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February 11, 2015 Readers Write No Comments

What is a Health Information Handler?
By Lindy Benton

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Recently I received a query from a healthcare professional wondering about the definition of a “health information handler” and their benefits. I’ve long desired to do a presentation on the subject so as to discuss their reason for being, their importance. and how they tangibly serve health systems. Given the lack of awareness surrounding the topic, perhaps it’s an appropriate time for a refresher on the subject.

First, a little history. The Center for Medicare & Medicaid Services (CMS) manages the health information handler program. CMS defines a health information handler as “any organization that handles health information on behalf of a provider.”

Providers and hospitals usually engage relationships with health information handlers (as third-party vendors) so they — the providers — are able to electronically submit claims data and health record attachments to payers and Medicare contractors in support of claims adjudication.

These health information handlers also are often called claim clearinghouses, release of information vendors, and health information exchanges. Most also offer electronic submission of medical documentation (esMD) gateway services.

EsMD is still a work in progress, an ongoing experiment spearheaded by CMS to support electronic exchange of information between health systems and Medicare audit contractors. Prior to esMD, providers had just two ways in which to respond to documentation requests from Medicare review audit contractors – mail or fax. EsMD fixed that problem. 

The program has been in effective for more than three years – Phase One went into effect on September 15, 2011. Phase Two will allow providers the ability to receive electronic documentation requests when their claims are selected for review. CMS has yet to launch Phase Two.

To date, tens of thousands of medical records and other health information have been submitted through esMD in response to audit requests. More specifically, though, according to AHIMA, the esMD program directly impacts health information manager professionals. For these folks — who typically pull and send medical records in response to CMS audits — the process can be slow, frustrating, and costly. The esMD program and the health information handler entities that facilitate the record exchange are working to simplify that process, AHIMA states.

The esMD gateway is not set up like a typical website, though. Not everyone who wants to submit information via the gateway can simply jump on, upload files, and press the “send” button. To interact with CMS through esMD, organizations need access to the portal. The gateways are costly to develop and maintain, so hospitals and providers turn to health information handlers to facilitate the exchange process.

Health information handlers build and service an esMD gateway for multiple provider participants and submit electronic documentation on a provider’s behalf. As more providers use health information handlers to simplify their audit processes, electronic health information exchange also will increase in usability.

Documentation requests from Medicare’s audit contractors are the primary requests received by health information professionals. Auditors request additional claims information from hospitals to verify or “ensure” that coding and claims are submitted properly. If claims are coded incorrectly, hospitals must return funds to Medicare. The program was designed to reduce incorrect Medicare payments and to recollect overpayment, identify underpayments by hospitals, and prevent future issues with payments. EsMD supports this effort and enables health information handlers to support the flow of information.

Overall, the recovery program has been a success from the perspective of CMS. Medicare’s recovery auditors returned more than $3 billion to the program in 2013. Providers may disagree, but in the very least they are able to more easily satisfy exchange of crucial information to support their billing practices with Medicare.

From a business and enterprise perspective, the move by CMS to launch the program has meant the growth of a number of health information handler firms that offer a variety of services and skill sets. In addition to providing exchange capabilities, some allow for capture of information, scanning, storage, and transmission in a secure manner. The health information handlers also track data sent and acknowledge and verify that it has been received by auditor through the gateway. Health information handlers are considered business associates of the organizations they serve and are required by CMS to follow HIPAA rules.

According to a Government Health IT piece earlier this year, overall the esMD program is still not streamlined, but there is traction here and despite ongoing setbacks more and more providers are using the program. CMS even reported that more than 500,000 records were sent through esMD in 2013 and more than 30,000 hospitals, physicians, and medical equipment providers use esMD for auditor medical record requests.

Because of the advent of esMD and health information handlers, hospitals and health systems are gaining speed in the processing of their audit documents as well as allow for the exchange of secure information between health system and Medicare auditors. The time saved in responding to the information requests is a huge benefit. There’s also the ability to address sensitive audits rather than sending information through mail or unreliable fax servers. This alone typically cuts down the time required to submit the documents for review and reduce potential penalties.

An example of this can be found at Boca Raton Regional Hospital in Florida. Established in 1967, just five years ago it faced a variety of Medicare audits and penalties. Now the not-for-profit 400-bed hospital is seeing a complete turnaround. 

One significant change is how the hospital now manages responses to Medicare audits. According to hospital officials there, the previous process had been cumbersome and meant printing, sorting, packaging, and mailing documents to Medicare to support claims and to adjudicate their bills. Since one patient record can fill a box or more, hospitals are left paying for all materials, labor, and shipping involved, enormous financial considerations for every organization.

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

There are hurdles to widespread implementation, though, as hospitals resist using the solutions because they’re overwhelmed with current technology. They’re already so invested in other projects that many are unable to see the benefits of bringing on additional solutions and being able to exchange information with CMS. A prevailing thought is that those managing hospital IT departments simply are overwhelmed and growing ever more nonchalant about the idea that technology is going to save them or their employers any more than already has been promised.

In fact, recent reports have begun to surface claiming that CIOs at struggling health systems have little faith that new technologies, on top of recently implemented systems like EHRs, will do much good for them since these other solutions – the EHRs – had such little positive effect on their organizations’ bottom lines. Simply put, they’re sensing a bit of personal doom and are growing tired of all the hype. It’s unfortunate.

Also, for payers, despite the obvious benefits of encouraging health information handler relationships with physicians, esMD and electronic exchange are not a top priority considering all the issues they are managing, not the least of which is the current federal insurance overhaul. Perhaps time will change this, but for the foreseeable future, esMD is likely not going to gain the traction is needs to become an industry standard.

What is fortunate, though, is that service providers like health information handlers are having a positive impact on the healthcare environment and are bringing down some pretty mighty horses while also helping bring about better workflows, improved efficiencies, and increased profitability. Despite the lack of awareness surrounding these healthcare partners and their impact across the sector, many are still unaware of the health information handler’s purpose and the very term by which they are defined.

Lindy Benton is CEO of MEA|NEA.

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