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ABT NEWS
QUARTERLY NEWSLETTER 3rd Quarter 2016
Architecting document control systems for healthcare providers and pharmaceutical companies
O ce for Civil Rights Policy Shakes Up ROI Outsource Industry
Where Do We Go From Here?
The Release of Informa/on (ROI) outsource service industry is under assault by the Office for Civil Rights (OCR). For decades, the ROI outsource industry has offered its services to most Healthcare Providers for “free.” This “free service” arrangement between ROI outsource vendors and Healthcare Providers was possible partly because the vendors were able to charge Requestors a substan/al state-regulated ROI fee for fulfilling requests for medical records, without bearing any cost for crea/ng and maintaining the very PHI that they collected, packaged, and sold to Requestors.
OCR Fee Structure. With its recent policy update, OCR has established a new ROI fee structure for Pa/ent requests. According to OCR, Providers (and their ROI service companies) can either calculate a “verifiable reasonable labor rate” based on actual or average labor cost, or they can simply charge a fixed fee of $6.50 per billable Pa/ent request. Because OCR has mandated that this new fee structure supersede all exis/ng state ROI fee schedules, Providers and ROI vendors are faced with using either an established state fee structure that is at odds with OCR or an OCR fee structure that will endanger the “free service” model as we know it.
Audits. Un/l now, the ROI service industry leveraged loosely regulated fee structures, undisclosed to Provider-clients. However, OCR has made it quite clear that Providers who use the “verifiable reasonable labor rate,” rather than the “flat rate of $6.50,” will be subject to stringent audits. The Provider will absorb full liability for any OCR non-compliant billing ac/vity by their ROI outsource vendor. Therefore, many Providers now insist that their vendors use the OCR-mandated fee structure rather than exis/ng state fee structures in spite of the poten/ally significant impact on their HIM department budgets. Similarly, many service companies will adopt the new OCR fee structure to appease their clients.
Personal Representa7ve. OCR’s impact on ROI fee compression doesn’t stop there. OCR has further indicated that Pa/ents may freely designate any third party as their Personal Representa/ve (PR). This PR may receive or request PHI on the Pa/ent’s behalf and must be charged the same low fee that OCR grants to the Pa/ent. The result is that all third-party Requestors (such as aZorneys and insurance companies) will quickly persuade Pa/ents to name them as PR on the Pa/ent’s medical records release form to enjoy the new OCR low price. Giving “proxy” authority to the Pa/ent to designate anyone as PR (even someone who does not meet any legal PR defini/on) truly signals the end of the “free service” model that has benefited both Providers and ROI outsource service companies for decades.
H ow Does “F ee for S ervice” Work?
With the recent OCR ROI fee ruling, ROI service companies will be forced to charge their Provider- clients the difference between the new OCR-regulated fee for fulfilling medical records requests and the amount they need to maintain their profitability as a company.
The Provider community will be asked to subsidize the very vendors that are now providing outsource services “free of charge.” The “free of charge” arrangement that Providers currently enjoy will be transformed into “fee for service.”
As a result, Providers’ HIM budgets will be heavily impacted. Right now, Providers have no idea of the real cost burden they will bear to outsource their medical records requests under the upcoming “fee for service” model.
For the first /me in the ROI industry, Providers will begin to closely watch and judge ROI vendors on price and service. ABT Medical’s service company affiliates will enjoy the advantage of being the “lowest cost” vendors, with ROI+ workflow automaNon and secure “Zero Cost” web delivery of PHI.
Angela Ford
aford@abtmedinc.com
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