the CPT codes but also contains
codes for services, procedures, and equipment that are not covered by CPT
codes, therefore, one can say that all CPT codes are HCPCS codes, but not
all HCPCS codes are CPT codes.
Since both HCPCS codes and CPT codes are similar, medical coders are
faced with an imminent problem of choosing the correct code set to be
used for the reimbursement. One of the best methods is to find out what is
the preferred code (HCPCS or CPT) of the health plan to which you are
submitting the claim. For the proper use of the HCPCS code it is necessary
that the medical coder has a sound knowledge of fractions and decimals
used in the dosage and strength of drugs.
Like CPT, HCPCS codes are further bifurcated into three levels:
Level I:
Level I HCPCS codes are identical to the CPT codes and are numeric. There
arises a question in the mind of a medical coder that if both the codes are
identical how one would differentiate whether it is a HCPCS code or a CPT
code. The answer is look at the health plan if these codes are used in
Medicare or Medicaid, they are referred to as HCPCS codes, and if these
codes are used in private health plans, they are referred to as CPT codes.
Example:
Consider a person visiting a physician's office to get a flu shot. The HCPCS/
CPT code for administering flu shot is 90658. The physician will mention
this code and send it to the health plan of the patient for reimbursement. If
the person's health plan is Medicare or Medicaid, this 90658 code will be
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referred as HCPCS codes, and if the person's health plan is any other
private health plans, this 90658 code will be referred as CPT codes.
Level II:
Level II HCPCS is a standardized coding system that consists of

alphanumeric codes generally used by medical suppliers. They consist of a
single alphabetical letter followed by four numeric digits, while the Level I
HCPCS consist of five numeric digits. These codes are also sometimes
referred to as national codes. These codes include non- physician services
like ambulance services, durable medical equipment (DME), etc. These are
typically not costs that get passed through a physician's office so they
must be dealt with by Medicare or Medicaid differently from the way a
health insurance company would deal with them.
The main reason for establishing the Level II HCPCS codes was that
Medicare and Medicaid generally pay for certain services (ambulance
services, durable medical equipment (DME), etc.) required for the
healthcare of the patient, but these services are not listed in the CPT
codes, hence in order to form a uniform coding system Level II HCPCS
codes were developed. For example, consider the Level II HCPCS "G codes"
which contains codes for temporary procedures and professional healthcare
services for which there are no CPT-4 codes, as CPT-4 codes contains
mainly procedures performed on the patient but does not have extensive
codes for the product used in the procedures.
Level II HCPCS codes are further divided into the following 17 sections
according to the single alphabetical letter which precedes the four digits of
the HCPCS codes. The 17 divisions are as represented below:
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Codes Description Range

A Transportation, Medical and Surgical Supplies, Miscellaneous A0021 through A9999
and Experimental
B Enteral and Parental Therapy B4000 through B9999
C Temporary Hospital Outpatient Prospective Payment System C1204 through C9899
D Dental Codes D0000 through D9999
E Durable Medical Equipment E0100 through E9999
G Temporary Procedures and Professional Services G0008 through G9360
H Rehabilitative Services H0001 through H2037
J Non-orally Administered Medication and Chemotherapy J0120 through J9999

Drugs
K Temporary Codes for Durable Medical Equipment Regional K0000 through K9999
Carriers
L Orthotic/Prosthetic Procedures L0112 through L9999
M Medical Services M0064 through M0301
P Pathology and Laboratory P2028 through P9999
Q Temporary Codes Q0035 through Q9969
R Diagnostic Radiology Services R0000 through R5999
S Private Payer Codes S0000 through S9999
T State Medicaid Agency Codes T1000 through T9999
V Vision/Hearing Services V0000 through V5364
Fig 4.7: All 17 sections of Level II HCPCS codes
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Temporary HCPCS codes
There are two types of national codes, viz, permanent national codes
and temporary national codes. While the permanent national codes are
updated once annually, the temporary national codes are updated
quarterly. The CMS HCPCS workgroup has set aside certain sections of the
Level II HCPCS code set to allow the workgroup to develop temporary
codes for a health insurer that does not exist in the current existing
national code. If a particular insurer feels the need to have a specific code
that currently does not exist in the national code set before the scheduled
annual update of permanent national codes, it wound approach the CMS
HCPCS workgroup which would then develop and maintain the new
temporary code.
Temporary codes allow health insurers the flexibility to develop codes

needed for normal operation before the next annual update or until a
unanimous decision can be achieved for a permanent national code.
Different types of temporary HCPCS codes:
1. The C codes were established to permit implementation of section 201

of the Balanced Budget Refinement Act of 1999. HCPCS C codes are
utilized to report drugs, biologicals, magnetic resonance angiography
(MRA), and devices that must be used by hospital outpatient
prospective payment system (HOPPS).
2. The G codes are used to identify professional healthcare procedures and

services for which there are no CPT-4 codes.
3. The H codes are used by State Medicaid Agencies that are mandated by
State law to establish separate codes for identifying mental health
services such as alcohol and drug treatment services.
4. The K codes were established for use by the DME MAC (Durable Medical
Equipment Medicare Administrative Contractor) when the currently
existing permanent national codes do not include the codes needed to
implement a DME MAC medical review policy.
5. The Q codes are used to identify services such as drugs, biologicals, and
other types of medical equipment or services, and which are not
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identified by national Level II codes but for which codes are needed for
claims processing purposes.
6. The S codes are used by the Blue Cross Blue Shield Association (BCBSA)
and the America's Health Insurance Plans (AHIP) to report drugs,
services, and supplies for which there are no national codes. These
codes are also used by the Medicaid program, but they are not payable
by Medicare.
7. The T codes are designated for use by Medicaid State Agencies to

establish codes for items for which there are no permanent national
codes (T codes are not used by Medicare but can be used by private
insurers).
Level III:
Level III HCPCS codes referred to as local codes were developed and used
by Medicare and Medicaid in their local areas of jurisdiction hence the
name local codes. The usage of Level III was discontinued on December
31, 2003. Local codes were developed to identify a service which neither
had a Level I HCPCS or a Level II HCPCS code instead of just using
"miscellaneous/not otherwise classified" code. In such cases, health
insurers preferred that medical suppliers use a local code.
Level III HCPCS were discontinued due to the implementation of HIPAA

which warranted requirement of adopting uniform standards for coding
systems used for electronic healthcare transactions.
So basically one can also say that HCPCS has two levels, viz, Level I/CPT-4
codes and Level II/National codes.
HCPCS Modifiers:
The basic principle of using an HCPCS modifier remains the same as with
CPT modifier, that is, to achieve detailed information about the procedure
or service. With respect to the two levels of HCPCS codes, there are two
levels of HCPCS modifiers. Level I HCPCS modifiers are similar to the CPT
modifiers as Level I HCPCS codes are identical to CPT codes. They are two-
digit numeric codes. Level II HCPCS modifiers are two digits alphabetic or
alpha-numeric codes (AA through VP)
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Example 1:
For example, a "UE" modifier is used when the item identified by a HCPCS
code is "used equipment," and a "NU" modifier is used for "new
equipment."
Example 2:
HCPCS modifier Q3 is used to report a live kidney donor surgery and
related services. This modifier allows 100% reimbursement of the live
kidney donor's medical services.
The order of placing the HCPCS modifier is same as of the CPT modifier, the
functional modifiers are placed before the informational modifier. A
functional modifier is one which would affect the reimbursement amount
while an informational modifier is one which would provide extra
information rather than directly affecting the reimbursement amount.
4.11 NATIONAL DRUG CODES (NDC):
The National Drug Code (NDC) is a unique 11-digit numeric identifier

assigned to each specific drug or product administered to the patient
intended for human use in the United States. In some situations the NDC
are 10 digit and need to be converted to 11-digit format to successfully
include in the claim form. If the NDC is not submitted in the correct format,
the claim will be denied. It is maintained and distributed by Health and
Human Services (HHS).
There is some overlap between HCPCS codes and the NDC codes, with a
subset of NDC codes identical to a subset of HCPCS and vice-versa. A
crosswalk from NDC to HCPCS in the form of an excel file is maintained by
CMS and is updated on a quarterly basis.
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4.12 CURRENT DENTAL TERMINOLOGY (CDT):
The Current Dental Terminology (CDT) also known as Code on Dental

Procedures and Nomenclature is maintained and distributed by the
American Dental Association (ADA). It lists the codes for dental procedures
and its supplies. It was developed in order to achieve uniformity and
consistency in reporting different types of dental procedures.
If a medical coder judiciously uses the accurate CDT code, it would help the
health insurer to efficiently process the dental claims thereby benefiting the
provider. The CDT4 is included in HCPCS Level II as "D codes" (D0000
through D9999). Though it is included in Level II HCPCS since it is
copyrighted by the American Dental Association (ADA), all decisions
pertaining to the modification, deletion, or addition of CDT codes are made
by the ADA and not the HCPCS workgroup.
4.13 INTERNATIONAL CLASSIFICATION OF DISEASES

(ICD) CODES:
The foundation of the International Classification of Diseases codes were

laid in the year 1893 by a French physician named Jacques Bertillon when
he decided to keep a record of the possible reasons for death in his book
titled The Bertillon Classification of Causes of Death. Later in 1948, the
World Health Organization (WHO) assumed responsibility for preparing and
publishing the revisions to the ICD every ten years. Since then ICD has
seen several modifications to simplify the classification of codes.
The main objective of developing the ICD codes was to create a universal
code for describing the causes of injury, illness, and death. It is the most
widely used statistical classification system for diseases in the world. The
ICD codes have been updated several times since the version of ICD-6
published in 1949. In this naming system, the "-6" stands for the sixth
edition of the ICD code.
Following the ICD-6, other versions were created such as ICD-7, ICD-8,
and then ICD-9. After the publication of ICD-9, that is the ninth edition of
International Classification of Diseases, a need was felt to include some
additional morbidity detail and also to increase the specificity of the code.
This set of revisions was put in place by the National Center for Health
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Statistics (NCHS), a division of the Center for Medicare and Medicaid

Studies (CMS). Hence the current version of ICD which is being used
worldwide is ICD-9-CM. Here the "CM" stands for clinical modification.
Therefore it is called as International Classification of Diseases, 9th Edition,
Clinical Modification.
ICD-9:
In short, one can say that ICD-9-CM provides codes for the reasons the
Current Procedural Terminology (CPT) and Healthcare Common Procedural
Coding System (HCPCS) procedures or services were provided.
Current Procedural Terminology (CPT) and Healthcare Common Procedural

Coding System (HCPCS) procedures informs the health insurer "WHAT"
was the procedure and ICD codes explain to the health insurer "WHY" the
physician or surgeon performed that certain procedure.
The ICD-9-CM consists of two sections:
First section named as ICD-9-CM Volumes 1 and 2 contain diagnosis

codes. The Volume 1 consists of tabular list of diseases and Volume 2
consists of alphabetic list of diseases. ICD- 9-CM Volumes 1 and 2 are 3- to
5-digit codes and in all there are approximately 14,000 codes.
Second section named as ICD-9-CM Volume 3 contains tabular and

alphabetical list of procedure codes. ICD-9-CM Volumes 3 are 3- to 4-digit
codes and in all there are approximately 4000 codes.
Since volume 3 contains list of procedure codes many new medical coders
get confused with the proper usage of ICD-9-CM Volume 3 and HCPCS. The
main difference is ICD-9- CM Volume 3 is used for inpatient setting to
obtain reimbursement, that is, it is to be used in hospitals to identify
procedures performed on patients admitted in their facilities, whereas for
other procedures HCPCS must be used. CMS instructs hospitals to use
Volume 3 codes for inpatient setting, but the HIPAA standard is to use
Healthcare Common Procedure Coding System (HCPCS) codes in every
other setting.
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ICD-9-CM Volumes 1 and 2 contain diagnosis codes ranging from 001

through 999. Volumes 1 and 2 are used simultaneously by the medical
coders in order to attain the accurate diagnosis codes. The ICD-9-CM
Volumes 1 and 2 are divided into 19 chapters, 17 chapters which covers
certain group of diseases and two chapters called as E-codes and V-codes.
The E- codes and V-codes are called as supplemental classification which
will aid in coding more accurately. They provide additional information to
the basic diagnosis codes.
E and V codes of ICD-9-CM
E codes are supplementary classification of external causes of injury and

poisoning. It ranges from E800 to E999. For example, auto accidents,
poisoning, etc. If we look at the chapter table below, we will notice that the
range 800 to 999 is for injury and poisoning whereas range E800 to E999
is for external causes of injury and poisoning, so what does is really simply.
E codes are supplementary classification of ICD-9-CM diagnosis code and

are NEVER to be used as the first-listed diagnosis as E codes describes the
events and circumstances that caused the primary injury and not the injury
itself.
There are two basic reasons for implementation of E codes:
1. It is used for statistical purposes (Example, there are E codes

specifically for auto accidents (E810 to E825), so if one has to find out
the number of accidents in a particular region in a given year, he has to
just pull those E codes.)
2. It helps to define the possible extent of the injury (Example, if a

person has suffered an auto accident by head on collision with another
vehicle (E813) there will be more grievous injury than a person who
has suffered an auto accident by hitting the lamp post, E815)
V codes are supplementary classification of factors influencing health

status and contact with health services. These are encounters for
circumstances other than for the diagnosis and treatment of diseases or
injuries such as organ or tissue donation, screening for hereditary disease,
vaccination, etc. It ranges from V01 to V91.
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Example of V Code:
A person visiting the healthcare provider for assessment due to a family

history of diabetes. In this case, the person himself at the present time is
not suffering from diabetes, but wants to get himself assessed due to a
family history to mitigate any future risk.
Below table represents the 19 chapters of ICD-9-CM Volumes 1 and 2 of

which 17 chapters are specific to group of diseases and 2 chapters related
to E-codes and V-codes.
Fig 4.8: 19 Chapters of ICD-9-CM Volumes 1 and 2
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ICD-9-CM Volumes 3: As we have mentioned earlier, the procedural

codes mentioned in the Volume 3 of ICD-9-CM is used only when the
patient is admitted in the hospital.
This section of ICD-9-CM is further divided into 17 chapters as listed

below:
Fig 4.9: 17 Chapters of ICD-9-CM Volumes 3
Note: Since the ICD-9-CM Volumes 3 contains codes for inpatient

procedures and not for the diagnosis coding (reason for the cause of the
death) it is especially used in U.S. only and the ICD-9-CM Volumes 1 and 2
which contains diagnosis coding (reason for the cause of the death) which
is maintained by the World Health Organization (WHO) is used worldwide.
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ICD-10:
Although currently ICD-9-CM is the gold standard of coding and is
religiously used worldwide for medical coding, it has reached the maximum
level and further addition of new code is
not possible in ICD-9-CM. Therefore, in order to be able to add additional
codes for increased specificity, ICD-10, the tenth edition of ICD has been
developed and is set to be implemented on October 1, 2015. ICD-10 offers
more specificity and accuracy in the medical coding process and contains a
whole lot more codes than the ICD-9-CM.
Similar to ICD-9, ICD-10 is also divided up into two parts ICD-10-CM and
ICD-10-PCS. ICD-10-CM, International Classification of Diseases, 10th
Edition, Clinical Modification is similar to ICD-9-CM Volumes 1 and 2 and
consists of all the diagnosis code whereas ICD- 10-PCS is similar to ICD-9-
CM Volumes 3 and consists of all inpatient procedural codes. ICD-10-CM is
maintained by the WHO and is expected to become the new gold standard
across the globe for medical coding.
One of the easiest ways to find out which coding manual is to be used for
coding a particular disease or procedure is to ask two questions, WHAT IS
DONE? & WHY IS DONE?
Fig 4.10 : What & Why of ICD
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4.14 DIFFERENCE BETWEEN ICD-9-CM & ICD-10-CM/PCS
Although ICD-9-CM and ICD-10-CM/PCS are updated versions of ICD,

there are quite a few differences between both the editions of the
classifications of diseases.
1. The main difference lies in the number of codes in each of these coding
manuals.
• Diagnosis codes: ICD-9-CM (Volume 1 and 2) diagnosis codes are

14,025 codes while the ICD-10-CM diagnosis codes are 69,823 codes.
• Procedure codes: ICD-9-CM (Volume 3) procedure codes are 3824

codes while the ICD-10-PCS procedure codes are 71,924 codes.
2. Length of the codes in each of these coding manuals.
• Diagnosis codes: ICD-9-CM (Volume 1 and 2) diagnosis codes are 3-

to 5-digit codes while the ICD-10-CM diagnosis codes are 3- to 7-digit
codes.
• Procedure codes: ICD-9-CM (Volume 3) procedure codes are 3- to 4-

digit codes while the ICD-10-PCS procedure codes are 7-digit codes.
3. The V-codes present in ICD-9-CM (Volume 1 and 2) diagnosis codes

have been replaced by Z codes in ICD-10-CM to describe circumstances
outside of injury or disease that cause a patient to visit a healthcare
provider.
4. ICD-9-CM has reached it maximum accomodation point and does not

have scope to add new codes, on the contrary ICD-10-CM/PCS have
been built in such a way that it has scope to add vast number of new
codes as and when they are developed.
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Below is a simplified chart to highlight the differences between ICD-9-CM &

ICD-10-CM/ PCS
Fig 4.11: Key differences between ICD-9-CM & ICD-10-CM and ICD-10-
PCS code sets
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The Department of Health and Human Services (HHS) has mandated that
all entities covered by the Health Insurance Portability and Accountability
Act (HIPAA) must transition to the new ICD-10 code set for electronic
healthcare transactions on October 1, 2015. Even though the use of
ICD-10 code set has not been widely accepted as of yet for electronic
healthcare transactions of U.S., there are many other countries which have
started use of ICD-10 for reimbursement purposes. Some of the examples
of countries using ICD-10 are Dubai, Canada, Australia, Germany, etc.
4.15 GENERAL EQUIVALENCE MAPPINGS (GEMS)
The due date of ICD-10 (October 1, 2015) is fast approaching and

everyone would have to comply with implementing the transition from
ICD-9 to ICD-10 on or before that date. Transitioning from ICD-9 which
contains 17,849 codes (including diagnosis and procedure codes) to
ICD-10 which contains 141,747 codes (including diagnosis and procedure
codes) would be pretty difficult for medical coders and health insurers.
Searching for an appropriate code from the ICD-10 would prove quite a
time-consuming affair, and therefore, to help with the swift transition the
Centers for Medicare and Medicaid (CMS) have created General
Equivalence Mappings (GEMs), otherwise known as crosswalk tools and are
freely available on their website to be used by the public. Crosswalks refer
to the process which helps a user to translate one code set to the other.
Crosswalks do not automatically provide translation, but is a useful tool in
getting the translation done efficiently and accurately. It reduces the effort
required by a medical coder to navigate the complexity of translating
meaning from one code set to the other code set.
Consider a case where after implementation of ICD-10-CM/PCS in October

2015 one has to refer to reports of a patient which was coded using ICD-9-
CM codes, now in this case there would be a need to convert the available
ICD-9-CM codes in the report to ICD-10- CM/PCS, hence the need for
crosswalk.
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There are two types of General Equivalence Mappings depending on which

transition is to be performed, for example, one GEM is for the diagnosis
codes {ICD-9-CM (volume 1 and 2) to ICD-10-CM} and the other GEM is
for procedure codes {ICD-9-CM (volume 3) to ICD-10-PCS}. When the
crosswalk is done from ICD-9 to ICD-10 it is termed as forward
crosswalk/mapping and when the crosswalk is done from ICD-10 to
ICD-9 it is termed as backward crosswalk/mapping. One important
rule to be borne in mind while crosswalking is that one can code from a
specific injury to a general injury but cannot code from a general injury to
a specific injury.
Example for forward crosswalk/mapping
003.21 Salmonella meningitis (ICD-9) to A02.21 Salmonella meningitis

(ICD-10)
Example for backward crosswalk/mapping
C92.01 Acute myeloid leukemia, in remission (ICD-10) to 205.01 Myeloid

leukemia, acute, in remission (ICD-9)
The above examples is a simple one-to-one crosswalk but also there are
certain instances where there is one-to-many, many-to-one, or one-to-
none codes. One-to-none codes especially occur while crosswalking from
ICD-10-CM back to ICD-9-CM and is represented by "NoDX." The reason
for this imbalance is because ICD-9-CM contains only 17849 codes while
ICD-10-CM/PCS contains 141,747, so a one-to-one match for all codes
cannot be possible. Owing to all these factors, the crosswalking from
ICD-9-CM to ICD-10-CM and vice versa becomes a complex process and
requires an in-depth knowledge of both the ICD-9-CM and ICD-10-CM code
sets.
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4.16 WAYS TO IMPROVE CODING QUALITY FOR A HIGH

PERFORMING REVENUE CYCLE
As defined by the Healthcare Financial Management Association, revenue

cycle refers to “all administrative and clinical functions that contribute to
the capture, management, and collection of patient service revenue.” In
short, it includes the entire lifecycle of a patient account, from initial
appointment setup to payment receipt.
2020 presented challenges to the healthcare industry, not only in

diagnosing and treating COVID-19 patients, but also in seeing the growth
of telehealth services. A remote workforce, which had been common in
other industries, became the norm for many healthcare workers who
hadn't been doing remote work before. This was true for medical coders
and other RCM workers.
While the ultimate aim of the healthcare practice is to deliver the best
outcomes for the patients, this isn’t possible unless the administrative
functions of a provider’s systems stable enough to handle revenue
disruption.
With so many changes, it is not surprising that financial leaders at

hospitals and health systems identified confusion over COVID-19 coding
and claim requirements as one of the top issues impacting revenue cycle
operations in 2020. Internal audits uncovered the average hospital claim
denial rate increased during the height of COVID-19, hitting a new record
of nearly 11 percent of claims denied upon initial submission in 2020.
Payment posting and collections are crucial indicators of a well-established

revenue cycle management (RCM) system. Medical coding is the process of
converting complex medical information, records, and documents to
alphanumeric codes to simplify patient communications, billing, and
revenue collection. In the era of value-based reimbursements, nothing
plays a more critical role than having a team of experienced medical coding
professionals aid in building a healthy revenue cycle and ensuring providers
are correctly paid for the care they provide. Given that coding sits in the
middle revenue cycle, providers often undermine its significance in
ensuring each step before and after the coding process runs like a well-
oiled machine. As an integral part of reimbursement in revenue cycle
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management, experienced quality coders are often the first to diagnose

deficient pitfalls.
2021 continued to be another year of change. Historic changes to

evaluation and management (E/M) coding took effect on January 1st and
more than 60 new codes were added. Additionally, providers continue to
see the need to have robust coding education and training in place to keep
up with the COVID-19 code changes and prevent claim denials.
To uncover the vulnerabilities in today’s RCM, HIMSS Media surveyed 100

respondents in leadership roles within finance, revenue cycle,
reimbursement, and health information management. The results
published established clinical documentation and coding as the key area of
vulnerability for lost or decreased revenue - with 84% claiming this
challenge as a “high” or “medium” risk.
When coding is done in the right manner, claims get processed quickly. On
the other hand, missed deadlines, messy submissions, and lack of training
often result in denied claims and cost your healthcare organization
thousands of dollars in lost/delayed revenue.
Hospital revenue in 2021 is predicted to decrease between $53B to $122B

compared to pre-pandemic levels because of COVID-19 says the American
Medical Association.
So, the question is, how can Hospitals and health systems prevent dips in
coding quality for a high-performing revenue cycle?
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Revenue Cycle Management: Improve your coding quality for a

high-performing revenue cycle
1. Pay attention to your EMR workflows.
The volume of charts to code is often so large and overwhelming that

working denied claims takes a backburner.
Indeed, working denials is a cumbersome, time-consuming process that

involves research, rework, and resubmission - all within a tight deadline.
Most importantly, it is essential to edit the practice management system
and educate coders about the rules and regulations to prevent repeat
errors.
Therefore, coding managers need to correct inefficiencies in the coding

workflow to allow enough time for edits and reworks, which, if ignored, can
slow down reimbursement.
Revisiting the coding workflow involves assessing if your coding

department is adequately staffed to handle the workload, defining task list
and priority, and deciding who will work on what part of the process (i.e.,
new claims, denials, and edits)
2. Partner with the best talent
Hiring high-quality coders is one of the best ways to improve RCM medical
coding.
RCM leadership is tasked with –proper due diligence which includes the
following verifications:
Coders have certifications from accredited healthcare organizations,

including AAPC and AHIMA.
Coders are aware of their significant role in RCM, work proactively towards
quality assurance, seek continuous education and training to keep abreast
with changes in the healthcare environment, and learn every day from
colleagues.
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While this may seem like a common standard, continuous training, and
management of in-house coders is a tedious time-consuming task to keep
up with. Waiting to explore outsourcing the job to companies that
specialize in end-to-end RCM medical coding does more harm than good.
3. Ensure HCC and SDOH are always on your radar
Deloitte found that an increase in value-based purchasing and at-risk

payment models has heightened interest in improving the health of the
populations being managed. Consequently, accurate coding for risk factors
HCC Coding and SDOH capture has become more critical than ever. In
2021, providing quality care, reducing costs, and avoiding potential loss of
revenue for healthcare providers means leaving every stone unturned for a
comprehensive deep dive.
The Center for Medicare and Medicaid Services (CMS) mandates the use of
Hierarchical Condition Categories (HCC) coding to calculate the
reimbursement under Medicare.
HCC codes consider a patient’s demographic factors, such as gender, age,

etc., and current health status to calculate a risk adjustment factor that
determines the patient’s expected healthcare spending for the year.
HCC coding allows providers to receive adequate and fair compensation for
treating patients with higher risk while providing value-based care.
Therefore, managers and leaders must ensure every stakeholder

understands the impact of proper HCC coding on revenue cycle
management. For example, physicians must document the patient’s
condition to the highest levels of specificity using the M.E.A.T criteria,
making it easier for coders to assign the correct codes.
Similarly, coding for the social determinants of health (SDOH) improves the
patient care and experience, reducing readmissions, contributing to a
healthy revenue cycle. SDOH are the socioeconomic factors in the
environment where the patient lives, which can be grouped into five
categories –
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(i) economic stability,

(ii) education access and quality,
(iii) healthcare access and quality,
(iv) neighborhood and built environment, and
(v) social and community context.
According to the 2021 regulations around SDOH, all clinicians, i.e.,

providers, case managers, social workers, nurses, etc., must collect data
around social needs, including lack of food, homelessness, social isolation,
etc. Coding managers must ensure coders are familiar with the use cases
of SDOH Z codes and have the right support and encouragement to
execute coding around social needs, which was previously assigned a lower
priority.
4. Don’t skip the coding compliance audit.
Complete and accurate coding leads to a high-performing revenue cycle

and ensures compliance with government healthcare regulations.
A Change Healthcare study found over $262 billion in claims were initially
denied in a year primarily due to insufficient clinical information, with $28
billion in denied funds linked to lack of clinical documentation.
Ensuring medical coding practices are at par with the stated guidelines and
procedures can prevent such denials that require additional information for
reimbursement.
A coding compliance audit examines a specific number of charts per

qualified healthcare professional to check the accuracy of the services
documented and codes recorded.
Therefore, performing quality audits highlights areas of improvement that

cause revenue leakage, identifies opportunities for training and workflow
correction, and expedites claim reimbursement by reducing denials.
Upon the completion of the audit, providers must openly communicate the
audit findings and arrange education and training programs, if necessary.
Additionally, they must also communicate any changes in coding
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compliance, especially during unexpected and unprecedented situations

like the COVID-19 pandemic that can potentially change revenue cycle
coding processes.
TAKING MEDICAL CODING TO THE NEXT LEVEL WITH ARTIFICIAL

INTELLIGENCE
AI cannot solve every healthcare data challenge, but strategic applications

of AI can help teams improve performance and experience. For example, in
life sciences companies, we’re seeing early signs of the potential of AI to
help medical coders improve efficiency of clinical trial research by more
quickly being able to find accurate codes.
Medical coding is one of many disciplines that must adjust to the increasing
volume, variation and complexity of healthcare data. For starters, medical
coding is becoming more specific and granular over time. MedDRA is the
standard medical dictionary resource for regulatory communication and
pharmaceutical medical coders. At the most specific level in its hierarchy,
there are more than 70,000 terms to communicate information.1 Medical
coders must use these vast lists to search for and select the most
appropriate code(s) for each clinical trial participant.
At the same time, incoming data is also increasing. More widespread use of
decentralized trials will generate even larger quantities of unstructured
data. And, in an aging population where as many as four in ten adults have
two or more chronic diseases2, it can be increasingly complex to apply
medical codes accurately and efficiently.
Accuracy in medical coding is an important factor in clinical trial operations.

Medical codes for things like medical history or adverse events in clinical
trial participants can affect researchers’ decisions about trial revisions, as
well as gather more accurate information. It also has the potential to help
clinicians improve the patient experience by delivering the best quality care
throughout the clinical trial. These codes directly impact patient care, for
example, capturing medication allergies can help clinicians prevent
potential adverse events.
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AI designed to support the expertise of a medical coder
With the exponential growth of healthcare data and complexity expected to

continue, the expertise of medical coders remains in high demand. The US
Bureau of Labor Statistics projects 8% growth for the profession between
2019 and 2029, which is faster than the estimated growth rate for other
professions.4
AI can support the work of medical coders. Not only can this relieve
medical coding fatigue and help improve efficiency and accuracy, but it has
the potential to enable medical coders to focus on more meaningful work –
such as spotting trends of unusual numbers of adverse effects being
reported. AI can help reduce manual tasks in medical coding workflows and
enable teams to apply those resources where most needed.
4.17 ERRORS IN MEDICAL CODING
Medical coding is not free from errors. After exercising extreme caution in
coding for a particular medical report, sometimes it may happen that
errors creep in either due to inexperience or due to laxity. We will see some
of the common errors which need to be avoided by a medical coder in
order to get speedy claim settlement. Once a medical coder identifies and
avoids these errors, it will dramatically reduce denied claims and will
greatly enhance the revenue cycle process.
Some of the common medical coding errors are as follows:
1. Inaccurate coding error: This is a common type of error where the

medical coder does not code accurately. It may arise either due to lack
of proper coding guidelines or carelessness of the medical coder or due
to healthcare provider missing out on proper documentation or
documenting illegible medical reports.
2. Domino-effect error: This kind of error arises due to wrong medical

reports dictated by the physician or transcribed by the medical
transcriptionist. Since the medical coder reads the report provided and
codes accordingly, this error often occurs without the medical coder
realizing that an error has occurred.
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3. Production-related error: When a medical coder is pressed for

productivity either due to incentive-related coding or due to
management policies, it leads to sloppy medical coding errors.
4. Specificity error: In order to be reimbursed timely and appropriately,

it is a requirement to code up to the highest possible specifics. If a
medical coder performs general level coding, that is, codes only for the
basic or primary diagnosis without providing the secondary diagnosis or
the modifiers it leads to rejected claims.
5. Outdated code set error: As we have discussed in this chapter that

the coding manuals are periodically (mostly annually) updated by the
agencies developing and maintaining the codes. It is important that all
medical coders keep themselves abreast with the new codes. If a
medical coder does not update himself with the up-to-date code sets,
then the outdated codes used in the claim form will certainly lead to
claim denial.
6. Inaccessibility error: Since medical coders are required to code

complex medical reports, accessibility to the physician or the medical
transcriptionist is of essence in order to clarify any doubts arisen during
the coding process, but sometimes it is not possible. In this case,
medical coders use their insight and judgement to accurately code
might lead to an error.
Let us also focus on a couple of more insidious coding practices followed by

some physicians and medical coders that is turning out to be an imminent
time-bomb of the coding industry. It is advisable that every medical coder
should refrain from such coding practices. These practices are not
considered to be error but fraud because they are mainly practiced by the
physician and the medical coder intentionally for some type of financial,
taxation, or audit benefit.
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1. Undercoding: Undercoding is defined as providing a service to a

patient and deliberately coding it less than the parameters required for
that service. Undercoding is practiced by physicians in order to avoid
any audit or cross questioning from the insurer and fear of insufficient
supporting documentation of the service.
2. Overcoding: Overcoding is defined as reporting a more complex and/or

higher cost procedure than what was actually performed by the
physician. Overcoding is practiced by physicians to get reimbursed on
the higher side than the actual cost of the service rendered.
3. Unbundling: Unbundling codes is when a medical coder submits codes

in a piecemeal fashion for a single procedure. This is also a dishonest
way adopted by certain medical practitioners to intentionally unbundle
the codes which should be usually billed together to maximize the
reimbursement amount paid by the health insurer. This type of
fraudulent practice especially occurs in laboratory tests or surgeries,
where the single procedure code is broken down into several different
codes.
All the above forms of coding practices are termed as fraudulent practices
and the medical facility and individuals indulging in such malpractice are
liable to be legally prosecuted along with hefty penalties.
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4.18 PRICING
The pricing pattern in medical coding and billing are almost similar and
much of time the pricing strategy of both of them are coupled together as
mostly the job of medical coding and billing is performed by the same
company.
There are several ways to bill for medical coding and some of the common
ones used in the industry are discussed as follows:
A. Percentage-based model: This is the most widely accepted and used

pricing model in the medical coding industry. It is based on the total net
collections received by the medical facility as the reimbursement. This
type of pricing strategy is beneficial both for the medical facility as well
as the medical coding company. In this model, the medical facility does
not have to worry about any inflated costs or hidden costs as the
payment will be based on a certain percentage of the total
reimbursement received by the medical facility. On the other hand, in
order to receive maximum amount the medical coding companies strive
their best to make sure that they employ best medical coders in order
to reduce the amount of rejected or denied claims.
If the amount of rejected or denied claims increases, it will directly

impact the net collections of the medical facility and this in turn will have
a negative impact on the revenue earned by the medical coding
company.
The percentage is basically somewhere in the range of 4% to 5% and

will depend on the specialty to be coded. Some specialty like oncology or
operative is a bit complex than physical therapy. Similarly inpatient
coding is much more time consuming and requires in- depth knowledge
of medical codes than outpatient coding. Considering all these factors a
particular flat percentage is set of the total collections of the medical
facility or hospital.
Consider if the medical facility's total collection is $40,000 and the

medical coding rate was set at around 4% of the net collection.
The medical coding company will receive $1600 (4/100 x 40000 = 1600)
in revenue.
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This type of pricing model is pretty straightforward and is mostly preferred

by both the medical facilities as well as the medical coding companies.
B. Full-time equivalent model: An FTE is the equivalent of one medical

coder who has been hired as a full-time employee and works full time,
that is, 8 hours per day and 5 days per week. FTEs do not represent the
number of employees. It just represents a unit that indicates the total
number of labor hours put in by an employee.
An "FTE of 1" or "1 FTE" is equivalent to one employee working full time.
For detailed explanation on FTE refer to Chapter Medical

Transcription.
The rate for one FTE medical coder ranges between $12 to $15 per hour or
$2500 and $3000 per month and again the rate emphatically depends on
the complexity or speciality of the coding.
The only drawback of FTE billing is that the number of FTE and amount per
FTE is fixed at the start of the month and the medical facility or hospital
will have to pay the medical coding company the agreed amount for the
team of FTEs hired irrespective of the volume of work. Hence for a
company whose volume keeps on fluctuating this might not be the
appropriate pricing model.
C. Fixed Price Model: This type of model is also pretty renowned in

outsourcing industry. Usually in this model short term projects are
involved. The medical facility or hospital has a particular volume of
work (project) which needs to be completed within a specified time
limit. The medical facility then comes up with a particular amount they
would like to spend on this project. Proposals are invited from the
vendors and they are informed of the project, the time of completion,
and the amount of payment. Depending on the proposals received,
eligible vendors are then selected and the project is awarded to the best
fit vendor.
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D. Per Chart Model: The per chart model is not seen very often seen in
the coding fraternity. It was developed originally for the home-based
coders (freelance coders). Many hospitals or clinics prefer to pay
medical coders who work from home on per chart basis rather than a
fixed monthly salary. This relieves the hospital or clinic from monitoring
the production part of the home-based coder and focus only on their
accuracy. The coder will receive the payment based on the number of
accurate charts coded. Average rate for coding per chart is anywhere
between $1.50 and $2.0.
4.19 ELECTRONIC SOFTWARES FOR CODING
Software have now become an inherent part of medical coding. Every

medical coder has to depend heavily on these softwares to code the
medical reports. Although an essential part of coding, experts believe use
of only softwares to code would once in a while lead to coding errors,
therefore, it is always advisable both for amateur as well as seasoned
medical coders to keep their coding manuals handy.
One deterrent factor to the use of coding manuals is the expense involved
in buying the updated manuals annually, nevertheless it is a very low price
to pay for instead of botching up with the medical codes.
The software used for coding can be divided into two basic categories:
1. Electronic dictionaries for coding.
2. Computer-assisted coding.
1. Electronic dictionaries for coding: These software are just electronic

version of the coding manuals. Electronic dictionaries make the search
process for a particular code really fast. The medical coder has to only
enter the diagnosis or the procedure in the search box using which the
dictionary retrieves and presents all the codes matching the particular
search criteria with several other useful details.
Mostly, these medical coding softwares are available as an electronic

software-as-a- service (SaaS) model and the user has to pay a monthly or
annual charge to access the codes of the software. Along with the ICD-9-
CM and ICD-10-CM/PCS codes these softwares also provide many other
important features such as crosswalks, claim scrubbing, NPI validator, etc.
At last, again it is imperative to reiterate that the traditional way of
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referring the coding manuals for accurate coding is the gold standard of
coding.
Some of the famous electronic softwares used for medical coding are as
follows:
• EncoderPro
• Find-A-Code
• Flash Code
• Code Correct
• Speed Coder, etc.
2. Computer-assisted coding software: Computer-assisted coding

software analyzes health care documentation using the natural language
processing (NLP) engine and produces appropriate medical codes for
specific medical terminology within the electronic health record (EHR).
Although the software assigns the codes for the medical report, these
codes need to be reviewed by a medical coder for any discrepancies.
Adoption of computer-assisted coding (CAC) softwares act as tools to
reduce the backlogs and produces improved accuracy and efficiency.
Some examples of Computer-Assisted Coding (CAC) softwares are:

• Optum Enterprise Computer-Assisted Coding software
• Fusion Computer-Assisted Coding software
• 3M Computer-Assisted Coding software, etc.
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4.20 SUMMARY
Medical code characterizes a medical diagnosis or procedure/treatment

rendered by a healthcare provider and is used for the sake of brevity and
uniformity. Brevity and uniformity are two important functions of medical
coding.
Medical coder is the person who transforms the medical diagnosis and
procedure/treatment into an appropriate numeric or alphanumeric medical
code.
Prominent skills required for a medical coder are medical skill,

comprehensive skill, technical skill, eye-for-detail skill, analytical skill,
interpersonal skill, transformative skill, and concealment skill.
Medical coding certification is offered by two professional organizations

namely AAPC (American Academy of Professional Coders) and AHIMA
(American Health Information Management Association) offers certification
both based in U.S.
Medical code sets defines a standardized medical condition, treatment, or

service. It consists of unique numeric or alphanumeric code for the
specified diagnosis and services performed by the physician. The code set
rule defined by HIPAA requires use of the following medical code sets for
any electronic transactions: CPT, ICD, HCPCS, CDT, and NDC.
The CPT-4 codes are used to describe medical, surgical, and diagnostic
services performed in physician's office.
The Healthcare Common Procedure Coding System (HCPCS) was

established in 1978 to provide a standardized coding system for describing
medical procedures and services when healthcare is delivered. It is
commonly pronounced as "hick-picks."
The National Drug Code (NDC) is a unique 11-digit numeric identifier

assigned to each specific drug or product administered to the patient
intended for human use in the United States by the Centers for Medicare &
Medicaid Services (CMS).
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The Current Dental Terminology (CDT) also known as Code on Dental

Procedures and Nomenclature lists the codes for dental procedures and its
supplies. It was developed in order to achieve uniformity and consistency
in reporting different types of dental procedures.
International Classification of Diseases (ICD) codes create a universal code

for describing the causes of injury, illness, and death. Updated version of
ICD-9-CM Volume 1 and 2 is ICD-10-CM and updated version of ICD-9-CM
Volume 3 is ICD-10-PCS.
Crosswalks refer to the process of translate one code set version to the
other. It is of two types it forward crosswalk/mapping and backward
crosswalk/mapping.
Fraudulent practices in medical coding are divided into undercoding,

overcoding, and unbundling.
Medical coding is the process of transforming descriptions of medical

diagnosis or procedure/ treatment into universally standard medical codes.
Undercoding is defined as providing a service to a patient and deliberately

coding it less than the parameters required for that service.
Overcoding is defined as reporting a more complex and/or higher cost

procedure than what was actually performed by the physician.
Unbundling is defined as submitting codes in a piecemeal fashion for a

single procedure.
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IJP Internal job posting

AAPC American Academy of Professional Coders
AHIMA American Health Information Management Association
CPC Certified Professional Coder
CPC-H Certified Professional Coder-Hospital Outpatient
CPC-P Certified Professional Coder-Payer
CPT Current Procedural Terminology
AMA American Medical Association
HCPCS Healthcare Common Procedure Coding System
DME Durable medical equipment
MRA Magnetic resonance angiography
BCBSA Blue Cross Blue Shield Association
AHIP America's Health Insurance Plans
NDC National Drug Code
CDT Current Dental Terminology
ICD International Classification of Diseases
WHO World Health Organization
GEM General Equivalence Mapping
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1. Define the following:

a. Medical code set
b. Crosswalk
c. Undercoding
d. Unbundling
e. Overcoding
2. Explain medical coding and the need for medical coding?
3. Describe any five skills required to be a successful medical coder.
4. What are the two certifying bodies for medical coder and explain in
brief?
5. Briefly explain CPT and its types.
6. Explain any five different types of temporary HCPCS codes.
7. What are the two basic reasons for implementation of E codes, explain
with example?
8. Distinguish between ICD-9-CM and ICD-10-CM/PCS.
9. Write a short paragraph on GEM.
10.What are the different types of errors in medical coding?
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4.23 CASE STUDY
HOSPITAL INFORMATION
• Acute-care hospital
• 100-bed facility
• 2 In-house inpatient coders
• 2,885 Annual inpatient discharges
CHALLENGE
The hospital coding staff turnover created a slow-down in the billing cycle.
ISSUE
Increase in discharge-to-final-bill (DNFB) days with significant delays in
reimbursement.
OBJECTIVE
Decrease DNFB, streamline the coding process and improve workflow to
ensure consistent,
optimal reimbursement in a timely manner.
RESULTS
Synernet's coding services provided the hospital with dedicated,
credentialed coders, who alleviated the backlog, dropped the outstanding
billable accounts from $2.2 million to $649,000 - improving cash flow
within six weeks.
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WHY CHOOSE SYNERNET CODING SERVICES?
• Professional cost-effective onsite and/or remote coding services
• Eliminate costly travel expenses such as airfare, rental cars, and hotels
• Managed by local, accessible Director with expertise in HIM and revenue

management
• A dedicated coding staff who are certified and highly skilled in their
profession
• Site visits for training and initial set-up with ongoing support
• Quality assurance plan to ensure at least 95% accuracy rates for all
types of coding
• Ongoing staff education and training to stay abreast of changes in our

industry
OUTCOME
Reduced Outstanding Billable Accounts: 70% within six weeks
(Source Synernet, Inc., White Papers and Case Studies,

www.synernet.net)
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1. The key elements that make up the Coding and Revenue Cycle field
include:
a) Patient Pre-authorization
b) Insurance Eligibility and verification
c) Charge and Code
d) All of them
2. Which of the following is not a prominent skills required for a medical

coder?
a) Medical skill
b) Training skills
c) Comprehensive skill
d) Technical skill
3. ICD-9 Codes have a maximum of 5 characters. What is the maximum

number of characters for ICD-10 codes?
a) 10
b) 5
c) 7
d) 9
4. What does the "ICD" in ICD 10 Coding stand for?

a) Internal Calling Description
b) International Classification of Disease
c) Internet Checked Diagnosis
d) International Career Development
5. Which of the following is a common error in medical coding?

a) Specificity error
b) Domino-effect error
c) Inaccurate coding error
d) All of them
6. The ways to bill for medical coding and billing are:

a) Percentage-based model
b) Full-time equivalent model
c) All of them
d) None of them
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[Answer: 1 (d), 2 (b), 3 (c), 4 (b), 5 (d), 6 (c)]
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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Chapter 5
Medical Billing
CHAPTER OBJECTIVES:
• Insurance
• Medical Billing
• Skills of Medical Biller
• Certifying Bodies
• Medical Billing Terms
• Health insurance payer and plan
• Claim form
• Medical billing process
• Errors in Medical Billing
• Pricing
• Electronic Softwares for Billing
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STRUCTURE:
5.1 Introduction
5.2 Insurance
Life Insurance & General Insurance
5.3 Difference between Indian and US Health Insurance
5.4 Medical Billing
5.5 Need for Medical Billing
5.6 Skills of a Medical Biller
5.7 Certification
AAPC & AMBA
5.8 Basic Medical Billing Terms
5.9 Health Insurance Plan
Fee-For-Service (FFS), Managed Care Organization (MCO),
& Consumer Driven Health Plan (CDHP)
5.10 Health Insurance Payers
Public-Funded Payers, Private-Funded Payers, & Self-Funded Payers
5.11 Claim Forms
CMS-1500, UB-04, & ADA J430D
5.12 Medical Billing Process
5.13 Errors in Medical Billing
5.14 Pricing
5.15 Electronic Softwares for Billing
5.16 Artificial Intelligence in Medical Billing
5.17 Summary
5.20 Case Study
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5.1 INTRODUCTION
"Revenue is vanity, cash flow is sanity, but cash is king."
The above maxim is profoundly accepted in the business arena for its
verity. It talks about the importance of money in all its forms in a business
environment. Money, as we may call it, is the backbone of any business. In
the wake of a negative cash flow the business might run for a short term
(if properly managed), but no business can survive for long without enough
cash to meet its current and future needs.
In short, without a constant cash flow there lies a threat to the very
existence of any business. Hence it is very essential for the management to
make every effort that efficient people are employed to keep track of the
cash flow and take every necessary step required to improve the cash flow
management.
Healthcare industry is no different. Any deficit in the cash flow might force
the hospital or the medical facility to the brink of being shutdown despite
providing the best healthcare service to the patients. Healthcare providers
are educated to diagnose the ailment of the patients and provide
appropriate procedure or treatment for the malady and not to spend their
precious time handling the hassles of claims, therefore, the medical billing
department is of essence to every healthcare facility. Nevertheless,
healthcare providers need to carefully handle and supervise the revenue
cycle management of the medical facility or hospitals in order to function
smoothly and profitably.
5.2 INSURANCE
Insurance is a contractual agreement between an insurance company and

an individual or entity to provide compensation or reimbursement against
any form of loss for which the individual or entity pays a premium to the
insurance company. There are two most common types of insurance which
primarily everyone should know, viz, life insurance and general insurance.
Life insurance is the contractual agreement between an insurance

company and an individual (normally termed as policyholder) to provide
predefined financial compensation in case of the death of the insured
person or after the maturity period of the policy.
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General insurance (non-life insurance) is defined as the insurance

coverage given to all other types of risk other than life. Health insurance
is insurance against the risk of incurring medical and surgical expenses to
the insured entity. Health insurance is considered as a subcategory of
general insurance in India, but in many countries, it is considered as a
different type of insurance all together. The company providing the health
insurance can opt to either reimburse the policyholder for the medical
expenses caused due to the illness or injury or can pay the healthcare
provider directly.
If we talk about the US healthcare industry close to 85% of the US

population is covered under health insurance schemes and with the advent
of the Patient Protection and Affordable Care Act (PPACA) commonly called
as the Affordable Care Act (ACA) or the "Obamacare" as amended by the
Health Care and Education Reconciliation Act of March 23, 2010 a near-
universal healthcare insurance coverage to all the US citizens will be
achieved.
The premium for the health insurance scheme in US is either paid by the
individual or the employer or both the employer and employee contribute
equally towards the premium. Since most of the US individuals are covered
by health insurance in the event they visit any healthcare provider for
treatment, the payment for the service rendered by the physician is
covered or paid by the insurance company. In order to receive the
payment, the healthcare provider needs to submit a claim to the insurance
company. Claim is the bill prepared by the medical biller to be submitted
to the insurance company. The health insurance company will then analyze
the claim and release the payment to the healthcare provider. This is
where medical billing comes into play.
The scenario in the Indian healthcare industry is a tad different. It is

different in the sense that here the healthcare providers (physicians,
medical facilities, or hospitals) are in most cases paid directly by the
patient. This is due to the fact that less than 25 percent of the Indian
population has access to any form of health insurance while the rest 75
percent remain uninsured and have to bear the cost of the medical
expenses on their own. Although the Indian government through various
government-sponsored health insurance schemes (GSHISs) is trying to
ensure that all Indians rich or poor (especially the poor) are covered with
some sort of health insurance. The implementation of the famous Rashtriya
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Swasthya Bima Yojana (RSBY) in various states in India is an example of a

commendable work in
that direction.
In India, even in cases where the individuals are covered under the health
insurance plan (normally termed as Mediclaim in India), the follow-ups with
the health insurance company for the payment is done by the policyholder
and not by the healthcare provider.
Only exception being cashless facility where hospital coordinates with the
TPA (third party administrator).
Fig 5.1: Classification of Insurance
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5.3 DIFFERENCE BETWEEN INDIAN AND US HEALTH

INSURANCE
After learning about the basic structure of the Indian and US health
insurance industry, we will try to gain some insight into some of the
common differences between the Indian and US health insurance plans and
companies.
Many scholars attribute these differences in the health insurance plans to

the fact that India is still a developing nation whereas US is a developed
country. Whatever may be the case, the health insurance situation in India
needs to be reviewed and restructured promptly so that it benefits the
needy Indian citizens and does not pose any imminent threat or danger to
the country's general population.
Let us try to delve into some of the key differences between the health
insurance industries of both of these countries.
Fig 5.2: Difference between Indian and US Health Insurance Industry
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5.4 MEDICAL BILLING
Medical billing is the process of documentation, submission, and follow-

ups on claims with health insurance companies in order to receive
payment for services rendered by a healthcare provider.
Oftentimes medical billing is transposed with medical coding as usually

medical coding and billing are referred together as one entity. Although
there are some who refer to coding and billing as two departments working
together like different gears in a gearbox in order to achieve the primary
goal of setting the revenue cycle in motion, at the same time, there are
some who believe medical coding to be a part of the medical billing. In the
revenue cycle management of healthcare, medical billing is preceded by
medical coding. If any of the aspect, that is, medical coding or medical
billing is not performed timely and accurately, then the reimbursement
cycle of the healthcare system may fall out of place.
Medical biller is a person skilled to document, submit, and follow-up on

claims with health insurance companies in order to receive payment for
services rendered by a healthcare provider. Medical biller is also known as
medical billing specialist. Since the process of medical coding and medical
billing are very closely related, there are professionals who master the art
of both worlds and are termed as medical insurance specialist. Medical
insurance specialist is a person skilled to handle the complete
reimbursement cycle.
The job of the medical biller is a little easier than of a medical coder but
relies heavily on the performance of the latter. The medical coder reads
through the medical report, gleans out the diagnoses and procedures in the
report, and utilizing the coding skills provides appropriate medical codes to
those diagnoses and procedures. The medical biller has to just look at
these codes, find the appropriate fees for these corresponding codes, and
prepare a bill to be sent to the health insurance company.
A medical biller or medical insurance specialist has a very good job

prospect and can be employed either at a physician's office, medical
facility, or hospital. The clearing houses as well as the health insurance
companies also employ medical biller or medical insurance specialist at
various positions to check for the accuracy and authenticity of submitted
claims.
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5.5 NEED FOR MEDICAL BILLING
Physicians and hospitalists are occupied the whole day in the care and
wellbeing of the patients and it becomes really burdensome for them to sit
and file the claims to the insurance company to be reimbursed for the
services which they have rendered to the patients. Also due to the
stringent new rules and regulations laid down by the healthcare regulatory
bodies, the insurance companies and healthcare payers have started
demanding for detailed records of services rendered to the patients by the
healthcare providers, this in turn acts as a deterrent to the providers who
wish to file the claims themselves. All this coupled with the complex coding
standards which are developed and updated quarterly or annually,
bespeaks the need of a seasoned medical billing specialist. According to a
study of the American Medical Association it is observed that healthcare
providers have to spend a fair amount of time and perform quite a
cumbersome task to file a claim manually. Subsequent to employing all the
time and resources, the healthcare providers are still not sure that the
claim submitted to the insurance company is error-free. Imagine, despite
all the endeavors, the claim is rejected citing one or the other trivial
reason. The healthcare provider would then have to resubmit the claim
after making the necessary changes or providing appropriate justification.
This whole process of submitting and resubmitting the claims normally

would lead to delay in payments thereby increasing the reimbursement
cycle to 90 days or even more. This deferment in timely payment may
have a significant negative effect on the financial bearing of the medical
facility. The medical facility may be bound to borrow money for its day-to-
day expenses or may have to postpone any expansion plan or purchase of
new medical equipment which may in turn be of grave consequence to the
viability of the medical facility.
A medical biller relieves the healthcare professionals from the hassle of

filing claims. This in turns saves time for the providers which can be
directed toward what they do the best, that is, take care of the patients. It
is now the prime duty of the medical biller to ensure that the provider
receives every dollar rightfully owed to the practice.
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5.6 SKILLS OF MEDICAL BILLER
The responsibilities of a medical biller encompasses gamut of duties which

requires qualities such as perseverance, diligence, and accuracy. These
responsibilities vary and can range from trivial job such as gathering the
medical and demographic information to as crucial as responding to
adjudicated claims. Claim adjudication is the process of paying the
submitted claims or rejecting or denying them after examining the claims
to the benefit or coverage requirements.
To become a successful medical biller, an individual requires to hone certain

skills while chucking away the other which are not required. Medical billing
although sounds simpler can get very tricky and intricate at times and
hence requires a discreet and diligent approach as with everything related
to the healthcare system. There are a definite set of skills required to be a
successful medical biller and we would be learning about them in detail.
Some of the distinct skill sets which every medical biller should possess are
as follows:
1. Medical skill: In addition to referring the claim form filled by the

medical coders, medical billers at times may need to refer to the
patient's medical records to prepare accurate claims. They need to
relate the diagnosis and the procedure codes and in order to effective
do the same they need to possess sound knowledge of medical
terminology, human anatomy and physiology, and medical coding.
2. Technical skill: Billing department of almost every medical facility,

small or big, relies intemperately on the use of computers. It has
become the integral part of the healthcare billing system. Almost all
practices have integrated the billing process into their information
technology infrastructure and make use of one of the many billing and
coding softwares available in the market. Hence it is vital that every
medical biller is well-versed with computers and usage of different kinds
of medical billing softwares in order to succeed.
3. Eye-for-detail skill: A medical biller should have a keen eye for detail
because the job implicates dealing with different kinds of numbers, viz,
social security number, preauthorization identification number, tallying
medical codes, calculating various kinds of payments, etc. Any
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typographical error will lead to claim rejection. Along with dealing with
number, a medical biller has to carefully prepare the appropriate claim
form for corresponding insurance payer.
4. Interpersonal skill: Medical billers need to possess excellent

interpersonal skill since they have to constantly interact with the
patients, physicians, medical coders, and health insurance companies. A
good communication skill will help to effectively resolve any query
raised by the patient, physician, medical coder, or health insurance
company which will ultimately lead to speedy settlement of claims.
5. Transformative skill: Rules and regulations pertaining to the

insurance industry which are developed and implemented by the
statutory bodies undergoes constant change, hence it becomes
imperative that a medical biller should strive hard to keep abreast of the
new updates in the insurance industry.
6. Concealment skill: As is the case with any individual or entity which

needs to access the protected health information as part of the job
duty, medical biller under no circumstances should part or disclose the
protected health information, in part or whole, to any unauthorized
personnel.
7. Mathematical skill: Medical billers in many healthcare facilities are

required to maintain the record of all the financial transactions
pertaining to the patient claims due, claims received, and claim denied
or rejected. A basic knowledge of math to required in order to calculate
copay, coinsurance, deductible, various percentages, and to construct
financial reports.
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5.7 CERTIFICATION
Similar to medical coding, certification in medical billing is not mandatory.

Getting certified is a question of choice of the medical biller, but it is such a
choice that would provide a primary impetus for good career growth for
future advancement. A certified medical biller is a sound example of an
individual who is focused on the career objectives and would go to any
length in terms of updating his skill set to achieve the set career goals.
Certification provides knowledge and credibility to the medical biller and to
the potential employers. It also projects the individual as someone who has
demonstrated a superior level of commitment and dedication required for a
medical billing professional on an international level.
Fig 5.3: Medical Billing Certification Institutes
If we try to analyze the number of institutions that offer different types of

medical billing training, we will be faced with host of certifications. In this
chapter, we will keep a focused approach and concentrate only on two of
the biggest professional organizations that provide the best medical billing
training. These institutes namely are American Academy of Professional
Coders (AAPC) and American Medical Billing Association (AMBA).
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American Association of Professional Coders (AAPC):
The American Association of Professional Coders (AAPC) was established in

1988 to provide certification usually for medical coders. Being the largest
organization of professional medical coders, AAPC has also started
providing training for medical billing professionals. Although the medical
coding certification of AAPC are well regarded in the healthcare industry,
the medical billing certification which it provides have also slowly started
gaining a lot of importance in the medical billing fraternity in U.S. and
India.
The American Association of Professional Coders (AAPC) offers a unique

certification for the budding medical billing professionals called as the
Certified Professional Biller (CPB™).
Certified Professional Biller training of AAPC is designed in such a way that

a medical biller would learn the working of the healthcare revenue cycle
along with the tips and tricks of medical billing. Upon completion of the
Certified Professional Biller program, a medical biller would be able to
independently and effectively handle claim generation, claim submission,
claim follow-up, patient follow-up, and claim rejection resolution. The
Certified Professional Biller program prepares a medical biller to deal with
different kinds of events that may arise in the actual working
environment.
For medical billing professionals aiming to make a career and move ahead
in the healthcare industry, the Certified Professional Biller certification from
AAPC would act as the gold standard.
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American Medical Billing Association (AMBA):
The American Medical Billing Association (AMBA) founded in 1998 is

considered as the premier organization to impart medical billing
certification all over the globe. Unlike, AAPC which also provides other
types of certifications along with medical billing, AMBA is totally dedicated
to cater only the medical billing professionals.
The American Medical Billing Association (AMBA) has been offering

Certified Medical Reimbursement Specialist (CMRS) certification to the
medical billing professionals. It is the one of the most rigorous exams and
tests the medical biller on all aspects of the medical billing process. A
CMRS is skilled in facilitating the claims paying process from the time a
service is rendered by a healthcare provider until the amount is being paid.
The CMRS also possess a sound knowledge of different types of medical
codes, viz, ICD-9, ICD-10, CPT4 and HCPCS along with insurance claims,
denials, fraud and abuse, HIPAA, reimbursement process, etc.
The current exam structure of CMRS consists of the following 17 sections

and an individual is required to at least score 85% marks in order to earn
the CMRS credential designation.
Fig 5.4: CMRS Exam Structure
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Apart from AAPC and AMBA, there are several other institutions which offer
certifications for medical billing professionals. One such example is Medical
Association of Billers (MAB). Founded in 1995, MAB provides medical billing
professionals with education and training leading to Certified Medical Billing
Specialist® certification.
5.8 BASIC MEDICAL BILLING TERMS
There are various terms used in the medical billing profession and one
needs to have a thorough understanding about these jargons before
discussing the medical billing process. Some of these jargons are as
follows:
Capitation: Capitation is an agreement between the healthcare provider

and the health insurance payer wherein the health insurance payer pays
the healthcare provider a fixed lump sum amount. This lump sum amount
is called capitated payment and is fixed per month, per patient based on
the patient's health risks, history, etc. Example: Consider a healthcare
provider who has entered into an agreement with a health insurance payer
to receive a capitated payment of $20 per month per patient for hundred
patients. The health insurance payer will pay the healthcare provider ($20
x 100 patients) $2000 and the healthcare provider will have to cater to 100
patients for a month irrespective of the number of visits of the patients.
Co-pay: Co-pay is the amount paid by the patient out of his pocket to the
healthcare provider prior to the medical service or procedure. Co-pay is a
fixed amount and is distinct from deductible because it needs to be paid
during each visit. It varies depending on the health insurance plan and is
specified in the health insurance card.
Deductible: Deductible is the amount a patient must pay at the start of

every calendar year in order to be eligible for the health insurance plan
coverage. The patient will not be covered under the health insurance plan
until the deductible has been paid. Example: A patient with a deductible of
$500 will not be covered by the health insurance plan until the deductible
of $500 has been paid by the patient.
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Out-of-pocket: Out-of-pocket amount is the maximum amount the

patient may have to pay for medical service or procedure rendered in a
calendar year. Once the patient has paid the out-of-pocket amount,
thereafter nothing needs to be paid, and the health insurance plan will
cover the rest of the medical cost. One important thing to note is that the
out-of- pocket amount may or may not include the deductible amount.
Co-insurance: Co-insurance is a cost sharing of medical service or

procedure between the health insurance company and the patient based on
percentage. This cost sharing is usually 80%/20%, that is, the health
insurance company will pay 80% of the medical cost and the patient has
to pay the remaining 20% of the medical cost. Different health insurance
payer have different co-insurance sharing ratio ranging from 100% to
50%/50%.
Example for co-pay, deductible, out-of-pocket, and co-insurance.
Consider a patient who is covered under XYZ Insurance Company. The

policy features under the health insurance plan extended to the patient are
as below:
Co-pay amount = $25

Deductible amount = $500
Out-of-pocket amount = $1000 (Deductible included)
Co-insurance percentage = 80%/20% (Up to a maximum $3000)
Example 1: If the patient visits the doctor for a simple office visit or any
service, then the patient will have to pay the co-pay amount of $25 per
visit. Assuming the charge of the service delivered by the healthcare
provider is equal to $25, it is settled against the copay received by the
patient.
Example 2: If the patient visits the doctor for a medical service or

procedure, the patient will have to pay the co-pay amount of $25.
Assuming the charge of the service rendered by the healthcare provider is
equal to $525, the patient will have to pay $500 (as $500 is the patient's
deductible).
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Assuming the charge of the service delivered by the healthcare provider is
equal to $2900 and if the patient has paid the deductible of $500, then the
remaining $2375 ($2900 - $500 - $25 = $2375) will be shared between
the insurance company and the insured in the ratio of 80%/20%, that is,
the insurance company will pay the provider (80/100 x $2375) = $1900
and the patient will pay (20/100 x $2375) = $475.

Assuming the charge of the service delivered by the healthcare provider is
equal to $5000 and if the patient has paid the deductible of $500, then the
remaining $4475 ($5000 - $500 -$25 = $4475) will be shared between the
insurance company and the insured in the ratio of 80%/20%. According to
the co-insurance percentage, the insurance company will pay the provider
(80/100 x $4475) = $3580 and the patient will pay (20/100 x $3580) =
$895, BUT that is not the case. As the patient has an out-of-pocket amount
of $1000, therefore, the patient will only have to pay $475 (as he has
already paid $25 co-pay and $500 deductible).
$25 + $500 + $475 = $1000 (out-of-pocket amount including deductible)
So the patient will pay only $475 and not $895, and the insurance
company will bear the rest of the cost of the medical service. Therefore,
the insurance company will pay $4000 to the healthcare provider ($4475 -
$475 = $4000).
Billed amount: Billed amount is the total amount charged for a healthcare
service or procedure performed by the provider on the patient. Example:
Consider a healthcare provider providing an EKG service to a particular
patient and raising a bill (claim) of $100 to the insurance company. This
$100 is the billed amount as it is the total amount charged by the
healthcare provider for the EKG service.
Allowed amount: Allowed amount is the fixed amount an insurance

company will pay to the healthcare provider to reimburse a healthcare
service or procedure rendered to the patient. If the procedure or service
amount is greater than the allowed amount, then the patient will pay the
balance amount. Example: Consider a healthcare provider providing an
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EKG service to a particular patient and raising a bill (claim) of $100 to the
insurance company, but the insurance company has fixed an amount of
$60 for the EKG service. This $60 is the allowed amount.
Write-off amount: Write-off amount is the amount that the healthcare

provider deducts from the billed amount and does not expect to collect,
thereby "writing it off" the accounts receivables owed by payers or
patients. It is also known as adjustment amount or unpaid insurance
claims. The difference between the billed amount and the allowed amount
is equal to the write-off. Example: Consider a healthcare provider providing
an EKG service to a particular patient and raising a bill (claim) of $100
(billed amount) to the insurance company. The insurance company pays
$60 (allowed amount) for the EKG service. Hence
$40 ($100 - $60 = $40) is the write-off amount.
Offset: Offset is the process of adjusting past excess payments made to

the healthcare provider with the current or future claims raised by the
healthcare provider. Example: Assume an insurance company erroneously
made a payment of $100 to the practice against a claim of $60. Now, when
the practice raises a second claim of $50, the insurance company will pay
only $10 and adjust the previous excess amount of $40 against this claim.
This excess amount adjusted by the insurance company of $40 ($100 -
$60) against the current claim raised by the practice is known as the offset
amount. Offset, also known as recoupment, creates accounting problems
especially when one account is offset on some other account or if it is
offset months later.
Demographic entry: Demographic entry, as the name suggests, is the

process of entering or keying-in the demographic details of the patient into
the medical coding and billing software. It is also known as face sheets.
Charge Entry: Charge entry is the process of entering/keying-in the

insurance details and charges of the medical services and procedures
rendered by the healthcare provider to the patient into the medical billing
software. This is the process where the actual claim is created. During the
charge entry process, a unique account number for each patient is created
which will be used in the future to access the patient's account details from
the software. It is also in some instances known as charge sheets.
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Superbill: Superbill is a form that contains most commonly used subset of

codes for procedures (CPT/HCPCS) and diagnoses (ICD-9-CM) based on
the specialty of the medical provider. For example, consider an orthopedist
having to go through the whole ICD-9 and CPT/HCPCS code manual to
search for a specific code when all that provider needs is a group of specific
codes pertaining to the specialty, that is, orthopedics. This makes it easier
for the orthopedist to check on the preprinted billable codes provided on
the custom superbill and the medical coder has to verify for its accuracy
and add any codes that may be missed. Along with the space for billable
codes, superbill also provides space for patient's demographic information,
medical record number, insurance card information, laboratory draws,
follow-ups, etc.
Claim adjudication: Claim adjudication is the process of paying the

submitted claims or rejecting or denying them after examining the claims
to the benefit or coverage requirements. The adjudication process consists
of receiving a claim and then analyzing it manually or with the use of a
software whether to honor the claim or deny the claim. If the adjudication
is done manually it is known as manual adjudication and if it is done with
the help of a software it is known as auto-adjudication.
Explanation of Benefits (EOB): Explanation of Benefits is a document

sent by the health insurance company to the provider and the patient
explaining what medical services or procedures are covered under the plan.
The EOB generally contains information related to the covered claim
amount and the patient's obligation amount of the processed claim, and in
case of a claim denial, the EOB will go on to give a brief explanation why
the claim was denied.
Note that the EOB is NOT a bill, but once the EOB is received by the
patient, it will contain the amount of covered expenses by the insurance
company and the amount the patient is obliged to pay to the provider
thereby getting an estimate of the bill amount the provider will be sending
to the patient.
EOBs DOES NOT follow a standard format and differs from one hospital to
another and from one state to another, but all EOBs will contain some of
the basic information it needs to convey to the provider and the patient
such as the information about the provider and patient, service provided,
fee for the service, patient's obligation, adjustments, etc. Since it contains
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all sorts of numbers, it might be a daunting task for a patient to

understand it completely at the first glimpse, but it is something every
patient needs to analyze to avoid any inaccuracies in the claim. A sample
image of an EOB is shown below for reference.
Fig 5.5: Screenshot of Explanation of Benefit
Image credit
https://www.bcbsnd.com/tips-and-insights/articles/-/article-how-to-read-
your-explanation- of-benefits
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Electronic Remittance Advice (ERA): Electronic Remittance Advice is an

electronic version of Explanation of Benefits sent by the health insurance
company to the provider explaining what medical services or procedures
are covered under the plan. It contains almost all the data contained in the
EOB such as the claim amount, the patient's obligation, amount of the
processed claim, and in case of a claim denial, the ERA gives a brief
explanation why the claim was denied.
The ERA apart from being just an electronic version of EOB has another
significant difference, that is, they have a UNIFORM FORMAT. The
industry format for ERA data is HIPAA ASC X12N 835. It is this standard
format of ERA that helps medical billing companies to directly auto-post the
details of the ERAs into respective patient account.
Payment Posting: Payment posting is the process of posting/applying

the payments reimbursed by the health insurance company (primary,
secondary, or tertiary), patients, or other entities towards settlement of
claims to the relevant patient accounts. Payment posting is a difficult and
tedious process and requires significant amount of time along with a
considerable amount of expertise. It becomes more difficult if the there are
huge Explanation of Benefits (EOBs) involved hence care must be taken in
order to make sure that all the entered amount are accurate to avoid any
future trouble.
The medical biller responsible for payment posting has to look into
individual EOBs and extract the required information from the EOBs to be
posted or entered into the individual patient's account in the medical billing
software. The medical biller working in the U.S. (either in hospitals or with
any covered entity) might receive the EOBs on paper but the medical biller
in India normally receives the scanned copy of the EOBs. Hence the
healthcare KPOs based on India usually make use of dual monitors to
increase the efficiency of the medical biller. In this case rather than
toggling between window panes, the medical biller would open the scanned
copy of the EOB on one monitor and key-in the payment details in the
medical billing software opened on the another monitor. The process of
payment posting is usually manual as different insurance companies have
different format of EOBs and implicates a copy-paste-type methodology.
Due to this nature of operation, it becomes laborious, time consuming,
and prone to errors all leading to less productivity.
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In recent times, things have slowly started to change as the US healthcare

industry has introduced the standard format ERAs (electronic version of
EOBs). Many new practice management softwares available in the market
have the ability to import the details of the ERAs into the system without
the interference of the medical biller, although an overseeing process needs
to be put in place to avoid any kind of discrepancy. This auto-posting of
ERAs in the billing software is time saving and speeds up the
reimbursement cycle process.
Account Receivable: Account receivable is the amount owed to the

healthcare provider by the insurance company or the patient for the
medical services rendered to the patient. Account receivables are handled
by the account receivable department and are focused towards speedy and
accurate settlement of claims. The account receivable department analyse
the reason of the delay in submission or settlement of claims utilizing
various kinds
of reports that can be generated from the medical billing software and
takes appropriate action to ensure that the claims are settled in a timely
fashion.
5.9 HEALTH INSURANCE PLAN
A plan that provides insurance against the risk of incurring medical and
surgical expenses to the insured entity is called health insurance plan. It
can be an individual health insurance plan (where only the individual and
sometimes the immediate family members are covered under the plan) or
a group health insurance plan (where a group of individuals are covered
under a single plan).
Depending on the features, there are different types of health insurance

plans that exist in the insurance industry. Some health insurance plans
cover for certain medical illness and treatments whereas other might not
cover those medical illness and treatments. Some health insurance plans
may be flexible than others, which some may be cheaper than others. In
short, there are a whole lot of health plans.
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In general, depending on features all forms of health plans can be

categorized into the following three types of insurance plans, that is,
1. Fee-for-service (FFS) health plans,

2. Managed care organization (MCO) health plans, and
3. Consumer-driven health plans (CDHP).
1. Fee-for-service (FFS) health plans: In fee-for-service health plan,

the healthcare provider delivers the medical service or treatment to the
patient and raises the claim (bill) to the health insurance payer. It is one
of the oldest and most basic type of insurance available to date. In this
type of health plan, each and every service rendered by the provider is
paid separately and the insured has the liberty to choose any provider
for the medical service. The only disadvantage of this type of plan is
that it is too costly since the medical service or procedures are
unbundled and paid separately.
Healthcare providers caring for patients with this type of insurance plan
tend to perform more procedures (sometimes unnecessary) because the
payment is directly proportional to the amount of service or procedures.
Adding to the woes is that as the patient are indemnified by the
insurance company against costs of medical services and procedures
according to the benefits schedule of the policy, they too are inclined to
welcome any service or procedure that the healthcare provider feels
would help the patient's condition. Owing to all these factors, these
types of insurance plans are costlier and are slowly losing market share
to the bundled or integrated health plans. It is also known as indemnity
health plan or pay-for-service health plan.
2. Managed care organization (MCO) health plans: Managed care

organization health plan differs from fee-for-service health plan in a
sense that this does not provide the liberty to the patient to choose the
provider. The patient has to visit the provider or hospital within the
network of the managed care organization. The premiums and
deductibles are low as compared to fee-for-service health plan and at
times are fixed. Due to the low cost of health insurance, this type of
health plans is more popular among employers and have gained
acceptance all over the United States.
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It is an umbrella organization that contains different organizations within

itself, some of the common ones are as follows:
A. Health maintenance organization (HMO)

B. Preferred provider organization (PPO)
C. Point-of-service plan (POS), etc.
A. Health Maintenance Organization (HMO): Health Maintenance

Organization was introduced to tackle the problem of rising
healthcare cost through the Health Maintenance Organization Act of
1973. In this type of health plan, the insurance company negotiates
contract with certain healthcare providers and hospitals and creates a
network. The HMOs would then charge the insured individual a fixed
amount and in exchange for that amount would allow the insured
individual to receive medical service from any of the healthcare
provider or hospitals only within the network of the HMOs.
HMO assigns healthcare provider a group of insured individuals and

pays the healthcare provider a fixed amount for the same called the
capitated payment (see capitation). In return, the healthcare
provider has to cater the assigned individuals irrespective of the
number of visits per month by the insured individual. In this type of
plan, the insured individual cannot see healthcare provider or
hospital outside the network.
B. Preferred Provider Organization (PPO): Preferred provider

organization is an organization which enters into contracts with
specific healthcare providers and hospitals under the terms that they
will be provided the membership of this PPO network and in return
the healthcare providers and hospitals would have to provide a
significant discount in their regular fees to the insured individual. In
this type of health plan, the insured individual benefits from the
discounted rates whereas the healthcare providers and hospitals
benefit from getting to see more number of patients than usual.
Preferred provider organizations generate revenue by charging an
access fee to the health insurance companies for using their
healthcare providers and hospitals network. The basic difference
between an HMO and a PPO is that in PPO the insured individual has
the option of utilizing the service of a healthcare provider and
hospital outside the network, however, it would cost more.
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C. Point-of-Service Plan (POS): Point-of-Service Plan is a mix of HMO

and FFS health plan. In this type of health plan, the insured individual
has the access of the healthcare providers and hospitals within the
organization's network, but at the same time the insured individual
has the option of choosing a healthcare provider or hospital which is
outside the network. In the latter case, the insured individual would
have to pay more fees out-of- pocket. Example: If the insured
individuals engage the service of healthcare provider or hospital
within the network and seek referral to use a specialist, in such case
they may have to just pay copayment, but instead, if they opt to
engage the service of a healthcare provider or hospital outside the
network and do not seek a referral, they may have to pay more in
the form of coinsurance.
3. Consumer-driven health plans (CDHP): Consumer-driven health

plan is similar to the preferred provider organization health plan except
for a small difference that it also provides a savings account to the
insured individual. A certain sum of the untaxed wages of the insured is
deposited regularly into the savings account with or without an equal
contribution from the employer and this amount is utilized to pay for
any out-of-pocket medical expenses that may arise in the future. This
amount is deposited into the savings account until the deductible limit,
once the deductible has been met, the plan offers PPO- like benefits.
These types of plan usually have high deductibles and low premiums
and the funds deposited in the savings account is used to meet the high
deductibles.
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Fig 5.6: Types of Health Plans
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5.10 HEALTH INSURANCE PAYER
Now that we have discussed about the different types of health insurance
plans available for the insured individual, where does an individual buy
these insurance plans. If the individual is self-employed or employed with
an employer that does not provide health insurance coverage, then one has
to buy an individual health insurance plan. If the individual is employed
and the employer provides health insurance coverage, then the individual
will be covered under the group health insurance plan of the employer.
Let us focus on the types of health insurance payers who provide these
kinds of insurance plans. Health insurance payers are the insurance
companies which provide coverage to the individuals purchasing one of the
various insurance plans from the basket of plans available.
Typically, the health insurance payers can be segregated into three

categories,
1. Public-funded payers.
2. Private-funded payers.
3. Self-funded payers.
1. Public-Funded Payers: Public-funded payers are those insurance

payers which are financially supported by the US government either
state government or federal government. In an effort to provide quality
and affordable healthcare to all the people, US government has started
various insurance programs each having different sets of eligibility and
benefits. They are also known as government-funded payers. Some of
the most common government-funded payers are as follows:
• Medicare: Founded on July 30, 1965, Medicare is totally federal

government funded program. It provides healthcare coverage to
individuals who are either above 65 years of age, to individuals who
have some kind of disability (total or permanent), end stage renal
disease (ESRD) patients, and amyotrophic lateral sclerosis (ALS)
patients. Medicare provides health coverage to approximately 54
million individuals in United States.
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• Medicaid: Also founded on July 30, 1965, Medicaid on the other hand
is partly funded by the federal government and partly funded by the
state government. It provides healthcare coverage to individuals
hailing from low income groups. Since it is partly funded by the state,
each state has its own set of rules and regulations, and hence,
Medicaid of different states usually has distinct set of features and
benefits. Medicaid provides health coverage to approximately 66
million individuals in United States.
• TRICARE: TRICARE was formerly known as the CHAMPUS (Civilian

Health and Medical Program of the Uniformed Services). TRICARE is a
United States Department of Defense healthcare program funded by
the federal government which provides medical coverage to the active-
duty military personnel, retired military personnel, and the dependents
of the military personnel.
• Child Health Insurance Programs (CHIP): Child Health Insurance

Programs are funded by the state government and provides coverage
to the uninsured children of families whose income falls below a certain
threshold.
2. Private-Funded Payers: As the name implies, private-funded payers

are group of insurance companies which are funded by private entities.
Usually the basic intention behind founding a private-funded
organization is to earn profit but there are certain not- for-profit,
private-funded organizations as well. They provide all types of health
plans ranging from individual to group and HMO to PPO. There are
several examples of private-funded payers such as Aetna, Cigna,
UnitedHealthcare, Blue Cross Blue Shield, Kaiser Permanente, etc.
We will look at a for-profit private-funded payer (Aetna), a not-for-profit

private-funded payer (Kaiser Permanente), and a hybrid Blue Cross Blue
Shield Association with both for-profit and not-for-profit private-funded
payer.
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• Aetna: Aetna is a for-profit health insurance payer which offers health

plans and insurance solutions to individuals and to small- and big-sized
employers to provide coverage to the employees. It has a wide
network of healthcare providers and hospitals and offers both the
traditional type of plans as well as the consumer- driven health plan
(CDHP) to the members.
• Kaiser Permanente: Kaiser Permanente is one of the largest not-for-

profit health insurance payers. Founded in the late 1930s, it used to
provide industrial healthcare programs to the workers and was later in
1945 opened for the general public. It has introduced many unique
features into the US healthcare system since its institution such as
prepaid health plan, physician group practice, and organized delivery
system of medical services.
• Blue Cross Blue Shield Association (BCBSA): Blue Cross Blue

Shield Association is a federation of 37 different health insurance
organizations. The BCBSA constitutes of both for-profit and not-for-
profit health insurance organization under its umbrella, which provides
a product mix of health insurance plan to cater the unique needs of
different individuals. Some of the most widely known companies which
are part of this esteemed association are WellPoint, WellMark, and
CareFirst.
3. Self-funded payers: Self-funded payers are those big companies

which provide the health coverage and disability benefits to its
employees. To provide for the medical expenses these companies create
a pool of own funds from the partial or total contribution and use this
pool of funds to meet any unforeseen medical expenses of the
employees. Though this type of medical coverage is easy to operate
since it does not involve any outside insurance company and the
employer has the ability to control the medical cost, issues especially
arise when there is a legal action against the self-funded plan. One of
the main disadvantages of this type of plan for the employer is the
unlimited risk as the employer is solely responsible to cater all the
medical expenses of the employees, irrespective of the volume and cost.
Microsoft, Oracle, and Apple are among a few companies that act as
self-funded insurance payers.
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5.11 CLAIM FORMS
Claim is the bill prepared by the medical biller to be submitted to the

insurance company. The bill is sent on behalf of the healthcare provider to
the insurance company for the service which has been delivered to the
patient. Claim forms are basically either electronic claim, form or paper
claim form. The paper claim forms are also known as manual claim forms
or physical claim forms.
We have earlier seen in the electronic transaction rule of HIPAA

Administrative Simplification and Privacy that covered entities need to
comply with the electronic transaction rule which advocates the use of
standard electronic formats for transfer of healthcare information between
two parties. It was observed that there were hundreds of different formats
of claim sent and received for healthcare transactions, which necessitated
the development of a standardized format for exchange of electronic
healthcare information. The basic intention behind this implementation is
to promote uniformity by adopting standard electronic format rather than
using several different types of claim formats for electronic health
information transactions. Each and every covered entity will be required to
utilize the standard formats for processing claims and payments as well as
for maintenance and transmission of electronic healthcare data.
Aside from yielding a standard format with the adoption of electronic claim
form, it also provides several other advantages over the traditional paper
claim form. With the adoption of electronic claims, the error rate can be
significantly reduced as the manual interference is reduced. On an average
it is estimated that the error rate is anywhere between 25% and 30%
when using a paper claim form, there can be substantial decrease in the
error rate with the use of electronic claims. Electronic claims are faster to
process which in turn leads to reduction in the payment period or
reimbursement cycle bringing the collection period down from an average
of 60 days to 15 days. Lastly, electronic claims create a paperless, clutter-
free environment and at the same time reduce the worry of missing or lost
claims. With all these benefits electronic claims are steadfastly catching up,
but nevertheless, in some instances paper claims are still being used by a
lot of healthcare providers and insurance companies. Paper claim forms are
basically permitted to be used by those providers who have not
computerized their medical practice or those small service providers with
fewer than 25 FTE (full-time equivalent) employees or a physician,
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practitioner, facility, or supplier (other than a provider of services) with

fewer than 10 FTE (full-time equivalent) employees.
While the electronic claims saves more time and money as compared to
the paper claims, there do exist a few weaknesses of the electronic claims
such as the need for updated versions of softwares to file the claim and the
need for a clearinghouse to process the claim.
There are three different types of claim forms used for the electronic
transactions, and everyone working in any medical facility or hospital
needs to be aware about these claim forms. They are CMS-1500, UB-04,
and ADA J430D.
CMS-1500: CMS-1500 claim form (formerly known as HCFA-1500

pronounced "hick-fa") is used as a standard claim form to bill for non-
facility services, such as healthcare provider services, transportation, and
durable medical equipment. It is 8.5 × 11.0 inches in dimension and
printed with OCR "dropout" red ink on front side consisting of data fields
and black ink on back side of the form consisting of instructions. OCR
"dropout" red ink is a type of ink designed to be intentionally ignored by
OCR machines and just scan the text filled in the data fields. The
CMS-1500 claim form has 33 blocks or data fields on the front side that
need to be correctly filled in order to submit a clean claim. All these 33
blocks are marked "Required," "Required if applicable," or "Not required,"
and details have to be filled accordingly. A slight mismatch of details or
error in any of these 33 blocks may result in claim denial or rejection.
These 33 blocks of the CMS-1500 claim form can be broadly divided into
two sections, first section (Blocks 1 through 13) contains the insured
individual's details and the second section (Blocks 14 through 33) contains
the healthcare provider/supplier's details.
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UB-04: UB-04 (formerly known as CMS-1450) is the standard claim form

sent to the insurance company to bill the inpatient charges for services and
procedures delivered to the patient. UB-04 was introduced as the
replacement for the UB-92 form. The physical attribute of UB-04 is same
as CMS-1500 in that it is also 8.5 × 11.0 inches in dimension and printed
with OCR "dropout" red ink, but they differ in the number of data fields.
The UB-04 claim form has 81 data fields known as form locators on the
front side that need to be correctly filled in order to submit a clean claim.
All these 81 form locators are marked as "Required," "Situational,"
"Recommended," or "Not Required," and details have to be filled
accordingly.
Since the UB-04 is used for inpatient services, it contains large section for
CPT and HCPCS codes to accommodate for various types of problems,
complications, procedures, and treatments during the patient's stay in the
hospital. Again, any mismatch or inaccurate details in the 81 form locators
could lead to claim denial or rejection. The UB-04 claim form is prepared
and sent by the coding and billing department of the hospital and requires
more expertise than preparation of a CMS-1500.
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Fig 5.7: Screenshot CMS-1500 Claim Form
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Apart from the basic difference between the CMS-1500 and UB-04 that the
former is used for non-institutional providers (primary care provider) and
the latter is used for institutional providers (hospitals), there are a few
more differences listed as below.
The structure of the UB-04 form is much more complicated than the
CMS-1500 and requires great skillfulness, experience, and in-depth
knowledge of the medical coding and billing practice in order to get
generate is clean claim. A clean claim is the claim which contains no errors
or inadequacies, and therefore, it will be processed faster by the insurance
payer leading to quick reimbursement to the healthcare provider. This does
not imply that the CMS-1500 forms are simpler but it is comparatively
easier to generate a CMS-1500 claim form with respect to the UB-04 claim
form.
Another vital difference between the CMS-1500 and UB-04 forms is the
number of data fields present in both the forms. CMS-1500 form contains
33 data fields referred to as blocks to be filled with the patient and
physician/supplier information and the charges, whereas UB-04 form
contains 81 data fields referred to as form locators (FL) which needs to be
filled by the patient and services rendered by the hospital and charges for
those services.
On account of the varying requirements of different health insurance

payers sometimes even for an experienced medical coder and biller it
becomes hard to determine which claim form is to be submitted. In such a
situation, the best means of knowing it for sure is to call the health
insurance payer to whom the claim is to be submitted and request them to
provide their preference of claim form, whether CMS-1500 or UB-04.
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Fig 5.8: Screenshot UB-04 Claim Form
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ADA J430D: ADA J430D (also known as ADA dental claim form) is the
claim form used by dentists for reporting dental services provided to a
patient's dental benefit plan. The size of the ADA J430D is also 8.5 × 11.0
inches in dimension and printed with OCR "dropout" red ink. This ADA
J430D is same as the ADA J430, J431, J432, J433, and J434 forms and
contains 58 data fields in all to be filled to precisely file the dental claim.
Fig 5.9: Screenshot ADA J430D Claim Form
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5.12 MEDICAL BILLING PROCESS
Universally, there are three parties involved in the medical billing process,
the patient (insured individual), the healthcare provider (physician/
hospital/supplier), and the payer (health insurance company). In India, the
concept of medical billing for an insured person is entirely different from
the US medical billing process, but for an uninsured person the concept
remains the same in India and US as well as all over the world.
The medical billing process for an uninsured person is quick and simple and
is the same for the period before any health insurance company existed. In
this scenario only two parties exist, that is, the patient (uninsured
individual) and the healthcare provider. The medical billing process starts
from the time the patient walks into the healthcare provider's facility with a
particular complaint. The healthcare provider does a thorough physical
examination of the patient leading to an assessment and plan being
provided to the patient. The patient in turn of the healthcare provider's
service pays a specific amount of fees. This terminates the medical billing
process.
Fig 5.10: Billing Process of an Uninsured Person
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If we talk about an insured person, the medical billing process in India as

compared to the United States differs in the fact that WHO needs to follow
up with the health insurance company. In India, any individual covered
under a health insurance (typically called as mediclaim) depending upon
the kind of plan has the option to either visits the healthcare provider or
hospital within the network of the health insurance company or a
healthcare provider or hospital outside the network for medical service.
The insured individual has to inform the health insurance company of the
hospitalization. Previously, any type of treatment which did not require 24
hours of hospitalization was not covered under the Indian health insurance
plan, but recently due to the influx of many new health insurance
companies several exceptions and benefits have been added which range
from covering 30 days pre- hospitalization, 60 days post-hospitalization,
day care procedures (such as cataract surgery, appendectomy, dialysis),
and domiciliary hospitalization, etc.
If the healthcare provider or hospital is within the company network it will

become a cashless claim where the health insurance company will pay the
provider, and if the healthcare provider or hospital is out of the network,
then the patient will have to foot the bill of the hospital. The patient will
then send the medical documents and bills to the health insurance
company which after examining the medical documents and bills submitted
by the patient may reimburse the patient partly or fully. In this case, the
insured individual has to follow up with the insurance company.
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Fig 5.11: Medical Billing Workflow Cycle (United States)
Alternatively, the medical billing process in United States usually starts

right from the point the patient checks-in for the appointment at the
medical facility to the time the claim is being paid to the healthcare
provider.
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The whole United States billing process can be summed up in seven steps,
which are:
1. Registration
2. Demographics & Insurance Verification
3. Medical Documentation
4. Medical Coding
5. Claim Submission
6. Payment Posting
7. A/R & Collections
Some or all of the above steps of the medical billing process can be
performed electronically (computer) or manually (paper) depending on the
infrastructure of the clinic/hospital.
1. Registration: The patient usually calls up to schedule an appointment

with the physician at which time the front-office staff obtain the minimal
information of the patient required to schedule an appointment in case
of a new patient. In case of an established patient, the front-office staff
will verify the information and schedule an appointment.
2. Demographics & Insurance Verification: After presenting to the

medical facility on the scheduled appointment, the patient needs to fill
out the registration form and the office staff will input the demographic
and insurance information into the system. The patient needs to carry
the insurance card AND state or federal government-issued photo
identification. Based on the all the information gathered, it becomes
easier for the medical biller to ascertain about the medical coverage of
the patient and other benefits extended by the insurance company.
Previously, the eligibility of the insurance coverage for patient was a

time consuming task requiring Email and phone calls to the insurance
carrier for the details, now, with the evolution of technology, real-time
eligibility verification is provided by many medical billing softwares.
With electronic real-time eligibility application, the medical biller can
instantly and preemptively determine the eligibility of the patient.
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Subsequent to confirmation about the eligibility of the patient, the

medical biller coveys to the patient about the copay (if any under the
insurance coverage) that needs be paid to the provider. If a particular
medical service is not covered under the insurance plan of the patient,
an Advance Beneficiary Notice of Noncoverage (ABN) needs to be
signed by the patient undertaking to pay for the medical service from
out-of-pocket expense or to refuse the service altogether. In case an
ABN form is not signed and the service is not covered by the insurance
payer, the provider will then have to write off the total fees because the
patient cannot be billed for the same, hence, it is of essence that the
medical biller invariably verifies the particulars of the patient's insurance
before the patient encounter with the provider.
3. Medical Documentation: In this step, the encounter between the

patient and the physician takes place. The physician examines the
patient to formulate a working diagnosis and impart a treatment plan
accordingly. All these activities are recorded into a medical report either
by the physician or the medical transcription department. This medical
report containing all the billable services provided to the patient in the
medical facility is then forwarded to the medical coding team.
4. Medical Coding: On receipt of the medical report of the patient, the

medical coder reviews the report and scrupulously extracts all the
billable services provided to the patient and assigns a specific code to
each of these services. ICD-9 or ICD-10 is used to document the
diagnosis code and CPT or HCPCS is used to document the procedure
code or other ancillary services. These codes are then entered into the
superbills, and the paper superbill is then handed off to the medical
billing department whereas if the practice uses electronic superbill it
gets transferred to the medical biller through the billing software. One
important thing to bear in mind is that superbill does not eliminate the
need for coding manuals but acts as an assistive reference to speed up
the process of billing.
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5. Claim Submission: The medical biller reviews the superbill and it is the
job of the medical biller to ensure that respective charges for each of
the billable codes are entered into the claim form (paper or electronic).
The claim form contains several data fields each with its set of
specifications. The medical billing specialist needs to know which
charges needs to be entered in those data fields in order to generate a
clean claim which can be sent to the insurance companies. This claim
form accurately conveys the insurance payer about the ailment of the
patient and the treatment delivered.
Medical billers need to have a strong know-how about the billing

guidelines as majority of insurance payers simply follow standard billing
guidelines, but there exists a few which have their own specific
requirements to be filled into the medical billing claim form. Once the
claim form is prepared, it is submitted to the concerned health insurance
payer after checking that it meets the standards of billing compliance set
by the statutory bodies.
In reality with any claim submission process, there exists typically one of
the three outcomes mentioned, herein, the insurance payer will
a. Accept the claims and make the payment. (Rationale: It is a clean

claim).
b. Deny the claim in part or full and request additional

information.
(Rationale: If the information provided is incomplete or
illegible).
c. Reject the claim. (Rationale: Inconsistent claim format, out-of-

network patient, incorrect policy number, etc.).
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Fig 5.12: Outcomes of Claim Submission
Many healthcare practices employ the services of clearinghouses to submit

the electronic claims. Clearinghouses are intermediaries between the
healthcare practices and insurance payer that help to transmit electronic
claims to the insurance payers in a secure way.
One the unique feature of clearinghouses is claim scrubbing. Claim

scrubbing is the process of verifying the claims for any errors and
checking its format compatibility with the insurance payer. This process
significantly reduces the error rate of claims and improves the turn-around-
time of the payment cycle.
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6. Payment Posting: When the claim is approved or denied in part or full

by the insurance company, they send an explanation of benefit (EOB) to
the healthcare provider. This EOB contains the details about the
payment made, payment denied, patient responsibility, etc. The medical
biller responsible for payment posting has to evaluate the EOB and post
it in the medical billing software. The payment made by the insurance
payer along with the claim adjudication is also posted into the patient
account. On the basis, the medical biller also prepares a patient invoice
to be sent to the patient which mentions the amount paid by the
insurance company and the amount patient owes to the medical practice
(patient's responsibility).
7. Accounts Receivable (A/R) & Collections: By and large, every

medical facility assumes that all the claims generated by the medical
billing department will be a clean claim, processed quickly by the
insurance payer, and will lead to fast reimbursement, but in reality that
is not how things works. There are number of claims which get denied
or rejected due to incomplete information, information mismatch,
coverage issues, etc.
Accounts receivable is an extension of the billing department, although it

has its own wide set of function to be performed in order to effect the
collections. Collection refers to the outstanding amount due to the
medical practice. If these collections are not received in a timely manner
it would have a devastating effect on the revenue cycle.
Accounts receivable department handles the function of identification,

monitoring, and following up on pending payments either from the
insurance company or from the patient. Identification of pending
payments is done through generation so reports called aging reports
which gives a periodic report on the amount owed to the medical
practice and the duration of time the amount has been due. The reports
can be obtained in a spreadsheet or a graphical representation.
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Once identified, the accounts receivable department starts out with the
collection process. It will monitor each account on a case-to-case basis
on the assumption that each case is unique. For claims that are denied
or rejected from the insurance payer due to incomplete or wrong
information, further information is sought and claims are resubmitted or
appealed. In case of any outstanding from the patient, reminder and
follow-up calls are made for the collection, and finally, if the patient is
reluctant to pay the bill, the case will be handed over to a collection
agency.
The expertise of an efficient A/R team is to judiciously follow up of

outstanding payments from the insurance company and the patient and
at the same time not to trigger a vicious cycle that would delay the claim
forever and in worst cases to write-off.
Fig 5.13: Sample Aging Report
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5.13 ERRORS IN MEDICAL BILLING
As discussed earlier, the error rate of paper claim is between 25% and 30%
which can be substantially decreased with the use of electronic claim, BUT
can never be exterminated. Errors will tend to exist until human
interference is required to complete the billing process and even with the
use of the best technology eradication of error will always remain a difficult
task. It is very important for the medical billing department to analyze the
category of errors and make every effort to reduce the errors to the
maximum extent possible.
Let us discuss about some of the medical billing errors:
1. Inaccurate or Incomplete Information: This is a very common type

of error in the billing process where the information entered into the
billing software is either incomplete or inaccurate. This error may arise
when the medical biller has not inquired and verified the information
correctly or due to the typographical error. There are basically four
classes of information that needs to be entered correctly in order to
generate a clean clam, they are patient demographic information,
patient insurance information, provider information, and insurance
payer information. Any mistake or mismatch in any of the above
information may lead to claim denial or claim rejection.
2. Insurance verification error: After the insurance information

obtained from the patient, medical biller needs to verify the insurance
coverage with the insurance payer for determine whether the policy is
still in force and whether the procedure is covered under the policy plan.
Failing to verify these details in a timely manner will lead to claim
denial.
3. Domino-effect error: This kind of error arises due to wrong medical

reports dictated by the physician or transcribed by the medical
transcriptionist. The medical coder prepares the superbill based on the
inaccurate medical report whereas the medical biller prepares the claims
based on the inaccurate superbill. Likewise any mistake made by the
medical coder such as not coding to the highest level, using old code
set, mismatch of code and procedure will also lead to a domino-effect-
kind error.
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4. Wrong/Outdated claim format: Basically, CMS-1500 is for

professional service provider and UB-04 is for hospitals, but it is not as
simple as it sounds. There are various types of healthcare service
providers and suppliers as well as a host of insurance payers all with
periodically changing guidelines about the usage of claim form. If the
medical biller uses a wrong claim form or uses an outdated claim form
to submit the claim, the insurance payer will straightaway reject the
claim. Therefore, the medical biller has to remain up-to-date with the
insurance payer's requirement of the type of claim form.
5. Undercoding/Upcoding/Unbundling error: If a medical biller on the

behest of the healthcare provider intentionally undercodes, upcodes or
unbundles a procedure in order to receive any type of financial,
taxation, or audit benefit than legitimate, it is considered as a
fraudulent practice.
Undercoding is defined as providing a service to a patient and

deliberately coding it less than the parameters required for that service.
Overcoding is defined as reporting a more complex and/or higher cost

procedure than what was actually performed by the physician.
Unbundling codes is when a medical coder submits codes in a

piecemeal fashion for a single procedure. A surgeon performing a
surgery claiming for anesthesia and stitches separately is an example of
unbundling. As anesthesia and stitches are inherent part of surgery, they
should be bundled together rather than being claimed in a piecemeal
fashion.
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5.14 PRICING
As we had discussed in the medical coding chapter, the pricing structure for
coding and billing are identical and overlap with each other because usually
the same service provider performs the task of doing the coding and billing
for the covered entities.
Listed below are some of the medical billing pricing strategies adopted by
the industry:
A. Percentage-based model: Charging a particular percentage of the

total net collections of the healthcare practice is the most preferred
method of billing. The medical billing company usually charges between
3% and 4% of the total collection. The reason for the success of this
model is that the covered entity will not be faced with any hidden costs
as the payment is linked to the collection of the medical practice and the
medical billing company in an effort to increase the revenue, put their
best to generate clean claims that would reduce the amount of rejected
or denied claims which in turn would conserve the company's A/R and
Collection resources.
Consider if the medical facility's total collection is $40,000 and the

medical billing rate agreed upon is 3% of the total collection. The
medical billing company will receive $1200 (3/100 x 40000 = 1200) in
revenue.
In cases where the company provides both the medical coding and
billing service, it would charge accordingly in the range of 7% to 9% of
the total collection. This type of pricing model is also known as revenue-
based model and dominates all other pricing structures in the medical
coding and billing industry.
B. Full-time equivalent model: An FTE is the equivalent of one medical

biller hired as a full-time employee and works full time, that is, 8 hours
per day and 5 days per week. FTEs do not represent the number of
employees. It just represents a unit that indicates the total number of
labor hours put in by an employee.
An "FTE of 1" or "1 FTE" is equivalent to one employee working full

time.
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For detailed explanation on FTE refer to Chapter Medical

Transcription.
The rate for one FTE medical biller could range between $8 and $10 per
hour depending on the type of billing, whether it is outpatient or
inpatient.
The main drawback of FTE billing is that the number of FTE and rate per
FTE is fixed at the beginning of the month and the healthcare practice,
irrespective of the volume of work, has to pay the medical billing
company the contracted amount for the team of FTEs engaged to
perform the job.
C. Per Claim Model: In the per claim model, a rate is negotiated to be

paid for each claim processed by the billing department. Though not a
favorite of the billing industry, many small healthcare practices opt for
this kind of pricing model as well as freelance medical biller. The
payment will be calculated based on the number of claim submitted.
Average rate for billing per claim usually ranges between $2 and $3.
D. A/R & Collections: There are certain healthcare providers who only
need the accounts receivable and collections part of the process to be
outsourced to a particular vendor. They either perform the billing
services in-house or outsource to another vendor. In such cases, the
vendor needs to provide the rates for only accounts receivable and
collections service to the provider which is usually around $15/hour.
There exist various customized pricing options available in the medical

coding and billing industry for small, mid, and large healthcare
providers. All the pricing options have their own set of pros and cons
which need to be carefully weighed before opting for any of them.
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5.15 ELECTRONIC SOFTWARES FOR BILLING
Medical billing in recent have become hooked up with different types of

softwares, care must be taken in order to choose one. A wrong choice of
software would not only burn a hole in the pocket of the medical practice
but at the same time would not provide the desired results expected with
the purchase of the same. A thorough research in terms of the user need
and budget needs to be performed before settling on specific medical
billing software. Ideally, the use of electronic softwares for billing speeds
up the process by allowing to link patient to their respective insurance
providers, verifying insurance eligibility of patient in real-time, submitting
claims to clearinghouse or to payers, entering fees for various codes,
detecting any mismatch between the diagnosis and procedure code, etc.
Listed below are the names of a few electronic medical billing softwares:
• PracticeSuite
• AllegianceMD
• TheraBill
• NueMD
• Iridium Suite, etc.
These medical billing softwares are available as software-as-a-service

(SaaS) model and the user has to pay a monthly or annual charge for their
usage.
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5.16 Artificial Intelligence in Medical Billing
How is artificial intelligence used in healthcare?

• AI-assisted robotic surgery: Using data contained in medical records
to guide surgeons through surgery.
• Nurse-like chatbots: navigating basic questions with natural language
interpretation, processing requests and notifying the appropriate staff
member to navigate patient concerns.
• Diagnosis: Analyzing symptoms and producing objective, diagnostic
possibilities for medical professionals.
• Medical billing: AI has the capacity to automatically conduct audits,
self-adjusting known values to the audit results.
Artificial intelligence is helping healthcare providers save money and

improve efficiency in billing and insurance. From speech recognition for
clinical documentation to machine learning for data extraction, here's how
the tech is improving medical financing.
KEY TAKEAWAYS
• Artificial intelligence can help optimize backend

systems. Administrative workflows, such as filing claims or medical
coding, are one of the leading costs for healthcare systems and causes of
burnout. AI can help automate and optimize these workstreams.
• Recent advancements in NLP are streamlining the billing and

insurance cycle. Significant progress in interpreting medical
documentation has been made with language models from Google and
OpenAI. Healthcare-focused open-source NLP tools have also been
released for developers such as Amazon Comprehend Medical and
Google’s Healthcare Natural Language API.
• AI solutions in administrative automation will largely depend on

electronic health record (EHR) data. Medical coding solutions use
EHR notes to translate health services into billing codes, and AI-powered
RPA platforms can extract data from EHRs to populate claims forms.
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AI for medical billing and insurance
Medical billing and insurance represent huge revenue opportunities — and

huge costs.
In 2019, provider billing and insurance costs surpassed $280B in the US

annually, according to the Center for American Progress (CAP). A 2018
Duke University study found billing- and insurance-related costs can
represent up to 25% of health care systems’ revenue.
The pressure on providers to cut costs is higher than ever as the ongoing
Covid-19 pandemic has depressed revenues and brought on new costs. To
help, AI solutions are emerging to reduce claim denials and improve
workflows in the billing and insurance cycle.
For example, AI-powered RPA startups are working to completely automate

manual, repetitive tasks in the end-to-end revenue cycle such as claims
submission and denial. In medical coding, players such as Google-backed
Nym use NLP to automate the labor-intensive process of translating EHR
notes into billable code.
These artificial intelligence systems also have the potential to combat the
rise in provider burnout brought on by an increasing volume in
administrative tasks such as claims, pre-auth, coding, and more.
In fact, AI’s potential to reduce tedious workflows in provider backend

systems may be one of its largest impacts in healthcare.
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Fig. 5.14 Artificial Intelligence in Medical Billing
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5.17 SUMMARY
There are two most common types of insurance which primarily everyone
should know, viz, life insurance and general insurance. Health insurance
(normally termed as Mediclaim in India) is insurance against the risk of
incurring medical and surgical expenses to the insured entity.
In India 25 percent of the Indian population has access to any form of

health insurance while the rest 75 percent remain uninsured.
The key differences between the health insurance of India and United
States are usually on the lines of coverage, medical cost, remittance
period, claim submission, follow-ups, and out-of-pocket expense involved.
In the revenue cycle management of healthcare, medical billing is preceded

by medical coding. Professionals working as both medical coder and
medical biller are known as medical insurance specialist.
A successful medical biller must possess certain skills such as medical,

technical, eye- for-detail, interpersonal, transformative, concealment, and
mathematical.
Two biggest professional organizations that provide the best medical billing
training are American Academy of Professional Coders (AAPC) and
American Medical Billing Association (AMBA).
The medical biller responsible for payment posting has to look into
individual EOBs and extract the required information from the EOBs to be
posted or entered into the individual patient's account in the medical billing
software.
Health Insurance Plans are of the following three types, Fee-For-Service

(FFS) Health Plans, Managed Care Organization (MCO) Health Plans, and
Consumer-driven health plans (CDHP).
Managed Care Organization (MCO) Health Plans is an umbrella organization

containing Health Maintenance Organization (HMO), Preferred Provider
Organization (PPO), Point- Of-Service Plan (POS), etc.
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Health Insurance Payer can be segregated into three categories, Public-

Funded Payers, Private-Funded Payers, and Self-Funded Payers.
Electronic claim forms or paper claim forms are of three different types,
CMS-1500, UB- 04, and ADA J430D.
Data fields in CMS-1500 are known as blocks (33 blocks) and data fields in
UB-04 are known as form locators (81 FL).
Seven steps of the medical billing process are: Registration, Demographics

& Insurance Verification, Medical Documentation, Medical Coding, Claim
Submission, Payment Posting, and A/R & Collections.
Claims submitted can be accepted, denied, or rejected. Error rate of a

paper claim is between 25% and 30% which can be substantially
decreased with the use of an electronic claim.
Insurance is a contractual agreement between an insurance company and

an individual or entity to provide compensation or reimbursement against
any form of loss for which the individual or entity pays a premium to the
insurance company.
Health insurance is insurance against the risk of incurring medical and

surgical expenses to the insured entity.
Medical billing is the process of documentation, submission, and follow-

ups on claims with health insurance companies in order to receive payment
for services rendered by a healthcare provider. Medical biller is a person
skilled to document, submit, and follow-up on claims with health insurance
companies in order to receive payment for services rendered by a
healthcare provider.
Claim adjudication is the process of paying the submitted claims or

rejecting or denying them after examining the claims to the benefit or
coverage requirements.
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Capitation is an agreement between the healthcare provider and the

health insurance payer wherein the health insurance payer pays the
healthcare provider a fixed lump sum amount.
Co-pay is the amount paid by the patient out of his pocket to the
healthcare provider prior to the medical service or procedure.
Deductible is the amount a patient must pay at the start of every

calendar year in order to be eligible for the health insurance plan coverage.
Co-insurance is a cost sharing of medical service or procedure between

the health insurance company and the patient based on percentage.
Write-off amount is the amount that the healthcare provider deducts

from the billed amount and does not expect to collect, thereby "writing it
off" the accounts receivables owed by
payers or patients.
Explanation of Benefit (EOB) is a document sent by the health

insurance company to the provider and the patient explaining what medical
services or procedures are covered under the plan. ERA is an electronic
version of EOB.
Claim is the bill prepared by the medical biller to be submitted to the

insurance company.
OCR "dropout" red ink is a type of ink designed to be intentionally

ignored by OCR machines and just scan the text filled in the data fields.
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PPACA Patient Protection and Affordable Care Act
ACA Affordable Care Act
GSHIS Government-Sponsored Health Insurance Schemes
RSBY Rashtriya Swasthya Bima Yojana
AMBA American Medical Billing Association
CPB Certified Professional Biller
CMRS Certified Medical Reimbursement Specialist
MAB Medical Association of Billers
EOB Explanation of Benefit
ERA Electronic Remittance Advice
FFS Fee-For-Service
MCO Managed Care Organization
CDHP Consumer-Driven Health Plan
HMO Health Maintenance Organization
PPO Preferred Provider Organization
POS Point-of-Service
ESRD End-stage renal disease
ALS Amyotrophic lateral sclerosis
CHAMPUS Civilian Health and Medical Program of the Uniformed Services
CHIP Child Health Insurance Program
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BCBS Blue Cross Blue Shield
ABN Advance Beneficiary Notice of Noncoverage
A/R Accounts Receivable
1. What is insurance and what are its types?
2. Define claim and its types.
3. What are the skills required to be a medical biller?
4. Differentiate between Indian and US health insurance.
5. What is medical billing and state its use?

• Co-pay
• Deductible
• Co-insurance
• Offset
• Charge entry
• Claim adjudication
• Explanation of Benefit
• Payment posting
• Account receivable
• OCR "dropout" red ink
7. Describe health insurance plan and its types.
8. Write a short note on

• Managed care organization (MCO)
• Public-funded payer
• CMS-1500
• UB-04
9. Explain the 7-step process of medical billing in detail.
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MEDICAL BILLING
10.What are the different types of errors that occur in medical billing?
11.State any 2 pricing plans adopted by the medical billing company.
12.Write a short on electronic softwares used for billing process.

• ACA
• RSBY
• CPB
• EOB
• ERA
• HMO
• PPO
• BCBS
• ABN
• A/R
1. What is the full form of ACA?

a) Affordable Care Act
b) Affordable Claim Act
c) Affordable Co-pay Act
d) None of them
2. The amount a patient must pay at the start of every calendar year in
order to be eligible for the health insurance plan coverage is called?
a) Co-payment
b) Deductible
c) Fee for service
d) Co-Insurance
3. The process of documentation, submission, and follow-ups on claims

with health insurance companies in order to receive payment for
services rendered by a healthcare provider is called?
a) Insurance
b) Claim Adjudication
c) Medical Billing
d) Capitation
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4. Medical billing is the process of documentation, submission, and follow-

ups on claims with health insurance companies in order to receive
payment for services rendered by a healthcare provider.
a) True
b) False
5. Claim adjudication is the process is the process of paying the submitted

claims or rejecting or denying them after examining the claims to the
benefit or coverage requirements.
a) True
b) False
[Answers: 1(a), 2(b), 3(c), 4 (a), 5(a)]
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5.21 CASE STUDY
CODING AND BILLING MANAGEMENT
Encoder Product Suite
The Encoder Product Suite provides an intelligent, comprehensive approach

to VA inpatient and outpatient data management technology for the HIMS,
Billing, Utilization Review, Accounts Receivable, and Compliance
departments.
The Encoder Product Suite includes Windows graphical user interface

modules of various VistA packages with coding, compliance, billing, and
auditing functionality. It provides VA staff and management with the tools
needed to do their jobs effectively. With the official VA-sanctioned
communication technology, RPC Broker, the system provides real-time
integration into VA packages, such as Patient Care Encounter, Patient
Treatment File, Computerized Patient Record System, and Surgery. This
integration ensures that all of the necessary data and documentation is
available to staff directly involved with coding and billing of accurate,
comprehensive claims for the VA.
Benefits:
• Improves auditing and monitoring capabilities with VA-specific Veterans

Equitable Resource Allocation (VERA) tools
• Improves coding knowledge with real-time error indicators
• Identifies "high-risk" coding practices
• Reduces claim denial with CMS 1500 and UB-04 claim scrubbing
• Improves screening capability for claims and encounters
• Improves reporting capabilities with an ad hoc report builder
(Source http://www.nuance.com/for-healthcare/capture-anywhere/him-
solutions/coding- billing-management/index.htm)
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MEDICAL BILLING
References:
Billing & Coding Clear & Simple: A Medical Insurance Worktext By Nancy
Gardner
http://www.nuance.com/for-healthcare/capture-anywhere/him-solutions/
coding-billing-management/index.htm
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
270
Chapter 6
Revenue Cycle Management
CHAPTER OBJECTIVES:

• Revenue Cycle
• Revenue Cycle Management (RCM)
• Key modules in RCM
• Key Players in RCM
• RCM - Stages
• Revenue Cycle Process
• Life of a Claim
• Claim Rejection & Claim Denial
• RCM – Problems & Solutions
• Ways to Cut Costs Through Hospital Revenue Cycle Management
• Revenue Cycle Management System
• Adopting Advanced Analytical Techniques
STRUCTURE:
6.1 Introduction
6.2 Revenue Cycle in Healthcare
6.3 Revenue Cycle Management
6.4 Stages in RCM

• Preservice Stage.
• Service Stage.
• Postservice Stage.
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6.5 Healthcare Revenue Cycle Process (10 Steps)

• Patient Verification & Scheduling
• Patient and Provider Encounter
• Charge Entry
• Medical Coding
• Claim Submission
• Payment Posting
• Accounts Receivable
• Difference Claim Rejection & Claim Denial
• Write off, Refund, & Collections
• Closing of Account
6.6 Revenue Cycle Management - Problems & Solutions
6.7 Ways to cut costs through Hospital RCM
6.8 Revenue Cycle Management System
6.9 Summary
6.13 Case Study
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6.1 INTRODUCTION
Revenue is defined as "income, especially when of an organization and of

a substantial nature" by Oxford Dictionary.
Revenue originates from Latin (revenire) and French (revenir) words

meaning "return." In short, one can say that revenue means getting back
what is yours.
In terms of business, revenue is the income of an organization from its

day-to-day operations. Revenue is the money a company receives in
payment for its products or services. The fundamental principle on which
every business is based is generation of revenue, not just, some revenue
but maximum amount of revenue possible.
Why does an organization want to have revenue, oh excuse me, huge

revenue?
The answer is simple. Huge revenue means huge inflow of money into the
organization, money which can be utilized for operating expenses,
expansion, purchase of new equipments, or simple corner the profits. The
sustainability of any business depends in the amount of revenue it
generates. Be informed that the revenue is NOT the profit, but instead, it is
the total amount of money earned by an organization before deducting any
expenses or taxes. Revenue has a significant impact on the profit and to
increase the profitability of a business it is important to create the widest
possible difference between the cost and the revenue of the business.
Profit = Revenue - Cost
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6.2 REVENUE CYCLE IN HEALTHCARE
Healthcare Financial Management Association (HFMA) a not-for-profit

organization defines healthcare revenue cycle as:
"All administrative and clinical functions that contribute to the capture,

management, and collection of patient service revenue."
Healthcare revenue cycle starts right at the time the patient places a phone
call to the medical practice for an appointment and it ends when the
payment has been received in the healthcare provider's account either
from the insurance company or from the patient for the service rendered to
the patient. It involves several steps such as patient registration, insurance
verification & eligibility, medical documentation, chart review & coding,
claim submission, payment posting, and accounts receivable & collections.
When all these steps are performed correctly and in timely fashion, the
cycle runs smoothly and efficiently, however, any incorrect or erroneous
entry at any point in the revenue cycle can turn it into a vicious cycle. The
farther an erroneous entry moves into the revenue cycle the more difficult
it becomes to trace and rectify it. Hence a foolproof system needs to be put
in place that would keep a check on the errors in the first place, and if any
error slips-in, the system should be able to try to detect and rectify the
same.
6.3 REVENUE CYCLE MANAGEMENT
Revenue Cycle Management (RCM) in healthcare is the process of

managing claims process, payment, and revenue generation. To put it
simply, RCM in healthcare helps a medical practice to increase the revenue
by proper claim management, i.e., making sure that the claims are paid up
to the maximum possible limit and within a specified period of time. If the
claims are paid partly or if it is paid after a long period of time, then
resources from the accounts receivable and collection department need to
be utilized in order to get the claim settled. This delay in claim payment
and consecutive follow-ups from the accounts receivable and collection
department would generally have a negative effect on the revenue cycle
and in certain cases might raise a question on the future growth of the
medical practice.
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There are four key players involved in the Revenue Cycle Management
(RCM) of healthcare system. They are patient, healthcare provider, billing
company, and insurance payer. For the revenue cycle to function as
expected, all the four players need to work in tandem. If any of the players
diverts from their principal responsibilities or functions and lacks the focus
to do their job duties properly, the cycle would stop thereby creating a
bottleneck or backlog. Therefore, it is imperative that all the four players
align their goals and work together to achieve that common goal. Time
management and productivity play key elements in the healthcare RCM.
Fig 6.1: Key Players of RCM
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Fig 6.2
What is Healthcare Revenue Cycle Management?

Revenue cycle management is the process used by healthcare systems to
track revenue from patients from their initial appointment or encounter
with the healthcare system to their payment of balance.
Revenue cycle starts with the appointment or hospital visit and ends when
the provider or hospital gets paid fully for the services provided.
The seven steps of revenue cycle include preregistration, registration,

charge capture, claim submission, remittance processing, insurance follow-
up and patient collections.
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1. Preregistration
Preregistration is the first and most vital step in the revenue cycle process.
Preregistration allows the medical practice to capture demographic
information, insurance information and eligibility in real-time through a
clearinghouse, often while the patient is still on the phone. Information
goes to the patient’s insurance carrier and flows through the provider’s
practice management system, then tells the provider the patient’s
coverage, deductible, co-insurance, co-payment, and in certain instances,
if a referral is needed.
During preregistration, the practice can discuss financial expectations of

the patient, including time of payment and no-show/cancellation policy.
The preregistration process allows a practice to set the financial tone at the
beginning and prevents questions about payment. If a practice doesn’t
have a tight preregistration process, there are many areas that can get
missed.
2. Registration
Registration solidifies the process of ensuring the patient’s information is

100% accurate from start to finish. During registration, the provider makes
sure the patient’s address, phone number, date of birth, guarantors, and
insurance information are correct, and it’s critical they secure this data
each time a patient is treated.
During registration, the provider collects co-payments, and if it’s a

specialist, they will ensure a referral or authorization is in place to treat the
patient. If that step is missed in a specialist’s office, it is unlikely they will
get paid for that service in the end. During registration, financial forms are
signed, and insurance benefits are assigned. In the event these steps are
missed and the practice is audited, there’s the risk of financial
repercussion.
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3. Charge Capture
Charge capture, step three in the revenue cycle process, can be done a
couple of different ways.
It can be automated, where the information automatically flows into the

practice management billing side based on what the provider puts in their
documentation. The other option is the old-fashioned way, where front
desk staff enter information or send it to billing, where it’s manually keyed
in.
4. Claim Submission
Claim submission includes sending information to the insurance carrier

after the charges have been entered. The revenue cycle team will look at
the charges, the CPT code, and the diagnosis code. They will ask whether
the diagnosis will support the procedure performed. If two services are
provided, those need to be separated and coded correctly.
Claim scrubbing is the process of making sure claims are clean and going
in the door correctly. If a claim gets to the insurance carrier clean, it will
get paid a lot faster. The process includes sending the claims from your
practice management system to a clearinghouse, which acts as a
mailroom, taking in the claims and sending them to the different payers.
The transmission report shows claims sent, claims coming back in, and
claims dropped, while the rejections report identifies incorrect codes. Make
sure you review both reports as part of the claim submission process. The
sooner errors are identified, the sooner they can be fixed, and the sooner
the claims will get paid.
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5. Remittance Processing
Step five in the revenue cycle is remittance processing. Once a practice’s

claims have gone out, they will get remittances back. The explanation of
benefits shows the practice what they got paid for the services provided.
During this process, allowables are determined. Allowables are what the
provider has contracted with the insurance carrier on a service provided.
The provider and carrier negotiate the contract, at which time the
insurance company will confirm how much they will pay for each service.
One common mistake during the remittance process is “post and go.” As
electronic posting has become the norm for the revenue cycle, a practice
can encounter problems when they post remittances and never look at
them again. For example, if a carrier does not pay or something is set up
incorrectly in the practice management system, the error could get missed
in the “post and go” scenario. If no one is reviewing the process or the
reports, a practice could miss the chance for an appeal and thus an
opportunity to correct a mistake.
Another element of remittances are fee schedules, which are the amounts
providers charge for each of their services. Providers should review their
fee schedules on an annual basis to make sure they are in line with
adjusting rates, contracts, and allowables. Evaluate your fees regularly to
make sure you are not leaving money on the table.
The final piece of the remittance process includes write-offs, both

contractual and non-contractual. Contractual write-offs are unpreventable,
as they involve contracted rates with carriers and payers.
On the other hand, non-contractual write-offs are avoidable; they include

write-offs that would have not happened with a tight process in place,
either at the beginning, the end, or somewhere along the way. Avoidable
write-offs are generally the result of a breakdown in the provider’s
remittance process and can be prevented by looking at reports. Red flags
include no authorization, no referral on file, and claim not submitted in a
timely manner.
There are multiple points in the remittance process that can affect your
revenue cycle.
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6. Insurance Follow-up
The next step in the revenue cycle process is insurance follow-up. In this
stage, practices look at not only what has been paid, but also what has not
been paid. What happens to the items that don’t get paid?
The accounts receivable (A/R) report shows everything that’s sitting in the
insurance and/or patient buckets for a period of time. This report will show
if insurance follow-up is broken and why it is taking so long to get it paid.
An important piece of insurance follow-up is determining the structure.

Questions to ask include:
• Are people assigned certain carriers?
• Is your billing team cross-trained?
• Do you have more than one billing person who can work on Medicare?
• Is the practice management team working this insurance?
• Are you seeing any noticeable changes on the aging monthly?
• Are claims being appealed or are they being resubmitted?
7. Patient Collections
The most difficult part of the revenue cycle process is patient collections.
The best time to get money from a patient is when they are in your office.
For that reason, it’s recommended that front desk staff are trained to
collect at the time of service.
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6.4 STAGES IN RCM
Gone are those days when all the functions of a healthcare revenue cycle
management were used to be done manually. In today's world, computers
have replaced the typewriters used by the medical transcriptionists,
servers have replaced the file cabinets used to store the medical records
documentation, electronic dictionaries and softwares have replaced the
traditional dictionaries and coding manuals, and electronic data
interchange (EDI) has replaced the US Postal Service to send claims. All
these factors clubbed together have helped RCM tremendously in reducing
the billing cycle period as well as decreasing the amount of error by
embracing the automation of the revenue cycle process.
Still with all the latest advancement in technology, the human interference
is of prime need of the hour in the RCM process to help it run in an
effective manner. In order to develop an efficient RCM process, medical
practice need to make use of a practice management software that
seamlessly integrates patient registration, insurance verification & real-
time eligibility, medical documentation, chart review & coding, claim
submission, payment posting, and accounts receivable & collections. If a
single software application handles all of the above mentioned RCM
functions, it would be easier to detect any mistakes early on in the process
and rectify it in a timely manner, thereby preventing any significant ripple
effects that would occur later on during the process.
Alternatively if a medical practice implements several different softwares

from different vendors, then it might be a perfect recipe for disaster. For
instance, softwares from different vendors would be hard to integrate into
the system. If an error crops up, it would be difficult to track the origin of
the error in order for it to be rectified so that it does not happen in the
future. Also if a technical glitch were to occur, which of course it would in
due time, the vendors would start playing the blame game and the medical
practice will be at the receiving end.
A medical practices choice of practice management software (PMS) should

be largely centered on how the RCM needs to be implemented. A right
choice of PMS would lead the medical practice on the path of ascent;
whereas a wrong choice of PMS would lead the medical practice on the
path of descent.
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One other important reason to develop an efficient revenue cycle is

working on claim denials and claim rejections. Researchers from the
California Nurses Association analyzed data reported by the insurance
payers and found out that 22 percent of all the claims submitted were
rejected. Researches feel that the guidelines for submitting the claims are
getting tougher and tougher day by day to root out any fraudulent
collection of payments. Due to the stricter and complex regulations the
rejection rate of claims is rising, moreover, it is believed that out of all the
claims rejected (22%), almost 40% are never re-submitted due to claims
being lost/ missed, the claim resubmission is done after the time deadline
specified, or the healthcare provider purposely does not resubmit the claim
thinking that the amount is not significant enough to go through the
hassles of appeals and follow-ups. Maximum number of these claims is
denied for trivial reasons and RCM helps to identify those insignificant
cause and root it out so that lesser amount of denial occur thereby
increasing the medical practice revenue.
A proper revenue cycle management works on each and every stage of the
revenue cycle to increase the payments and collections while decreasing
the write-offs. In a nutshell, we can describe the revenue cycle as
consisting of three stages:
1. Preservice Stage.
2. Service Stage.
3. Postservice Stage.
Preservice Stage: Preservice stage consists of all the activities prior to

the patient's encounter with the healthcare provider or in other words prior
to the patient receiving any kind of healthcare service. The patient's call to
the medical practice, gathering of the information - patient’s demographic
and patient's insurance, verification of the insurance information, real-time
eligibility, authorization information, and financial position of the patient -
payments due in the past all these form part of the preservice stage. If
care is taken by the front office staff to follow these steps in the right
order, it will significantly reduce the number of claim denials in the
upcoming future.
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Service Stage: Service stage is the actual point where the patient
receives the healthcare service for the medical ailment. The patient visiting
the clinic/hospital, patient's encounter with the healthcare provider
(provider's examination, diagnosis, and treatment plan), medical
transcription, medical coding, and medical billing are part of the service
stage. This stage is the core activity stage of the revenue cycle
management. Due to the complexity involved in this stage, the potential of
generating an error-ridden claim is the maximum at this stage. The service
stage consumes most of the resources of any medical practice.
Postservice Stage: Postservice stage is the last stage of the RCM after
the healthcare service to the patient has been delivered. Claim submission,
patient statement/invoice, payment posing, accounts receivable, working
on denials and appeals, write-offs and refunds, and assigning to collection
agency form part of the postservice stage.
To summarize, the three stages of RCM is comprised of all the

administrative, clinical, and financial functions of a medical practice.
6.5 HEALTHCARE REVENUE CYCLE PROCESS
The recent changes in the healthcare industry over the couple of years
ensuing the HIPAA implementation has been overwhelming without a doubt
for all the four parties, the patient, the healthcare provider, the billing
company, and the insurance payer. The ICD-10 implementation with the
compliance date of October 1, 2015 will only add to the sense of disarray if
not already.
Failing to comply with the regulatory requirements laid down by the

statutory bodies will only lead to more claim denials and rejections bringing
down the overall profitability of the medical practice. Therefore, it is crucial
to have a structured revenue cycle process in place.
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Basically, the revenue cycle process involves the following ten steps:
1. Patient Verification & Scheduling

2. Patient and Provider Encounter
3. Medical Transcription
4. Charge Entry
5. Medical Coding
6. Claim Submission
7. Payment Posting
8. Accounts Receivable
9. Write off, Refund, & Collections
10.Closing of Account
1. Patient Verification & Scheduling: This is the first step in the process
which kick starts the revenue cycle. It includes the preregistration,
verification, and scheduling process. The patient calls up the medical
practice to schedule the tests or procedures. This is termed as the
preregistration process. Some medical practices, for example Maine
Medical Center, have even setup online patient preregistration portals so
the patient can log onto the web portal of the medical practice as per
their convenience using the Internet and do the preregistration on their
own. In India, some of the hospitals who have introduced online
booking of physician's appointment are Apollo Hospital (http://
www.apolloedoc.co.in) and All India Institute of Medical Sciences
(AIIMS). During the preregistration process, information about the
patient, dependents, insurance, medical history, and financial position
have to be provided.
The most preferred and the traditional way of preregistration is by

placing a call to the medical practice and giving the bare minimum
details asked by the office staff. Alternatively, patients who are tech
savvy can also opt to use the preregistration online portal. In this case,
care should be taken to fill all the details onto the website portal
accurately, otherwise insurance verification will fail and appointment will
not be able to be scheduled. After the details are obtained by the office
medical staff either by online portal or by phone call, the process of
eligibility kicks-in. In this process, the patient's insurance eligibility is
confirmed with the health insurance payer via batch or real-time
eligibility. Electronic real-time eligibility applications have made it
simpler to instantly determine the insurance eligibility of the patient. If
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all the above processes are successful, the patient's appointment is

scheduled.
When the patient arrives at the medical practice for the stated
appointment, the office registration staff will ask for insurance card,
state or federal government-issued photo identification, and a referral
from the patient's primary care physician in case of a hospital visit. Also
it is at this stage that the medical office staff will counsel the patient
regarding their financial obligation called the patient's responsibility.
Fig 6.3: Sample Online Preregistration Form
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Image Credit Maine Medical Center, (https://web.mmc.org/preadmit/

AdmissionInfo.aspx)
This counselling process includes the following activities:
a. Informing the patient about the copay, coinsurance, and deductible, and
collection of the copay.
b. Obtaining a signed consent form for treatment and PHI privacy.
c. Obtaining an Advance Beneficiary Notice of Noncoverage (ABN) form, if

required. Advance Beneficiary Notice of Noncoverage (ABN) is an
undertaking signed by the patient to pay from his own pocket for the
medical service delivered by the provider.
d. Obtaining an Advance Directive form. This is usually obtained for

inpatient services. Advance directives may be a form, living will, or
power-of-attorney documents written in advance mentioning the
patient's choices for medical services or mentioning the name of a
person who can make those choices for the patient in case the patient is
unable to make decisions (For example if the patient lapses into coma,
suffers from Alzheimer, etc.).
The above mentioned process is usually followed in a non-emergent

condition, when the patient does not have any emergency complication
like motor accident, cardiac arrest, etc. For an emergent situation, the
triage nurse (nurse who attends accident and emergency cases in the
hospital) will assess the patient and treatment will begin in order to
stabilize the condition of the patient without waiting for the patient
registration and insurance verification, which will be performed by the
hospital staff simultaneously. This has been possible because of the
Emergency Medical Treatment and Labor Act (EMTALA) rule passed in
1986 as part of the Consolidated Omnibus Budget Reconciliation Act
(COBRA) which requires hospitals to treat patients coming to the
emergency department for examination or treatment of a medical
condition. The hospital should evaluate the patient appropriately. If the
patient is suffering from emergency medical condition, then the hospital
is obligated to either provide with treatment until stable or to transfer to
another hospital in conformance with the EMTALA directives.
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Fig 6.4: Patient Verification & Scheduling
2. Patient and Provider Encounter: Following the financial counseling of

the patient, payment of copay, and signing of all the forms, the patient
is set to meet the healthcare provider. The patient's initial encounter
with the healthcare provider occurs at this point. The healthcare
provider will look into the chief complaint of the patient and review the
past medical and surgical history of the patient. The provider will try to
gather as much detail as possible, from interviewing the patient, which
may have a direct or indirect bearing on the chief complaint. The more
structured and detailed the interview of the patient, the easier it will get
for the provider to develop a working diagnosis for the patient. The
provider would then perform a thorough physical examination
depending on the chief complaint and chart out the recommendations
and follow-ups for the patient. The provider will make a note of all the
observation, assessment, and plan of the respective patient and will
record it for the medical transcription department to create the medical
report.
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3. Medical Transcription: In these times, the modern healthcare

providers are tech savvy and with the help of various different types of
functions built within the EMR/ EHR applications in the form of voice
recognition, template creation, macro creation, etc., they tend to
document the medical report themselves. Since the creation of the
medical document even with the help of these applications and
softwares is time consuming, the major chunk of the healthcare
providers still follow the traditional approach of dictating and recording
the audio file, which is then accessed by the medical transcriptionist (in-
house or outsourced) and a medical report is created for the respective
patient. This medical report will usually contain all the billable medical
services provided to the patient in the medical facility is then forwarded
to the medical coding team.
4. Charge Entry: As the name signifies in this process, charges are

entered, i.e., all the details are keyed in at this juncture. This is the
point in the revenue cycle where the claim or bill is actually generated.
A medical biller is assigned with the job of charge entry, where in, a
unique account for the patient is created for reference. It is this unique
account number that will be used to query for any issues regarding
claim or for use in the future to access the patient's account details from
the medical billing software. The medical biller will also enter the
demographics of the patient, the insurance details, and charges of the
medical services (depending on the type of visit, type of procedure/
treatment delivered to the patient) into the medical billing software.
5. Medical Coding: Medical coding is the key step in the revenue cycle
process. It is one of the most skilled administrative departments of the
hospital requiring good medical, interpersonal, comprehensive, and
analytical skill. They comprehend the medical report generated by the
provider or the medical transcriptionist and glean out all the billable
services provided to the patient. Medical coders may at times have to
interact with the providers for any detailed information from the
physician or other the medical provider.
Once all the billable services have been identified, the job of assigning
codes to each of the billable service begins. Each and every service for
which the healthcare provider needs to be reimbursed should be
assigned a diagnosis or procedure code.
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The diagnosis code is assigned with the help of ICD-9 coding manual
(ICD-10 is set to be implemented from October 1, 2015), while the
procedure ancillary services code is assigned with reference from the
CPT or HCPCS. While assigning the procedural codes it is the duty of the
medical coder to ensure that the diagnosis code and procedure code
match up in order to be reimbursed. If there is a mismatch between the
diagnosis code and procedure code or the diagnosis code is not definitive
enough (not coded to the highest specificity), the claim will be denied.
If the medical practice makes use of a medical billing software, there is a

very good chance that this software has a inbuilt feature called claim
scrubbing. If not, then various claim scrubbing applications are available
in the market which can be easily integrated into the existing billing
software of the medical practice. Claim scrubbing application is rapidly
being integrated as a basic feature in all the leading medical billing
software. Claim scrubbing is the process of verifying the claims for any
errors and checking its format compatibility with the insurance payer.
This can be an effective tool in reducing the amount of claim denial and
improving the turn-around-time of the revenue cycle.
Sometimes often in a small medical practice, the coding and billing is

handled by the same department or often by the same individual. This
reduces the risk of an error creeping in when the claims are sent to-and-
fro between the departments.
6. Claim Submission: Claim submission beckons the start of the post

service stage. The claim form should be able to accurately and
completely convey the information to the insurance payer about the
ailment of the patient and the treatment delivered and this can be
achieved only with the choice of correct claim form (CMS-1500 for
professional and UB-04 for institutional) and with the right charges
entered into the specific data fields of the claim forms.
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The medical biller before submitting the claim to the insurance payer
should ascertain that the claim that has been generated follows all the
guidelines laid down by the respective payer and in case of any doubt
should call up the insurance payer and get all the queries answered.
Once the claim has been thoroughly inspected for accuracy, integrity, and
compliance set by the statutory bodies, it is submitted to the insurance
payer for reimbursement. Some hospitals submit the claims directly
while others appoint a clearinghouse to submit the electronic claims.
Clearinghouses are intermediaries between the healthcare practices
and insurance payer that help to transmit electronic claims to the
insurance payers in a secure way.
Following the claim being successfully submitted to the insurance payer,

the process of claim adjudication begins. Claim adjudication is the
process of paying the submitted claims or rejecting or denying them
after examining the claims to the benefit or coverage requirements.
Typically, the insurance payer will send an explanation of benefit (EOB)
explaining the outcomes of claim adjudication process for the particular
claim and detailed information about how the claim was settled.
Following are the three outcomes of a claim adjudication process:
a. Accept and approve the claim (clean claim) and will send out the
payments of the same to the healthcare provider or to the healthcare
provider's billing company.
b. Deny the claim partly or wholly (Incomplete or inaccurate

information) and ask for further clarification such as specifics of a
medical history, patient responsibility, etc. Usually after followup with
the information sought by the insurance payer, the claim is approved
but a persistent effort needs to be made b the accounts receivable
department to follow up with the insurance payer.
c. Reject the claim. Again, the insurance payer will send an EOB justifying
the reason for rejection such as the claim has been sent to a wrong
payer, prior authorization for the procedure was not obtained, the
patient has exhausted the insurance limit, etc.
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Fig 6.5 life of a claim
7. Payment Posting: Upon receipt of the explanation of benefit (EOB)/

Electronic Remittance Advice (ERA), the medical biller assigned to do
the job of payment posting enters the details of the EOB/ERA into the
respective patient's account using the medical billing software. The
medical biller has to discretely enter the denial code for the respective
accounts where the claim was not approved for the accounts receivable
to follow up.
It is here that every medical biller has to make use of the mathematical
skill to perform the job duty of adjusting the payment received by the
insurance payer, transferring the balance as patient's responsibility,
writing-off, etc. After making all the necessary adjustments for the
copay, coinsurance, deductible, and approved claim amount by the
insurance payer, the medical biller prepares a patient's statement also
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known as the patient's invoice which contains all the essential details
with respect to the patient's responsibility.
Fig 6.6: Payment Posting Process
8. Accounts Receivable (A/R): CareCloud, a leading provider of cloud-

based practice management and QuantiaMD, the largest social learning
and collaboration platform together announced the findings of the
Practice Profitability Index (PPI) at the HealthBeat 2013 Conference in
San Francisco. According to the PPI, 65% of physicians see declining
reimbursement rates as the top issue negatively affecting medical
practice profitability. The declining reimbursement rates coupled with
the rejection rate of claims (From the data published by the researchers
from the California Nurses Association gathered from insurance payers
about 22 percent of all the claims submitted are rejected outright for
some or the other trivial reasons) by the insurance payer will act as an
impediment to the growth of any medical practice.
While there is nothing that can be done to stop the declining

reimbursement rates, a timely and proactive measure will certainly go a
long way for the medical practice to mitigate the potentially disastrous
effects of rejection rate of claims. This timely and proactive measure to
palliate the adverse effects of rejection rate of claims is overseen by the
accounts receivable department as they play a decisive role in keeping
the accounts receivable within the 120-day-limit.
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Although every effort initially is made by the medical billing department

to yield a clean claim no matter how efficient and seasoned the medical
biller is there are always certain instances where a claim is denied or
rejected. The basic difference between claim denial and claim rejection
is that claim rejection occurs outright even before processing the claim
and claim denial occurs after the health insurance payer has processed
the claim and determined any inadequacy.
Many health professionals use the word claim denial and claim rejection
interchangeably, but there exist some stark differences between the two.
Fig 6.5: Difference Between Claim Rejection & Claim Denial
It is crucial that one understands the difference between the claim denial
and claim rejection which is of essence when working on ways to rescind
the claim denial or claim rejection. A proper understanding of the
differences between the claim denial and claim rejection would help in
effective management of the revenue cycle.
Accounts receivable is that part of the medical billing department which

handles a variety of functions such as to identify, monitor, and follow up on
the pending payments from the insurance company or the patient. A
structured and well-organized accounts receivable department is essential
to carry out the process of generating different kinds of reports which will
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help in analyzing the contributory factor for the due payments and steps
that should be taken to counteract the causative factor.
A detailed study of the diverse medical billing reports will help a medical
practice to discover its pain points and effective measures can be
undertaken to convert these pain points into joy points. Without the help of
these reports, it will be difficult to diagnose the current financial health of
the medical practice or the state of the important revenue cycle metrics.
The reports can be obtained in the form of spreadsheet or graphical
representation.
The reports generated by the accounts receivable department may vary

from company to company depending on their scope of work, but some of
the important types of reports generated by most of the AR department
are as follows:
a. Collection Aging Report.

b. Procedure Payment Analysis Report.
c. Insurance Carrier Report.
d. Key Performance Indicator Report.
e. Denial Management Report.
One of the most important reports that is generated and studied by the AR
department is the aging report. Aging reports gives a periodic report on the
amount owed to the medical practice and the duration of time the amount
has been due. Aging reports are generated usually monthly and gives a
detailed picture about the number of unpaid claims and the number of days
(30, 60, 90, or 120) they have been pending. It also demonstrates whether
the new revenue management service employed is having any positive
effect on the follow- up of the patients' accounts.
After the identification of the pending claims, they are followed up

accordingly. For claims that have been denied or rejected from the
insurance payer due to incomplete or wrong information, further
information is sought and claims are resubmitted or appealed. In case
there is any payment due from the patient's side (patient's responsibility),
reminder in the form of calls or mails are sent to make the payment.
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9. Write-Off, Collection Agency, & Refund: However, hard or persistent

the accounts receivable team can be, there always exist a class of
patients who are delinquent to make the payments citing one or the
other reason for the dereliction. Having identified those accounts and
ensured that all efforts have been made by the AR department to collect
the payment, the AR department is left with two options, either write off
the account or send it to a collection agency.
Write-Off amount is the amount that the healthcare provider deducts

from the billed amount and does not expect to collect, thereby "writing it
off" the accounts receivables owed by payers or patients. The process of
making the choice from the two abovementioned options is not that
difficult. AR team will look at the value of the bill. If the amount is
nominal, then it would not be cost-effective to turn over these accounts
to a collection agency and in such case the department may write-off
the account, but if the amount is significant, in such cases the AR
department will turn over these accounts to a collection agency which
has an expertise in recovering such payments. It is now the duty of the
collection agency to recover the payment from the patient.
Insurance payers receive thousands of claims everyday from various

medical practices and clearinghouses. When working with such huge
number of claim adjudication process, a mistake is bound to happen.
Overpayment is one of such mistakes where insurance payers out of
mistake sometimes make an insurance overpayment, i.e., they make
insurance payment greater than the billed amount. Insurance
overpayments made by the insurance payer need to be refunded quickly
by the medical office before it is recouped to avoid any future accounting
problems.
10.Closing of Account: This is the last step of the postservice stage as

well as the revenue cycle as a whole. Once the final payment is received
and recorded by the medical billing department, the revenue cycle for
that respective claim is complete. At this stage, the balance of the
account is zero. All the documentation for that particular claim will be
filed accordingly (in case of paper claim) or will be updated in the
patient's account (in case of electronic claim) for any future reference
and financial report generation.
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What we have studied here is a general working of the healthcare

revenue cycle process in detail, but each and every organization has
their own specific way of working and their own particular needs
depending on the amount of patients they see, the man power they
have, and the financial resources or obligation they face. Therefore,
every organization will have to reinvent their revenue cycle based on
their specific needs and resources to successfully enhance their
productivity and profitability.
Fig 6.8: Revenue Cycle Process
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6.6 REVENUE CYCLE MANAGEMENT - PROBLEMS &

SOLUTIONS
Are you sending clean claims to your billing company? If not, read ahead.

managing claims process, payment, and revenue generation. The main
objective of any revenue cycle management is to ensure that the claims
are paid up to the maximum possible threshold within a specific period of
time.
On close dissection of the 10-step revenue cycle process, it can be noticed

that over the life of the revenue cycle, there are scores of opportunities
where simple errors can creep into the cycle. These insidious errors might
be hard to detect and will eventually take a toll on the financial position of
the medical practice. The core competence of a dynamic revenue cycle
management lies in detecting these errors, getting to the root cause of it,
and implementing policies that would annihilate or exterminate such errors
from occurring in the future.
To determine the type of errors that occurs at each step of the revenue
cycle let us break down the revenue cycle and take a closer look at each
step to try to understand the problems that occur at each step and
solutions that can be implemented to improve the revenue cycle metrics.
Problem 1: Errors during preservice stage.
This is the stage where a significant amount of errors occurs in the revenue
cycle. Errors range from typing in inaccurate demographics of the patient,
keying inaccurate insurance information of the patient, not verifying the
patient's eligibility, not obtaining preauthorization, etc.
Solution: The medical practice should always hire trained and well-
educated staff to handle the registration and verification process. Many
providers do not pay much attention on the front-office staff selection
which is one of the reasons for piling up of claim denial and rejection.
Whenever a patient calls, it is important to note down accurate details of
the caller (name, date of birth, insurance card details, employee number,
etc.) and key in into the practice management system as soon as possible
so that nothing is missed out.
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A real-time eligibility of the patient's insurance coverage should be

performed without fail, and if time does not permit, then towards the end
of the day all the patient's insurance eligibility should be performed by
performing a batch submission.
Problem 2: Errors during service stage.
Errors faced during the service stage can be inability to collect the copay or
coinsurance, inaccurate coding, improper claim form, etc.
Solution: The office staff should be instructed to previously (before the

scheduled appointment and after eligibility verification) communicate to the
patient about the copay, coinsurance, or deductible not met, etc. This
would reduce the outstanding on the patient's responsibility.
Medical coders should be trained and updated on the new guidelines or

changes in the coding standards periodically. They should be instructed to
make generous use of the references available in the form of coding
manuals and softwares in order to code accurately. Medical biller should be
instructed on the use of the proper claim form depending on the respective
insurance payer's preference. Due care should be taken at every step so
that there is no mismatch between the diagnosis code and the procedure
code. Lastly, an internal scrutiny should be performed to check for the
completeness and accuracy of the claims before it is sent to the insurance
payer. If all these steps are followed in a judicious manner, it would
drastically reduce the amount of claim denial and rejections as well as
reduce the payment period cycle.
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Problem 3: Errors during post service stage.
Some of the errors that occur in the post service stage are delay in
refunding the overpayments, inability to collect the patient's responsibility,
inefficient management of rejected or denied claims, etc.
Solution: The accounts receivable department should generate all kinds of

reports possible in order to track the claim's life at each and every stage.
This would give a broad picture about the reasons for the denial or
rejection and work should be done on resolving those causative factors.
The balance owed by the insurance payer is usually technical in nature,
where the billing company has to furnish some kind of detail in order for
the payment to be realized, but the balance owed by the patients to the
medical practice is usually emotional in nature where a good deal of
persuasion and convincing is necessary on the accounts receivable
department for the payment to be realized. Hence, accounts receivable
department should hire staffs who are polite while placing a customer call
so as to patiently listen and answer all the queries raised by the patient,
and in case, the patient is unable to pay, should guide them towards
certain other avenues such as obtaining a financial aid or an interest-free
loan, etc. If the patient opts for a financial aid or an interest-free loan to
repay the medical practice, this would aid the medical practice in reducing
the claims turned over to the collection agency and improve its net
collection.
In case proper financial counseling is not provided to the patient either due
to failure to identify alternative payment option or due to incompetent
collection staff, it will lead to bad debts and write-offs which will have a
negative effect on both the medical practice as well as the patient's
financial position.
It is always advisable to try to reduce the errors from the very first stage
because the farther the error traverses into the revenue cycle, costlier and
harder it gets to rectify it. Automation of the revenue cycle management
by implementation of proper RCM software will help the medical practice on
a variety of fronts and will lead to zero accounts receivable balance.
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6.7 WAYS TO CUT COSTS THROUGH HOSPITAL REVENUE

CYCLE MANAGEMENT
Reducing overhead costs, raising patient satisfaction and using technology

effectively are just some of the hospital revenue cycle management
techniques that can cut spending.
It can be tricky for hospitals to maximize cash flow and net revenue when
they are also supposed to deliver high-quality, effective care. However, if
hospitals reduce unnecessary tests and overhead costs, raise patient
satisfaction, use effective technology and identify key performance
indicators that are likely to reduce spending.
The top five ways that hospitals that improve their revenue cycle
management to slash waste, boost patient satisfaction, and maintain a
high quality of care are:
Reduce overhead costs
Keeping non-medical spending down can be a challenge for hospitals.

Keeping up a healthcare facility as well as taking care of bill processing can
eat away at a budget. Overhead is an area where cost-reduction can be
achieved. It’s in a healthcare executive’s best interest to pay close
attention to administrative costs. Sales and marketing budgets typically
make up a large portion of administrative cost.
It is recommended that hospitals consider costs from the holistic

approach. Hospital executives should determine if costs are a utilization or
a variation. Variation is caused by management and causes cost, Hallowell
explained.
“If I have four different managers doing the same function, I'm going to
get it four different ways”. This factor alone can run up costs.
It is believed that consolidating management layers can reduce overhead

cost and help with the new payment methodologies. Hospitals that do this,
tend to become more efficient.
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Also, some facilities are employing external expertise to help lower cost
structures by exploring outsourcing in information technology, finance,
human resources, labs and pharmacies.
Raise patient satisfaction
Keeping the patient satisfied throughout all aspects of their healthcare

experience has proven to be an essential ingredient for helping hospital
margins. Higher hospital margins are typically distinguished by higher
patient satisfaction. A recent report pointed out that hospitals in the US
that gave a superior patient experience gained net margins that were 50
percent higher, on average, than those that provided an average customer
experience.
If a patient feels unsatisfied with their office interaction, they may also
have a negative perception of the entire healthcare facility. This can
sometimes cause the facility to spend more time and money on customer
service.
Keeping patients satisfied has many other benefits as well. Satisfied

patients are more likely to adhere to prescribed treatment plans and keep
up an ongoing relationship with a provider. These factors can lead to
improved health outcomes.
Embrace the adoption of technology
When used correctly, technology can be one of the best tools a hospital can
use to improve revenue cycle performance. Many providers are using
telehealth technology as a key part of hospitals’ readmission reduction
programs to deal with high readmission rates. By improving the follow-
up care and care management of a range of patients, many providers have
found that they are able to prevent a portion of avoidable readmissions. As
a result, costs associated with high readmissions rates are lowered.
Additionally, clinical decision support systems have helped to reduce

costs in some cases. These systems are geared towards overseeing
laboratory utilization. They have the ability to significantly decrease the
number of unnecessary tests ordered by clinicians without affecting patient
care quality.
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A branch of the Veterans Health Administration saved on averaged more

than $150,000 per year for the two years after implementing a laboratory
expert system that helped decrease test volume by about 11 percent.
Clinical decision support systems can also help hospitals save money if
doctors use the systems correctly during the prescription placement phase
of healthcare. These systems help providers to avoid making common
mistakes that often result in high-cost prescribing behaviors.
Identifying key performance indicators (KPIs)
To reduce labor costs and increase efficiency, managers should have timely
access to different types of data and KPIs that will help them monitor work
hours, overtime, number of patients, and full- time employees per
occupied bed. Healthcare executives benefit from carefully examining
financial data.
They should capture and validate data from their organization’s financial
systems to determine its current state of performance. They should
determine which KPIs impact their organization’s revenue. It’s also a good
practice to monitor KPIs for adequate and poor performance. It’s in a
provider’s best interest to maintain KPIs and evaluate whether to add or
remove metrics from monitoring.
Providers should specifically track KPIs for the transition care process and
identify readmission issues. By doing this, providers will be able to assess
situations and make continuous improvements.
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Reduce duplications of tests and other services
In the US, redundant testing alone has been estimated to waste up to $5

billion each year, according to The American Journal of Clinical Pathology.
It’s estimated that laboratory and pathology testing makes up 4 percent of
all yearly healthcare costs.
“Laboratory testing is one factor that contributes to rising health care

expenditures,” researchers from the journal said. “It is becoming
increasingly evident that cost stabilization and reduction, including within-
laboratory services, are necessary to place our nation’s healthcare system
back on a sustainable course.”
To prevent unnecessary laboratory testing, providers should be cautious

when they first order tests. Physicians can order tests effectively by using
computerized physician order entry systems that allow for system-defined
rules for utilization management.
6.8 REVENUE CYCLE MANAGEMENT SYSTEM
The healthcare industry all around the globe are engaged in rapidly
embracing the automation of the revenue cycle process to create a positive
impact on the productivity both in terms of quantity and quality. Softwares
which automate the revenue cycle process are termed as revenue cycle
management solutions. A desirable revenue cycle management solution
should have the capability to shorten the billing cycle by assisting the
medical billing department in producing more and more clean claims and
less and less write-offs. It is imperative to choose a good revenue cycle
management solution as it has the capacity to make or break the otherwise
sound medical practice.
Let us ponder on some of the basic features that a revenue cycle

management solution should possess in order to be able to mitigate any
technical, functional, or compliance-related issues and allow a steady flow
of revenue to the medical practice.
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Fig 6.9 Electronic Health Record (EHR) integrated Advanced Revenue

Cycle Management
The EHR-integrated advanced RCM process includes clinical data

management, medical billing, automated claims coding and sending the e-
claims to the clearing house.
Optimal revenue performance depends on monitoring key performance

indicators and acting decisively to address issues before they significantly
affect your practice.
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1. Real-Time Data: Preferably, all revenue cycle management solution

should be able to generate real-time data in a jiffy and make them
available in hand for use by the front-office staff, back-office staff, and
the providers. There are typically three types of real-time data required
in the revenue cycle, viz, real-time eligibility, real-time report
generation, and real- time clinical information. The real-time eligibility is
used by the front-office staff to verify the insurance coverage of the
patient and helps in future claim denials or rejections. The back- office
staff uses the real-time report generation function of the system to
generate various kinds of reports (aging report, referral report,
physicians' productivity report, etc.) to help them understand and
determine the administrative and process-related inadequacies which
are impacting the cash flow.
These detailed reports are used for effective decision making that would
help in proper management of all aspects of patient's care such as
clinical, financial, and administrative. Real-time clinical information can
be used by the provider to instantly determine whether the medication
or service prescribed to the patient will be covered by the insurance
payer or not, if not, is the patient willing to pay for that out of his own
pocket. This will prompt the patient to undertake the financial obligation
for the medication or service or leave it all together, thereby obviating
any future hassles. All these real-time data linked together would create
a smooth revenue cycle process.
2. Ability to Integrate and Upgrade: Every medical practice installs

applications that are compliant with the rules laid down by the
governing bodies, but governing bodies in an effort to provide better
healthcare service keep on updating those rules. What happens if the
rules change and the existing application of the medical practice is not
in compliance with the new rules? In this dynamic environment where
rules are constantly changing, the medical practice would have to shell
out a hefty price to implement another application and this would
definitely not go down well on the profit and loss statement. Therefore,
a revenue cycle management system should offer a great level of
flexibility and scalability to adapt to changing business rules at any time
in the future.
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The integration of the RCM system with other applications used in the
hospital will allow for easy data sharing across the healthcare delivery
system, because a blend of heterogenous systems will not only make it
difficult to identify problem-causing areas but also make it extremely
difficult to generate reports. Therefore, an RCM system should be
dynamic with ability to integrate with other application as well as to be
upgraded as and when need arises.
3. Security: The RCM system put in place should have a robust and
comprehensive security feature. Care should be taken to ensure that the
system is HIPAA certified as it would play a critical role in determining
the HIPAA compliance process of the medical practice. It should have
enough administrative, physical, and technical safeguards to prevent
the misuse of any protected health information. Features such as role-
based access control, unique username and password, data encryption,
etc., are essential for any RCM. Role-based access control is restraining
an individual to access only those files and folders which are essential to
perform the individual's job duties. The roles are defined according to
job responsibility and authority within the medical practice. Level access
is granted strictly to only minimum required data depending on the
employee's job responsibilities. Unique username and password act as a
stringent control system to ensure that the sensitive ePHI is only
accessed by the intended authorized personnel.
4. Hybrid (Professional and Institutional): RCM solution should be

able to handle both the professional-side and the institutional-side
billing. According to the recent reports, hospitals are on a buying spree
or forming hospital-provider partnership. Hospitals are aggressively
taking over private medical practices to increase their patient base
hoping to increase their profitability. Therefore in this existing market
where marriage between hospitals and practices are growing rapidly, an
RCM system which can handle both the professional and institutional
billing and integrate seamlessly will be advisable. One other function
would be for the RCM solution to be able to handle different insurance
carriers effectively without any standard incompatibility.
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5. Patient Focused: Of late, patients have become more aware and want
to actively participate in the clinical and financial decisions regarding
their healthcare. If patients on a regular basis can track their ongoing
healthcare progress both in terms of clinical and financial aspects, it
would greatly help in making an informed decision and would help in
developing a positive relationship between the patient and the provider.
In fact, HIPAA advocates and necessitates providers to encourage
patient involvement into the healthcare process. It encourages utilizing
healthcare technologies to increase patient involvement in order to be
eligible for the incentive program set up by Medicare and Medicaid.
Patient involvement is looked upon as an important link in providing

quality healthcare service. The patient's involvement into joint decision
making will also help healthcare providers cut costs on several grounds
such as registration and scheduling (by engaging online preregistration
forms), financial counseling (by allowing the patient to calculate an
estimate of patient's responsibility), collections (by electronic fund
transfer from patient's account), etc.
6. Mobility: Healthcare providers are always pressed for time and require
a kind of RCM system that would help them do their job function even
on the move. Of recent, the next generation healthcare providers and
RCM managers are tech savvy and appreciate the consolidation of
mobile applications into the RCM system. Having a real-time situation of
a particular account or the medical practice anytime and anywhere
would enhance the ability of the providers to perform their job duties
more efficiently. Lately, mobile applications such as cell phone, laptops,
and tablet PC are playing a major role in revenue cycle management.
Not to mention these are just a few characteristic of an efficient and

dynamic revenue cycle management solution which would cause a
positive financial impact on the revenue cycle managing the financial
aspects as well as clinical aspect of care and at the same time changing
towards a better care coordination.
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One fundamental question that needs to be kept in mind before zeroing

down on an RCM system is to review the need and budget of the medical
practice/hospital. There are a lot of different RCM systems all packed
with various kinds of innovative features and benefits but with a hefty
price tag. Implementation of a wrong RCM system would impact the
hospital's financial stability and affect future performance. Therefore the
hospital management has to select an RCM system that fits within the
hospital's budget as well fulfils the current and future needs.
Some of the famous revenue cycle management solutions are as

follows:
ChartMaker Medical Suite
CareCloud Revenue Cycle Management
Soarian Enterprise Revenue Cycle Management
McKesson's Revenue Cycle Management
GE Centricity Revenue Cycle Management
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Adopting Advanced Analytical Techniques
Advanced analytics are imperative for healthcare leaders, not only to

conduct analysis on historical process information and identify claims
denials, but also to leverage the process-related data using predictive
intelligence.
Some highlights of how advanced process analytics will help:
1. Reduce Bad Debt Write-offs and Days Receivables Outstanding (DRO) —

Makedecisions proactively and ensure that steps are never missed, and
that deadlines and clinical requirements are followed so that providers
are paid quickly and efficiently 100% of the time.
2. Catch Errors Sooner — With deadline analysis, analyze the number of

events that comply with deadlines. With monitoring, ensure that
deadlines are met through preemptive alerts that deadlines are about to
be missed.
3. Predictive and Prescriptive Analytics Capabilities — Pay-for-performance

has stressed quality of care, creating pressures to decrease the number
of patients experiencing bad outcomes. Predictive capabilities allow for a
greater level of confidence with patient care.
4. Automatically Understanding Process Execution — Point and click

analysis functionality allows for healthcare providers to easily identify
improvement opportunities to reduce cost, increase revenue, and boost
efficiency through the entire revenue cycle.
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6.9 SUMMARY
Healthcare revenue cycle starts right at the time the patient places a phone
call to the medical practice for an appointment and it ends when the
payment has been received in the healthcare provider's account either
from the insurance company or from the patient for the service rendered to
the patient. Revenue cycle management in healthcare helps a medical
practice to increase the revenue by ensuring that the claims are paid up to
the maximum possible limit and within a specified period of time.
There are four key players involved in the Revenue Cycle Management
(RCM) of healthcare system namely are patient, healthcare provider, billing
company, and insurance payer.
Researchers from the California Nurses Association analyzed data reported

by the insurance payers and found out that 22 percent of all the claims
submitted were rejected.
A proper revenue cycle management works on each and every stage of the
revenue cycle to increase the payments and collection while decreasing the
write-offs and consists of three stages:
• Preservice Stage.
• Service Stage.
• Postservice Stage.
These three stages comprise of all the administrative, clinical, and financial
functions of a medical practice.
The revenue cycle process involves the following ten steps:

• Patient and Provider Encounter
• Charge Entry
• Medical Coding
• Payment Posting
• Accounts Receivable
• Write Off, Refund, & Collections
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• Closing of Account
The patient's insurance eligibility is confirmed with the health insurance

payer via batch or real-time eligibility.
Emergency Medical Treatment and Labor Act (EMTALA) rule passed in 1986
as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA)
requires hospitals to treat all patients coming to the emergency
department for treatment of a medical condition.
Charge entry is the point in the revenue cycle where the claim or bill is
actually generated.
If there is a mismatch between the diagnosis code and procedure code or

the diagnosis code is not definitive enough (not coded to the highest
specificity), the claim will be denied.
The three outcomes of a claim submission is claim approval, claim denial,

or claim rejection.
Claim denial and claim rejection are often used interchangeably but differ
on many accounts.
Accounts receivable is that part of the medical billing department which

handles a variety of functions such as to identify, monitor, and follow up on
the pending payments from the insurance company or the patient.
Errors occur in the revenue cycle at all stages, preservice, service, and
postservice stage.
One fundamental question that needs to be kept in mind before zeroing

down on an RCM system is to review the need and budget of the medical
practice/hospital as a wrong RCM system would impact the hospital's
financial stability and affect future performance.
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Healthcare revenue cycle: "All administrative and clinical functions that

contribute to the capture, management, and collection of patient service
revenue." (HFMA)

managing claims process, payment, and revenue generation.
Clearinghouses are intermediaries between the healthcare practices and

insurance payer that help to transmit electronic claims to the insurance
payers in a secure way.
Claim adjudication is the process of paying the submitted claims or

rejecting or denying them after examining the claims to the benefit or
coverage requirements.
Write-off amount is the amount that the healthcare provider deducts from
the billed amount and does not expect to collect, thereby "writing it off"
the accounts receivables owed by payers or patients.
HFMA Healthcare Financial Management Association
RCM Revenue Cycle Management
EDI Electronic Data Interchange
PMS Practice Management Software
ABN Advance Beneficiary Notice of Noncoverage
EMTALA Emergency Medical Treatment and Labor Act
COBRA Consolidated Omnibus Budget Reconciliation Act
EOB Explanation of Benefit
ERA Electronic Remittance Advice
PPI Practice Profitability Index
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KPI Key Performance Indicator
A/R Accounts Receivable
1. Define the following:

• Healthcare Revenue cycle
• Revenue Cycle Management
• Claim Adjudication
• Write-Off
2. What is revenue cycle management and explain its key players?
3. Explain the three stages of revenue cycle management.
4. Describe in brief the revenue cycle process.
5. Write short notes on:

• Payment Posting
• Write off, Refund, & Collections
• Criteria on RCM System Selection
6. Differentiate between claim denial and claim rejection with example.
7. Explain the errors and solutions at each stage of RCM.
8. Give the full forms of the following:

• EMTALA
• ABN
• KPI
• PMS
• EOB
• ERA
• A/R
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1. The process of paying the submitted claims or rejecting or denying them

after examining the claims to the benefit or coverage requirements is
called?
a) Claim adjudication
b) Write-off
c) Payment Posting
d) None of them
2. The key players of revenue cycle management are?
a) Patient
b) Healthcare Provider
c) Billing Company
d) All of them
3. The three stages of RCM is comprised of all the administrative, clinical

and financial functions of a medical practice.
a) True
b) False
4. The revenue cycle process involves ten steps. Which of the following
steps are involved?
a) Patient Verification & Scheduling

b) Patient and Provider Encounter
c) Medical Transcription
d) All of them
5. The outcomes of a claim adjudication process are:
a) Accept and approve the claim

b) Deny the claim partly or wholly
c) Reject the claim
d) All of them
[Answers: 1(a), 2(d), 3(a), 4 (d), 5(d)]
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6.11 CASE STUDY
Spectrum Family Medicine
Practice Overview
Spectrum Family Medicine, is a five provider practice located in Rockville,
Maryland, serving the community with comprehensive outpatient services
and is an affiliate of Shady Grove Adventist Hospital. The practice is
dedicated to treating patients with the highest quality of medical care,
since inception in 2001. All physicians are Board Certified by the American
Board of Family Medicine and two Nurse Practitioners are certified by the
American Nurses Credentialing Center. As an adopter of the EHR, Spectrum
ensures professional medical care for all members of the patient family,
from newborn to seniors.
EHR Selection & Implementation

In 2010, typical of most practices, providers at Spectrum were faced with
the common challenge of "doing more for less." Increased costs of running
the practice coupled with decreased reimbursements from insurance
companies forced the practice to take a hard look at internal processes and
determine what improvements could assist in improving efficiencies. As a
result, Spectrum made the critical decision to begin researching
comprehensive EHRs and transition from paper records. The practice
required an EHR to allow for continued supply of high-quality service,
which patients have come to expect. After a lengthy search, Spectrum
uncovered a solution that could manage both growth and cost, while still
providing care. eClinicalWorks (eCW) comprehensive electronic health
records (EHR) solution and Revenue Cycle Management (RCM) were
chosen, combining industry leading technology and a billing service that
submits claims electronically and efficiently, with a first-pass acceptance
rate of 98%, well above industry-average. The RCM Dashboard allows the
practice to navigate through payment details, view the collection
management module, and access refund summaries all from one
convenient area within the eCW EHR.
Implementation was rapid and smooth, which included a week dedicated to

on-site training and learning new processes. During this time, staff at
Spectrum remained positive as the technology was intuitive and easy-to-
use. As a result, the practice made a collaborative effort in the months
following, helping each other learn the nuances of the system.
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Enhanced Practice
For the providers and staff at Spectrum, implementing an EHR has meant
greater efficiencies and improved quality-of-care provided. There are no
longer paper records lining the walls. The EHR has improved
communication by having all patient information available right at staff's
fingertips. With the elimination of paper charts, the clinical staff can
instantly view the patient's record online, print information out immediately
and respond to patient calls or questions for medication refills, and lab
results. In addition, providers and staff now have quick access to labs, x-
ray and mammogram results, along with consult notes. With the use of the
Patient Portal, patients can communicate directly and quickly with the
practice, allowing them to be proactive in the management of their care.
Patients now access their medical records online anytime, request
medication refills, and view lab results.
"I love pulling up patient information on the EHR and sharing it with a
patient immediately." Sally Belcher, family practitioner
Revenue Cycle Management (RCM)

By leveraging the RCM technology, Spectrum has the tools to perform all of
the necessary functions to submit and follow up with claims, all within the
EHR. eClinicalWorks RCM allows its staff of expert billers to handle back-
office operations directly through the application, securely and accurately.
Dashboards are provided to Spectrum staff for transparency into the
process and real-time visibility into the practice's financial performance.
"With RCM, we receive tremendous reports in a timely manner and our

days in A/R have been significantly reduced. We are confident all charges
are being captured," said Dr. Carolyn Baier O'Conor, family physician.
To ensure problem claims are sent in a timely manner, Spectrum staff has
daily communication with eCW RCM staff. As a result, the practice has
averaged close to 1,200 visits per month and claims are submitted within
two days, typically billed the following day.
"RCM has created a more efficient practice, especially for the front-office
staff, because now when a patient inquires about their account it's simply a
matter of a few clicks and the information is available at your fingertips. In
addition, communication between the patient and the office has improved,"
explained Denise Maness, practice manager.
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Progress notes are now completed on time, allowing for claims to be

created efficiently. Consequently, turnaround times have been dramatically
reduced and days in A/R have been reduced to 22 days.
Patient Involvement
Two years ago, prior to the adoption of the EHR, patients were initially
hesitant about the technology, fearing change and what it would entail in
terms of their care. Many now understand the importance of having a
technologically advanced relationship with their primary care provider.
Patients receive the information they need, in a quick and efficient manner,
providing reassurance and a sense of being more involved in their health.
Through the use of the Patient Portal, patients can communicate directly
with their doctor and access important information over the Internet.
Spectrum takes advantage of the tool by sending lab results electronically.
Front Office Improvements

Since implementing eClinicalWorks, Spectrum has experienced multiple
front office improvements, including:
Electronic access to real-time patient information
Communicating directly with the patient through the Patient Portal
The ability to quickly make appointments and check records for messages
and reports.
"The implementation of the eClinicalWorks EHR has been incredible for the
practice. It has made our office more efficient, productive, and provides
improved care and assistance to the patients, as everything is now at our
fingertips," stated Denise Maness, practice manager.
The Challenge
Spectrum Family Medicine, a five provider practice in Rockville, Maryland,
was faced with increasing costs for running the practice, coupled with
decreasing reimbursements from insurance companies. As a result, it
needed to implement a comprehensive EHR that could assist in improving
overall efficiencies.
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Solution
eClinicalWorks comprehensive EHR solution and eClinicalWorks RCM met all
of the goals set by Spectrum, providing great efficiencies and improved
quality of care.
Results
A f t e r a d o p t i n g e C l i n i c a l Wo r k s , S p e c t r u m n o w h a s i m p r o v e d
communication, the ability to view patient records online, and has access,
directly through the progress note, to labs, test results, and consult notes.
In addition, with the use of the Patient Portal, patients can communicate
directly and quickly with the practice, allowing them to be proactive in the
management of their care.
Source http://www.eclinicalworks.com/customer-case-studies-spectrum-
family-medicine.htm
References:
https://web.mmc.org/preadmit/AdmissionInfo.aspx
http://www.eclinicalworks.com/customer-case-studies-spectrum-family-
medicine.htm
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
319
PHR-EMR-EHR
Chapter 7
PHR-EMR-EHR
CHAPTER OBJECTIVES:
• Electronic records
• Types of electronic records
• Personal health records
• Electronic medical records
• Electronic health records
• Types of EMR/EHR.
• Basic requirements of an ideal EMR/EHR.
• Difference between PHR-EMR-EHR
• Advantages and disadvantages of EMR/EHR.
• Difference between SaaS and client-server EMR/EHR.
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PHR-EMR-EHR
STRUCTURE:
7.1 Introduction
7.2 Electronic records
7.3 Benefits of electronic records over paper-based records.
7.4 Types of electronic records
PMR
EMR
EHR
7.5 Personal Medical Record (PMR) or Personal Health Record (PHR)
7.6 Requirements of an ideal PMR/PHR
7.7 Types of Personal Medical Records
7.8 Electronic Medical Record (EMR)
7.9 Requirements of an ideal EMR
7.10 Electronic Health Record (EHR)
7.11 Requirements of an ideal EHR
7.12 Types of EMR/EHR. Client-server installation.
Software-as-a-service (SaaS) system.
7.13 Difference between SaaS and standalone EMR/EHR
7.14 Advantages of EMR/EHR
7.15 Disadvantages of EMR/EHR
7.16 Summary
7.17 Glossary
7.19 Case Study
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PHR-EMR-EHR
7.1 INTRODUCTION
On July 12, 1973, a disastrous fire at the National Personnel Records

Center (NPRC), St. Louis, MO, USA destroyed approximately 16-18 million
Official Military Personnel Files (OMPF). (http://www.archives.gov)
Millions of medical records were lost in hurricanes such as Katrina, Sandy,

and Rita which were some of the deadliest and destructive hurricanes in
the mankind history. Reports surfaced that many hospitals were dealing
with the prime question of ways to salvage the paper-based medical
records and medical records officer who were not able to salvage the
hospital's medical records were preoccupied with the thought of what
needs to be done for the medical records that were destroyed in the
hurricanes.
Instances such as the above may lead to medicolegal issues or at

the least malign the image of the hospital which would be of grave
consequence for its survival.
Medical records are a vital legal document that needs to be protected and
preserved at any cost to render better patient care and avoid any
medicolegal issues. Historically, it has been seen that even with the finest
paper-medical storage facility, there is always an imminent danger looming
of medical records getting misplaced or destroyed.
It is well-known that almost every country on the world map is facing

increased healthcare cost problem. There may be different factors that
contribute to this increased cost in different regions, but ultimately, the rise
in cost has come to haunt the healthcare industry as a whole.
Hence it has become absolutely necessary to take steps that would either
exterminate or extenuate the effects stemming from the above-mentioned
events. To help achieve this goal, a perfect system must be imposed and
put in place to accurately and timely document as well as protect the
medical records. Electronic record then comes as an answer for this perfect
system.
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PHR-EMR-EHR
7.2 ELECTRONIC RECORDS
Electronic records have slowly been spreading its wings in the healthcare
domain all throughout the world. Developed countries have larger
penetration of electronic records as compared to their developing
counterparts. The greater adoption of electronic records in developed
countries is found on factors such as high literacy rate, accessibility to
Internet and computers, etc.
In United States, incentive programs have been introduced for

implementation of EMR in a healthcare facility.
The Medicare and Medicaid Electronic Health Records (EHR) Incentive

Programs will provide incentive payments to eligible professionals and
eligible hospitals as they demonstrate adoption, implementation,
upgrading, or meaningful use of certified EHR technology. (www.cms.gov)
Information captured or recorded on electronic media is termed as

electronic records. The information can be stored in different formats such
as text, image, or sound in a similar manner as paper is used to store
information in different formats such as written text or photograph. If the
information is in machine-readable format it is termed as electronic record
irrespective of the electronic storage medium whether it is a hard disk
drive, solid state drive, USB drive, CD, DVD, etc. Since the electronic
records are in machine-readable format, to read the information suitable
software and hardware are required and in absence of suitable software
and hardware the information cannot be retrieved or accessed.
Examples of electronic records:

Patient's medical information stored in a USB drive.
MS Word document containing sensitive information about patient's and
doctor's encounter stored on computer.
Medical record of a patient stored in the EMR.
All the above examples will need the help of some hardware or software
applications to access the information.
A handwritten medical record or a typed medical record or print out of a

medical report is not an electronic record as it can be easily read by any
person without the use of any software or hardware, but as soon as these
documents are scanned and saved on the computer, they get transformed
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PHR-EMR-EHR
to an electronic record and will require the help of a suitable hardware or

software to read the information in the scanned document.
There are two ways of production of electronic records, they may be

produced electronically (by scanning the paper records) or created digitally.
Fig 7.1: Two Ways to Produce Electronic Records
Scanned records: Nowadays, more and more new hospitals are trying to
implement the paperless environment format and the existing hospitals
are planning to migrate from paper- based records to electronic records.
The main hindrance in this transition is the conversion of the existing years
of medical records in the medical records department. Unless these paper-
based medical records are converted into electronic forms the hospital
facility will not be able to fully complete its transition to electronic records
and will remain as a hybrid format. It is this conversion of paper-based
records which is making the hospital administration and physicians think
twice before implementing the electronic records in their facility.
Conversion of paper-based records into electronic records though a tedious
process is not that cumbersome and can be easily performed with the help
of a scanner. Many hospitals have implemented this process of scanning
their old paper-based medical records and creating a database of the
same.
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PHR-EMR-EHR
When a paper-based medical record is scanned with the help of a scanner,

an image is generated. This image of the document with the help of the
software integrated in the scanner can basically be saved in one of the two
formats, a TIFF (Tag Image File Format) or a scanned PDF (Portable
Document Format). The scanner does not have the ability to recognize or
reconstruct the text present in the paper document and so instead it takes
an image or picture of the document. Therefore, while the image may be a
file that contains texts, the computer is not able to distinguish those texts
from the image. This is one of the main disadvantages of scanned
documents either in TIFF or in scanned PDF.
• TIFF (Tag Image File Format): This is a file format which was and is still
in some cases used for storing scanned images of paper records. TIFF is
a standard format for most of the scanners all over the world and was
originally designed to store only images, hence, it lacks the ability of
text-based search in the file.
A TIFF image can only be made searchable by performing an optical

character recognition (OCR) process on the file which sometimes does
not create a file of desired accuracy.
• Scanned PDF (Portable Document Format): With the arrival of PDF,

electronic documents have altogether got a new meaning to it. Although
the file size of PDF and TIFF does not differ a lot, it is the other
significant features of PDF that is slowing making it as the preferred
format to store electronic records across all domains.
As with a TIFF image, a scanned PDF document can also be only made
searchable by performing an optical character recognition (OCR) process
on the file.
Digital records: Documents that are created from an electronic source

such as word processing documents (Microsoft Word or Word Perfect),
Microsoft Excel, native PDF, or other databases constitute the digital
records. As these documents are born or created in digital format, they
have electronic character information embedded into the document. These
character or texts can be easily read by the computer and hence a text-
based search is possible in digital records. Native PDFs are those PDFs that
are generated from Microsoft Word, Microsoft Excel, etc., and hence have
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the ability to provide text-based search in these documents. This is one of

the significant feature which helps native PDF to excel over TIFF.
• Advantages of PDF over TIFF in storing records.

• Portability across all operating systems and all platforms.
• Robust security.
• Ability to perform text-based search (Native PDF).
Productive Hints to transition from paper medical records to an electronic

medical records facility
Everyone is aware of the fact that if electronic records are managed timely,
accurately, and efficiently, in a long-run it will contribute significantly
towards improved healthcare service for the patient and will be far more
cost effective to the hospital as compared to paper records. The huge costs
and the vast amount of manpower required for the process acts as a
deterrent for hospitals to migrate from paper records to electronic records.
Typically, it would not be advisable for the hospital to scan all the old paper
records as many patients who had visited the hospital in the past for the
treatment may not even return for various reasons such as if the patient
has moved to another location, patient is seeking care of another provider
at a different hospital, or due to death of the patient. If the hospital or
medical practice has a small setting it would be beneficial for it to start
keeping electronic records from the date of implementation (current date),
but if the hospital has enough staff to do the task of scanning the old
records that would be beneficial as well.
Medical facilities which are in the process of transition or planning to

undertake the transition should focus on a few things which would go a
long way in yielding smooth transition from paper to electronic records.
1. Initial scanning of only vital data: Since the conversion of the paper
medical records into electronic medical records entails a humungous
amount of labor work to scan the paper- based documents, only the
important data required to start servicing the patient can be scanned
and entered into the electronic records (Data such as current problems,
past medical/ surgical history, medication list, lab data, allergies, etc).
Gradually, the remaining portion of the medical information can be
entered into the system as and when required over a period of time
avoiding initial burden of transferring the entire patient's file instantly,
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and once all the details are successfully transitioned into the electronic
records, the paper records should be appropriately destroyed by
incinerating or shredding under supervision.
2. Piecemeal fashion scanning: Hospitals or medical facilities can set-up

a system where only the data of certain class of patients needs to be
transferred in a specified time frame. Criteria for the piecemeal fashion
can vary from facility to facility depending on the amount of patients
they see and other requirements:
• Transfer records of a class of patients at a time, elderly, pediatrics,

female, males, etc.
• Transfer records of those patients who are scheduled to be seen the

next day, in a week, in a fortnight, etc., depending on the size of the
facility.
3. Outsourcing: If any of the above methods does not work for the
medical facility, then outsourcing the scanning work to a third-party
contractor is advised. Steps needs to be taken to ensure that the
contractor is HIPAA compliant and an agreement needs to be signed
explaining the terms and conditions of providing the service, failure to
provide the service, and data breaches. One main point that needs to be
borne in mind is the preference of the vendor, an onsite vendor should
be favored rather than an offsite vendor as it would add an extra layer
of security of the confidential medical records.
4. Quality control: This is an important step that needs to be put in place

irrespective of the method adopted by the medical facility for conversion
of its paper records into electronic records. As usually the scanning of
the paper records in any facility is undertaken by medically
unknowledgeable staff or unskilled staff, the possibilities of occurrence
of an error is quite high. These errors may include vital papers of
medical documents not being scanned, saving scanned papers of one
patient's records into another patient's electronic file, overwriting of one
patient's electronic records with another patient's records, etc. This type
of error may prove to be very dangerous for the care of the patient and
measures needs to be taken to avoid those, hence, a medically sound
staff has to be appointed from the facility to oversee that the patient's
medical records are scanned and filed correctly.
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7.3 BENEFITS OF ELECTRONIC RECORDS OVER PAPER-

BASED RECORDS
1. Improved patient's care. The best feature of electronic records over

traditional paper medical records is the ability to glean vital medical
information of the patient and provide them to the physician which in
turns helps to make an informed clinical decision. Some of those
features are as follows:
• Adverse Drug Events Alerts: This is basically the best feature of

many EMR. As soon as a physician enters a drug which may cause an
adverse reaction to the patient, the EMR alerts the physician by
popping up an adverse drug event alert.
• Data integration: EMRs have the capability to integrate medical data

available from all the available sources such as other physicians,
hospitals, or medical facilities, laboratory, pharmacy, imaging centers,
etc.
• Reminders: EMRs have the feature of sending reminders to patients

as a text message on phone or an Email about a scheduled laboratory
test, a diagnostic test, or a follow-up appointment which eliminates the
need for an appointment scheduler and at the same time obviates the
possibility of missing any reminder.
2. Handiness: Accessibility of electronic records is exceptionally faster

than searching for paper-based medical records from the medical
storage cabinets. Even better, the search for the patient can be
performed on many parameters such as name, date of birth, phone
number, medical record number, or any other unique number prevailing
in the country.
3. Low storage space: Electronic records require fairly low amount of

storage space as compared to the paper medical records.
4. Cost effective: Over the long-run the cost incurred on implementation

and running of the electronic medical records is less when equated to
paper-based medical records. EMRs have high implementation costs,
but low maintenance cost, whereas paper- based medical records have
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initial costs, personnel-to-manage cost, storage costs, etc., and these

costs are ongoing hence surpasses the EMRs costs in the long term.
Bundled with all the benefits electronic records also have some risks, but
the benefits of electronic records far outweigh the risks.
7.4 TYPES OF ELECTRONIC RECORDS
Electronic records are capable of accumulating and storing medical records

that can later on be utilized for reference of the patient's medical history.
Electronic records can be divided into three main categories, viz, Personal
Health Record (PHR)/ Personal Medical Record (PMR), Electronic Medical
Record (EMR), and Electronic Health Record (EHR).
Fig 7.2: Categories of Electronic Records
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7.5 PERSONAL MEDICAL RECORD (PMR) OR PERSONAL

HEALTH RECORD (PHR)
As we all know, nowadays everybody is living life in the fast lane. Such a
life along with its share of excitement brings an equal amount of danger.
People are prone to meet with an accident at any time of the day whether
in the office, on their way to home, vacationing locally or globally. God
forbid if a person meets with a sudden accident and he is not in a state to
recollect all his vital medical history nor is there anybody nearby who is
aware of the person's medical history, an accurately maintained personal
medical record (PMR) which can be accessible from anywhere in the world
will go a long way in providing faster and better healthcare service.
Personal Medical Record (PMR) or Personal Health Record (PHR):

PMR is a type of electronic record that contains the health-related data and
information specific to a patient. The patient owns the data. The patient
can use PHR to share the health-related data and information in a secure
and confidential manner with other physicians or medical facilities.
This concept of patient health record was first introduced by AHIMA, the
American Health Information Management Association. According to the
AHiMA (American Health Information Management Association), PHR is
defined as:
The PHR is an electronic, universally available, lifelong resource of health

information needed by individuals to make health decisions. Individuals
own and manage the information in the PHR, which comes from healthcare
providers and the individual. The PHR is maintained in a secure and private
environment, with the individual determining rights of access. The PHR is
separate from and does not replace the legal record of any provider.
According to NAHIT (The National Alliance for Health Information

Technology), PHR is defined as:
An electronic record of health-related information on an individual that

conforms to nationally recognized interoperability standards and that can
be drawn from multiple sources while being managed, shared, and
controlled by the individual.
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Originally, personal medical record used to act just like a plain online diary
to record the medical information without any additional features which
was just an electronic version of paper-based personal medical record
(PMR) or personal health record (PHR). It did not have the power to be
accessed 24x7 from anywhere around the world, nor was it able to
communicate with other healthcare monitoring devices generally used in
the healthcare of the patient. Gradually with modern technology setting its
foot into the healthcare domain, personal medical record got evolved into a
full-blown application. Now, there are several personal medical records
available in the market with the ability to interact and exchange healthcare
information with various other health monitoring devices as and when
required from time to time. One of the basic criteria of personal medical
record which are required to interchange information with other healthcare
monitoring devices is that it should conform to globally adopted
interoperability standards. This would enable the personal medical record
to communicate and seamlessly integrate into the healthcare information
system.
Personal medical records (PMR) if managed properly will improve a

patient's healthcare by providing easy access of the health-related
information to the physicians that would in turn help them to make
informed decisions regarding the care of the patient.
Due to the growth in technology, the penetration of personal medical

records or personal health records have significantly increased across the
globe, although more so in the western countries on account of more
patient awareness as compared to its eastern counterparts where patient
awareness if any is very limited.
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7.6 REQUIREMENTS OF AN IDEAL PMR/PHR
There are certain requirements which need to be followed by every PMR/

PHR in order to justify its utilization. It should be created in such a way
that it is able to collect all the valuable information from the person
including the personal, medical, surgical, labs, family, social, dietary, and
any other information relevant to a person's health.
An ideal PHR should contain at least the following information:
• Personal demographics, such as name, date of birth, and address.

• Immediate relative or friend to be contacted in case of an emergency.
• Name and contact details of primary care physician.
• Health insurance information
• Medical power-of-attorney and advanced directives (DNR/DNI/No blood
transfusion)
• Organ donor authorization
• Chronologically listed past medical and surgical history
• Current medications and dosages
• Immunizations
• Intolerances and allergies (environmental, food, or drug)
• Family and social history
• Lab results (recent)
• Permission forms for release of medical information and medical
procedures.
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7.7 TYPES OF PERSONAL MEDICAL RECORD (PMR) OR

PERSONAL HEALTH RECORD (PHR)
Generally speaking, Personal Medical Record (PMR) can be broadly

classified into two major types, viz, patient-based personal medical record
and EMR-based personal medical record.
Patient-based personal medical record:
As the name suggests, patient-based personal medical records are those

types of records which are created, maintained, and updated by the
patient. Since the records are patient- based, the patient has the authority
to decide what all information he or she needs to include in the medical
record, though hiding any vital medical fact may in turn beat the whole
purpose of maintaining the personal health record. Hence, it is the sole
responsibility of the patient to enter all the particular of his medical
information correctly and completely in the records, as eventually, the
accuracy of the medical information stored by the patient will play a crucial
role in the healthcare of the patient. If the information stored is incorrect
or incomplete, clinical decision making of the physician is hampered
accordingly, affecting the proper care of the patient. The most common
problem with the patient-based records of late has been the timely
updation of the medical information. In case the medical information is not
up-to- date, it will not give a complete picture to the physician and will
negatively impact the capability of the physician to treat the patient
effectively.
Many PMR companies have started adding different new features into the
software. These features vary according to the company and requirement
of the individual and may have the ability that along with the medical
information the patient may also enter any supplementary information like
the exercise routine, dietary pattern, social habits, etc. Since it is managed
and controlled by the person, the power to decide with which providers he
or she would like to share his information rests upon him or her. To share
the information the person will have to provide the log-in information to
the provider or individual with whom he wants to share the information.
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At this stage, the PHR/PMR is maintained by the individual, but it is

anticipated that in the coming years, a health repository would be created
by every government for its citizen which would enable health providers
and health insurers to deliver to the patient a timely and affordable
treatment. Ideally, the building of this kind of health information repository
should start at the state level and then the country would merge the entire
state health information database to create a national health database.
Depending on the way the medical record is stored, the patient-based

personal medical record is sub-divided into two categories:
Online patient-based personal medical records:
In this type of patient-based personal medical records, the medical

information of the patient is stored online, that is, on the cloud. The cloud
is an interconnected system of computer servers which are used for
storage of data and can be accessed via Internet. The major benefit of
online patient-based personal medical records is that it can be accessed
anytime 24x7 from anywhere around the world. This feature
complements to the portability of personal health record as well as
its availability round the clock.
As the medical information is stored online, extreme precaution has to be

taken both by the patient as well as the service provider of the online
patient-based personal medical records to make sure that the information
remains secure and it cannot be sneaked into by a hacker. Data thefts of
online healthcare databases are on the rise as hackers find it easy to break
into the company servers which usually do not have enough security
measures setup in place.
To maintain or create an online patient-based personal medical record a

person has the option to either choose a paid service or choose a free
service.
Paid service are those in which the companies would provide the online
patient-based personal medical record service and charge a monthly fee or
may be annually fee depending upon the account chosen by the person.
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Fig 7.3: Screenshot of Online Patient-Based PMR
(Image credit https://www.mymediconnect.net/phr.php)
Given below is the list of some of the providers of paid online patient-based
personal medical records:
http://www.myminerva.com
https://www.docengage.in
https://healthrecordsindia.com
http://www.myphr.com www.personalmd.net
http://www.myhealthrecords.in
Free service are those in which the companies providing the online patient-
based personal medical record service do not charge any fee to the person,
but it MAY generate revenue by showing advertisements on the online web
pages or selling generic information/impersonal information from the
medical records to pharmaceutical and research companies. Two of the
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most famous free online patient-based personal medical records are

Microsoft HealthVault and Google Health (discontinued).
Microsoft HealthVault
Microsoft HealthVault started in 2007 is the most famous free online

patient-based personal medical record developed by Microsoft that can be
used to store and maintain health information. Originally, it was started to
cater the United States people, but in June 2010, Microsoft HealthVault
expanded its services to include the United Kingdom.
Some of the salient features of Microsoft HealthVault as follows:
• This online patient-based personal medical record has the ability to

communicate with a gamut of health monitoring devices such as blood
pressure monitor, blood glucose monitor, peak flow meter, pulse
oximeter, weighing scale, pedometers etc.
• Microsoft has developed applications for Windows, I-Phone, and Android

platforms to help access the Microsoft HealthVault using smart phones.
• Microsoft HealthVault now also allows uploading of medical images, such

as x- rays, MRIs, ultrasounds, etc.
• Microsoft HealthVault has integrated with various other online PHRs such
as
https://www.mymediconnect.net
http://www.myhealthfolio.com
http://www.getrealhealth.com
Google Health
The second most famous free online patient-based personal medical record
would have been the Google Health. Google Health was launched in 2008.
As with personal medical record, the main intention of Google Health was
to provide people with the power to be in-charge of their medical records,
by being able to create, manage, and share the medical records as they
deem fit.
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Eventually a couple of years later, due to poor awareness and lack of

widespread adoption Google announced the discontinuation of Google
Health in 2011. Google announced well in advance and intimated its users
about the retiring of Google Health and provided ways to continue to
maintain the online records by importing the medical information to other
personal health record such as Microsoft HealthVault or to download the
records.
Offline patient-based personal medical records: In this type of

patient-based personal medical records, the medical information of the
patient is stored offline, that is, on the patient's personal computer or any
other storage medium, for example, USB flash drive, mobile application.
The main disadvantage of the medical records being stored on a personal

computer is that it is not portable and can only be accessed locally by the
person himself. It will not be accessible and hence of no use to the
physician or doctor who would be treating the patient in case of an
emergency.
To undermine this disadvantage, all such offline patient-based personal

medical record softwares are gradually starting to update their technology
in order to provide a hybrid kind of solution where the personal medical
record while being maintained on the local computer can also be uploaded
to a secure web server. This medical record uploaded on the secure web
server can be accessed around-the-clock from anywhere in the world over
the Internet. In most cases, individuals are allowed to upload all or part of
their medical information as they desire. An example of such a hybrid type
of PHR is SynChart.
www.synchart.com
There are several offline mobile applications on Android, Windows, or iOS

platforms which can be used to store the personal medical records.
https://www.capzule.com (iOS mobile application - Offline PHR)
www.freehealthtrack.com (iOS mobile application -Offline and Online PHR)
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The personal medical record that is downloaded from the computer onto a
portable device such as an USB flash drive and kept along with the person
is also called as an offline patient- based personal medical record. The
basic advantage of medical record present on the USB flash drive is its
handiness and portability because it can be carried around in a keychain,
pendant, wallet, etc., but at the same time, it highlights a grave danger to
the security of the medical records as an USB flash drive can easily be
misplaced or lost. Therefore, whenever the medical records are stored in
an USB flash drive, the person should make sure that the medical
information present in the USB flash drive is properly encrypted with at
least 128-bit SSL encryption. The encryption of the medical information
would help in preventing an unauthorized person from accessing the
private and confidential medical records of the person.
NOTE : Most the providers of personal health records (either online or

offline) are not regulated by any medical body and hence a due-diligence
approach needs to be exercised while signing up for any of such patient
health records.
Apart from online and offline patient-based personal medical records, let us
also look into what is called the medical identification symbol.
This symbol is usually carried by individuals who suffer from an ailment

and it acts as a medium to inform about the medical condition of individual
to either emergency medical technician or anyone who is near the person
in case of an emergency.
Fig 7.4: Medical Identification Symbol
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This above symbol which is usually red in color, occasionally blue, typically
found printed or even engraved on jewellery is known as the medical
identification symbol. It denotes that the person carrying this symbol in
any form (garments, emblem, card, or jewellery) has some kind of
medical situation which needs to be attended carefully and immediately in
case the person meets with an emergency. This medical identification tag
usually consist the symbol on one side and on the other side it may contain
the name of the disease the patient is suffering from, allergies or
intolerances, medical history of the patient, or in some cases contact
information of someone close to the patient may be the primary care
physician, relatives, or friends who can answer the queries raised by the
emergency medical technician (EMT) who is treating the patient in
emergent condition.
Emergency medical technicians (EMT) or emergency medical personnel

(EMP) are the paramedical staff who are first to reach in a case of medical
emergencies or accidents. They are trained in emergency care of the
patient while the patient is being transported from spot of incident to the
hospital. The treatment provided by the EMT would wholesomely depend
on the type of medical information gathered by the EMT. This interim
period of transportation if utilized properly by the EMT would prove vital in
giving the life to the patient and would act as a differentiator between life
and death.
There are various forms in which the medical identification tag is available
in the market.
Card: It can be in the form of a card known as medical identification card

or emergency wallet card and can be easily carried in a wallet. It would
generally have the personal information of the patient, contact information
of someone in case of emergency, and comprehensive medical history of
the patient. This information would be enough for an EMT to treat the
person appropriately in case of any adverse situation.
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Front Side Back Side

Fig 7.5: Medical Identification Card
Image Credit https://www.medicalinfoproducts.com
Wrist band: Medical identification tags are also available in form of wrist
bands which can be worn on the wrist and will be easily visible to the
emergency responders in case of any adversity. The information on the
wrist band is not as exhaustive as the medical identification card and may
have just the vital details engraved on the underside of it such as allergies
or any advanced directives or diagnosis of the person.
Fig 7.6: Wrist Band
Image credit http://www.medicalert.org/products
Miscellaneous Jewellery: Medical identification tags can also be

customized according to the person's need into various other forms of
jewellery such as shoe tag, pendants, necklace, bracelet, etc. Whatever the
form may be the main function of it is that it should be easily visible to the
emergency care team and have either the medical information within it or
the contact number of a person who could provide the same to the
emergency responders.
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Fig 7.7: Medical identification tag jewellery
Image credit https://www.medicalinfoproducts.com
MedicAlert Foundation is the pioneer and undoubtedly the top player to

provide this kind of service. Founded in 1956 by Dr. Marion and Chrissie
Collins, it is a non-profit, charitable, and membership-based organization
dedicated to the well being of others. MedicAlert® is the only medical
identification and information network with medically trained staff that
reviews and prioritizes your health information, ensuring the most
important details are delivered first.
MedicAlert Foundation as of year 2014 provides its service in the following

ten countries:
• United States
• Australia
• Canada
• Cyprus
• Iceland
• Malaysia
• New Zealand
• South Africa
• United Kingdom
• Zimbabwe
They issue a medical information tag (wallet card, wrist band,

jewellery, etc.) called as MedicAlert®, which contains the medical
identification symbol printed or engraved on one side and a toll-free
number and member identification number on the other side. Using this
toll-free number, the emergency medical technician (EMT) can connect to
the medically proficient 24x7 call center staff and request the medical
information on the particular person using the unique member
identification number.
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This medical history is the electronic patient-based personal health record

updated continuously by the patient which can be accessed by the
MedicAlert call center staff and provided to the emergency medical
technician (EMT) or the physicians in case of an emergency.
Fig 7.8: MedicAlert Medical Information Tags
EMR-based personal medical records: In this kind of personal medical

record, the data is not created or managed by the individual instead the
individual is only entitled to view the data of the electronic medical records
which is maintained by the servicing physician, hospital, any healthcare
agency, or even an insurance company. The individual would not have the
ability to view the whole medical record but can access only certain
sections of the medical records such as scheduling the appointment or
ordering the medicines through e-pharmacy. However, more and more
EMR-based personal medical records have started adding a host of features
in order to capitalize the market. Some of the distinct features are as
follows:
a. Individuals are able to enter any relevant and vital health information
into the system.
b. Data from the home healthcare monitoring devices such as blood

pressure, blood sugar, pulse oximeter, etc., can be easily imported into
the system.
c. Functionality to exchange healthcare information from other sources

such as the pharmacies or other healthcare providers.
Individuals can gain access to their medical records through web browser
and in some cases even through mobile applications on the smartphones.
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Examples of EMR-based personal medical records are:
In 2013, Cleveland Clinic started offering its patients access to certain

sections of their medical records through web browser and later on through
mobile application.
https://mychart.clevelandclinic.org (Web Browser) MyChart® mobile

application (iOS and Android devices)
Kaiser Permanente also opened the online access of medical records to its
members through My Health Manager and through mobile application.
https://healthy.kaiserpermanente.org/html/kaiser/index.shtml KP App
mobile application
Singapore's National Skin Center was the first healthcare institution in

South East Asia to introduce the free online patient health record. It allows
patients to access certain aspects of their health records including dates of
visits, diagnosis, medication history, allergies and procedures. Launched in
December 2011, the initiative received excellent feedback. https://
www.myportal.nsc.gov.sg
7.8 ELECTRONIC MEDICAL RECORD
Electronic Medical Record (EMR): EMR is a type of electronic record

that assimilates all the paper-based medical records of a patient in an
electronic form. This health information is created and managed by and for
the physicians for diagnosis and treatment of the patient. It is specific to
and controlled by a single medical facility and can be accessed only by the
physician and staff of that medical facility.
According to NAHIT (The National Alliance for Health Information

Technology), Electronic Medical Record (EMR) is defined as:
An electronic record of health-related information on an individual that can

be created, gathered, managed, and consulted by authorized clinicians and
staff within one health care organization.
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Electronic medical records have been around since a couple of decades but
its adoption has been far slower than expected by the researchers. One
main factor attributed to the low rate of adoption of EMRs is the huge
amount of initial investment for the implementation of the EMR. Many
providers feel that the benefit achieved from implementation of EMR does
not justify the huge cost associated with it. Another factor that acts as a
hindrance would be the time consumed by the providers in inputting the
data of the patient into the EMR. Since the system is new, even though the
providers are trained, it is a time-consuming affair and leads to decrease in
the productivity of the providers and overall decreasing the number of
patients seen in the medical facility. This normally leads to a sandwich-type
effect where on the one side the hospital has to pay for the EMR cost and
on the other side its overall turnover margin is decreased due to providers
not being able to see more patients. Eventually, due to the frustration of
the providers and hospitals, they opt to switch to a different EMR assuming
that it would complement their existing healthcare setup. This is the fate
shared by many providers and hospitals. Many providers have to go
through at least two to three EMR before they are able to find the best EMR
that suits to their needs.
While protagonists of EMRs have categorically criticized paper medical

records for their limited accessibility, ambiguity, and illegibility, antagonist
still believe that paper records are far more secure in terms of protecting
the PHI as compared to the electronic medical records.
There are a multitude of electronic medical records (EMRs) available in the

healthcare industry each with their own set of advantages and
disadvantages. Hence it becomes very critical for the medical facility and
hospital to ensure that the electronic medical records they choose not only
meets their current requirements but will also cater to their future
requirements as well. When opting for an EMR, the hospital should
ascertain that the EMR meets most if not all the criteria. Selection of an
EMR should be meticulous and customized as per the requirements of the
hospital because in the future if the EMR falls short on the expectation of
the providers or does not meet the standards set by the medical body, then
the transition to another EMR not would only shoot up to the cost but also
add to the agitation of the providers trying to learn the new software.
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Most EMRs are out-of-the-box softwares, meaning, it can be used instantly

after installation, but the issue with these types of EMRs is that they are
not customized to a specific medical specialty or a specific staff size, hence
may not work efficiently for all the providers. One other option is to
customize the EMR according to the requirement of the hospital. The issue
with this approach is that it adds up to the initial cost as EMR vendors
charge a hefty sum for the customization of the product according to the
customer's need and most EMR vendors do not even customize their
products and sell as a readymade product.
One of the first electronic medical records developed in India was e-

Sushrut in 2002. It was developed by the Center for Development of
Advanced Computing (CDAC), Govt. of India.
The electronic medical record has been pursued as an ideal by so many, for
so long, that some suggest that it has become the Holy Grail of Medical
Informatics. (Kay and Purves 1996, pg 73)
7.9 BASIC REQUIREMENTS OF AN IDEAL EMR
• First and foremost it should be fairly priced as cost has been the main
factor interfering with widespread adoption of EMR.
• The EMR should meet all the certification criteria of the local and global
governing bodies.
• The EMR vendor should provide any future updates for the EMR software
as and when required in order to meet the meaningful use requirement.
(For example the transition from the existing ICD-9 to ICD-10)
• It should be coherent and should complement in productivity

enhancement of the hospital.
• It should have the capability of customization as per the size of the

medical facility and medical specialty.
• The EMR software should be able to easily integrate with the existing
healthcare monitoring devices/softwares used in the hospital.
• It should provide a robust security for the medical database storage.
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• The EMR provide should have provide an onsite training team during the
implementation process and a 24x7 technical support team available
during the live process to answer any queries promptly.
• It should have some backup system in place in case of any kind of

system failure.
7.10 ELECTRONIC HEALTH RECORD
Electronic Health Record (EHR): EHR is a type of electronic record that

constitutes of all the paper-based medical records of a patient in electronic
form but is not controlled by a single medical facility, instead, it can be
shared among multiple healthcare providers and multiple medical facilities.
As defined by NAHIT (The National Alliance for Health Information

Technology), Electronic Health Record (EHR) is an electronic record of
health-related information on an individual that conforms to nationally
recognized interoperability standards and that can be created, managed,
and consulted by authorized clinicians and staff across more than one
health care organization.
Usually, EMR and EHR are used interchangeably, but there is a very fine
but prominent difference between the two and that is the ability of an EHR
to securely share the patient's health data across multiple healthcare
organizations. This ability of the EHR helps in providing a more
comprehensive patient health record which in turn leads to better standard
of care.
7.11 BASIC REQUIREMENTS OF AN IDEAL EHR
The requirement of an ideal EHR is in addition to all of the above

requirements of an ideal EMR it should conform to globally or nationally
adopted interoperability standards.
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7.12 TYPES OF ELECTRONIC MEDICAL RECORDS (EMRS)/

ELECTRONIC HEALTH RECORDS (EHRS)
Broadly, electronic medical records (EMRs)/electronic health records

(EHRs) can be classified into two basic types
1. Client-server installation.
2. Software-as-a-service (SaaS) system.
Client-server installation.
This is the most basic type of installation seen in the hospitals. In client-
server installation system, the server which is used to store the electronic
medical database is installed locally within the premise of the hospital.
Sometimes, it is also known as local system or standalone system. This
type of setting requires a huge upfront and recurring maintenance cost as
the hospital needs to purchase the software, then procure the required
hardware, install in its own premise, and perform regular maintenance for
its proper functioning. A separate area is set aside within the premise
demarcated especially for the server with appropriate infrastructure and
qualified technical team is set in place whose main task is to regularly
monitor the proper functioning of the software to avoid any downtime.
In India basically all the hospitals utilize this type of client-server

installation as the data is not required to be shared with other institutions.
Software-as-a-service system (Saas):

SaaS is a software delivery method that provides access to software and its
functions remotely as a web-based service. The user is provided a web-
based login and after successful login can access the host of features of the
software without installing it on the computer. The main benefit of this
system is that the provider's do not have to pay a hefty amount for the
purchase of the licensed software but can use the software by paying a
monthly or an annual fee. This is the most evolved form of the EMR/EHR
technology and more and more healthcare institutions are opting for this
kind of system. In this system, the medical database is not stored on
hospital server or within the hospital premise but instead it is stored in the
cloud (Internet) which gives it the advantage to be shared within different
health organizations.
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Using this type of system can save the initial investment into the
infrastructure and hence is more preferred by small medical practices that
are willing to implement the EMR/EHR but are on a restricted budget.
Hospitals do not need to invest in expensive hardware because the
software is hosted remotely and vendor takes care of the new upgrades as
well. It also saves the medical practices from the burden of daily
maintenance and monitoring of the applications.
A major drawback of this system is that since the data is stored in the
cloud (Internet), the providers does not have total control over the medical
database and is totally dependent of the vendor for the security of the
data.
7.13 DIFFERENCE BETWEEN SAAS AND STANDALONE

INSTALLATION
SaaS system Client-server installation
Cost Low-Providers have to pay a nominal High-Hospitals have to pay

monthly or annual fees depending upon for initial implementation
their usage. and ongoing maintenance
and upgradation of the
hardware.
Accessibility Accessible using a host of devices Accessibility is limited to

desktop, laptop, smart phones, tablets, only desktops and laptops
etc. within the hospitals.
Customization An out-of-the-box application is It can be customized

provided with limited to no depending upon the
customization. product vendor.
Hardware/ The SaaS provider implements the Hospitals have to bear the
software required hardware and software. cost of the new software
upgradation and hardware
implementation.
Security Security is a concern in SaaS as the Security is far better than

data at rest is stored on the cloud and SaaS as the data is within
also is accessed through Internet. the safeguard of the
hospital.
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Scalability With increase in business, only the With increase in business,

subscription plan needs to be increased hospital needs to invest in
and you are ready to go. more hardware and
software to handle the
increased workload.
Downtime SaaS is accessed through Internet Being connected within the

hence any downtime will affect the LAN, there is no downtime
medical practice. except for any system
failure.
Interoperability SaaS providers usually take care of the Hospitals would have to
interoperability standards set in place. invest in appropriate
technology to abide by the
interoperability standards.
Speed SaaS is accessed over the Internet Since the software is

hence the speed is depends on the hosted in the LAN the
broadband speed. speed is good.
Database SaaS provider controls and database. Hospital owns and controls
control the database.
7.14 ADVANTAGES OF EMR/EHR:
When employed successfully, EMR/EHR can improve the efficiency of the

providers
• Electronic medical/health records integrate all the patient data to create

a comprehensive patient medical history and helps in providing proper
treatment to the patient.
• It is very useful in avoiding any drug-to-drug interaction as the EMR/EHR

generates adverse drug events alerts in case of any possible drug-to-
drug interaction.
• Automatic reminders can be effectively sent to the patients on time for

appointment schedule, immunization, follow-up, lab tests, etc.,
eliminating the risk of missing any reminder.
• Effective use of EMR/EHR by the practice can reduce the revenue spent
on medical transcription.
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• Integration of medical data from various other sources, such as labs,

diagnostic center, and pharmacies, can be performed providing a
complete health record and avoiding duplication of any diagnostic tests.
• Electronic medical/health records can also analyze the data over a period
of time of a specific disease and provide a statistical data that can be
used for research purpose.
7.15 DISADVANTAGES OF EMR/EHR:
• Many physicians complain about the decrease in their productivity with

implementation of EMR as they need to learn the software and input data
of the patient on their own into the software.
• In the event of a system failure, data stored on the EMR/EHR will not be
available to the providers.
Some examples of EMR
We will briefly discuss about three EMR softwares (two subscription based
and one free) and their features.
1. eClinicalWorks (http://www.eclinicalworks.com)
2. McKesson (http://www.mckesson.com)
3. OpenEMR (http://www.open-emr.org)
eClinical Works (http://www.eclinicalworks.com/products-electronic-

medical-records.htm) eClinicalWorks' award-winning Electronic Medical
Record (EMR) system is more than a way for your practice to go paperless.
This next-generation technology is a means to save money, improve
efficiency and enhance security. Using industry leading technology, the
eClinicalWorks EMR will help your practice achieve your goal of delivering
the best patient care possible.
Some of the advantages of eClinicalWorks' are:
Improved workflow, Customizable, Access clinical content, Communication,

Unification, and ARRA Meaningful Use
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Fig 7.9: Screenshot eClinicalWorks' EMR
Image source http://www.eclinicalworks.com
McKesson (http://www.mckesson.com/bps/solutions/technology/
electronic-health-records/)
McKesson's InteGreat EHR (Cloud Based)
InteGreat EHR lets you build and access complete electronic health
records, freeing you to perform the tasks that matter most, while
maximizing revenue generation for your practice. The InteGreat EHR can
be implemented as an affordable Software as a Service (SaaS) installation
and deployed as a browser-based solution, so you can be live on your EHR
in less than half the time required by traditional EHR products.
McKesson's Practice Partner (Server Based)

Practice Partner® is a fully-integrated electronic health record (EHR) and
practice management (PM) software that helps practices of all sizes do
more for patients with less effort. The Practice Partner system includes
three powerful applications, which are available individually or together:
Patient Records, Medical Billing and Appointment Scheduler.
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OpenEMR (http://www.open-emr.org)
OpenEMR is a Free and Open Source electronic health records and medical
practice management application that can run on Windows, Linux, Mac OS
X, and many other platforms. OpenEMR is ONC Complete Ambulatory EHR
certified and is one of the most popular open source electronic medical
records in use today. OpenEMR is supported by a strong community of
volunteers and professionals all with the common goal of making OpenEMR
a superior alternative to its proprietary counterparts. The OpenEMR
community is dedicated to guarding OpenEMR's status as a free, open
source software solution for medical practices and is dedicated to
maintaining a spirit of openness, kindness and cooperation. The most
important features of OpenEMR are it is free and is ONC Complete
Ambulatory EHR Certified.
Below infographics gives a detailed report of the most preferred EMR/EHR

softwares. Source http://www.capterra.com/infographics/top-emr-software
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Fig 7.10: Popularity Index of EMR/EHR
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7.16 SUMMARY
Information captured or recorded on electronic media is termed as

electronic records. The greater adoption of EMR in developed countries is
founded on factors such as high literacy rate, accessibility to Internet and
computers, etc.
There are two ways of production of electronic records, they may be

produced electronically (by scanning the paper records) or created digitally.
Medical facilities in the process of transition should focus on a few things

which would go a long way in yielding smooth transition from paper to
electronic records such as initial scanning of only vital data, piecemeal
fashion scanning, outsourcing to a third party, and quality checks.
There are several benefits of electronic records over paper-based records

such as improved patient's care, handiness, low storage space, and cost
effective.
Electronic records can be divided into three main categories, viz, Personal
Health Record (PHR)/ Personal Medical Record (PMR), Electronic Medical
Record (EMR), and Electronic Health Record (EHR).
Personal Medical Record (PMR) can be broadly classified into two major
types, viz, patient- based personal medical record (online and offline) and
EMR-based personal medical record. Most the providers of personal health
records (either online or offline) are not regulated by any medical body and
hence a due-diligence approach needs to be exercised while signing up for
any of such patient health records.
An electronic record of health-related information on an individual that can

be created, gathered, managed, and consulted by authorized clinicians and
staff within one health care organization.
Electronic Health Record (EHR) is an electronic record of health-related

information on an individual that conforms to nationally recognized
interoperability standards and that can be created, managed, and
consulted by authorized clinicians and staff across more than one health
care organization.
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EHR can be defined as an EMR equipped with interoperability standards.
There are two basic types of EMR/EHR standalone installation and

software-as-a-service (SaaS) installation.
7.17 GLOSSARY
Emergency medical technicians (EMT) or emergency medical personnel

(EMP) are the paramedical staff who are first to reach in a case of medical
emergencies or accidents.
PHR Personal Health Record or (PMR) Personal Medical Record
EHR Electronic Health Record
EMR Electronic Medical Record
EMT Emergency Medical Technician or (EMP) Emergency Medical Personnel
USB Universal Serial Bus.
TIFF Tag Image File Format
PDF Portable Document Format
OCR Optical Character Recognition
HIPAA Health Insurance Portability and Accountability Act
NAHIT The National Alliance for Health Information Technology
CDAC Center for Development of Advanced Computing
ICD International Classification of Diseases
SaaSSoftware-as-a-Service
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1. Define electronic records.
2. Discuss two basic ways of production of electronic records?
3. What are the key factors a medical facility should focus on before
transitioning from paper-based medical records to electronic records?
4. Explain the advantages of electronic records over paper-based records?
5. Briefly explain the different types of electronic records?
6. Explain in detail Personal Health Record (PHR) and its types?
7. List any five basic requirement of an ideal personal medical record?
8. What are the basic requirements of an electronic medical record?
9. What is the most important distinguishing factor between EMR and EHR,
discuss?
10.Discuss the two basic types of EMR/EHR and distinguish between them?
11.Given any five advantages of EMR/EHR?
12.Detail any two disadvantages of EMR/EHR?

a. SaaS
b. ICD
c. EMT
d. PMR
e. CDAC
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1. Which of the following is a requirement of an ideal personal record?

a) Personal demographics like name, date of birth
b) Current medication and dosages
c) Family and social history
d) All of them
2. The PHR is maintained in a secure and private environment, with the

individual determining rights of access. The PHR is separate from and
does not replace the legal record of any provider.
a) True
b) False
3. Which of the following is not a basic requirement of an ideal EMR?

a) It should be fairly priced
b) It should have the capability of customization as per the size of
the medical facility and medical speciality
c) It need not meet the certification criteria of the local and global
governing bodies
d) None of the above
4. A type of electronic record that constitutes of all the paper-based

medical records of a patient in electronic form but is not controlled by a
single medical facility, instead, it can be shared among multiple
healthcare providers and multiple medical facilities. This document is?
a) EMR
b) EHR
c) Both of them
d) None of them
5. In Saas system, an out of the box application is provided with limited to

no customization.
a) True
b) False
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6. What are the types of EMR/HER?

a) Client-server installation
b) Software as a service system (Saas)
c) All of them
d) None of them
[Answers- 1(d), 2 (a), 3(c), 4 (b), 5 (a), 6 (c)]
7.20 CASE STUDY
IMPLEMENTATION OF EMR SOLUTION PROVES SIGNIFICANT

RETURN ON INVESTMENT (ROI) YEAR AFTER YEAR.
Block & Nation Family Medicine
Block & Nation Family Medicine is a four provider independently owned

office. The majority of the patient visits are for routine medical care for
young and middle-aged families; however, there are also a small number of
procedures that are performed on patients within the office. Their goal is to
create a medical office that gives high quality patient care and excellent
customer service in a pleasant environment.
EMR Selection and Implementation

Block & Nation was looking to use technology to streamline work, improve
documentation, provide better sharing of patient history between doctors
outside of the practice, and increase efficiencies and profitability. They
realized that they needed an electronic medical record solution.
The practice did an in-office analysis to estimate what the cost savings
would be for the practice by eliminating paper charts. The numbers proved
this was the right path to take - the only path to take - as shown within the
ROI graph further in the document.
Dr. Bradley Block spent six months researching and comparing dozens of
different EMRs to fit their office needs. The lengthy search revealed that
the eClinicalWorks comprehensive EMR solution with unified practice
management and document imaging & storage capabilities was cutting
edge and full-service and was his group's top-end choice. eClinicalWorks
was affordable and priced more favorably than any EMR with similar
abilities.
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Block & Nation Family Medicine converted to eClinicalWorks in late 2004. It

switched all of its paper charting and practice management software to
complete electronic charting and PM software through eClinicalWorks. The
data migration of over 14,000 patient demographic files went very
smoothly. The scanning of paper files, forms, insurance cards, and driver's
licenses was quick and easy as patients came through the office. The staff
and physicians quickly learned to use eClinicalWorks thanks to its
intuitively designed layout and features; the office manager states that she
was a "computer dummy," but found the software very easy to use and
navigate. And most importantly, the office has found the "eClinicalWorks
support team has been excellent and timely" in responding to any needs.
"eClinicalWorks is the EMR that gets better and better year after year. We
would NEVER go back to paper!" Dr. Bradley Block
Practice Clinical and Administrative Workflow Efficiencies
Detailed below are the clinical and administrative efficiencies the staff at
Block & Nation Family Medicine have experienced since integrating the
eClinicalWorks EMR/PM application.
• It is much easier to pull up patient information by name or DOB if

someone calls.
• The telephone encounter is entered into the patient chart and the doctor
gets the encounter right away.
• Easier to fax directly from the patients chart then having to go to a paper
fax machine and wait in line to send out a fax.
• Patient prescription and appointment requests can be handled through

the Patient Portal. The practice can fax the request (refills, etc.) without
having to do it manually.
• We don't have to leave our desk, which saves us time. eClinicalWorks

makes our job faster.
• Mark Shulman, a patient of Dr. Block, stated, "I have been a patient of
Dr. Block's since prior to the eClinicalWorks EMR system. I appreciate
that prescriptions can be sent to the pharmacy directly from the office,
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Dr. Block can compare and discuss previous and current lab results side
by side with me, and the patient portal gives me the ability to schedule
appointments and see lab results without having to call the office."
• eClinicalWorks makes the check-in and check-out process very easy and
basically error proof.
• Once the electronic claims & payments from insurance companies are
received, there's very little that the billing office has to do to put the
information into the proper patient record.
• Automatic ERA downloads - downloads payments from clearinghouse and

automatically posts to the appropriate patients…great feature!
• The application is so intuitive that employees with no previous EMR

experience were able to grasp the fundamentals within two days of using
the system.
eClinicalWorks P2P™
Block & Nation is currently using eClinicalWorks P2P - a network that gives
providers the freedom to connect and collaborate with virtually any
provider with Internet access. Dr. Block shared with eClinicalWorks an
example of how P2P has saved the practice and patient's time and money,
and improved care.
Dr. Bradl ey Bl ock refers pati ents on a regul ar basi s to the

gastroenterologist. He is able to transmit the patient's information - 20 or
more medications, diagnostics, labs, and all aspects of their medical
records - within a couple of minutes. This normally took at least 5 -10
minutes for his staff to take care of and easily 30 minutes for the receiving
specialist nurse & office staff to pull together. When the referral
appointment is complete, the gastroenterologist is able to send a consult
letter back to Dr. Block in minutes. Additionally, Dr. Block is able to see the
specialist's available appointments and make an appointment for the
patient. This saves time for the patient,office staff, and the doctors
especially in an urgent situation. Dr. Bradley Block states, "Being able to
make sure that doctors have the exact same patient information and not
just sharing the information is invaluable."
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The benefits that Block & Nation have seen from P2P are: improved
documentation and sharing of patient history between doctors outside of
the practice, less medical information related errors occur, patients receive
consistent quality care, the right medications are administered/ refilled/
adjusted, and patient information is shared from doctor to doctor.
"At our office, we know that choosing to convert to eClinicalWorks was the
right decision. We are far better off now by using eCW than by being on
paper charts. This conversion has helped our medical office evolve into an
efficient, modern platform of patient care in order to remain quality
oriented, independent, and financially successful." Dr. Bradley Block.
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Return on Investment (ROI)
The Return on Investment that the practice achieved over a three year
period is substantial.
In the first eight months of using the eClinicalWorks comprehensive EMR

solution with unified practice management, the practice had a significant
staff reduction thanks to increased efficiencies:
• From five full-time medical assistants to four
• From four full-time front-office staff to three
• From two full-time billing staff to approximately 1.25 full-time

equivalents
As a result, the practice saved more than $5,500 per month in payroll and
benefits.
• Overhead savings per physician
• Better charting and less prophylactic down coding
• All services provided were charged
• The three year totals are shown in the Return on Investment (ROI)
graph.
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The practice has not only broken even on its investment but, as noted
within the ROI graph, is saving money month after month in addition to
generating more income every month. This new-found money helped the
practice to complete a long-term goal. After 10 years of renting office
space, the practice bought property and built a permanent office.
"Hurricane Charlie hit the area the same day that the eClinicalWorks
training took place. Police evacuated the area. I told the staff, "Go home
but on Monday we start implementation." Monday came and we went live.
Implementation was very easy. There were a few minor glitches but
nothing that couldn't be easily fixed. We can't imagine our lives without
eClinicalWorks." Thea Castor, Practice Administrator for 12 years at Block
& Nation
The Challenge
Find an EMR solution to fit the needs of the practice, improve
documentation, and increase efficiencies and profitability.
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The eClinicalWorks Solution:

• EMR/PM
• Clearinghouse: Gateway EDI
• Electronic Remittance Advice (ERA)
• Third Party Products: Midmark Spirometer
• Patient Portal
• P2P
• MU Attestation 8/11
• Bidirectional Lab Interfaces with:
• Quest
• LabCorp
• CPL Labs
Success
Block, Nation, Chase & Smolen Family Medicine achieved its goals by
integrating the eClinicalWorks application and eliminating paper charts
from the office completely; thus streamlining the office to the point where
it was able to reduce staff by 3¾ positions. The ROI made it possible to
purchase its own office space after 10 years of renting space
(Source http://www.eclinicalworks.com/customer-case-studies.htm)
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References
SIANG EDMUND, L., K. RAMAIAH, C., PRAKASH GULLA, S.. Electronic

Medical Records Management Systems: An Overview. DESIDOC Journal of
Library & Information Technology, North America, 29, Mar. 2010. Available
at: <http://publications.drdo.gov.in/ojs/index.php/ djlit/article/view/273>.
Date accessed: 12 Jul. 2014.
MEDICAL RECORD MANAGEMENT, now known as HEALTH INFORMATION

MANAGEMENT, is intended to be a basic textbook & reference for the field
of medical records & health information management. Edna K. Huffman,
AHIMA. "Role of the Personal Health Record in the EHR

(Updated)." (Updated November 2010).
AHIMA Personal Health Record Practice Council. "Helping Consumers Select

PHRs: Questions and Considerations for Navigating an Emerging Market."
Journal of AHIMA 77, no.10 (November-December 2006): 50-56.
Citation: Thede, L., (December 12, 2008) "Informatics: Electronic Personal

Health Records: Nursing's Role" OJIN: The Online Journal of Issues in
Nursing Vol. 14 No. 1.
http://healthit.gov/providers-professionals/faqs/are-there-different-types-
personal-health- records-phrs
http://www.archives.gov www.cms.gov
https://www.mymediconnect.net/phr.php www.hhs.gov
https://www.medicalinfoproducts.com http://www.medicalert.org/
http://www.capterra.com/infographics/top-emr-software
http://www.eclinicalworks.com/customer-case-studies.htm
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
366
HIPAA
Chapter 8
HIPAA
CHAPTER OBJECTIVES:
• What is HIPAA?
• HIPAA - Use and Need
• Titles of HIPAA
• Administrative Simplification and Privacy - Six Divisions
• HIPAA Violation
• HIPAA compliance
• Business Associate (BA) & Business Associate Agreement (BAA)
• HIPAA - Indian Hospitals and Healthcare BPOs and KPOs
• HIPAA certified versus HIPAA compliant
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HIPAA
STRUCTURE:
8.1 Introduction
8.2 HIPAA
8.3 Why HIPAA?
8.4 HIPAA - Titles
Title I, Title II, Title III, Title IV, Title V
8.5 Insurance Reform and Tax-Related Provision
8.6 Administrative Simplification and Privacy
8.7 Electronic transaction rule
8.8 Code sets rule
8.9 Unique identifiers rule
8.10 Privacy Rule
8.11 Security Rule
Administrative safeguards
Physical safeguards Technical safeguards
8.12 Enforcement Rule
8.13 HIPAA Violation
8.14 HITECH Act 2009
8.15 Who needs to comply to HIPAA?
8.16 Business Associate
8.17 HIPAA - Indian Hospitals and Healthcare BPOs and KPOs
8.18 HIPAA certified versus HIPAA compliant
8.19 Summary
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HIPAA
8.1 INTRODUCTION
Every organization, be it small or large, needs to have certain rules and

regulations set in place for its growth and success in the long term. If an
organization does not have rules and regulations to guide its business
structure, then the organization even though sometimes may do well in the
short-term is surely bound to fail in the long term. Hence it is crucial for
every business organization to conform to the appropriate rules and
regulations set by the governing bodies from time to time so as to stay
clear from any unexpected hurdles in the future. Abiding by all the rules
and regulations as laid down by the authorities also projects a superior
image of the organization over its competitors in the eyes of the general
public.
Barring from a few generalized rules and regulations which needs to be

followed by all the industries, different industries have their own specific
rules and regulations pertinent to their domain. In this chapter, we will
specifically deal with some of the rules and regulations that govern the
healthcare industry of the US and healthcare BPO (Business Process
Outsourcing) and healthcare KPO (Knowledge Process Outsourcing)
situated all across the globe that outsource work from the US healthcare
industry. Healthcare BPO and healthcare KPO both have identical
organizational structure and differ only in the type of staff involved to
perform the job. A staff in a KPO should essentially be a skilled professional
with strong domain knowledge whereas a staff in a BPO need not be highly
skilled or possess strong domain knowledge as the job in a BPO entails
basic business functions.
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8.2 HIPAA
HIPAA stands for The Health Insurance Portability and Accountability Act of
1996. HIPAA was enacted by the 104th United States Congress and signed
by President Bill Clinton in 1996. Since its enactment it has undergone
various changes including updates and revision of the original HIPAA rule.
The most significant change of them all being the inclusion of the HITECH
Act under the HIPAA scope. The primary goal of the HIPAA is to mainly
focus on the privacy and security of patient health information. It
mandates uniform standards and formats for electronic health information
and code sets for routine types of health transactions. Since the time it was
implemented, it has altogether brought a new meaning to the way the
information is being stored, managed, and exchanged between the
hospitals, medical facilities, insurance companies, covered entities, or third
party contractors. While concentrating on privacy and security of patient
health information, HIPAA also focuses on reducing the administrative costs
of the healthcare facilities to the minimum with the help of using advanced
technology for electronic data exchange.
HIPAA amended the US Social Security Act of 1935, the US Public Health
Service Act of 1944 (PHSA), the US Employee Retirement Income Security
Act of 1974 (ERISA), and the US Internal Revenue Code (IRC) of 1986 to
provide better healthcare access and portability and renewability of health
insurance coverage. It has a specific focus on trying to minimize the
healthcare fraud and abuse of medical benefits and also imposing fines and
penalties for organizations who are not complying with the HIPAA.
The Health Insurance Portability and Accountability Act (HIPAA) is also

sometimes referred to as the Kennedy-Kassebaum Act. Kennedy-
Kassebaum Act derives its name after an United States Senator Edward
Moore Kennedy and another United States Senator Nancy Landon
Kassebaum Baker-Kennedy Act who were known to be the forefront
runners and biggest sponsors for ushering in a new era in healthcare
legislation.
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8.3 WHY HIPAA?
An excerpt from the Hippocratic Oath

"All that may come to my knowledge in the exercise of my profession or in
daily commerce with men, which ought not to be spread abroad, I will keep
secret and will never reveal.”
In a sense, the above-mentioned Hippocratic Oath is the basis of the

HIPAA. The following examples illustrate the need for HIPAA and HITECH
Act.
MICHAEL SCHUMACHER'S STOLEN "MEDICAL RECORDS" OFFERED FOR

SALE. (http://www.theguardian.com) June 24, 2014
On August 8, 2013, Cogent Healthcare based in Brentwood, Tennessee,

USA made public that it had learned that M2ComSys, a medical
transcription company, was not storing PHI (protected health information)
securely. The online system that stored the notes could be accessed easily
because the firewall protection was down for a month. The protected
health information included information such as physician's name, patients'
date of birth, diagnosis descriptions, summaries of treatments provided,
medical histories, and medical record numbers. The public access to these
notes was from May 5, 2013 through June 24, 2013, according to a public
notice from Cogent. This breach exposed 32,000 patients' data across 48
states in the county. In some cases, the physician notes were indexed by
Google. (www.phiprivacy.net)
Consumer satisfaction in terms of providing the best quality products or

service is the core requirement for all the modern organizations. For the
healthcare industry, the consumer is the patient, and the patient's
satisfaction is of utmost importance. The patient's satisfaction in any
healthcare setup can be achieved through two steps, one by providing the
best possible treatment and care to the patient and the second by
protecting the medical information of the patient from falling into the
wrong hands. While the first step of satisfaction can be achieved at the
physician's level, the achievement of the second step needs a
comprehensive effort from the physician as well as the hospital
administrative staff. The medical information that the patient shares with
the care provider is a confidential information and due diligence needs to
given to protect that information. In the 1990s the medical facilities and
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hospitals had most, if not all, of their patient health information on paper
files. These medical records were stored in medical records department
under the monitoring of the security staff, who was not competent enough
to protect all the confidential medical records. During those periods,
several complaints were filed by the patients regarding the improper
handling of their medical records, divulging the medical records to
unauthorized persons, and revealing more personal medical records than
necessary to others without patient's authorization. This led to a great hue
and cry for a law that would address all these issues.
With the inclusion of advanced technology in the healthcare industry and

digitization of patient health information to facilitate the electronic data
interchange (EDI) between the healthcare organization, the security and
privacy aspect of the medical information became more critical and needed
a comprehensive rule, such as HIPAA, to be put in place to avoid any
medical data breach and detailing consequences following the breach.
Similarly, more and more healthcare organization started exchanging and

accessing the patient health information remotely with other facilities the
help of E-mails, mobile phones, tablets, and remote desktop clients again
pressing the need to set up certain guidelines for the hospitals and
providers to prevent unauthorized access of the confidential medical
information.
Keeping all the above-mentioned factors in mind, the HIPAA was ordained
by the United States Congress in 1996 and signed by the then President
Bill Clinton. It was an effectual way of assuring the patients that the
healthcare facilities are committed to protecting the patient’s health
information at any cost. The main contention of HIPAA was that once this
law is put in place, it would compel the healthcare organizations and
providers or individuals who come in contact with the medical information
to handle it more carefully and utilise reasonable and appropriate
protections to ensure that it is not misused or accessed without
authorization.
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8.4 HIPAA - TITLES
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is

usually made up of five subsections. These subsections are also known as
titles and represented as title I, title II, title III, title IV, and title V.
Basically, the privacy of the patient health information, the security of the
patient health information, and various incentives and tax-related
provisions fall under the purview of these five titles.
Let us see the five titles of the HIPAA in detail:
Title I:
Title I of HIPAA consists of provisions that are intended to improve the

healthcare access, portability, and renewability of insurance coverage of
individuals or families and groups of individuals who are covered under any
insurance plans. It provided special rights to the individuals so that they
can retain their insurance coverage in case of changing jobs from one
company to another.
For example, if a person working for XYZ Pvt. Ltd. who is covered under a
specific individual insurance plan or group insurance plan changes his
employment and moves to a different company ABC Pvt. Ltd. which may be
either in the same state or a different state within the country will be able
to maintain is insurance coverage on an as-it-is basis. Whereas prior to the
enactment of HIPAA whenever an individual had to switch from one
company to another the continuation of the insurance coverage had to be
at the behest of the insurance company.
Title I of HIPAA also gives special enrollment rights to those individuals or

families who would have otherwise lost their insurance coverage either due
to being terminated from their current employment and to those
individuals who face the risk of losing their insurance coverage after being
divorced from their significant other.
It also contains an important provision that provides for non-discrimination

of any individual from giving limited-period insurance coverage or disease-
specific insurance coverage in a group health plan unless the restriction is
imposed on the whole group health plan. Therefore, the insurance
company would have to provide a uniform insurance coverage to the whole
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group of individuals irrespective of the health condition of individual

members under a group health plan.
Title II:
Title II of HIPAA consists of provisions which are directed towards focusing

on preventing healthcare fraud and abuse, administrative simplification and
privacy, and medical liability reform. It is the most important title of all the
existing five titles and is again made up of seven subtitles. All the seven
subtitles or provisions are intended to combat fraud and abuse and to try
to simplify the administration of the health insurance and health care
delivery systems.
The most important of all the seven subtitles or provisions is the

administrative simplification and privacy which emphasizes for the
standardization of healthcare related information transactions and it also
defines different types of civil and criminal offenses owing to the improper
handling of healthcare information and defines civil and criminal penalties
liable for those offences.
The administrative simplification and privacy comprises of six subdivisions,

viz, privacy rule, electronic transaction rule, code sets rule, security rule,
unique identifiers rule, and enforcement rule. We will see all these six
subdivisions in details in the coming sections. We will be studying the
administrative simplification and privacy part of the HIPAA as it is the only
title that affects the Indian healthcare BPOs and KPOs which are
outsourcing work from United States.
Title III:
Title III of HIPAA especially amended the US Internal Revenue Code (IRC)
of 1986 to provide for tax-related health provisions for deductions. It
provides for various tax deductions for health insurance and reforms health
insurance law.
It specifies the amount from a pre-tax medical savings account that may
be used for medical expenses and regulates the long-term healthcare
services that must be treated as medical care.
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Title IV:
Title IV of HIPAA constitutes of application and enforcement of group

health insurance requirements. It specifies conditions for group health
plans regarding coverage of persons with pre-existing conditions, and
modifies continuation of coverage requirements.
This title also tries to clear-up various questions related to the The
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) under
which every employer who has 20 or more employees must offer COBRA
coverage for their group health plans. COBRA coverage
contains provisions giving certain former employees or spouses of former
employees or dependent children of former employees the right to continue
the health insurance coverage for a specified period of time which would
otherwise be terminated upon losing the employment. This health
insurance coverage, however, is only available when the employment is lost
due to certain specific events such as voluntary or involuntary termination
of employment for reasons other than gross misconduct and reduction in
the number of hours of employment.
In short, we can say that Title IV establish guidelines for the enforcement
of Title I.
Title V:
Title V of HIPAA deals with the amendment of the US Internal Revenue

Code (IRC) of 1986 by repealing the IRC's financial institution rule to
interest allocation rules. It includes provisions to regulate the employer's
tax deductions related to company-owned life insurance and treatment of
individuals who lose or give up the U.S. citizenship for income tax reasons.
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Fig 8.1: Five Titles of HIPAA
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All the five titles of HIPAA which are explained above usually can be
categorized into two major divisions, that is, (1) administrative
simplification and privacy which takes care of the accountability part of
HIPAA and (2) insurance reform and tax-related provisions which
takes care of the portability and revenue offset part of HIPAA.
The administrative simplification and privacy part of HIPAA especially has a

bearing on the healthcare providers, examples, physicians, hospitals, home
healthcare facilities, pharmacies, etc., and the insurance reform and tax-
related provision division of HIPAA especially has a bearing on the
employers and payers, examples, Medicare, Medicaid, etc.
Fig 8.2: Divisions of HIPAA
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8.5 INSURANCE REFORM AND TAX-RELATED PROVISION
The insurance reform and tax-related provision part of HIPAA has reformed
the working of the health plans and insurers especially with effect to
continuation and portability of health insurance coverage to avoid lapse of
health coverage and revenue offsets.
The prominent features of the insurance reform are as follows:
1. It provides for non-discrimination against individuals based on their

specific health conditions under a group health plan.
2. If a new member of a group health plan has any pre-existing condition

but has prior creditable coverage, in such case insurance reform
prevents health insurers from imposing any exclusion and even if any
exclusion is to be added it tries to limets the exclusions of the health
plans and insurers on individual's pre-existing health conditions.
3. It enables individuals to retain their health insurance coverage when

switching from one job to another and from one state to another state
within the country.
4. It also in a sense provides guarantee that once any individual plan or

group plan is issued under health insurance coverage, the health payers
must periodically renew the health plan.
8.6 ADMINISTRATIVE SIMPLIFICATION AND PRIVACY
In general whenever we come across the word HIPAA either while speaking
with other people or while reading it in any article or literature, it almost
90% to 95% of the time refers to only the administrative simplification and
privacy part of HIPAA and its six subdivisions, viz, electronic transactions
rule, code sets rule, unique identifiers rule, privacy rule, security rule, and
enforcement rule.
Some of the basic functions of administrative simplification and privacy are

as follows:
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1. As stated earlier, administrative simplification and privacy basically tries

to protect the patient health information by providing guidelines for
privacy and security implementation.
2. It focuses on reducing medical fraud and abuse.
3. It tries to set forth several rules for secure transfer of protected health
information over the Internet to avoid any security breaches.
4. Administrative simplification and privacy provides the road map to

reduce the overhead costs of administrative activities.
5. By implementing the centralized clinical database access, it tries to

improve the healthcare services of the individuals and glean information
for informed decision making by providers which in turn would increase
the effectiveness of the whole healthcare system.
Administrative Simplification & Privacy Subdivision
Fig 8.3: Subdivision of Administrative Simplification & Privacy
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8.7 ELECTRONIC TRANSACTION RULE:
Electronic transaction rule is also sometimes colloquially referred to as

electronic data interchange (EDI) rule since it requires use of standard
electronic formats for transfer of healthcare information between two
parties (covered entities). All the covered entities must adhere to the
standard content and format requirements for each transaction based on
electronic data interchange (EDI) standards defined by the Accredited
Standards Committee (ASC) and the National Council for Prescription Drug
Programs (NCPDP).
HIPAA has adopted certain standard electronic transactions for electronic

data interchange (EDI) of administrative health care data. These standard
formats generally focus on the content of the transactions, and all covered
entities are required to use and accept these standard formats.
HIPAA advocates to use standard formats and contents for the following
standard electronic transactions mentioned below:
270- Eligibility Inquiry (Providers Payers)
271- Eligibility Response (Payers Providers)
276-Claim Status Inquiry (Providers Payers)
277-Claim Status Response (Payers Providers)
278-Referral Request and Response (Providers Payers)
820-Health Plan Premium Payments (Employers Payers)
834-Benefit Enrollment and Maintenance (Employers Payers)
835-Claim Payment and Remittance (Payers Providers)
837-Claim/Encounter Submission (Providers Payers)
NCPDP-National Council for Prescription Drugs Programs (Pharmacy

Payers)
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Electronic transaction rule was published on October 16, 2003 and its final
compliance date was set to be January 1, 2012.
8.8 CODE SETS RULE:
Code sets rule defines the standardized medical and non-medical data code
sets to be used as applicable by covered entities which are involved in any
kind of electronic transactions. Code sets are values that are used in the
data fields of electronic transactions to identify a medical condition,
procedural techniques, and or other entities.
There are two types of code sets, viz, medical code sets and non-medical
code sets.
Fig 8.4: Types of Code Sets
Medical code sets:
HIPAA has approved the following medical code sets, viz,

ICD-10 International Classification of Diseases
HCPCS Health Care Procedure Coding System
NDC National Drug Codes
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Example:
ICD code for pneumonia is 480 which will be standard all over the U.S.
CPT code for biopsy of liver is 47100 which will be standard all over the
U.S.
Non-medical code sets:
HIPAA has approved the following non-medical code sets, viz,

Telephone and Fax Numbers
Zip Codes
Social Security Number (SSN)
Medical Record Number (MRN)
Example:
Social Security Number (SSN): 222-111-4444
Telephone and Fax Numbers:
PHONE: (515)-232-3937
FAX: (515)-232-7147
Consider a case where providers from different states sending their claims
to the health payer to receive payment against the medical services
rendered by them to the patients. If each of them use a non-standard code
sets or local code sets, then it will be very hard for the health payer to
process the claim accurately, hence the need to have a standardized code
sets as advocated by HIPAA.
Code sets rule was issued on October 16, 2003 and its final compliance
date was set to be October 1, 2014 which again was proposed to be
postponed to October 1, 2015 to accommodate for ICD-10.
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8.9 UNIQUE IDENTIFIERS RULE:
Unique Identifier Rule of HIPAA mandates the use of standard unique

identifier for employers and healthcare providers. Under this rule, each and
every employer has to obtain an Employer Identification Number (EIN)
(sometimes known as (FEIN) Federal Employer Identification Number)
unique to them and each and every healthcare provider has to obtain a
National Provider Identifier (NPI) unique to them which will help in easy
identification of the employer and the providers while doing electronic
transactions.
The Employer Identification Number (EIN) or Federal Employer

Identification Number (FEIN) is a unique 9-digit identification number
issued by the United States Internal Revenue Service (IRS) to business
entities operating in the United States for the purposes of identification. It
can be termed as similar to Tax Deduction Account Number (TAN) issued to
employers of India.
The National Provider Identifier (NPI) is a unique 10-digit identification

number issued to healthcare providers in the United States by the Centers
for Medicare and Medicaid Services (CMS), details of which can be obtained
from the official website https://nppes.cms.hhs.gov.
Employer Identification Number (EIN) or National Provider Identifier (NPI)

will be the unique identification numbers that will used by the covered
entities in any kind of electronic communications with reference to the
employers or healthcare providers.
Unique Identifier Rule was published on May 31, 2002 and its compliance
date was set on July 30, 2004.
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8.10 PRIVACY RULE:
Privacy Rule of HIPAA lays down the guidelines that every covered entity
should adhere to who are involved in the safe-keeping of the protected
health information (PHI), both electronic format and paper format. It
regulates the use and disclosure of protected health information by covered
entities and lists the 18 personal identifiers.
Protected health information (PHI) is any information such as individual's

medical and demographic information, provision of healthcare information,
or payment for healthcare information that can be easily linked to the
individual. PHI can be in electronic format or paper format.
Personal identifiers are information that is unique to an individual and can

reveal the individual's identity. In general, there are 18 such personal
identifiers and any health information by itself without these 18 identifiers
is not considered to be PHI.
For example, blood pressure is 120/75, pulse rate is 80, temperature is

98.5 degrees Fahrenheit, and respiratory rate is 20. The above vital signs
in itself is not a PHI even though it is a health information because none of
the 18 personal identifiers are mentioned with the vital signs.
Instead if we say, Robert Barlow's vital signs are as follows: Blood pressure
is 120/75, pulse rate is 80, temperature is 98.5 degrees Fahrenheit, and
respiratory rate is 20. This becomes a PHI and comes under the purview of
the privacy rule because one of the personal identifier, that is, Name
Robert Barlow is mentioned along with his vital signs.
It is very important to know all the 18 personal identifiers because

disclosing of any of these 18 personal identifiers would lead to the violation
of HIPAA attracting penalties to the company.
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Below is the list of all the 18 personal/individual identifiers listed by the

privacy rule.
1. Names.
2. All geographical subdivisions smaller than State, for example, street
address, city, county, zip code, and their equivalent geocodes, except
for the initial three digits of a zip code.
3. Dates (except year) directly related to an individual, for example, birth
date, admission date, discharge date, and date of death.
4. Phone numbers.
5. Fax numbers.
6. Email addresses.
7. Social Security numbers (SSN).
8. Medical record numbers (MRN).
9. Unique health plan numbers.
10. Account numbers.
11. Certificate/license numbers.
12. Vehicle identifiers and serial numbers, including license plate numbers.
13. Medical device identifiers and serial numbers.
14. Universal Resource Locators (URLs).
15. Internet Protocol (IP) address.
16. Biometric identifiers, such as fingerprint and voice print.
17. Full face photographic images and any comparable images.
18. Any other unique identifying number, characteristic, or code.
The main purpose of examining these 18 personal identifiers is that if an

individual working in any healthcare organization or healthcare BPOs or
KPOs comes across any of the personal identifier as a part of the job
function he/she should exercise extreme caution in handling such data. In
case any individual stumbles upon any of the above-mentioned personal
identifier, either due to malicious or unintentional tampering of any other
personnel, he should immediately notify it to his superior so that adequate
measures should be put in place to contain the breach.
Privacy rule equips individuals with certain rights regarding their medical
information and manner in which they may exercise those rights.
Some of the prominent rights of individuals advocated by privacy rule are

as follows:
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1. Covered entities must disclose the PHI or provide a copy of PHI when
requested by the individual within 30 days from the date of receipt of
request.
2. Covered entities must notify each and every individual as to how their
PHI is used for research, clinical data management, etc., and take
written authorization for the same.
3. It gives individuals the right to report any inconsistencies or inaccurate

data in their PHI and request changes for the same.
4. Most importantly, it enables individuals to file a complaint with the

Office for Civil Rights (OCR) against the covered entity in case they feel
that the privacy of their PHI is not maintained.
Although there are certain exemptions provided by the privacy rule where
the covered entities can disclose the protected health information without
any written authorization from the patient, it goes on to state that
whenever a covered entity discloses protected health information the
privacy officer must make certain to disclose only the minimum necessary
information required to achieve the purpose.
The exemptions set by privacy rule to disclose the protected health

information without any written authorization from the patient are as
follows:
1. As and when required by the law (suspected child abuse, court orders,
and subpoenas).
2. As and when required for administrative purposes such as to identify or

locate a suspect or missing person or as an evidence material.
3. If disclosing of PHI is necessary to facilitate improved healthcare

services.
The Privacy Rule was published on December 28, 2000 and the compliance
date was set to be April 14, 2003.
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8.11 SECURITY RULE:
Security rule of HIPAA establishes standards to protect individuals'

electronic protected health information. On certain occasions due to being
inextricably linked, security rule and privacy rule are often used
interchangeably in Indian healthcare BPOs and KPOs but there exist a stark
difference between the two, in that privacy rule covers the gamut of
protected health information (PHI) including paper and electronic, whereas
security rule specifically focuses on electronic protected health information
(ePHI) creation, transmission, and management.
Fig 8.5: HIPAA Security
Security rule encompasses three types of security safeguards to maintain

the confidentiality of the electronic protected health information (ePHI) in
any healthcare system. The three basic safeguards are administrative
safeguards, physical safeguards, and technical safeguards. All covered
entities must implement all the above-mentioned safeguards to ensure
security with respect to electronic protected health information.
The administrative safeguards, physical safeguards, and technical

safeguards all of them have their own implementation specifications and
each of the implementation specifications is either labeled as
"Required" (R) appears in parentheses after the title of the
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implementation specification or "Addressable" (A) appears in

parentheses after the title of the implementation specification.
If an implementation specification is labeled as "Required," the

specification must be implemented and failure to implement the
specification automatically leads to violation of the HIPAA security rule.
If an implementation specification is labeled as "Addressable," it provides

the covered entity some flexibility with respect to compliance with the
security rule. The onus lies on the covered entity to decide whether the
given addressable implementation specification is a reasonable and
appropriate security measure to apply within its particular security
framework. The outcome of the decision will depend on a variety of factors,
such as, the covered entity's risk analysis, risk mitigation strategy, security
measures already in place, and the cost of implementation.
Depending upon the outcome of the decision, the covered entity may
choose one of the following three options:
i. Implement the addressable implementation specification.
ii. Implement any other alternative security measure (Example, if

implementation of addressable specification is prohibitively expensive).
iii. Do not implement either an addressable implementation specification or

an alternative security measure (Document the rationale for the
decision).
The whole purpose of the above implementation specification is that the

security rule compliance requirements should be "technology neutral" and
"scalable." Smaller medical facilities that do not have enough staff or are
unable to bear the cost of expensive technological solutions may opt for an
alternative solutions or no solutions at all so long as the objectives of
HIPAA are accomplished.
Breakdown of the HIPAA security rule implementation specification into

"Required" (R) and "Addressable" (A) are as follows:
Physical (24%) - 4 Required and 6 Addressable.
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Technical (21%) - 4 Required and 5 Addressable.
Administrative (55%) - 12 Required and 11 Addressable.
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Fig 8.6: HIPAA Security Rule Implementation
Image Source http://www.hhs.gov/ocr/privacy/hipaa/administrative/

securityrule/ security101.pdf
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Administrative safeguards:
Administrative safeguards details the policies and procedures that all the
covered entities should enforce in order to ensure the prevention,
detection, containment, and correction of security violations. It includes
implementation features consisting of a risk analysis, risk management,
and sanction and security policies.
It creates strong sanction and security policies to define and analyze the
risks to the ePHI both internally and externally and take precautionary
steps to prevent or contain those risks so that the entity remains HIPAA
complaint.
Some of the main features of administrative safeguards for covered entities

in order to comply with the HIPAA requirements are as follows:
1. All the covered entities should periodically conduct an internal audit or

information system activity review and document it properly. Internal
audit should also be conducted whenever an incident or event occurs.
The primary motive of the accurate and thorough internal audit should
be to analyze any present or future security risk and vulnerabilities.
2. Covered entities should appoint privacy and security officers who will be
responsible for implementing HIPAA requirements and will be
accountable in case of any ePHI security breach.
3. Authorization of access should be granted strictly to only minimum

required data of ePHI depending on the employee's job responsibilities.
4. It should document detailed sanction policy set in place for employees

who fail to comply with the security policies, for example, verbal
warning for inadvertent disclosure of PHI on first occurrence, written
warning on second occurrence, and termination of employee on third
occurrence.
5. If the covered entity outsources its work to any other vendor, such as
business associate, contractors, sub-contractors, in that case it needs to
ensure that they comply with the administrative safeguards of HIPAA
and also get business associate agreement as well as nondisclosure
agreement. This series of agreement between covered entities, business
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associates, and third-party contractors are known as Chain of Trust

(COT) agreements and should be documented appropriately.
6. Covered entities should develop a training calendar and provide HIPAA

training to all its new recruits and a refresher HIPAA training for its
existing employees on a periodic basis and maintain a documentation of
the same.
7. A written documentation of the policies and procedures in case of any

emergency, natural or man-made, detailing ways to recover or backup
the medical data should be maintained.
8. Employees should be trained to protect their log-in and access

passwords and to change them on a regular basis.
9. There should be written policies to prove the covered entities

compliance of HIPAA in case of an employee's or a business associates'
deliberate neglects to handle sensitive ePHI leading to data breach.
Physical safeguards:
Physical safeguards are physical control measures housed within facilities

to protect a covered entity's electronic information systems and related
buildings and equipment, from natural and environmental hazards, and
unauthorized intrusion. In short, it controls the physical access of
electronic protected health information by any unauthorized personnel.
Physical safeguard focuses specially on the following key areas: Assigned

security responsibility, media controls, physical access controls, policies
and guidelines on workstation use, a secure workstation location, and
security awareness training.
Some of the main features of physical safeguards for covered entities in

order to comply with the HIPAA requirements are as follows:
1. Every covered entity must have a stringent physical access control to

ensure that the sensitive ePHI is only accessed by the intended
authorized personnel. This can be established by making use of
biometric devices, locks, alarms, security guards, and closed-circuit
television (CCTV) cameras.
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2. Physical measures must be implemented to ascertain that any hardware

and software installation and uninstallation are impregnable, and
whenever a piece of hardware is required to be disposed off, it should
be done in a safe and secure manner.
3. Daily logs should be maintained for routine maintenance visits and

visitor's sign-in. These logs should be reviewed in order to glean any
information pointing towards any changes or lapse in the physical
security policy.
4. Workstations handling sensitive health information should not be in the

direct view of the public and it should be devoid of any removable
drives, such as CD or DVD drive, and if any removable drive is present,
it should be secured thereby rendering it useless. If there is a need to
have removable drives, in such cases strict rules are required for proper
workstation use.
5. Data backup taken are encrypted and stored in a different secure

location.
ensure that they comply with the physical safeguards of HIPAA.
Technical safeguards:
Technical safeguards deals policy and procedures and employment of latest

technology to control access to computer systems, protect ePHI at rest,
and protect ePHI when transmitted electronically over open networks from
being intercepted by anyone other than the intended recipient.
Technical safeguard proposes five technical security services requirements

with supporting implementation features, viz, Access control, Audit
controls, Authorization control, Data authentication, and Entity
authentication.
Some of the main features of technical safeguards for covered entities in

order to comply with the HIPAA requirements are as follows:
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1. Covered entities should maintain information technology documentation

that includes record of all configuration settings of workstations,
servers, and network devices because these components are complex,
configurable, and always changing.
2. Covered entity must implement electronic measures for entity

authentication, the corroboration that an entity is who it claims to be.
"Automatic logoff" and "Unique user identification" were specified as
mandatory features, and were to be coupled with at least one of the
following features: (1) A biometric identification system, (2) a password
system, (3) a personal identification number, and (4) telephone
callback, or a token system that uses a physical device for user
identification.
3. Each covered entity is responsible for ensuring that the data in its
possession has not been altered or destroyed in an unauthorized
manner through data integrity and authentication mechanisms, for
example, "error-correcting memory," "digital signature," and "magnetic
disc storage."
4. Encryption must be employed to protect the security of ePHI being

transmitted electronically from one point to another over open
networks. If the data is at rest in a closed network and existing access
controls are considered sufficient, then encryption is optional.
ensure that they comply with the security safeguards of HIPAA.
6. All workstations should have the latest malware, spyware, and antivirus
installed and updated periodically and a log of the same should be
maintained.
The Security Rule was published on February 20, 2003 and the compliance
date was set to be April 21, 2005.
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Fig 8.7: Working of Email/document encryption technique
8.12 ENFORCEMENT RULE:
The enforcement rule of HIPAA sets forth rules and regulations, which
constitutes investigational procedures, court hearings, and most
importantly establishes civil monetary penalties in case of any HIPAA rule
violations.
In its early days, HIPAA focussed more on voluntary compliance, which did
not seem to work very well as providers and healthcare facilities seemed
reluctant to comply in the absence of any strict legal implications. Since
the enactment of the HIPAA in 1996, it was found that though thousands of
complaints alleging violations of HIPAA was received by the government,
there were only a few cases in which there was any penalty. This miniscule
rate of conviction raised questions over the very existence of HIPAA. There
was a need to devise a system that would give people some confidence in
the healthcare system. The people needed to be assured that their medical
information was not going to be misused and the healthcare system they
are dealing with was HIPAA complaint hence any deviation from the rules
and regulations would be strictly dealt with both in terms of civil and
criminal prosecution. This was the basis for the enactment of the
enforcement rule.
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HIPAA
In general, there are two governing bodies which oversee the enforcement
rule of the administrative simplification and privacy subdivisions of HIPAA.
The civil prosecution of security and privacy rule of HIPAA is enforced by
the HHS' Office of Civil Rights (OCR), the criminal prosecution of security
and privacy rule of HIPAA is enforced by the United States Department of
Justice (DOJ), and the electronic transactions rule, code sets rule, and
unique identifier rules is enforced by The Centers for Medicare & Medicaid
Services (CMS).
Enforcement Rule was published on April 14, 2003 and its compliance date
was set to be March 16, 2006.
Fig 8.8: HIPAA Privacy & Security Rule Complaint Process
Image Source http://www.hhs.gov/ocr/privacy/hipaa/enforcement/

process/index.html
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HIPAA
8.13 HIPAA VIOLATION:
Having learnt about the entire rule pertaining to the administrative

simplification and privacy part of HIPAA, let us now discuss about some of
the implications of either advertently or inadvertently violating those HIPAA
laws. There are grave consequences of not complying or breaking any of
the HIPAA laws both in terms of monetary penalties and prison time.
For instance, non-compliance with any of the HIPAA rule is considered as a

civil offense and the HHS' Office of Civil Rights (OCR) enforces a penalty of
$100 per person per violation with a cap of $25,000 per year for similar
type of violations.
On the contrary, if there is any unauthorized access or disclosure of

protected health information with any malicious intent (such as to sell,
alter, transfer, or destroy), it is considered as an criminal offence and the
United States Department of Justice (DOJ) enforces a penalty of minimum
$50,000 and maximum $250,000 AND/OR minimum prison time of 1 year
and maximum 10 years.
Following tables gives the detailed summary of the civil and criminal
monetary penalties and prison time for different kind of violations of
HIPAA.
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HIPAA
Fig 8.9: Civil and Criminal Penalties Table
8.14 HITECH ACT 2009:
Since the enactment of the HIPAA in 1996, there have been several
amendments ranging from imbibing the enforcement rule, implementing
more rigorous privacy and security rule, increasing the civil and criminal
prosecution penalties, and the breach notification rule.
Breach notification rule was issued on August 24, 2009 via Health
Information Technology for Economic and Clinical Health (HITECH) Act
which also promulgated various other prominent changes to HIPAA. Breach
notification rule requires covered entities, business associates, and
individuals to provide notification following a breach of unsecured protected
health information to the affected individuals and to the HHS Secretary. If
the breach involves data of more than 500 individuals, then the rule states
that the covered entities, business associates, and individuals should notify
the affected individuals, the HHS Secretary, and publish it in a public
media. HITECH Act also dramatically strengthened the enforcement rule by
increasing the fine levels and making the business associates and
subcontractors equally accountable for any HIPAA violations.
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HIPAA
Some of the major changes enforced by the HITECH Act 2009 to HIPAA are
as follows:
1. It is through the HITECH Act that the business associates of the covered
entities have come under the purview of the HIPAA and are accountable
for any violations of HIPAA.
2. HITECH Act implemented the breach notification rule explained above.
3. HITECH Act also set forth stage 1 and stage 2 requirements of

meaningful use of EHR. Unless and until any eligible healthcare
providers or entities meet all the required criteria for meaningful use of
EHR, mere adoption of EHR in their healthcare system would not qualify
them for the stimulus money under the EHR incentive program.
4. HITECH increased the civil and criminal penalties for violations of the
HIPAA rules.
Activity - HIPAA
A. List down at least five safeguards that are being taken to protect the
sensitive medical information in your organization.
1. Five administrative safeguards.
2. Five physical safeguards.
3. Five technical safeguards.
B. Formulate a plan in order to fortify the existing security plans and

procedures that are in place in your organization along with the
rationale for the same.
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HIPAA
Fig 8.10: Timeline for HIPAA Compliance
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HIPAA
8.15 WHO NEEDS TO COMPLY TO HIPAA?
Prior to the HITECH Act 2009, only the covered entities, that is, healthcare
providers, healthcare clearing house, and health plan came under the
purview of HIPAA. With the inclusion of HITECH Act 2009 into HIPAA,
business associates as well as subcontractors were also subjected to be
compliant with HIPAA and maintain the same level of confidentiality and
security as the covered entities.
Under HITECH Act, business associates as well as subcontractors were also

required to comply with the data breach notification and routine privacy
and security analysis and maintenance along with covered entities.
Every provider or healthcare facility, small or big, was now directly liable
for HIPAA violations and needed to take appropriate steps to prevent any
incident of data breach. Business associate agreements/contracts
underwent a great deal of modifications requiring business associates to
obtain business associate agreements (BAAs) from their subcontractors
and to take reasonable steps to prevent the breach or terminate the
contract in the event of any HIPAA violation by the subcontractor.
HIPAA compliance is an ongoing process and periodic risk analysis and

management needs to be performed in order to attain the same. This
periodic risk analysis needs to be performed by the privacy and security
officers and necessary steps needs to be taken to mitigate any risks that
may have dire consequences in the future.
Covered Entity (CE):
The administrative simplification and privacy rule of HIPAA states that any
entity that directly handles the protected health information is a covered
entity.
Covered entity under the HIPAA law can be any of the below-mentioned
three types of entities:
1. Healthcare providers who electronically transmit any protected health

information.
2. Healthcare clearing house.
3. Health plan.
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HIPAA
If any covered entity outsources its healthcare functions to a business

associate, the covered entity must have a written business associate
agreement that defines the scope of work of the business associate and the
rules and regulations the business associate must comply with in order to
protect the privacy and security of protected health information.
Healthcare providers:
Healthcare provider is any individual or organization who furnishes, bills, or

is paid for healthcare in the normal course of business. All health care
providers are NOT covered entity. A healthcare provider is termed as a
covered entity only if it transmits any protected health information
electronically in connection with a transaction. The transmission of the
electronic information can be directly or through a business associate.
There are certain healthcare providers which are not covered entity. For
example, a social worker involved in the healthcare of the patients but
does not perform any standard electronic transactions is a healthcare
provider but not a covered entity. Similarly, a pharmaceutical company
providing support and guidance to doctors is a healthcare provider, but if it
does not transmits any protected health information, it does not come
under the definition of covered entity.
Examples of healthcare providers are physicians, clinics, hospitals,

pharmacies, etc.
Healthcare clearing house:
Healthcare clearing house is any public or private entity that either process
or facilitate the processing of electronic protected health information
received in a nonstandard format or data content into standard format or
data content or electronic protected health information received in a
standard format or data content into a nonstandard format or data content
for various covered entities.
Examples of healthcare clearing house are Navicure, Ingenix, FusionEDI,

etc.
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HIPAA
Health plan:
Health plan is any individual or group plan or combination of both that

provides or pays for the cost of medical care.
Examples of health plan are health maintenance organization, Medicare,

Medicaid, etc.
8.16 BUSINESS ASSOCIATE (BA):
Business associate is any person or entity who performs certain functions

or activities involving use or disclosure of protected health information on
behalf of a covered entity but is not part of the covered entity's
workforce.
Some of the business associates functions and activities are claims

processing, transcription, billing, coding, data analysis and management,
quality assurance and management, etc.
Few examples of business associates are:
• An independent medical biller, coder, or transcriptionist that provides

billing, coding, or transcription services to a physician or a hospital.
• A lawyer whose services to a health plan involve access to protected

health information.
• A third party administrator who assists a health plan to process claims.
Business Associate Agreement (BAA):
Business Associate Agreement is the service agreement of a covered entity

with a business associate. It is mandatory under HIPAA that every covered
entity which utilizes the services of a business associate to perform any
functions or activities involving use or disclosure of protected health
information should enter into a written agreement. This agreement is
known as Business Associate Agreement (BAA) or Business Associate
Contract (BAC).
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HIPAA
A properly executed business associate agreement (BAA) should address at

the least the following points:
• It should specify the administrative, physical, and technical safeguards

put in place by the business associate to prevent any kind of data
misuse.
• It should mention the permitted uses and disclosures of the protected

health information by the business associate as required by the contract
or as required by the law.
• The BAA should cite that in the event of any data breach it will be
immediately notify the covered entity and initiate necessary steps to
contain the data breach.
• The agreement should also mention an unconditional termination of the

contract by the covered entity in case the covered entity is suspicious of
any data breach or possible misuse of ePHI by the business associate.
• The BAA should be executed in such a manner that each and every
person handling the protected health information is accountable for any
misconduct.
• BAA should also clearly delineate the responsibilities of the business

associate of proper handover or disposal of hardware and software
containing ePHI in case of contract termination.
Subcontractor or Independent contractor:
In many cases due to increased work load or short turn-around-time, the

business associates need to outsource work to a different vendor.
These vendors are known as subcontractor or subvendor or independent
contractor. In a sense, a subcontractor is a business associate of a
business associate, hence all the rules and regulations of the business
associate are applicable to the subcontractor as well.
The BA should sign a BAA with the subcontractor and inform the
subcontractor of all the rules and regulations that needs to be followed for
proper compliance of HIPAA. The BA should also send the subcontractor a
due diligence questionnaire to comply with the HIPAA.
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HIPAA
Chain of Trust (COT) Agreements:
Consider the case of a healthcare facility, Wellbeing Hospital, which due to

shortage of staff outsources its medical transcription, medical billing, and
medical coding work to a company named Stat Transcription which
performs some of the work but owing to short turn-around- time of work
set by the Wellbeing Hospital, Stat Transcription also contracts some of the
work to another company called Accurate Services.
In the above example, Wellbeing Hospital is the covered entity and Stat
Transcription is its business associate and they both have to document a
written business associate agreement for the service. Stat Transcription
outsources work to Accurate Services, hence, Accurate Services is the
subcontractor. They both also need to have a written business associate
agreement in place same as the BAA between Wellbeing Hospital and Stat
Transcription.
A home-based medical transcriptionist, medical biller, or medical coder is

an independent contractor of the company that provides the work. This
company providing the work is the business associate of the hospital which
in turn is the covered entity. Hence a BAA needs to exist between the
covered entity (hospital) and the business associate (company) and
between the business associate (company) and the independent contractor
(medical transcriptionist, biller, or coder).
Chain of Trust (COT) Agreements are aggregate of all the business

associate agreements (BAAs) that exist right from the covered entity to
each and every entity that has had access to protected health information.
All the entities are required to provide protections comparable to those
provided by the covered entity, and that entity, in turn, require that other
entities with which it shares the data satisfy the same requirements.
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HIPAA
8.17 HIPAA - INDIAN HOSPITALS AND HEALTHCARE BPOS

AND KPOS:
With respect to Indian perspective about compliance of HIPAA, it is still a

grey area and is being widely debated with the enforcement of final HIPAA
Omnibus rule on September 23, 2014. Most of the healthcare organizations
in US vastly depend on offshore vendors across the globe, preferably India,
for performing numerous healthcare-related services, including insurance-
related services, medical transcription, medical billing, medical coding,
radiology services, and clinical decision support. This extensive list of
offshore vendors according to the HIPAA definition fall into the category of
business associate (BA), therefore, legally all the implications of a business
associate as defined by the HIPAA-HITECH act should apply to these
vendors. Here is where many experts differ in their opinions, leaving a
HIPAA- compliance sword hanging over the necks of the vendors.
Some experts believe that the offshore vendors fall into the business
associate (BA) definition and should follow all the rules and regulations to
be HIPAA compliant as for the covered entity (CE), but some experts are of
the view that in the absence of any mention of an offshore vendor located
outside the U.S. it is unclear if the U.S. Department of Health and Human
Services has any legal right to take any action against an offshore
contractor, and even if the HHS' Office for Civil Rights did choose to pursue
action against an offshore BA, does HIPAA provide for any such
investigation to be carried out on foreign land.
What is more comforting that even though in the wake of this debate the
unanimous decision of all the experts of the healthcare industry is
something like the famous quote "Better safe than sorry." Each and
every healthcare security officer, implies that all the offshore vendors
should show voluntary compliance of HIPAA comparable to the covered
entity to avoid any legal hassles in the future. This voluntary compliance of
HIPAA can be achieved by performing regular security risk analysis and
management either by employing privacy and security officers or
outsourcing the work of security risk analysis and management to a third
party. If an offshoring organization in India is fully HIPAA compliant, it
would not only save the organization from any unforeseen incident in the
future but also project a creditworthy image among the business groups.
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HIPAA
Indian Hospitals:
In the absence of any detailed mandatory security and privacy laws in the
hospitals in India except for a few guidelines set by the Medical Council of
India (MCI), the onus of compliance lies on the individual organization.
Indian hospitals in a bid to achieve international standards in order to
increase their medical tourism business from US as well as other Western
and European countries are trying to implement HIPAA-certified softwares
and hardwares.
With the enormous rise in the healthcare costs in the western countries
especially U.S. and U.K., thousands of patients are looking to opt for
healthcare services in other countries which would not burn a hole in their
pocket and at the same time provide them with high- quality medical
services. This is known as medical tourism. The Indian medical tourism
industry is expected to reach $6 billion (around Rs. 36,000 crores) by
2018, with the number of people arriving in the country for medical
treatment set to double over the next four years, according to a report by
Punjab Haryana Delhi (PHD) Chamber of Commerce and Industry.
The patients traveling from U.S. to India for medical care need to follow
certain guidelines laid by American Medical Association (AMA) to facilitate
smooth healthcare services. Some of the main highlights of the guidelines
are that the facility should be accredited (which is the main reason why
several hospitals in India are now vying for the National Accreditation
Board for Hospitals & Healthcare Providers (NABH) and National
Accreditation Board For Testing and Calibration Laboratories (NABL)
accreditation, Quality Council of India as it is accepted by the ISQUa,
International Society for Quality Assurance in Healthcare) and the handling
and transfer of the medical records should be according to the HIPAA
guidelines. Owing to all these factors and the general awareness in the
minds of local patients about the privacy of their medical records, hospitals
in India are slowly and steadily moving towards adopting HIPAA
standards.
In India, since compliance-related initiatives are mostly voluntary, the

hospitals pick software solutions that are complaint to international
standards and are closest to their requirement, which means that there is
no uniformity.
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HIPAA
Indian healthcare BPOs and KPOs:
Indian healthcare BPOs and KPOs are also trying to implement various
measures in terms of administrative, physical, and technical securities in
order to comply with HIPAA. The main intention behind doing this is to
increase the flow of the business from Western and European countries.
If an Indian healthcare BPOs and KPOs is HIPAA compliant, it would

undoubtedly be the preferred choice among the US healthcare industry to
outsource the work due to the hefty civil and criminal penalties imposed by
the HITECH act 2009 on covered entities in case of any data breach. On
the other hand if an offshoring organization has the required skill set and is
cost effective but does not meet the HIPAA criteria, it would deter the US
healthcare industry to consider it as a vendor.
There are certain questions Indian healthcare BPOs and KPOs should
always be prepared with respect to the HIPAA compliance when dealing
with a covered entity. This would not only help in creating a good
impression in front of the covered entity but also go on to suggest how
serious your organization is when it comes to the matter concerned with
the security and privacy of protected health information. Mentioned below
is a shortlist of twelve questions every business associate (healthcare BPOs
and KPOs) should be able to answer.
Twelve questions for business associate (healthcare BPOs and

KPOs):
1. Does your organization have proper business associate agreement

(BAA) with the respective covered entity and business associate?
2. Is there a full-time privacy and security officer or consultant on your

organization's payroll?
3. Are all the softwares and hardwares used by your organization HIPAA
certified? If not, provide the rationale.
4. Does your organization provide routine security risk analysis and risk
management?
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HIPAA
5. Are all the employees of your organization regularly trained and aware
of HIPAA privacy and security regulations?
6. Does your organization have all the required privacy and security
policies and procedures in place in order to achieve HIPAA?
7. What are the measures taken by your organization to ensure that use or
disclosure of PHI to the employees are set such that to only effectively
perform their job duties?
8. In case of an employee violating HIPAA law, what is your sanctioning

policy?
9. Does your organization have data breach notification policy?
10.Does your organization have proper disposing of PHI policy?
11.Have all the employees understood signed the nondisclosure agreement

(NDA)?
12.What are your official policy regarding disposing of computers

containing hardwares and softwares which contains PHI?
Who does not qualify as a business associate?
Although over the time, HIPAA has brought most of the individual and
entities involved in the healthcare services under its wings, there are still
some exceptions on whom HIPAA does not apply. These employees while
working in the healthcare system does not come in direct contact of the
protected health information during the course of their job responsibilities
and the work they perform does not require the use or disclosure of the
protected health information. Hence the creation of a business associate
agreement for those employees is not necessary.
However, it cannot be ruled out that as employees they NEVER come in

contact with any PHI but whatever information they encounter are limited
in nature or insignificant and cannot be prevented in order to effectively
perform the job duties, therefore, it is permitted by the HIPAA rule.
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HIPAA
Some of the examples of employees or entities that do not qualify as a

business associate are janitorial services, plumbers, electricians, courier
companies, etc.
Fig 8.11: Identification of a business associate (BA)
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HIPAA
8.18 HIPAA CERTIFIED VERSUS HIPAA COMPLIANT:
Are you HIPAA certified AND is you organization HIPAA compliant?
A very important point to note is that an individual can be HIPAA certified

(though there is no officially sanctioned HIPAA certification) but an
organization/institution has to be HIPAA compliant. Some of the individual
HIPAA certifications offered by private institutions are as follows:
Certified in Healthcare Privacy Compliance (CHPC) ®

Certified HIPAA Privacy Security Expert (CHPSE) ®
Certified HIPAA Security Expert (CHSE) ®
Certified HIPAA Privacy Expert (CHPE) ®
Certified HIPAA Privacy Associate (CHPA) ®
Softwares (EHR, medical billing and coding software, etc.) have to be

HIPAA certified if they are being used in a medical facility or by covered
entity, but mere integration of that software into the existing infrastructure
of the medical facility or the covered entity does not make the institution
HIPAA compliant. The covered entity has to put in place specific policies
and procedures which will in turn make it a HIPAA-compliant organization.
Although generally the difference between certified and compliant would

not sound significant enough for anyone to be bothered, but in reality there
exists a vast difference between the two. HIPAA certification versus
compliance is another aspect of HIPAA which has been highly discussed
and much confused. As soon as the word "certification" comes into picture,
healthcare entities are all ears. HIPAA certification is optional, but
HIPAA Compliance is mandatory.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA)

promulgated by the Department of Health and Human Services (HHS) and
the Office of Civil Rights (OCR) does not mandate any certification
required by law. It only emphasizes on HIPAA awareness. The organization
needs to be HIPAA complaint.
Excerpt from http://www.hhs.gov/ocr/privacy/hipaa/understanding/

coveredentities/ misleadingmarketing.html
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HIPAA
The HHS and OCR do not endorse any private consultants' or education
providers' seminars, materials or systems, and do not certify any persons
or products as "HIPAA compliant." The Privacy Rule does not require
attendance at any specific seminars. All of OCR's materials are available
free on this web site.
As mentioned above, the governing body of HIPAA does not recognize any
private institutions, consultants, seminars, or systems as HIPAA compliant.
HIPAA compliance needs to be achieved at the organizational level. Due to
the intricacies of the HIPAA law, many organizations opt for different types
of HIPAA certification from an outside expert agency which would make it
easy for the organization to train its employee and draft the required
policies and procedures to be put in place in order to be HIPAA compliant.
Once HIPAA compliance is attained by an organization, the buck does not
stop there. HIPAA compliance is not a one-time event, the organization has
to continuously on a periodic basis conduct compliance audit due to
constant changes in the business environment and HIPAA laws.
The inclusion of HIPAA transactions intends to reduce

administrative costs, but to do so, medical practices will need to
strengthen their revenue cycle management processes.
The healthcare industry is constantly striving to prevent fraud and abuse

within the system, and emphasize compliance and accuracy. Revenue cycle
management (RCM), the process that include claims management
processing, payment, and revenue generation, is a hospitals first line of
defense against these issues.
The HIPAA Security Rule, which was enacted on April 14, 2001, specifically
focuses on the safeguarding of electronic protected health information.
HIPAA started because of congressional concern about the portability and
continuity of health coverage. Congress passed legislature, “In order to
increase the efficiency, effectiveness, and cost savings through the use of
electronic data interchange in the healthcare industry,”
HIPAA “requires all healthcare providers, healthcare clearinghouses, and

health plans to implement and utilize standardized formats when
transmitting electronic data.” The inclusion of HIPAA transactions intends to
reduce administrative costs, but to do so, medical practices will need to
strengthen their RCM processes.
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HIPAA
The RCM process starts with patient scheduling. The key to this step is in
gathering the most vital patient information as possible. Medical practices
should ensure that any protected health information (PHI) is stored and
catalogued appropriately. As required by the HIPAA law, practices must
“Identify assets and information systems that create, receive, transmit, or
maintain” PHI. Hardware in which PHI is stored or shared must be
catalogued as required.
In addition to identifying these devices, a practice should have hardware

and software firewalls in place and should maintain updates to these
programs as needed. Data encryption is also an important way for a
practice to remain HIPAA compliant within its RCM process. The following
are examples of information that must be encrypted to assure HIPAA
compliance:
• Billing information
• Case management data
• Lab and clinical data
• Patient reports and transcripts
• Emails between patients and doctors, and between referral doctors
Once the patient is scheduled and appears for their appointment, medical
documentation must take place. Maintaining clear and detailed patient files
is an important part of a practice’s RCM. Without well-maintained
documentation, services rendered to a patient may come into doubt as well
as payments received. To prevent missing information and to remain HIPAA
compliant, a practice should put a written set of standards in place to
maintain accurate documentation.
A practice should then run a risk assessment of these standards and

practices to confirm that they “are reasonable and appropriate to provide
adequate protection against reasonably anticipated threats or hazards to
the confidentiality, integrity, or availability” of PHI. If the risk assessment
confirms the suitability of the standards, then they should be implemented.
After the patient’s medical data is recorded and the services are rendered,
it’s time for a provider to be reimbursed. Yet, often claims can be denied,
and bills go unpaid. To prevent this, a practice should implement additional
standards to prevent revenue loss.
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HIPAA
An example of revenue loss due to denied claims isn’t difficult to find, and
each one leaves unhappy customers in its wake. In New York, a health
insurance subcontractor allegedly mishandled the protected health
information (PHI) data of approximately 500 patients, causing denial
letters to be sent to the wrong members. The resolution required additional
notification to be sent and cost valuable company time and money.
8.19 SUMMARY
HIPAA stands for The Health Insurance Portability and Accountability Act of
1996. HIPAA was enacted by the 104th United States Congress and signed
by President Bill Clinton in 1996.
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is

usually made up of five subsections. These subsections are also known as
titles and represented as title I, title II, title III, title IV, and title V. All the
five titles of HIPAA which are explained above usually can be categorized
into two major divisions, that is, (1) administrative simplification and
privacy which takes care of the accountability part of HIPAA and (2)
insurance reform and tax-related provisions which takes care of the
portability and revenue offset part of HIPAA.
Administrative simplification and privacy part of HIPAA is further divided

into six subdivisions, viz, electronic transactions rule, code sets rule,
unique identifiers rule, privacy rule, security rule, and enforcement rule.
There are two types of code sets, viz, medical code sets and non-medical
code sets.
Security rule encompasses three types of security safeguards to maintain

the confidentiality of the electronic protected health information (ePHI) in
any healthcare system. The three basic safeguards are administrative
safeguards, physical safeguards, and technical safeguards.
Violation of HIPAA laws by covered entities may lead to legal prosecution,

monetary penalties, and/or prison time.
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HIPAA
HIPAA compliance is required by the covered entities (healthcare providers,

healthcare clearing house, and health plans), business associates, and
subcontractors.
Business Associate Agreement is the service agreement of a covered entity

with a business associate. Chain of Trust (COT) Agreements are aggregate
of all the business associate agreements (BAAs).
An individual can be HIPAA certified (though there is no officially

sanctioned HIPAA certification) but an organization/institution has to be
HIPAA compliant. Mere integration of a HIPAA certified software into the
infrastructure of the medical facility or the covered entity does not make
the institution HIPAA compliant.
HIPAA stands for The Health Insurance Portability and Accountability Act
of 1996.
Covered entity is any entity that directly handles the protected health
information of any individual.
Healthcare clearing house is any public or private entity that either

process or facilitate the processing of electronic protected health
information received in a nonstandard format or data content into standard
format or data content or electronic protected health information received
in a standard format or data content into a nonstandard format or data
content for various covered entities.
Health plan is any individual or group plan or combination of both that

provides or pays for the cost of medical care.
Business associate is any person or entity who performs certain

functions or activities involving use or disclosure of protected health
information on behalf of a covered entity but is not part of the covered
entity's workforce.
Business Associate Agreement is the service agreement of a covered

entity with a business associate.
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HIPAA
PHSA US Public Health Service Act of 1944
ERISA US Employee Retirement Income Security Act of 1974
IRC US Internal Revenue Code
COBRA US The Consolidated Omnibus Budget Reconciliation Act of 1985
EDI Electronic data interchange
ASC Accredited Standards Committee
NCPDP National Council for Prescription Drug Programs
ICD-10 International Classification of Diseases
HCPCS Health Care Procedure Coding System NDC National Drug Codes
EIN Employer Identification Number
FEIN Federal Employer Identification Number
TAN Tax Deduction Account Number
NPI National Provider Identifier
CMS The Centers for Medicare & Medicaid Services
OCR Office for Civil Rights
CCTV Closed-circuit television
HITECH Health Information Technology for Economic and Clinical Health

Act
CE Covered entity
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HIPAA
BA Business associate
BAA Business associate agreement
NDA Nondisclosure agreement
NABH National Accreditation Board for Hospitals & Healthcare Providers
NABL National Accreditation Board For Testing and Calibration

Laboratories
1. Give a brief description about HIPAA?
2. Explain in detail the administrative simplification and privacy &

insurance reform and tax-related provisions of HIPAA?
3. What are the functions of administrative simplification and privacy?
4. Define security rule and types of safeguards?
5. Give any five requirements of administrative safeguard?
6. Give any five requirements of physical safeguard?
7. Give any five requirements of technical safeguard?
8. What are the major changes brought about by HITECH Act?
9. Describe briefly covered entity?
10.Explain BA and BAA?
11.Distinguish between HIPAA certified and HIPAA compliant.
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HIPAA

• HITECH
• HIPAA
• BAA
• NABH
• NABL
• HCPCS
• CMS
1. The Health Insurance Portability and Accountability Act of 1996 (HIPAA)

promulgated by the Department of Health and Human Services (HHS)
and the Office of Civil Rights (OCR) does mandate any certification
required by laws.
a) True
b) False
2. If a person working for XYZ Pvt. Ltd. who is covered under a specific
individual insurance plan or group insurance plan changes his
employment and moves to a different company ABC Pvt. Ltd. which may
be either in the same state or a different state within the country will be
able to maintain is insurance coverage on an as-it-is basis. Whereas
prior to the enactment of HIPAA whenever an individual had to switch
from one company to another the continuation of the insurance
coverage had to be at the behest of the insurance company.
This scenario relates to which subsection of HIPAA?
a) Title I
b) Title II
c) Title III
d) None of them
3. A person or entity who performs certain functions or activities involving

use or disclosure of protected health information on behalf of a covered
entity but is not part of the covered entity’s workforce is best known as:
a) Business Associate
b) Project Manager
c) Project Intern
d) None of them
418
HIPAA
4. Violation of HIPAA laws by covered entities may lead to legal

prosecution, monetary penalties, and/or prison time.
a) True
b) False
5. Mere integration of a HIPAA certified software into the infrastructure of

the medical facility or the covered entity does not make the institution
HIPAA compliant.
a) True
b) False
[Answers-1(b), 2(a), 3(a), 4 (a), 5 (a)]
419
HIPAA
References
http://en.wikipedia.org/wiki/
Health_Insurance_Portability_and_Accountability_Act
http://journal.ahima.org/2013/04/12/a-decade-of-hipaa/
http://dhmh.maryland.gov/SitePages/Home.aspx
http://www.hhs.gov/ocr/privacy/hipaa/administrative/statute/
http://www.healthinfolaw.org/federal-law/HIPAA
http://www.gatlineducation.com/hipaademo
http://www.research.ucsf.edu/chr/HIPAA/chrHIPAAphi.asp#Definition
h t t p : / / w w w. i n t e g ra t i o n . s a m h s a . g o v / o p e ra t i o n s -a d m i n i s t ra t i o n /
Business_Associate_and_QSO_Agreement_Flow_Charts.pdf
http://www.hhs.gov/ocr/privacy/hipaa/administrative/securityrule/
security101.pdf http://www.hhs.gov/ocr/privacy/hipaa/enforcement/
process/index.html
420
HIPAA
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
421
HEALTHCARE OUTSOURCING AND OFFSHORING
Chapter 9
Healthcare Outsourcing And Offshoring
CHAPTER OBJECTIVES:
• Outsourcing
• Offshoring
• Difference between Outsourcing and Offshoring
• Offshore Outsourcing
• What and Why of Healthcare Offshore Outsourcing?
• Determinant Key Factors of Healthcare Offshore Outsourcing.
• Ideal data security feature of an Indian healthcare KPO.
• Advantages and Disadvantages of Offshore Outsourcing
• India's position in Offshore Outsourcing.
• Indian Advantage in Global Healthcare Outsourcing.
• Comparison of India against China and Philippines.
422
STRUCTURE:
9.1 Introduction
9.2 Outsourcing
9.3 Offshoring
9.4 Difference between Outsourcing and Offshoring
9.5 What and Why of Healthcare Offshore Outsourcing?
9.6 Determinant Key Factors of Healthcare Offshore Outsourcing.

• Cost Effective
• Faster Turn-Around-Time
• Labor Flexibility
• Focus on Core Competency
• Expertise
• Globalization
• Scalability
• Data Security
9.7 Ideal data security feature of an Indian healthcare KPO.
9.8 Advantages and Disadvantages of Offshore Outsourcing.
9.9 India's position in Offshore Outsourcing.
9.10 Indian Advantage in Global Healthcare Outsourcing.
9.11 Comparison of India against China and Philippines.
9.12 Summary
423
9.1 INTRODUCTION
"Made in China" "Made in Thailand" “Made in Vietnam"
After seeing the "Made in China" label on the brand new TV bought from
the South Korean company, LG Corporation or the "Made in Thailand" label
on the brand new DSLR camera bought from the Japanese company, Sony
Corporation or the "Made in Vietnam" label on the new laser printer bought
from the American Multinational Company, Hewlett-Packard, this small tag
is more than enough to leave any person dumbfounded and flummoxed.
A buyer incognizant of the outsourcing industry may be left aghast and

might even feel cheated as well, thinking that he had paid for the oranges
and instead got the lemons, but that is not the case. These companies
ensure that the quality of the product is not hampered by setting up a
stringent quality monitoring process and quality audits and ascertain that
the products which are manufactured from the offshore destinations are at
par with the parent company's standards. For a newbie, the fundamental
question still exists.
Why do the companies get their products or services from these

offshore destinations?
The reason is pretty simple, these companies get their products or services
from other countries to save time and money. It sometimes becomes
more quick and affordable to get goods manufactured from another
company with comparative advantages rather than producing it in-house.
424
Fig 9.1: Outsourcing
9.2 OUTSOURCING
According to the International Association of Outsourcing

Professionals (IAOP), an association which advocates outsourcing,
the outsourcing industry has reached to the tune of $6 trillion
globally. (www.iaop.org)
Outsourcing, a term coined in the year 1989, is the process of contracting

out a job, operation, or process to another company. Outsourcing can be
both foreign and domestic, that is, the contracting can be done to a
company which is within the same country or another country. In order to
flourish in the existing market where there is stiff competition, every
facility is vying for a better position over other contenders. Outsourcing can
provide that cutting edge to the facilities. Healthcare facilities given their
multitude of services will be best served by outsourcing their secondary
activities to an offshore destination.
425
Fig 9.2: Outsourcing Percentage by Industry
Image Source Wharton School & NY University
426
Initially, it only involved IT-related services which could be performed with

the help of the Internet, but soon, on account of its advantages took a
wide range of services under its ambit such as customer support, technical
services, human resource, knowledge process, research and development,
legal, healthcare, etc. Outsourcing was soon initiated at different levels
within companies and became a household term in the United States
during the 21st century when companies started contracting their in-house
job, operation, or process to third party organizations. As of now, it has
become a common practice in almost 70% of the business over the globe
to outsource. It has been observed that when applied judiciously through
proper study of cost and risk analysis outsourcing can prove to be a cost-
effective approach for hospitals. There are widely distinguished benefits of
outsourcing ranging from cost cutting, time saving, tapping expertise, labor
flexibility, etc.
All businesses big or small over the world are involved into some kind of
outsourcing process. They are currently involved in outsourcing some
process, receiving an outsourced process, or plan to do the same in the
near future. Some of the top industries in which carry out significant
outsourcing are information technology services, banking and insurance
services, manufacturing services, administrative services, etc.
9.3 OFFSHORING
Offshoring is the process of contracting out a job, operation, or process to

another company in a different country. If a company outsources all or
some of its business process to another country, it is termed as offshoring.
Generally, due to difference in the rules and regulations of different
countries, sometimes it becomes cost effective to get products
manufactured or services performed in another country, and in such cases,
companies may choose to outsource their work partly or wholly to the
other country.
427
9.4 DIFFERENCE BETWEEN OUTSOURCING AND

OFFSHORING
Generally speaking, outsourcing and offshoring is often used as they have

the same meaning in various contexts, that is, contracting the in-house
business process to another company which may or may not be in the host
country. Although in reality, there is a difference between these two
conflating words which look and sound almost identical to each other.
In order to understand outsourcing and offshoring in a simplified manner,

let us do some unwinding and go our basic question of Who and Where?
Ask these two questions:
1. Who is doing the work? (Host company OR another company)
If the answer to the first question is host company, then the work is done
in-house and is not outsourced and if the answer is another company, then
the work is outsourced.
2. Where is the work being done? (Host country OR another country)
If the answer to the second question is host country, then the work is done
onshore and if the answer is another country, then offshoring of the work is
done.
Fig 9.3: Outsourcing & Offshoring
428
The process of outsourcing and offshoring may or may not occur

simultaneously depending on the terms and conditions on which the job is
being sourced. Offshoring is oftentimes considered to be a subset of
outsourcing and specifically means sending business process or jobs out of
the country. With the tremendous increase in globalization and the
countries getting densely connected with each other, the line between
outsourcing and offshoring may eventually become more blurred.
For example, consider an institution like Welingkar's in Mumbai doing all its
back office process in-house through its own staff, this would be a normal
business process setting. Now, consider these three scenarios:
Scenario 1
A cost analysis study suggests that if the back office process which is being
done in-house by the Welingkar's staff is contracted to another company
based in Bangalore, it would be delivered faster and would be cheaper. The
management then decides to send the work to the Bangalore company.
This is known as outsourcing but not offshoring as the work is still being
performed within the same country (India).
Scenario 2
After a few years, another cost analysis study performed brings to the light
the fact that if the back office process which is being outsourced to the
Bangalore company is contracted to a company based in China, it would be
far more cheaper. The management now decides to send the work to the
company based in China. This is known as offshoring. In this case,
outsourcing and offshoring are occurring simultaneously as the work is
outsourced outside the host country (From India to China). This is also
called as offshore outsourcing.
Scenario 3
After reviewing the quality of the service delivered from China, it was
observed that although it was cheaper the quality was not at par with the
standards of Welingkar's. Hence, the institute decides that instead of
contracting the work to the Chinese company, they would open their own
branch in China to perform the back office process. In this way, they would
have more control over the whole operation. This is also known as
offshoring (since the work is performed in another country), but in this
instance, the work is not outsourced. Therefore, in this scenario
outsourcing and offshoring are not occurring simultaneously.
429
SCENARIO OUTSOURCING OFFSHORING
1 YES NO
2 YES YES
3 NO YES
Fig 9.4: Scenario Outsourcing & Offshoring
9.5 WHAT AND WHY OF HEALTHCARE OFFSHORE

OUTSOURCING?
During the 1990s, organizations in the United States started outsourcing

services which were not related to their core business. The intention at that
time was to cut cost and at the same time save time which will be utilized
to sharpen their core competency. These services usually involved
accounting and finance, healthcare, human resources, data processing,
etc. Hospitals and health insurance payers facing the perennial challenge of
labor shortage and delayed claim settlements jumped on the bandwagon,
almost everyone was outsourcing and everything was outsourced. There
were many healthcare services which started to be offshore outsourced
including but not limited to health claim processing, medical transcription,
medical coding, imaging services, laboratory services, healthcare IT,
insurance form filling, etc.
Offshore outsourcing soon became the Holy Grail of the United States and
European healthcare industry which in an attempt to save money and time
started to ride along the IT industry to outsource most of their non-core
healthcare processes to India. From every healthcare providers' viewpoint,
most of the offshore outsourcing decisions are generally explored for the
cost saving component and to deal with the challenge of the healthcare
professionals shortage, nevertheless, there are many other key factors
apart from the two mentioned above that play a definitive role in
determining the offshore outsourcing decision.
430
9.6 DETERMINANT KEY FACTORS OF HEALTHCARE

OFFSHORE OUTSOURCING
The eight key factors that impact the decision making of the healthcare
offshore outsourcing process are as follows:
1. Cost Effective
2. Faster Turn-Around-Time
3. Labor Flexibility
4. Focus on Core Competency
5. Expertise
6. Globalization
7. Scalability
8. Data Security
1. Cost Effective
Cost effectiveness was and is one of the prominent factors for healthcare
offshore outsourcing. Majority of the cost in a healthcare setting is tied to
its operational cost. According to several studies conducted on the cost
effectiveness of the healthcare offshore outsourcing, it was observed that
by outsourcing their administrative process hospitals would be able to save
almost 30% and in some cases even up to 40% of their operational cost.
431
Fig 9.5: Cost Advantage in Offshore Outsourcing
The main reason for this saving is that the salaries of the skilled
professionals to perform the job at hand tend to be higher in the developed
countries as compared to the skilled professionals in the developing
countries. This is because of the difference in the economies and the
availability of the talent pool. A collections agent in US is paid anywhere
between $2000 and $3000 while the same can be hired in India at $400 to
$500, which is a difference of about 5 to 6 times. Among hospital
administrators any opportunity to save on the running cost is always
cherished, therefore, offshore outsourcing was started by outsourcing the
administrative services to India.
Cost factor gave a significant boost to offshore outsourcing of the

healthcare services. However, experts caution that though cost analysis
plays a key factor it should not be considered as the ONLY factor to
outsource, as sometimes cheaper rate means a poor quality product or
service.
432
2. Faster Turn-Around-Time
Along with the cost, time is also an important driver for healthcare offshore
outsourcing. Timely documentation of medical report is very important to
have a steady and smooth reimbursement cycle. If there is a delay in the
medical documentation process, it will correspondingly affect coding,
billing, collections, etc., thereby creating a bottleneck.
Fig 9.6: Time Difference Advantage (India & US)
433
If a hospital in United States outsources its work to an offshore location

such as India, it gains on time. Since both these countries have
approximately 12-hour time difference, when it is night in the United
States, it is day in India and vice versa. The hospitals or insurance payers
in the United States send in the whole day's work at night when they leave
from work via the Internet to India. Since it is morning time in India, the
Indian KPOs (knowledge process outsourcing) download the work and
ensure that it is completed within 12 hours of their day time (while it is still
night in United States, factoring the 12-hour time difference).
This completed work is then sent back to the hospitals or insurance payers
in United States which they receive it first thing in the morning providing a
smooth handover in both directions. In this way, a work which would have
taken at least 24-hour turn-around-time if processed onshore in United
States gets delivered within 12-hour period.
3. Labor Flexibility
The number of transcriptionists in the U.S. has fallen from 350,000 in 1997
to 95,000 in 2010, according to the U.S. Department of Labor and experts
believe that the number is reducing at a rate of about 10% every year.
Every healthcare administrator or manager is aware of the continued

shortage of medical coders in United States. Some believe the gap
between the demand and supply side of the medical coders is around 30%
to 40%.
Offshore outsourcing provides a great deal of labor flexibility to the

developed countries. The volume of the work in the healthcare industry is
very inconsistent and can vary drastically from one day to another. The
work volume cannot be quantified accurately and has to be executed by
the staff at hand. Healthcare facilities have a fixed number of
administrative and clerical staff to take care of the day-to-day job duties
and a sudden increase in the work load would create enormous amount of
backlogs. At the same time, shortage of skilled administrative and clerical
staff in the Western countries compounds to the issue of backlogs. Offshore
outsourcing is the answer for this dreaded problem in the absence of any
other near-term solution. Asian countries, especially India, have a large
pool of skilled labor that could be tapped by the developed countries by
434
offshoring the work. This mitigates the issue of labor shortage in the host
country.
4. Focus on Core Competency
Maintenance of medical documentation has become far more important

and mandatory, more than ever, by the European and Western countries on
account of implementation of various stringent rules and regulations.
Oscillating between providing care to the patients and performing the
administrative duties of healthcare services can take a toll on the
healthcare professionals, which will in turn lead to inefficiency in their core
competency. For example doctors spending their precious time in medical
documentation, front-office spending time communicating between the
patient and insurance payer for claims adjudication process will eventually
have an adverse effect on the functioning of the healthcare practice.
Experts caution against involving the healthcare professionals in non-core

activities as this decision will turn out to be detrimental to the healthcare
of the patient. Offshore outsourcing the non-core activities to another
company, frees up the skilled and professional staff who can then focus on
their core competencies of providing improved quality of care to the
patients thereby increasing the overall efficiency of the healthcare practice.
5. Expertise
Better go without medicine than call in an unskilled physician.

(Anonymous)
Executing more and more business tasks in-house can be a smart and
economical management technique, but this technique may sometimes
back fire on the healthcare facility. If a healthcare practice delegates the
work of charge entry to its front-office staff, the work of medical report
generation to the physicians, and the work of the claims processing and
collections to the back-office staff, there is bound to be severe
repercussion.
435
The rationale behind it is that these people were delegated a task which is
not their core activity and definitely outside their skill set. In an effort to do
all the tasks in-house the management had assigned the task to its staff
outside their skill-set and the outcome was delay in the job turn-around-
time and poor quality job. Instead utilizing an expertise by offshore
outsourcing the job, the healthcare facility can benefit not only in terms of
quicker execution of the job but also perfection in the job. It will always be
beneficial to contract the work to an expert, the one who knows the ins
and outs of medical report generation, claims adjudication, accounts
receivable, etc. Offshore outsourcing benefits the healthcare facilities by
contracting tasks outside their skill-set to the readily available global talent
pool of experts, plus the quality work provided by the vendor acts as an
icing on the cake.
6. Globalization
Over the years, the widespread availability of the Internet has enabled
large firms to outsource their jobs seamlessly to low-cost developing
countries such as India. By offshore outsourcing the healthcare services,
these companies insulate themselves from the rising operational costs and
shortage of qualified manpower in the host country.
Certain multinationals such as Accenture and Capgemini have started their

own companies in several developing countries and have started offshoring
the jobs. Likewise, due to the easy accessibility of Internet by the
individuals in the developing countries, outsourcing of small projects is
done from all over the globe to these freelancers. Hence globalization too
plays a significantly important role in boosting the offshoring industry.
7. Scalability
Scalability is the ability of a system, network, or process to handle a

growing amount of work in a capable manner or its ability to be enlarged
to accommodate that growth.
Andre B. Bondi, 2000 (Characteristics of scalability and their impact on
performance).
436
The whole healthcare industry is reeling under the pressure of rising

operational costs. Perpetual evolution in the healthcare field continuously
stimulates the need to scale the existing healthcare IT infrastructure in
order to keep up with the peers and be compliant with the constantly
changing regulatory guidelines. This requires steady influx of capital for
hardware and software procurement and maintenance.
Outsourcing absolves the host company of any responsibility of frequent

capital investment. The KPO company takes care of all the hardware and
software purchases and upgrades required for the process.
New and updated data solutions not only places the healthcare practice at
a vantage point with respect to its peers but also gives the practice a solid
business insight needed to make any informed decision. Offshore
outsourcing fortifies healthcare practices to concentrate on their core
business without being perturbed by the thought of having to use outdated
data solutions by taking care of the healthcare information management
solutions.
8. Data Security
This is the only factor which previously acted as an impediment to the

outsourcing process but is now giving fresh impetus to the offshore
outsourcing industry. The reluctance to outsource previously was based on
the argument that it is unsafe to send the protected health information
across the globe, which was certainly warranted. Several reports transpired
citing violation of confidentiality agreement. During the initial phase of
embarking on the outsourcing journey, the healthcare industry faced
several backlashes with respect to the breach of protected health
information.
One of the frightful examples of the data breach came into light in the year
2003. Below is the excerpt from an article published by Davino, Margaret.
"Assessing Privacy Risk in Outsourcing." Journal of AHIMA 75, No. 3 (March
2004): 42-46.
The case in which the Pakistani subcontractor threatened to release patient

information illustrates how important it is for providers to choose vendors
carefully to complete due diligence with regard to chains of subcontracting
437
and to protect themselves contractually from liability for acts of the vendor
or the vendor's subcontractors.
The above story started in fall 2003 when the University of California at
San Francisco Medical Center (UCSF) forwarded a portion of its
transcription work to Transcription Stat, a company it had used for two
decades. Transcription Stat employs 15 subcontractors throughout the US
to handle the large volume of files it receives daily from UCSF. One of
those subcontractors, a woman in Florida, further subcontracted the work
to a man in Texas named Tom Spires.
Allegedly unbeknownst to the other parties, Spires also employed

subcontractors, one of whom was a Pakistani woman, Lubna Baloch. On
October 7, 2003, UCSF received an e- mail from Baloch stating that Spires
owed her money and would not respond to her. Baloch demanded that
UCSF require Spires to pay her. If not paid, Baloch wrote, she would
"expose all the voice files and patient records of UCSF on the Internet." To
show that she was serious, Baloch attached dictation reports from UCSF
physicians regarding two patients.
One of the contracted parties involved ultimately paid Baloch, who then
retracted her threat. Although the incident ended without a breach of
patient privacy, the situation dramatically illustrated the risks for parties
involved at all points in the chain.
Incidents such as these forced hospitals and insurance payers in the

Western and European countries to review their outsourcing policies with
respect to the data security. In order to allay the concern of data security
by the host country, the Indian KPOs started to buckle themselves up by
creating more awareness about the confidentiality of PHI among their
employees through continuous training and engaging all the technological
help required for the security of the PHI. Restructuring of security policies
by the Indian KPOs overtime have changed the perspective of the
companies over the globe who are now more than ready to offshore the
work after scrutinizing the strict administrative, physical, and security
safeguards followed in the destination country.
438
9.7 DATA SECURITY FEATURE OF AN INDIAN HEALTHCARE

KPO
We will try to put some light on the ideal data security feature of an Indian
healthcare KPOs. Listed below are some of the features that should be
followed by all the Indian healthcare KPOs to protect the data:
i. Employing advanced security features for secure file transfer protocol

with use of at least 256-bit encryption technology for file transfer
protocol (FTP) traffic and Emails.
ii. Conducting comprehensive training on HIPAA privacy and security laws

for new employees and refresher course for the existing employees.
iii. Setting up biometric-based or card-based system to restrict

unauthorized access in the restricted area.
iv. Removing or securing all USB drives, CD-ROM or DVD-ROM drives, and
any other ports which can be insidiously used to transfer confidential
data.
v. Restricting use of personal Emails or Internet access for company

employees.
vi. Frisking to prohibit carrying any type of portable hard drive, pen drive,
or cellular phones into the working area.
vii.Maintenance of employee logs and invariably auditing the logs to detect

for any prying eyes.
viii.Constantly reviewing and updating the company security policies to be

in compliance with the regulatory agencies.
ix. Setting up of virtual machines like VMware so that the data is saved on
a secure server concurrently allowing the executive to perform the
delegated job without any issue.
x. Getting chain of agreements from all contractors and subcontractors

executed such as business associate agreement, non-disclosure
agreement, HIPAA compliance agreement, etc.
439
Fig 9.7: Key Factors of Healthcare Offshore Outsourcing
440
9.8 ADVANTAGES AND DISADVANTAGES OF OFFSHORE

OUTSOURCING
Every coin has two faces, likewise offshore outsourcing along with a
number of potential advantages has some disadvantages. Healthcare
facilities intending to offshore the services should not believe things as
they look or is said by the others. The need of one healthcare facility will
differ from the requirement of another facility, hence, every healthcare
facility needs to do its own resource analysis before taking a call on
offshoring. A plan has to be chalked out specifically pointing out the
offshoring advantages to the facility versus pointing out the offshoring
disadvantages. If the advantages outweigh the disadvantages, only then
the healthcare facility should go ahead and consider about offshore
outsourcing.
Advantages of Outsourcing
1. Increased Profitability: It is achieved through access to cheap

manpower, saving benefits paid to in-house full-time employee such as
sick leave, bonus, medical, insurance, etc., saving on the need to have a
full fledged human resource team to oversee the process of hiring and
managing the employees, savings on infrastructure, etc.)
2. Faster Turn-Around-Time: Usually, the offshoring is done to developing

countries that have a significant amount of time difference as compared
to the host country. In terms of India, there is nearly 12-hour time
difference. This time difference can act as an advantage to process the
work quicker.
3. Labor Flexibility and Expertise: Offshore outsourcing acts as a tool to

counteract the labor shortage in the host country by getting access to a
vast pool of skilled manpower that can be scaled on-demand and offers
a combination of affordability, flexibility and quality.
4. Zero Capital Investment: The host country with low or zero capital
investment can make use of the destination country's up-to-date
information technology infrastructure.
5. Focus on Core Competency: When a healthcare facility outsources work

to another company, along with financial benefits it benefits in terms of
441
unburdening its staff of secondary duties. The in-house staff can then
focus on their core competency to increase the efficiency of the
healthcare facility.
6. Better Quality: The destination countries performing the outsourcing

jobs usually are adept in these services. Due to the vast amount of
experience and expertise, the quality of the work is more superior. One
other factor that drives the quality performance is the minimum service
levels (usually 95% to 98% depending on the process) detailed in the
service level agreement (SLA) contract.
7. Improved Access: Typically, all healthcare BPOs and KPOs work shift
wise and are open 24 x 7 x 365. Therefore, it becomes easier to track
the progress of a particular job process anytime during the day or
night.
Disadvantages of Outsourcing
1. Loss of Total Control: This is one of the biggest disadvantages usually

voiced by the healthcare facilities. A feeling of loss of total control over
the work process prevails because the work is performed at an offshore
location.
2. Data Security: With all the security measures in place due to the lax
security policies in the destination countries of the vendor, there still
exist some incidents of data breaches once in a while. As privacy of the
data is of utmost importance data breaches can land the host healthcare
facility in soup, and hence, the concern over data security weakens the
argument of offshore outsourcing.
3. Quality Issues: The work of offshore outsourcing is usually based on

chain of subcontracting. If any vendor within that chain is selected
without evaluating properly or are not committed towards continuous
auditing, it will lead to poor quality. Since the healthcare facility do not
have control over the offshore company and cannot regulate the
selection and hiring process of the employees, sometimes quality is
affected and this leads to far more outcry.
442
4. Financial Dependence: One more disadvantage of offshore outsourcing

is that the healthcare facility indirectly becomes dependent on the
financial position of the vendor. If due to any reason, there is some
financial crisis at the vendor's end it will backfire on the healthcare
facility.
Benefits of RCM outsourcing are listed below:
Focus on Patient Care: Outsourcing Revenue Management Cycle to a

well-experienced partner will help healthcare providers keep tabs on
compliance rules and enable them to focus on proper patient care.
Continuously monitoring on RCM will only distract healthcare providers
from maintaining high standards of care distribution, and medical
diagnosis.
Manage Staff: Reliable RCM partner taking care of day- to- day RCM
activities like billing, reimbursements, registrations, and patient check-in/
check-out, the healthcare facility can reduce the burden on staff. Managing
with fewer staff members will allow providers to focus on their medical
practice and network with other professionals.
Timely Reimbursements: With professional RCM partner/billing agents

working round the clock for you, can ensure timely reimbursements. As
they do not handle any other medical functions, they only focus on
collecting and verifying all details of patient enrollment, checking on
insurance, documenting the diagnosis and treatment, and giving the
correct medical codes. When this all is done, then billing agents can
provide an exact picture of the dues comprehended at consistent intervals.
This helps healthcare providers have a complete look at their earnings in
real-time.
Fewer Interruptions in Cash Flows: RCM outsourcing partners are

equipped with software and hardware solutions to handle the huge amount
of billing. Once the expected documents are received from the providers,
medical billing is done, and all procedures like insurance verification and
AR collections are followed up within a day or two. This provides a huge
scope to improve cash flow.
443
Reduced Billing Errors: With well-trained staff and the latest technology
in hand, outsourcing RCM partner will never commit standard billing errors
like entering the incorrect name of the patient, and wrong CPT codes.
Complete error-free billing helps healthcare providers improve their
reputation.
Maintaining Regulatory Compliance: In-house billing may not provide

you with constant information on regulatory changes and compliance
issues. An outsourcing RCM partner will introduce administrative workflows
that guarantee compliance activities. A healthcare provider will not need to
worry about industry regulations, payer policies, and compliance
Improve Reimbursements – Having a stack on professional experts for

billing and coding helps improve reimbursement rate. An RCM outsourcing
partner can apply the correct coding and rules, resulting in better refunds.
Enhanced Monthly Cash Flow – Think of a situation, when your hospital

staff is on vacation; what will happen to your RCM process? RCM function
will be affected, as the claims have to wait until your staff returns and
works on it. Interruption in the billing process will affect timely
reimbursements and indirect cash flow in the healthcare facility.
Outsourcing to an RCM partner will ensure a steady revenue cycle and
enhance cash flow.
Account Receivables (A/R): An effective RCM partner helps healthcare

providers follow up AR settlements from insurance providers. Outsourcing
to an RCM partner who has an expert team of A/R specialists, working with
several insurance firms and are conversant with policy handling, can
ensure streamlined payment and outcomes.
Stronger Financial Performance: RCM outsourcing helps you obtain

payments that you are legally permitted to collect, leading to an increase
in revenues with the reduced overhead cost of in-house billing team
salaries, expenditure on office equipment and technology upgrades,
outsourcing.
Managing in-house RCM operations can be expensive, as it requires

committed employees. Shifting this operating cost to an outsourced RCM
partner can save your expenses, and time associated with boosting
profitability.
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Maintaining an in-house RCM operation requires the latest infrastructure

and resources, as well as technology and investment.
Wrapping up in short
As a healthcare provider or a decision-making authority, you might be

perfecting in an in-house Revenue Cycle Management Strategy, but by now
it should be clear that a successful Revenue Cycle Strategy is one that is
continuously evolving to meet the needs of a rapidly changing healthcare
environment. The benefits of outsourcing the RCM process can transform
and improve your financial health. It will also give you extra bandwidth to
focus more on your business – offering quality healthcare.
9.9 INDIA'S POSITION IN OFFSHORE OUTSOURCING
"I have decided to take advantage of outsourcing. My next novel will be

written by a couple of guys in Bangalore, India." (Thomas Eugene "Tom"
Robbins, American author)
Undoubtedly, India has done a spectacular job in occupying the premier

position in global healthcare outsourcing industry over the past decade. It
is the pioneer in providing healthcare outsourcing solutions to the
developed countries all around the world. Almost all companies, big or
small, are outsourcing one or the other process to India. Initially, the
process started with outsourcing of insurance data entry and medical
transcription but soon other process such as medical coding, medical
billing, collections, and healthcare IT solutions started to be outsourced to
India. The outsourcing industry is still growing at an exceptional rate and
according to the reports will continue to do so for the near term due to the
strong demand from companies in the Western and European Countries.
The main advantage of India has been through its transition from being a
cost effective outsourcing destination to the one that provides utmost
quality service with the support of its vast pool of educated and skilled
professionals. Alternatively, highest number of Indian-origin physicians
practicing in the English-speaking countries has significantly contributed to
the healthcare offshoring industry by reestablishing and developing their
Indian contacts.
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There are 125,500 physicians of Indian Origin working in the English

speaking Western world (USA, UK, Australia and Canada combined), with
the major constituent being from USA and UK. Between 10-30% of the
physicians working of in USA, UK, Canada and Australia have their roots in
India. (Source http://www.gapio.in)
The primary intention behind healthcare outsourcing of any facility is to be

able to invest more time, more money, and more human resources towards
better caring for the patients rather than being tied into the transactional
activities.
9.10 INDIAN ADVANTAGE IN GLOBAL HEALTHCARE

OUTSOURCING
The advantage for India in leading the global healthcare outsourcing

industry comes due to its,
• Cost Effectiveness
• Time zone advantage
• Vast amount of English-speaking population
• Technical Expertise
• High-quality services
• Indian-origin physicians in Western countries, etc.
Being the world's biggest democratic country, India has its own share of
challenges in terms of political instability, economic competitiveness, and
unorganized outsourcing industry. Political instability in India is one the
major deterring factor voiced by many MNC companies who have or are
planning to outsource healthcare processes to India. To be able to maintain
its premier position and continue to take major strides in the outsourcing
industry, India will have to overcome the immediate and future competitive
challenges lurking in the market.
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Fig 9.8: Top Outsourcing Destinations
Image Source www.tholons.com/nl_pdf/Whitepaper_December_2013.pdf
447
9.11 COMPARISON OF INDIA AGAINST CHINA AND

PHILIPPINES
Many other countries, especially China and Philippines, have emerged out
to provide the healthcare services, and of late, have started offering
services at rates equivalent to or even in some cases lower than India. This
leaves Indian vendors to distinguish them against its counterparts based
on sheer talent and quality of the service delivered if they intend to
continue to be in the global offshoring race. Otherwise in the not-so-
distant future, China which is in the head-to-head competition with India
will steadily take over the tag of being the most popular destination for
healthcare offshoring from India. Many Asian countries like China,
Philippines, Pakistan, etc., are developing their infrastructure, talent, and
skill in order to get the bigger share of the offshoring market. There
emerges out a cut-throat competition in the offshoring industry and only
those offering the best quality, good stability with respect to political and
financial scenario, competitive rate, on-demand scalability, and sound
infrastructure will prevail in the long run.
China and Philippines are slowly but certainly closing in on India. According
to a report presented by A.T. Kearney (a global management consulting
firm based in California, USA) on attractive destination for offshoring,
China and Philippines seem equally attractive as India for global
companies. China with its vast manpower pool and Philippines with its
cultural capability similar to the Western countries pose the biggest threat
to uncrowning India from its present rank of being the number 1 in global
offshore outsourcing.
Some of the biggest names of the healthcare outsourcing companies in

India which have contributed and are still contributing significantly to the
development of the industry are Wipro, Infosys BPO, TCS, IBM Daksh,
Accenture, Capgemini, Gebbs Healthcare, M*Modal, etc. These companies
provide a host of services related to healthcare BPO and KPO process and
have branches all over the world.
Irrespective of what the research and studies are to say, only time will tell
which country has unrelenting perseverance in the midst of the internal
political or financial chaos to remain focused on attaining the pinnacle of
the outsourcing industry?
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9.12 SUMMARY
Companies get their products or services from these offshore destinations

to save time and money.
According to the International Association of Outsourcing Professionals

(IAOP), an association which advocates outsourcing, the outsourcing
industry has reached to the tune of $6 trillion globally.
Outsourcing can be both foreign and domestic, that is, the contracting can
be done to a company which is within the same country or another country.
Healthcare services which are offshore outsourced include but are not
limited to health claim processing, medical transcription, medical coding,
imaging services, laboratory services, healthcare IT, insurance form filling,
etc.
The process of outsourcing and offshoring may or may not occur

simultaneously depending on the terms and conditions on which the job is
being sourced. Offshoring is oftentimes considered to be a subset of
outsourcing and specifically means sending business process or jobs out of
the country.
Determinant key factor that impact the decision making of the healthcare
offshore outsourcing process are as follows, cost effective, faster turn-
around-time, labor flexibility, focus on core competency, expertise,
globalization, scalability, and data security. Cost is one of the prominent
factors for healthcare offshore outsourcing.
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Offshore outsourcing provides a great deal of labor flexibility to the

developed countries. Outsourcing absolves the company of any
responsibility for capital investment in IT infrastructure.
Offshore outsourcing along with a number of potential advantages has

some disadvantages such as loss of control, data security and quality
issues, and financial dependence.
Indian-origin physicians practicing in the English-speaking countries have

significantly contributed to the healthcare offshoring industry.
India has done a spectacular job in occupying the premier position in global
healthcare outsourcing industry over the past decade. Advantage for India
in leading the global healthcare outsourcing industry has been due to its
cost effectiveness, time zone advantage, vast amount of English-speaking
population, technical expertise, high-quality services, and Indian- origin
physicians in western countries, etc.
Political instability in India is one the major deterring factor voiced by

many MNC companies who have or are planning to outsource healthcare
processes to India.
India is facing tough competition from China and Philippines in the global
outsourcing industry. According to a report presented by A.T. Kearney (a
global management consulting firm based in California, USA) on attractive
destination for offshoring, China and Philippines seem equally attractive as
India for global companies. China with its vast manpower pool and
Philippines with its cultural capability similar to the Western countries pose
the biggest threat to India.
450
Outsourcing, a term coined in the year 1989, is the process of contracting

out a job, operation, or process to another company.
Offshoring is the process of contracting out a job, operation, or process to

another company in a different country.
When the work is outsourced outside the host country, then outsourcing
and offshoring occur simultaneously. This is called as offshore outsourcing.
Scalability is the ability of a system, network, or process to handle a

growing amount of work in a capable manner or its ability to be enlarged
to accommodate that growth.
IAOP International Association of Outsourcing Professionals
TAT Turn-Around-Time
KPO Knowledge Process Outsourcing
FTP File Transfer Protocol
SLA Service Level Agreement
451
1. Explain outsourcing and offshoring with examples?
2. Differentiate between outsourcing and offshoring.
3. What is offshore outsourcing, explain with example?
4. Discuss in brief about healthcare offshore outsourcing.
5. What are the determinant key factors of healthcare offshore

outsourcing?
6. Briefly discuss the role of data security in outsourcing.
7. What are the ideal data security characteristics of a healthcare KPO?
8. Discuss the advantages of offshore outsourcing.
9. Discuss the disadvantages of offshore outsourcing.
10.What are the advantages of choosing India as an offshore destination?
11.Briefly discuss some of the challenges faced by India in outsourcing?

• IAOP
• TAT
• KPO
• FTP
• SLA
452
1. The ability of a system, network, or process to handle a growing amount

of work in a capable manner or its ability to be enlarged to
accommodate that growth is known as:
a) Offshoring
b) Outsourcing
c) Scalability
d) None of them
2. The advantage for India in leading the global healthcare outsourcing

industry comes due to its,
a) Cost Effectiveness
b) Time zone advantage
c) Vast amount of English-speaking population
d) All of them
3. Determinant Key Factors of Healthcare Offshore Outsourcing:

a) Cost Effective
b) Faster Turn-Around-Time
c) Labor Flexibility
d) All of them
4. Which of the following are the advantages of Outsourcing?

a) Increased profitability
b) Faster turn-around time
c) Labor Flexibility and expertise
d) All of them
5. Which of the following are the disadvantages of outsourcing?

a) Loss of total control
b) Data Security
c) Quality Issues
d) All of the above
[Answers:1(c), 2(d), 3(d), 4 (d), 5 (d)]
453
References
Davino, Margaret. "Assessing Privacy Risk in Outsourcing." Journal of

AHIMA 75, No. 3 (March 2004): 42-46.
Andre B. Bondi, 2000 (Characteristics of scalability and their impact on

performance)
Quote by Thomas Eugene "Tom" Robbins, American author
Image Source Wharton School & NY University
www.iaop.org
http://www.gapio.in http://business.gov.in/outsourcing/outsourcing.php
https://www.udemy.com/blog/outsourcing-vs-offshoring/
Image Sourcewww.tholons.com/nl_pdf/Whitepaper_December_2013.pdf
454
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
455
APPLICATION OF ‘IT’ IN HEALTHCARE
Chapter 10
Application of ‘IT’ in Healthcare
CHAPTER OBJECTIVES:
• Development of Information Technology in Healthcare

• Hospital Information System (HIS)
• Classification of Hospital Information System
• Selection Criteria of Hospital Information System (HIS)
• Telemedicine
• Jugaad-A-Thon
STRUCTURE:
10.1 Introduction
10.2 Development of Information Technology in Healthcare
10.3 Hospital Information System (HIS)
10.4 Classification of Hospital Information System (HIS)
• Nursing Information System (NIS)
• Clinical Information System (CIS)
• Financial Information System (FIS)
• Pharmacy Information System (PIS)
• Laboratory Information System (LIS)
• Radiology Information System (RIS)
10.5 Selection Criteria of Hospital Information System (HIS)
• Interoperability
• Mobility
• Affordability
• User friendly
• Adept Vendor
10.6 Telemedicine
10.7 Jugaad-A-Thon
10.8 Summary
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10.1 INTRODUCTION
Tired of waiting for your turn in the hospital?
Blame it on the reluctance of the physicians or the hospital management to

rein in the power of information technology into the healthcare system. On
a lighter note, you can blame it on the population too which is swelling
rapidly. Jokes apart, if one was to avail the services of a hospital for an
outpatient service (where the patient does not need to be admitted into the
hospital), the average waiting period is considered to be anywhere from 30
minutes to several hours, and regrettably, if one was to avail the service
for an inpatient service (where the patient does need to be admitted into
the hospital) the waiting period can be from hours to even days depending
on the location of the hospital and whether it is a government hospital or a
private hospital. But don't be upset it is not that this is only the case of our
Indian hospitals, the same scenario persists all over the globe, in fact, if
you look at many Western Countries the waiting list and period runs even
longer than us. Notably, there exist a variety of reasons for the long
waiting period and they widely differ from one country to country.
All India Institute of Medical Sciences (AIIMS) Director, Dr. M. C. Misra

believes that the launch of the online and interactive voice response (IVR)
system for booking appointments at AIIMS have done with the sight of
crowded outpatient department (OPD) waiting rooms. Even though the
physicians and patients were a little sceptical in the start, everyone seems
to have readily embraced the online and interactive voice response (IVR)
system and it has significantly reduced the waiting period of the patients.
Illustration of Information Technology in Healthcare
Anita is newly admitted to the hospital after a motor vehicle accident

(MVA) with severe complaints pain in left leg, bruising, and swelling. While
Anita lies in the bed, Dr. Patel, accompanied by a nurse, visits her and asks
her usual questions related to the complaints in order to make a working
diagnosis. Dr. Patel logs into the hospital information system through the
iPad he is carrying and carefully enters all the answers provided to him into
the electronic patient record of Anita initiated by the front office staff by
assigning a unique medical record number to each patient upon
registration. He navigates into the Radiology Information System (RIS) and
looks at the x-ray report of Anita's left leg which shows a hair line fracture.
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After finishing off with the medical documentation and reviewing the x-
ray report, Dr. Patel feels that the he needs to draw some laboratory
studies. He quickly navigates into the Laboratory Information System (LIS)
and orders all the laboratory tests he needs should be conducted and then
through the computerized physician order entry (COPE) solution he
prescribes the required medication for Ms. Anita. Dr. Patel does all this
(medical documentation, reviewing the x-ray, ordering laboratory tests,
and ordering the medications) standing at the bedside of the patient and
within a couple of minutes using his iPad.
Although it sounds as if it is taken out of a science-fiction movie, this is

really materializing in several parts of the world. Newer generation
physicians who are more technology savvy have more affinity towards
utilizing information technology in healthcare. In order to be able to tap the
true potential of information technology in increasing the efficiency of
patient care several physicians around the world are making use of
laptops, PC notebook, PC tablet, etc. Information technology along with a
host of other customized softwares provide for improved coordination of
patient information in real time within laboratory, pharmacy, radiology,
administrative, and other departments of the hospitals. This has brought a
certain amount of mobility of real-time patient information which the
physician can access at anytime and from anywhere and advice according.
For example,
Kindred Healthcare physicians make use of iPad to provider better care for
patients.
The Ottawa Hospital, Ontario, Canada physicians use iPad and customized
applications to manage patient care.
"Not only has iPad increased efficiency from a provider perspective - it has
increased engagement between the provider and patient." Dale Potter,
Senior Vice President Strategy and Transformation, The Ottawa Hospital
Some of the customized application used by the physicians at The Ottawa

Hospital are a pain study app to document a patient's pain thresholds; a
hand hygiene app to record and report on hand hygiene compliance; and a
patient rounding app with a standard set of questions that nurses ask
patients on daily basis, so the answers are recorded in a consistent way.
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Fig 10.1: Mobility in Healthcare
Image Source http://www.apple.com/ipad/business/profiles/ottawa-

hospital/
Nevertheless, experts believe that the information technology in healthcare

is still far behind when compared with the adoption of information
technology by other domains. The acceptance of information technology in
healthcare was pretty slow as it was oppressed by physicians and hospitals
which were of the mindset that information technology cannot bring much
transformation into the core competency of the healthcare service. One
other impediment for its acceptance came in the form of wide spread
concern about the security and privacy of the protected health information,
a breach of which could land the hospital in a soup.
Some of the basic equipments available in most of the urban hospitals that
signifies the inculcation of information technology in healthcare are as
follows:
Telephone and cellular phone

Facsimile
Computer (Desktop and Laptop)
Radiology Equipment Laboratory Equipment
Monitoring Devices (ECG, Holter, Stress Test, etc.)
Constructive steps were taken to build the confidence of the physicians and
hospitals and to allay the concern about security breach leading to
progressive adoption of information technology in healthcare. Let us briefly
459
try to outline the development of information technology in healthcare

domain.
10.2 DEVELOPMENT OF INFORMATION TECHNOLOGY IN

HEALTHCARE
It all started as early as the 1960s when hospitals started deployment of

computers for hospital information systems. The chore of computers was
not integrated into the actual health process but was to churn the
numbers. The initial computers implemented in hospitals were large,
centralized mainframes mainly focused around the financial and patient
administration process of the hospitals. Limited utilization mainly for
hospital administrative tasks and exorbitant cost restricted very few
hospitals to hire computer systems. By the late 1960s some hospital
information systems started storing the patient diagnosis and important
patient information based on the physician's assessment and plan.
In late 1970s with the development of third generation computers

(minicomputers), hospitals began to widely use computerized Hospital
Information System (HIS) for streamlining the flow of patient's health
information in the problem-oriented medical record (POMR) form
(Developed by Dr. Lawrence Weed in 1960s). The hospital information
system further developed to include front office registration process and
back office medical record storage facility.
During the period of 1980s, programs specifically designed to suit the

ancillary department functions were developed. Many vendors were
developing hospital information systems but all systems were restricted to
providing individual department solutions like laboratory information,
nursing information, financial information, etc.
Finally, it was only in the 1990s, when two major events emerged out of
the information technology in healthcare. One was the shift from process-
oriented medical record to patient- oriented medical record and another
was initiation of integration of individual department solutions under a
single hospital information system. Until then, the basic hindrance to
develop an integrated hospital information system was that vendors and
healthcare providers sensed no major benefit in developing such an
advanced system.
460
General Practitioner Information System (GPIS), an information system

similar to Hospital Information System (HIS) but used by general
practitioners were introduced. Affordability of computers during this period
and growth of Internet played pivotal role in development of the present
age hospital information system.
After four-decade of metamorphosis in the 21st century, the development

and induction of information technology for clinical information was
accomplished. This was the phase when the true potential of harnessing
the benefits of clinical information in the improvement of the healthcare
services was realized. Clinical information was perceived to not only
provide improved health care to individual patient but can also provide
benefits to the general mass by easily helping to track and gather
information on incidence of specific communicable disease, effectiveness of
a particular drug, vaccination efficacy, etc. Clinical information systems
were developed to store images and x-rays along with the medical report
giving a complete medical history of the patient. Adoption of PHR, EMR,
RFID, etc. by patients, physicians, and hospitals increased tremendously
over the ensuing period.
The present age hospital information system has come a long way from
use of information technology for hospital administration to applying it for
clinical application and the major development have only occurred in the
last decade. Integration of smartphones and add-on device into the HIS is
proving far too beneficial for the physicians saving their valuable time
which otherwise is spent shuttling from one department to another for
required information. In fact, there are several add-on devices innovated
which when coupled with smartphones can track blood glucose, take blood
pressure, and even perform cardiograms.
Hospitals all across the globe are now embracing the hospital information
system to provide best quality of care and affordability to its patients.
Professionals caution that due diligence needs to be given before adoption
and deployment of hospital information system as there exist a broad
spectrum of systems in the market each with their own set of advantages
and disadvantages. Some of the esteemed vendors providing full-fledged
hospital information system are Epic, McKesson, Siemens Health Care,
Wipro, and SA-HIS. There still exists a wide scope of future healthcare
innovation in the hospital information system.
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The Application and Impact of Information Technology in

Healthcare
The healthcare sector is thriving amid challenges and ever-changing needs.

The sector has taken a center stage during this pandemic period, and with
the help of technological advancements, it has managed to save countless
patients. While improving the quality of life and enhancing patient care, the
healthcare sector is getting increasingly dependent on information
technology. Let’s dig deep in the detail about the impact and applications of
IT (Information Technology) in the healthcare sector.
How Information Technology Benefits Healthcare Sector:
Electronic Health Record (EHR)
Gone are the days when physicians and consultants kept on writing the
patient’s condition and medications on paper. Electronic Health Records
have successfully replaced the legacy paper-based records. Be it medical
assistants, registered nurses, or physicians, every healthcare service
provider has been impacted greatly by the implementation of an electronic
health record system.
Nurses and technicians add patient data into a central system and medical
billers update the data with diagnostic codes like lab results. It enables
patients, doctors, and insurance companies to access records using a few
clicks anytime and from anywhere. This digitization of health records can
enable healthcare organizations to manage the workflow seamlessly and
improve patient care.
Big Data and Cloud-based Applications
Big Data is not a new term in the healthcare sector. The IT solutions
company can integrate this technology with electronic health records while
developing customized healthcare applications. Big data and cloud-based
medical apps have many benefits for patients and healthcare organizations
alike.
462
Some of them include-

Improved Diagnosis and Patient Care
Prediction of Epidemics and Pandemics
Enhanced Quality of Life
Reduced Waste and Healthcare Costs
Increased Efficiency
Development of New Drugs and Medications
Cloud-based apps can be the best way to make the most of a lot of data
generated by healthcare service centers daily. These apps enable your
healthcare organization to provide expandable, flexible, and cost-effective
patient care services. Integration of cloud technology in custom software
development provides better and safer storage and access to confidential
data. The cloud plays a vital role in research by facilitating the sharing of
medical information. These days, the healthcare sector utilizes the
capabilities and functionality of cloud technology in mobilizing workforces,
sharing big data, and implementing the telemedicine concept.
It is fair to mention that big data and the cloud have brought radical
changes in the medical landscape.
Healthcare or Medical Apps
Over 95% of Americans have smartphones of some kind and this is a big
reason why healthcare service providers contact the IT solutions company.
The mobile app bridges the gap between people and physicians effectively
and healthcare organizations can transform their processes into more
patient-centric operations. Websites and mobile apps enable healthcare
professionals to connect with patients in real-time and share necessary
information.
Medical apps are significantly useful for rural areas and remote locations
where there is a lack of availability of healthcare services. Custom software
development has a lot of scope in various areas ranging from management
to counseling and diagnosis to support. With advanced Information and
Communication Technology (ICT), it is easy to implement telemedicine and
telemonitoring system. Also, it is easy to provide services like doctor-on-
call or appointment booking using a customized medical app.
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Medical apps also promote the concept of mobile health or mhealth. Apps
can be easily connected with medical equipment and the patient care
system to collect and exchange medical information. What’s more,
healthcare apps can have various features based on technological
advancements in the domains of IoT (Internet of Things), AI (Artificial
Intelligence), and Machine Learning (ML). The patient’s confidential health
data can be securely stored and shared through blockchain technology and
other security protocols. The custom software development company can
build HIPAA-compliant medical apps to improve communication, review
medical and access a patient’s EHR,
Here are the key focus areas of the healthcare sector that can be
effectively addressed by custom application development-
Chronic Care Management
Diagnostics and Treatment
Medication Management
Health and Fitness
Mental Health and Women’s Health
Medical Reference
Personal Health Records
Telemedicine
Wearable devices have also opened the doors of new opportunities in the
healthcare sector. The sector can leverage the benefits of the growing
popularity of wearables through mobile apps. Apart from fitness apps, the
healthcare sector can utilize wearable app development to fetch the
patient’s data and its analysis for real-time diagnosis.
It is fair to mention that advancing technology can take the healthcare

sector to a new level through various applications. Though the sector has
to deal with challenges like data security and growing incidents of
cyberattacks, the advantages of information technology certainly outweigh
the disadvantages.
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Concluding Lines
Information technology has a broad impact on various aspects of the
healthcare sector. Various healthcare applications can enable healthcare
organizations to reduce medication errors, expand patient reach, improve
compliance, decrease ADRs (Adverse Drug Reactions), and enhance patient
care services. It is possible to implement a concept like telemedicine
through custom software development. As a healthcare service provider,
you can hire custom application developers to leverage the benefits of
advancing IT.
10.3 HOSPITAL INFORMATION SYSTEM (HIS)
HOSPITAL+INFORMATION TECHNOLOGY = HOSPITAL INFORMATION

SYSTEM
Hospital Information System (HIS) is an integrated, computer-assisted

system designed to store, process, and retrieve information concerned with
the administrative and clinical aspects of healthcare services needed to
support the organization. It is also sometimes referred as integrated
hospital information processing systems (IHIPS).
Fig 10.2: Hospital Information System

Image Source http://blog.azoft.com/
465
Hospitals were facing tough challenge in terms of manually handling the

ever increasing number of patients every day. The main aim for all of the
hospitals was improved hospital experience by streamlining the patient
flow. Increasing the physical capacity had its own set of limitations, so the
other avenue to increase the service capacity was by redesigning the
healthcare processes to run smoothly. Hospitals were battling with the
problem of providing affordable and quality healthcare to patients and at
the same time meeting the guidelines issued by the statutory bodies.
Integration of administrative, clinical, financial, and operational information
to attain the desired level of efficiency was the only solution. This laid the
foundation of development of Hospital Information System (HIS).
Originally developed in 1960s to carry out only the administrative functions

of the hospitals, it has now become an essential part of the hospitals and
the healthcare system by successfully integrating the clinical applications
as well. The main objectives of an ideal Hospital Information System are
data storage, data organization, data retrieval, and data security. HIS
encompasses diverse types of data ranging from patient's health, finance,
laboratory, radiology, to medication information and more.
Some of the common benefits of HIS include but are not limited to
providing real-time statistical reports about patient count, patient's
continuum of care, staff productivity and efficiency, smooth flow of
communication between departments, financial position of the hospital,
cost incurred by various departments, etc.
466
10.4 CLASSIFICATION OF HOSPITAL INFORMATION

SYSTEM (HIS)
Fig 10.3: Components of Hospital Information System (HIS)
467
Hospital Information System (HIS) can be broadly classified into the

following categories of information systems, viz,
• Nursing Information System (NIS)

• Clinical Information System (CIS)
• Financial Information System (FIS)
• Pharmacy Information System (PIS)
• Laboratory Information System (LIS)
• Radiology Information System (RIS)
All these information systems may not be necessarily present in the

hospital information systems available in market or implemented in
hospitals, but if a system consists of any of the above two information
systems, then it is termed as hospital information system.
Lets us concisely try to understand the functions of each of these

information systems,
Nursing Information System (NIS)
NIS is a part of the Hospital Information System that deals with

maintenance of the nursing record. It integrates the science of nursing and
information technology in order to provide for better patient safety by
focusing on reducing errors in healthcare and vertical communication and
management of medical information. It takes care of the basic tasks of the
nursing care process in the hospitals and aids the nursing department to
provide improved care to patients. Real-time patient's clinical data can be
retrieved by the nursing department through NIS.
When the patient arrives in the hospital, the nurse enters the patient's vital
signs (Height, weight, blood pressure, respiratory rate, temperature, and
pulse) into the NIS along with any other observation and remarks. This
information is saved onto the central server and can be accessed along
with any other clinical data entered and updated from other departments
such as laboratory or radiology if required for proper care of the patient. It
also has the ability to set reminder for important tasks of the nursing
department. One of the most important functions of nursing information
system is proper scheduling of the nursing staff. NIS has inbuilt programs
which can be utilized to appropriately allocate the available nursing staff at
hand on to the hospital floor.
468
In short, NIS provides comprehensive medical documentation, automation

of nursing documentation, scheduling, and communication of all inpatient
health information.
Clinical Information System (CIS)
Clinical Information System (CIS) is a system that collects, organizes, and

stores the clinical information of the patient for future reference. The
clinical information of patient includes the present and past medical
condition of the patient of the patient, along with all other clinical
information such as surgical, medication, allergies, etc., that may be vital
in making an informed decision with regard to the patient's care. It
provides an integrated and complete view of patient's health information at
the point of care in a timely and orderly fashion.
CIS helps in making improved care decisions by access to various decision

support tools and online access to medical resources.
Electronic medical records (EMRs) are the famous example of clinical

information system.
Financial Information System (FIS)
A financial information system (FIS) collects and analyzes the financial

information and presents it in a structured form for proper financial
planning and forecasting decisions of the hospital. In simple terms, FIS
manages the business side of the hospital.
The main objective of financial information system is to simplify the day-

to-day operational activity of the hospitals by providing services on two
fronts, patient and staff. On the patient's front the FIS provides financial
information on patient's financial transactions, that is, payment made, due,
and offset. On the staff's front, the FIS provides financial information on
employee payments, benefits, and payroll history. In addition, to these
reports FIS also provides real-time financial status of the hospital at any
point in time and department that needs to be focused upon to attain the
hospital's financial objectives. In short, it acts as a financial planner for the
hospital.
469
Pharmacy Information System (PIS)
Pharmacy Information System (PIS) is that part of the Hospital Information

System that assists the pharmacist and pharmacy department in managing
medication. It is also sometimes referred to as Medication Management
System. Modern PIS are able to fully integrate with the computerized
physician order entry (CPOE), so when the patient is prescribed a
medication through CPOE, the system updates it in the PIS. PIS plays an
important role in the hospitals by doing the stock-taking of the medication
available in the pharmacy. It is with the help of this system that duplication
of medication delivery to patient can be easily prevented and drug-to-drug
interactions and drug allergies can be safely averted.
Basically, the array of functions that a PIS needs to perform are inpatient
and outpatient medication entry, e-prescription, stock-taking of medication,
bar coding technology, purchase and delivery, prompting for any drug
allergies, drug-to-drug interaction, or any other reminders for patient
safety.
Some of the examples of PIS are,

Meditech's Pharmacy Solution System.
EPIC Pharmacy System.
Siemens Pharmacy System
Laboratory Information System (LIS)
A laboratory information system (LIS) sometimes referred to as Laboratory

Information Management System (LIMS) is an information system that
analyzes, tracks, and communicates all types of laboratory data.
In a typical laboratory setting, there exists processing of vast amount of

data. Due to the immense amount of data involved, it is very cumbersome
to track and manage it accurately. The laboratory information system plays
a vital role in handling these data efficiently. Other objectives include
stimulating a smooth workflow by maximizing the sample processing rate
and minimizing the labor costs involved in the process.
Some of the basic functions of an ideal LIS are registration of new sample,
tracking, communication, storage of data, data mining and analysis,
generation of production and financial reports, etc.
470
Examples of Laboratory information system (LIS) are,

McKesson's Horizon Lab.
SRL Ranbaxy's Centralised Lab Information Management System (CLIMS):
SRL Ranbaxy's CLIMS is first of its kind in the healthcare segment in India.
It has introduced many features into the system such as encrypted e-mail
and web-based reporting which saves a lot of time since reports are sent
electronically. The best aspect of the system is that it was totally developed
by SRL Ranbaxy's in-house development team.
Radiology Information System (RIS)
Radiology Information System (RIS) is a computer system that helps in

proper storage and management of radiological data and imagery stored at
different locations. Of late, with the innovation of the several imaging
solutions process in the radiology department has become more complex.
To undermine this complexity, it has become far more important to manage
the radiological images in a timely and orderly manner. This proper
management of the medical imagery will make it easier for the radiologist
and providers to track, retrieve, and share the images promptly. RIS
emerges out as the perfect solution for securely handling radiological
images. RIS is typically used in conjunction with another information
system called picture archiving communication system (PACS).
Picture archiving communication system (PACS) is a computer system

utilized for capturing, storing, viewing, and sharing of all types medical
images. The capturing is done with the help of medical equipment such as
a magnetic resonance imaging (MRI) machine. This image obtained is then
stored in the PACS server, while the viewing and sharing by the radiologists
and other healthcare providers can be done through the PACS client.
Storing the radiological images in digital forms helps the hospital to not
only save on the cost but also to save on the space required to store the
analogue images.
Hospitals have taken several measures during the last two decades to
seamlessly integrate PACS with RIS in order to analyze large amount of
radiological information and generate specific reports from time to time.
RIS and PACS integration provides an efficient processing system for
radiographers, radiologists, and healthcare providers.
471
Fig 10.4: RIS & PACS Workflow
Some examples of RIS/PACS

Cerner ProVision PACS
GE Centricity RIS/PACS
McKesson's Horizon RIS/PACS
The strategic integration of all these information systems into the hospital
information system is primarily an effort of developing seamless work
process by improved care coordination between different departments. HIS
has now become an inherent part of the hospital system and in coming
days the state-of-the-art HIS will be more implied in the healthcare
process.
Looking from the Indian perspective, the growth of information technology

in healthcare has not been as significant as the growth of information
technology. Indian physicians and hospitals with the state-of-the-art
technology undoubtedly provide the best level of medical care to patients
from all over the world, but when it comes to automation of healthcare
process, majority of the doctors and hospitals still follow the traditional
manual process.
Indian reason for non-implementation of IT in healthcare is different from

that of the Western countries. While the providers in Western countries cite
PHI security as the major obstacle for IT implementation, the Indian
providers in absence of any stringent patient data security law do not have
to worry about that. The reason Indian providers and hospitals are still
reluctant to implement the hospital information system or for that matter
any kind of IT into their practice is the cost of acquisition and maintenance
472
and inability to comprehend the benefits of implementing those solutions.

Moreover the Indian healthcare IT market is very fragmented forcing the
hospitals to opt for in-house development and customized applications
which takes a toll on the financial side of the hospital. Only a few big
companies provide the out-of-box hospital information system but again
cost of acquisition acts as an impediment for smaller hospitals.
It would not be wrong to say that the healthcare IT market in India is still
in its infancy, but has a strong growth potential in the near future. This can
be substantiated by the fact that the private sector controls almost 80% of
India's healthcare industry whereas the government handles the rest of the
20%. Slowly, the private hospitals are realizing the benefits of utilizing
information technology in healthcare for clinical aspect as well, and it
would not be long enough that all the hospitals irrespective of their size
adopt IT for strategic management of the administrative, financial, and
clinical aspects of the hospital. Moreover the newer generation Indian
doctors have been scrupulously using information technology to
communicate among colleagues and patients and to gather knowledge
from online medical resources, hinting at the widespread adoption of IT in
healthcare in the very near future.
Here is a list of some of the Indian hospitals that utilize the hospital
information system, Lilavati Hospital, Jupiter Hospital, Apollo Group of
Hospitals, Fortis Healthcare, Bombay Hospital, Kasturba Hospital, Manipal
Hospitals, Aravind Eye Hospital, etc.
Again, it is hard to say how many of these hospitals utilize HIS for clinical
aspect of hospital automation, but studies indicate that the benefits of
reining the clinical information far outweighs the benefits provided by the
administrative activities of the hospital information system.
473
10.5 SELECTION CRITERIA OF AN EFFICIENT HOSPITAL

INFORMATION SYSTEM (HIS)
Once the hospital management has persuaded its physicians to deploy a

comprehensive hospital information system, the next major obstacle is the
selection of a solution which would automate the hospital's administrative,
clinical, and financial processes. Selection of the right software can be a
daunting task and extreme caution should be exercised before making the
choice. The HIS should be user friendly and offer interoperability. Here are
five simple steps to be able to choose an efficient HIS, although depending
on the size and function of the hospitals one will need to make necessary
changes in following these steps as required.
1. Interoperability: This should be one of the most important factors to

be considered before selecting any hospital information system.
Interoperability means the data generated by one system will be able to
be exchanged, retrieved, and analysed by another system across the
hospital. If any component of the HIS is not able to communicate with
other systems, information will fall through the gap and the hospital will
not be able to reap the full benefit of automation.
2. Mobility: Keeping the evolution in the information technology in mind,

it would be advisable to opt for such a hospital information system that
provides mobility. Mobility should be in terms of being able to access the
patient's health information from another off-site hospital location and
from the laptop or smartphones of the providers. This can be achieved
by setting up a web-based HIS which can be accessed through LAN
(local area network) as well as through WAN (wide area network). Wi-Fi
in hospitals is also slowly catching on to access the HIS using a portable
device such as iPad or PC tablet. Data security has to be factored in
before implementing Wi-Fi and WAN.
3. Affordability: There are various information systems available in the

market all with their own set of features and costs. The hospital should
try to customize the hospital information system to fit its needs rather
than opt for an off-the-shelf solution. This will reduce the acquisition
costs for the system.
474
4. User friendly: There are many hospital information systems available

in the market which has very dense interface. An ideal HIS should
preferably consist of checkboxes rather than descriptive boxes to be
filled in by the providers. The interface should be dynamic enough so
that it can be equally better viewed on standard PC as well as smaller
screen devices such as smartphones or PC tablets.
5. Adept Vendor: Choice of correct vendor is equally important as the

choice of the correct HIS. Going with a new software company may
have detrimental effect on the implementation process. Always try to
contract with minimum number of vendors (preferably single vendor) for
all the information system solution, this takes care of the
interoperability. Before investing in the solution, preferably the hospital
should ask for a demonstration of the information system and if possible
talk to some of the existing customers about their experience.
Some of the basic things a vendor must possess are,

• Should be a long-term player in the business.
• Should be able to provide with future updates and upgrades.
• Should be able to customize the software according to requirements.
• Should possess sound knowledge of global healthcare guidelines for
data compliance and data security.
• Should be able to provide 24 x 7 x 365 support though telephone or
Email.
475
The Role of Healthcare IT Support
At its core, healthcare information technology is all about communication

— communication between devices, between team members, between
patients and their medical providers, between separate medical facilities.
These communication channels are enabled by carefully-selected and
installed hardware solutions, and maintained with prompt and effective
repair services. These components should be scalable and flexible so that
your network can grow along with your facility.
Information technology’s role in communications also puts it on the

frontlines of your facility’s security team. Healthcare IT standards, patient
privacy rights and patient well-being all require a trustworthy, secure
network that is transparent and easy for your staff to use but opaque and
secure against unauthorized users. A healthcare IT services provider can
help your facility initiate best practices for network security. Today’s
patients expect their data to be secure, and we can help establish your
reputation as a trustworthy steward of patient data.
Information technology also plays a crucial role in ensuring the efficient

operation of your facility. Research indicates that new healthcare
technologies are only effective when they are designed with ergonomics
and human factors in mind, when they have a robust interface with the
patient and the environment and when appropriate implementation and
maintenance plans are established from the beginning. IT services
contribute fundamentally to the role of technology in the healthcare
industry. When health information technology is properly integrated into a
facility, users aren’t slowed down by awkward interfaces or unnecessary
roadblocks. The systems just work.
476
10.6 TELEMEDICINE
Telemedicine is the use of medical information exchanged from one site to

another via electronic communications to improve a patient's clinical health
status. (American Telemedicine Association)
In simple terms, if a healthcare provider takes the help of information and

communication technology to provide health care service to patient it is
termed as telemedicine.
Imagine a patient dropping into the general practitioner's (GP) office

complaining of severe pain and swelling in the abdomen. After performing
physical examination of the patient, the GP thinks that it might be the case
of appendicitis but wants to take a second opinion. Therefore, he refers the
patient to a gastroenterologist in town which is approximately 50 km from
the clinic. Now, it would really by difficult of the patient and the family to
go for the gastroenterologist appointment. This is where telemedicine
helps. The GP instead of sending the patient to town can setup an
appointment with the gastroenterologist via video conferencing.
Telemedicine makes use of the information technology to unite the doctors

and the patients from remote and distant geographical locations for
purpose of health care services. There are various ways in which
telemedicine is utilized nowadays. For example, it can be utilized for real-
time interaction between the doctor and the patient via video conferencing,
alternatively the medical reports or images of the patient can be sent to
the doctor who can go through the reports or images and provide the
assessment. It can be used for various healthcare processes such as
patient's progress monitoring, nursing, therapy, radiology, psychiatry, etc.
Telemedicine will be very beneficial for developing countries where there is

a shortage of qualified doctors and the rural areas are very much
disconnected from the urban areas. It will expand the reach of the
providers into several geographical locations and will benefit patient from
distant part of the country or globe. There has been a huge response to
telemedicine both in India as well as globally. Telemedicine hubs and clinics
are attracting vast number of patients and this has increased the efficiency
of the provider who would have to travel to many different hospitals to care
for the patient.
477
A pilot project of telemedicine had been launched by Indian Space

Research Organization (ISRO) in 2001 with the goal of providing healthcare
services to the Indian people living in the rural areas and facing difficulty in
accessing the services of qualified doctors from urban areas.
"Presently, ISRO's Telemedicine Network has enabled 382 Hospitals with

the Telemedicine facility, 306 Remote/Rural/District Hospital/Health
Centres, and 16 Mobile Telemedicine units are connected to 60 Super
Speciality Hospitals located in the major cities and about 1.5 Lakh patients
are getting the benefits of Telemedicine every year.’
Fig 10.5: Telemedicine ISRO, India
Image source http://www.isro.org/scripts/telemedicine.aspx
478
10.7 JUGAAD-A-THON, KOLKATA, INDIA
GE Healthcare & Glocal Healthcare have partnered with Consortium for

Affordable Medical Technologies (CAMTech) India, which is funded by
USAID, Omidyar Network, and BACCA Foundation to conduct a hack-a-thon
called "Jugaad-a-thon." The basic aim behind the project is to bring
together some of the world's brightest minds to develop affordable and
innovative healthcare technologies to solve some of the key clinical
challenges faced in India.
The Opportunities and Challenges of Healthcare IT Standards
Today’s medical facilities are built on the individual expertise of talented

physicians, nurses and staff, but patients receive the best care when all
these team members work together. Through legislation like the Health
Information Technology for Economic and Clinical Health (HITECH) Act of
2009, Congress pushed medical facilities to modernize their IT systems,
particularly regarding the use of electronic health records. These shared,
detailed records allow a patient’s medical providers to act as a team and
make crucial healthcare decisions based on the totality of a patient’s health
record.
EHRs are now used across the medical landscape, but there are significant
problems that need to be addressed for EHRs to live up to their promise.
Over 85% of office-based doctors use an EHR system, but most doctors
are calling for change. In a 2016 poll, 63% of doctors agree that EHRs
have improved patient care, but 71% think that EHRs are a cause of
physician burnout. Even worse, 69% of doctors indicated that they
have less time for patients because of the time they spend writing and
reading EHRs. Clearly, there’s a need for change.
The specific concerns these doctors raise highlight the value of health
information technology. In the same poll, doctors called for change in the
user interface of EHR systems and improved interoperability between EHR
systems. A healthcare IT support partner is vital for implementing both of
these changes. EHR user interfaces need to be intuitive, user-centered and
easy to use, and Worldwide Services can help build such systems from the
ground up. Interoperability is a larger goal that will require reliable
networking and carefully constructed systems, along with cooperation of
regulatory bodies and other healthcare partners. The 21st Century Cures
479
Act, passed in 2016, charged regulatory agencies with creating standards

for interoperable, usable and accessible EHRs. It won’t be enough to just
have electronic records — you’ll have to be able to share and receive
records from other providers, even ones outside of your system.
The new era of EHRs will bring many benefits to the medical community.
For one, patients will undoubtedly benefit when they can be confident that
their chosen medical providers will have immediate access to their health
records, no matter where they seek treatment. However, there are many
challenges that healthcare providers will face as they adjust to the new
healthcare information technology standards. EHRs should be usable and
available to all of a patient’s healthcare providers, and they need to be
highly secure, as well. Privacy and security guidelines established by the
Health Insurance Portability and Accountability Act (HIPAA) in 1996 and
since refined and expanded hold healthcare providers to a high standard.
It’s crucial to have an experienced healthcare IT provider capable of

implementing services that follow the required standards.
480
10.8 SUMMARY
All India Institute of Medical Sciences (AIIMS) makes use of online and
interactive voice response (IVR) system for booking appointments of
patients.
Many physicians and hospitals use iPad and PC tablet loaded with
customized applications to manage patient care.
Constructive steps were taken to build the confidence of the physicians and
hospitals and to allay the concern about security breach leading to
progressive adoption of information technology in healthcare.
Initial computers implemented in hospitals were large, centralized

mainframes mainly focused around the financial and patient administration
process of the hospitals.
In the 1990s two major events emerged out of the information technology
in healthcare. One was the shift from process-oriented medical record to
patient-oriented medical record and another was initiation of integration of
individual department solutions under a single hospital information
system.
Hospital Information System (HIS) is also known as integrated hospital

information processing systems (IHIPS).
Hospital Information System (HIS) can be broadly classified into the

following categories of information systems, viz, Nursing Information
System (NIS), Clinical Information System (CIS), Financial Information
System (FIS), Pharmacy Information System (PIS), Laboratory Information
System (LIS), and Radiology Information System (RIS).
Electronic medical records (EMRs) are the famous example of clinical

information system.
PIS should be able to fully integrate with computerized physician order

entry (CPOE).
RIS is typically used in conjunction with another information system called

picture archiving communication system (PACS).
481
The reasons Indian providers and hospitals have failed to implement

hospital information system are the cost of acquisition and maintenance
and inability to comprehend the benefits of implementing those solutions.
Five characteristics of an efficient Hospital Information System (HIS) are

interoperability, mobility, affordability, user friendly, and adept vendor.
If a healthcare provider takes the help of information and communication

technology to provide health care service to patient it is termed as
telemedicine. Telemedicine makes use of the information technology to
unite the doctors and the patients from remote and distant geographical
locations for purpose of health care services.
Indian Space Research Organization (ISRO) started a pilot project of

telemedicine 2001.
GE Healthcare & Glocal Healthcare have partnered with Consortium for

Affordable Medical Technologies (CAMTech) India, which is funded by
USAID, Omidyar Network, and BACCA Foundation to conduct a hack-a-thon
called "Jugaad-a-thon."
Hospital Information System (HIS) is an integrated, computer-assisted

system designed to store, process, and retrieve information concerned with
the administrative and clinical aspects of healthcare services needed to
support the organization.
Nursing Information System (NIS) is a part of the Hospital Information

System that deals with maintenance of the nursing record.
Clinical Information System (CIS) is a system that collects, organizes,

and stores the clinical information of the patient for future reference.
Financial Information System (FIS) collects and analyzes the financial

information and presents it in a structured form for proper financial
planning and forecasting decisions of the hospital.
482
Pharmacy Information System (PIS) is that part of the Hospital

Information System that assists the pharmacist and pharmacy department
in managing medication.
Laboratory Information System (LIS) sometimes referred to as

Laboratory Information Management System (LIMS) is an information
system that analyzes, tracks, and communicates all types of laboratory
data.
Radiology Information System (RIS) is a computer system that helps

in proper storage and management of radiological data and imagery stored
at different locations.
Telemedicine is the use of medical information exchanged from one site

to another via electronic communications to improve a patient's clinical
health status.
AIIMS All India Institute of Medical Sciences
IVR Interactive Voice Response
OPD Outpatient Department
MVA Motor Vehicle Accident
POMR Problem-Oriented Medical Record
GPIS General Practitioner Information System
EMR Electronic Medical Record
HIS Hospital Information System
IHIPS Integrated Hospital Information Processing System
NIS Nursing Information System
CIS Clinical Information System
FIS Financial Information System
483
PIS Pharmacy Information System
COPE Computerized Physician Order Entry
LIS Laboratory Information System
LIMS Laboratory Information Management System
CLIMS Centralised Lab Information Management System
RIS Radiology Information System
PACS Picture Archiving Communication System
MRI Magnetic Resonance Imaging
ISRO Indian Space Research Organization
CAMTech Consortium for Affordable Medical Technologies
1. Which are the two hospitals using iPad to provide patient healthcare
services?
2. Explain HIS and what is the classification of HIS?
3. Briefly discuss about NIS?
4. Explain PIS and its features.
5. Describe RIS and PACS.
6. What should be the selection criteria for efficient HIS?
7. What are the five features of an adept vendor?
8. Briefly define and explain telemedicine.
484
9. Give the full forms of the following:

• AIIMS
• HIS
• CIS
• LIS
• RIS
• COPE
• CLIMS
• PACS
• ISRO
• CAMTech References http://blog.azoft.com/
1. The use of medical information exchanged from one site to another via
electronic communications to improve a patient’s clinical health status is
called:
a) Telemedicine
b) PACS
c) LIS
d) HIS
2. CIS refers to;

a) Certified Information System
b) Clinical Information System
c) Collective Information System
d) Control Information System
3. Nursing Information System (NIS) provides:

a) Comprehensive medical documentation
b) Automation of nursing documentation
c) Scheduling
d) All of them
4. LIS is an information system that analyzes, tracks, and communicates

all types of laboratory data.
a) True
b) False
485
5. PIS is the part of hospital information system that assists that

pharmacist and pharmacy department in managing medication.
a) True
b) False
6. Which of the following are the characteristics of an efficient hospital

information system?
a) Interoperability
b) Mobility
c) Affordability
d) All of them
[Answers-1(a), 2(b), 3(d), 4(a), 5(a), 6 (d)]
References
http://www.apple.com/ipad/business/profiles/ottawa-hospital/
http://www.isro.org/scripts/telemedicine.aspx
Saba, V. K., Johnson, J. E., Simpson, R. L. (1994). Computers in nursing

management. Washington, DC: ANA.
Welter et al. BMC Medical Informatics and Decision Making 2011 11:68
doi:10.1186/1472- 6947-11-68
486
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
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REVENUE CYCLE MANAGEMENT

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Prof. Kanu Doshi Prof. B.N. Chatterjee

Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Prof. B.N. Chatterjee Prof. Vineel Bhurke

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Prof. Sandeep Kelkar Mr. Anuj Pandey

Prof. Dr. Swapna Pradhan Course Editor

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Mr. P.M. Bendre Course Coordinators

Mr. Ajay Prabhu Ms. Kirti Sampat

Mr. A.S. Pillai Mr. Kishor Tamhankar

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

"NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

Chapter No. Chapter Name Page No.

1 Medical Records Management 4-47

2 Medical Transcription 48-110

3 Challenges In Medical Transcription 111-146

4 Medical Coding 147-208

5 Medical Billing 209-270

6 Revenue Cycle Management 271-319

9 Healthcare Outsourcing And Offshoring 422-455

10 Application of IT in Healthcare 456-487

After studying this chapter, the student will be able to understand:

• Definition of medical records

Everyone loves systematic and methodological arrangement of just about

If a person is visiting a mall to purchase an item and comes across a scene

Oh, that is gross! How undisciplined?

How will I search for the items I need?

How much time will I have to spend to search?

On the contrary, while visiting a mall, departmental store, or a library

Similarly, proper management of a patient's medical data is required both

India is proving itself as a major player in the digital economy. By any

Preparation and maintenance of medical records dates as back as to the

Another significant change was the maintenance of all types of medical

Also in earlier days, there were no defined guidelines or framework for

Fig 1.1: Metamorphosis of paper records to electronic records

Medical record is a systematic documentation of information about a

As a general rule, physicians are required to maintain record of any

Most developing countries pay little or no attention to properly or

1.4 NEED FOR MAINTENANCE OF MEDICAL RECORD

Medical record maintenance forms an inherent part in the management of

1. Accurate medical records help in easy insurance claim or mediclaim

2. Medical records act as legal documentary evidence in medicolegal cases

5. Medical records are used for on-going record review or closed-record

6. Medical records helps in compilation of statistical information and

• Morbidity and mortality rate

Fig 1.2: Uses of Medical Records

1.5 MEDICAL RECORDS RETENTION AND DESTRUCTION

To give an overview of some of the rule and regulations about retention

Every physician shall maintain the medical records pertaining to his/her

For inpatient records 7 years.

Generally medical practitioners and hospitals retain medical records longer

Fig 1.3: Medical Record Cycle

Destruction of medical records can be done in different ways. However,

In case of paper-based medical records, the older records should be

In case of electronic media which contains sensitive medical information

In case of physical drives which contain sensitive medical information like a

Purging is to permanently delete unneeded sensitive data from HDD and

In general, a simple medical record destruction form would contain the

• Name of the authorizer

Fig 1.4: Sample medical record destruction form