The Use of Electronic Health Records Is Increasing Medicare Billing: Is It Also Increasing the Amount of Care Physicians Provide?

 By: Katie Booth

The New York Times recently reported that the switch to Electronic Health Records (“EHRs”) may be contributing to rising Medicare costs. The Times described two hospitals where the portion of patients billed at the highest reimbursement rate rose by over 40% when the hospitals adopted EHRs. The Times also reported that in hospitals that switched to EHRs between 2006 and 2010, Medicare payments rose 47%. Medicare payments for hospitals that did not adopt EHRs rose 32%.

There are several potential explanations for this increase in billing. One is that doctors are simply doing a better job electronically recording the same care they’ve always given, leading to higher Medicare billing. Another is that some doctors are abusing the EHR system by upcoding patients or copying and pasting examination histories, fraudulently increasing Medicare billing.

A third explanation is that EHR systems actually change the way doctors practice medicine. In the process of asking doctors for particular data points, EHR systems may remind doctors to look for particular symptoms or to provide particular treatments that doctors may not have considered otherwise. It is thus possible that EHRs have led to higher Medicare bills because they have increased the amount of time doctors spend diagnosing and treating patients.

If the last explanation is true, this is not necessarily a bad thing. More care can mean better care, especially if doctors spend more time on diagnosis and discover problems early on. More preventative care could improve patient outcomes, lowering health care costs in the long run. Some studies have shown that medical error rates may be surprisingly high, and advocates for medical reform have long suggested that standardized processes could improve medical care by preventing errors. EHR systems may be achieving this result indirectly by providing doctors with checklists and reminders. EHRs could thus be improving patient care.

Yet by focusing doctors on a particular checklist of items, EHR systems could also prevent physicians from considering problems that aren’t on the list. Standardization in medical practice is not always a good thing; today’s fringe treatment may be tomorrow’s gold standard. This type of standardization may be particularly unwise if it is done in the context of EHR systems, which may be focused on recording data that is important for billing or care coordination purposes rather than on reminding doctors about best practices. If this is the case, EHR systems may be nudging doctors to provide unnecessary care, which is the last thing our overburdened health care system needs. If EHR systems are actually changing the way doctors practice by providing standardized checklists and reminders, EHRs should be created with quality of care in mind.

It is thus critically important that we further investigate how EHR systems impact physician behavior. If EHR systems focus doctors on diagnoses and treatments that are better for billing but worse for patient care, patient care may suffer even as costs increase.  If EHR systems are thoughtfully constructed to remind doctors of best practices, they may be an easy way to improve quality of care and reduce errors.



Katie Booth Wellington was a Student Fellow during the 2012-2013 academic year. At the conclusion of her fellowship, she was a third-year law student at Harvard Law School with a focus on health care law. She attended Yale University, where she majored in English. Prior to law school, Katie worked for two years as a management consultant for pharmaceutical, biotech, and agribusiness companies. Katie was the joint Editor-in-Chief of the Harvard Journal of Law and Technology, which focuses on intellectual property law, health law, and technology law issues. During law school, Katie interned in the Health Care Fraud Unit of the United States Attorney’s Office in Boston and in the Health Care Group at Ropes & Gray. During her fellowship, Katie researched the problem of cyberattacks on wireless medical devices, focusing on the current U.S. legal and regulatory structure.

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