Using Health Information Technology

Medical assistants use health information technology (HIT)— computer hardware and software information systems that record, store, and manage patient information—in almost all physician practices. 

Practice Management Programs 

A good example of HIT is practice management programs (PMPs), specialized accounting software programs used in almost all medical offices for tracking charges for patients’ services and treatments, billing insurance companies and patients, recording payments, and collecting overdue accounts. Most programs also have the ability to schedule patient appointments. Since PMPs can send information electronically, rather than just on paper, cash flow is improved because physicians receive payment in less time than when they send in paper claims and wait for checks to arrive in the mail.

Practice management programs facilitate the day-to-day financial operations of a medical practice. Before PMPs became so universally used, manual accounting systems logged all of this information by hand, a time-consuming and cumbersome process. Now PMPs automate that work, so staff members can work more efficiently and in a timely manner. 

 Not all medical offices use the same PMP, but most programs operate in a similar manner. Initially, the program is prepared for use by entering basic facts about the practice. Often a computer consultant or an accountant helps set up these records. Information about many aspects of the business is entered, including:

  Patient data Information about each patient, such as name, address, contact numbers, and insurance coverage.

 Provider data Information about each provider, including facts about providers, referring providers, and outside providers such as labs, radiology, and ambulatory surgery centers. 

 Health plan data Details about the companies that insure the practice’s patients. 

 Transaction data The dates of patients’ past visits along with records of their illness and treatments, as well as payments collected. 

Once the initial setup and data entry are complete, the PMP is ready to be used to accomplish many of the daily tasks of a medical practice.

Electronic Health Records  

Another HIT application is rapidly becoming critical in physician practices: electronic health records, or EHRs. While patients’ financial records have been electronic for over a decade, clinical records—the documentation of a patient’s health entered by doctors, nurses, and other health care professionals—until recently, have been stored in paper charts. An electronic health record (EHR) is a computerized lifelong health care record for an individual that incorporates data from all sources that provide treatment for the individual. EHR systems are set up to gather patients’ clinical information using the computer rather than paper. Most EHR systems are designed to exchange information with—“to talk to”—the PMP and to cut out the need for many paper forms.

Working with Medical Insurance

The trillion-dollar health care industry—including pharmaceutical companies, hospitals, doctors, medical equipment makers, nursing homes, assisted-living centers, and insurance companies—is a fast-growing and dynamic sector of the American economy.

Spending on health care in the United States continues to rise. Advances in medical technology improve health care delivery but are expensive. Health care reform legislation requires insurance coverage for a growing number of people. Perhaps most importantly, the aging American population requires more health care services. Average life expectancy is increasing and a larger percentage of the population is over age 65. Older people need more health care services than do younger people. Two-thirds of Americans over 65 and three-quarters of those over 80 have multiple chronic diseases, such as diabetes, hypertension, osteoporosis, and arthritis. 

Since medical costs are rising faster than the overall economy is growing, more of everyone’s dollars are spent on health care. Federal and state government budgets increase to pay for medical services, employers pay more each year for medical services for their employees, and patients also pay higher costs. These rising costs increase the financial pressure on physicians’ practices. To remain profitable, physicians must carefully manage the business side of their practices. Knowledgeable administrative medical office employees are in demand to help. 

Medical administration tasks in medical offices may be handled by employees who have various educational backgrounds and work experience, such as administrative medical assistants, medical assistants, medical billers, patient services specialists, and receptionists. (In this text, for simplicity, the term medical assistant includes all of these administrative medical employees.) Their effective and efficient work is critical for the satisfaction of the patients—the physician’s customers—and for the financial success of the practice. 

To maintain a regular cash flow—the movement of monies into or out of a business—specific tasks must be completed on a regular schedule before, during, and after a patient visit. Managing cash flow means making sure that sufficient monies flow into the practice from patients and insurance companies paying for medical services, referred to as accounts receivable (AR), to pay the practice’s operating expenses, such as for overhead, salaries, supplies, and insurance—called accounts payable (AP) . Tracking AR and AP is an accounting job. Accounting, often referred to as “the language of business,” is a financial information system that records, classifies, reports on, and interprets financial data. Its purpose is to analyze the financial condition of a business following generally accepted accounting principles. The practice accountant sets up accounts such as AR, AP, and Patient Accounts for all aspects of running the practice and then prepares financial statements that show whether the cash flow is adequate. These statements are monitored regularly to see if revenues are sufficient or need improving.

 For this reason, revenue cycle management (RCM)—acting to ensure that the practice receives all appropriate payments from both insurance companies and patients, and gets them on time—is critical to practice success. Medical assistants have an important role in revenue cycle management. They help to ensure financial success by (1) carefully following procedures, (2) communicating effectively, and (3) using health information technology—medical billing software, electronic health records, Microsoft Office, and the Internet—to improve efficiency and contribute to better health outcomes.

UNDERSTANDING MEDICAL INSURANCE

KEY TERMS 

accounts payable (AP) 

accounts receivable (AR)

benefits 

cash flow 

certification 

coding 

coinsurance 

copayment 

covered services 

deductible 

diagnosis 

documentation

electronic claim (e-claim) 

electronic health record (EHR)

fee-for-service 

health care claim 

health information technology (HIT) 

health plan 

indemnity plan 

managed care 

managed care organization (MCO)

medical assistant 

medical billing cycle 

medical documentation and billing cycle 

medical insurance 

 medically necessary 

noncovered (excluded) services 

out-of-pocket PM/EHR 

policyholder 

practice management program (PMP)

preauthorization 

premium 

procedures provider 

 remittance advice (RA) 

revenue cycle management (RCM) 

statement 

third-party payer 

Patients who come to physicians’ practices for medical care are obligated to pay for the services they receive. Some patients pay these costs themselves, while others have medical insurance to help them cover medical expenses. Administrative staff members help collect the maximum appropriate payments by handling patients’ financial arrangements, billing insurance companies, and processing payments to ensure both top-quality service and profitable operation.