Linking EHRs to Practice Management SW

Mar. 13, 2007 | Electronic health records (EHRs) are gaining ground in the health-IT community, yet many of these programs are still young and the funding waters still murky. While healthcare providers can and do take their time transitioning to an EHR, they can’t afford to miss a beat in the billing and administration and have been relying on practice management software for years.

Today, there are roughly 800 practice management software vendors in the United States, though that’s down from more than 2,000 during the dot-com heydays of the late 1990s, says Vinson Hudson, president of Austin, Texas-based Jewson Enterprises, which publishes the POMIS Report on physician’s office management information systems. Hudson expects continued consolidation to shrink the number below 500 by 2011.

“Most people have been making hoopla about EHRs, but practice management systems aren’t going away because doctors still have to get money in the door,” says Hudson. Some observers argue it’s because of all the hoopla surrounding EHRs that practice management systems are not going away. Even if a practice is not actively looking for clinical software right now, it must ensure that a future EHR or EMR integrates properly with administrative operations.

With the new Stark and Medicare anti-kickback exemptions in place, hospitals soon may start offering significant financial assistance to physicians purchasing electronic health records (EHRs), and certification of ambulatory EHRs promises to remove some uncertainty about capabilities of vendor products. A similar program for inpatient records is on its way.

Practices seem to be waiting to see if health plans are going to help defray the cost of clinical technology, but clearly the technology is on its way. Traditionally, practice management encompassed income, expense tracking, and administrative functions, says Hudson. The latter category includes coding and claims submission, and often scheduling software.

“A state-of-the-art EMR isn’t going to bolt on real well with an [older] practice management system,” says Tim Eggena, vice president of product development at ambulatory systems vendor NextGen Healthcare Information Systems (Horsham, Penn.)

Even if the practice is only introducing a new administrative system, relying on a single-source, single-database product can pay off when it’s time for an EMR because the technology is ready to translate procedures into charges without requiring dual data entry. “It’s a huge head start,” Eggena says.

“Practices of all sizes have reached the point where they are saying, ‘I want one solution,’” according to Hudson.

 Forward-Focused Solutions
That was the case for Neurological Associates, a 15-physician practice in Richmond, Va. “It was our intention to keep the same vendor for the EHR as for practice management,” says administrator Lucien Roberts.

Following an evaluation process, the neurology practice chose small-but-established Pulse Systems (Wichita, Kan.) as its vendor.

Neurological Associates liked Pulse’s smaller size. Roberts says that Pulse allows its customers to provide input on product development and changes, a practice that is not as ubiquitous in the marketplace as some might think. “If I wanted to conference in the CEO, I’ve got his cell phone,” Roberts says. “I’d rather be a bigger fish in a small pond than be a smaller fish swimming with the big boys,” he adds.

At Neurological Associates, both the physicians and the staffers who would use the software were involved in the entire decision process. “We put trust in our employees to decide which system was best for them,” says Roberts.

It was the hands-on nature of the vendor that clinched the sale. “I want service after the sale. That’s very important to me,” Roberts explains. “They spend the days with the practice and show us how to do things smarter.”

During the actual installation, trainers were on site for three days to help staffers, then Pulse sent someone back a couple of weeks later to check up. “That’s when you know the questions you really want to ask,” says Roberts 

The Range of Options
Though not a universal rule, industry analyst Hudson cautions against picking a vendor that is too small. “Anyone who is a small vendor is in jeopardy of going out of business,” Hudson says, though he notes that some companies confined to specific markets are quite viable. “Regional vendors are doing well,” he says.

According to Hudson, practice management vendors tend to have a better chance of being around in the future if they offer components of an EMR and other clinical tools in addition to administrative systems. “I see a trend where practice management systems are adding EMR functions,” he says. “Practice management vendors probably want to try to develop their own EMRs, but EMR companies might develop a practice management system.”

In addition to the most common elements of practice management, vendors add a variety of other tools. Some packages incorporate clinical functions such as evaluation and management (E&M) coding and document scanning, Hudson says. “Charge capture is a major part of a practice management system, as well as an extremely good coding mechanism.”

About three to four years ago, NextGen introduced what Eggena calls an “electronic tasking system” to its administrative suite. This system assigns each workflow task to a specific person, so there is accountability within the practice. “We’re doing away with the green-bar paper and the highlighters,” Eggena says. “It takes the guesswork of productivity out of the equation.”

The next version of NextGen EPM (Electronic Practice Management System), currently under development, will automatically query payers for real-time claims status. “Anything we can automate, we’ve done or are working on,” Eggena says.

In many cases, products gain functionality as the result of mergers or acquisitions, both of which are increasingly common in the space. The GE takeover of Millbrook in 2003 was an early example. More recently, McKesson purchased management systems vendor Per-Sé in a deal that closed in January. Last month, Canadian EMR vendor Nightingale Informatix announced plans to buy VantageMed, a Rancho Cordoba, Calif., company that provides practice management software and services to 18,000 U.S. clinicians. And Boston-based software firm MedAptus recently has integrated its charge-capture features into the ambulatory EMR and practice management products of Misys Healthcare Systems (Raleigh, N.C.).

 Off-Site Management
Of the current 800 practice management vendors, a percentage of them are billing services. “Basically, they are practice management services where the software resides somewhere else,” Hudson explains.

Called application service providers (ASP) and, more recently, software as a service (SaaS), these types of software are gaining ground. Research firm Gartner predicts that 25 percent of all new business software — though not necessarily in healthcare — sold in 2011 will be delivered as a service, up from 5 percent in 2005.

ASP was the darling of the health-IT industry early this decade, but fell out of favor partly because of Internet security concerns. “There’s a trust barrier of choosing a service,” says Jonathan Bush, chairman and chief executive of athenahealth, a Watertown, Mass., company that offers practice management services and bills itself as a “virtual back office” for medical practices.

The desire for that sort of back office is growing. The market for outsourcing has started to rebound somewhat. “Not in a booming way, but it’s coming back,” Hudson says.

That is what Emdeon Corp. was counting on when it sold its Emdeon Practice Services unit to Sage Software for $565 million last fall, in order to concentrate on its lucrative claims processing and billing/coding services for physicians. Sage, meanwhile, launched a new healthcare division around the Intergy EMR and practice management software line.

The common thread is that outsourcing software or services means managing the all-important revenue cycle. “It’s really all a part of collecting dollars,” says Hudson.

“Up-front implementation costs are incredibly low,” Bush says. And set-up and maintenance should be quick and seamless, a crucial consideration for most practices. “You need it up and running on Day 1,” Neurological Associates administrator Roberts says.

An outside service can provide automatic software updates that are all but invisible to the customer contrary to some vendors of in-house practice management systems have had to mail out CD copies of software patches so practices with older versions could have a field to enter the National Provider Identifier that becomes mandatory for HIPAA-standard electronic transactions on May 23, says Bush.

And if there’s any hesitation left, some vendors are effectively removing the sting that comes with an IT transition. Athenahealth is among a newer breed of practice management IT companies that tries to guarantee financial improvement for its clients by assuming the practice’s risk for revenue-cycle management. The company acts as a hedge for its customers against the typical short-term slowdown in productivity that comes from an IT launch. “We put ourselves at risk…by being paid a percentage of [the practice’s] revenues,” Bush says.

Though EMRs still loom large on the horizon, practice management vendors are busy making the current administrative duties much more comfortable.

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