1. CHAPTER
© 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2
The Use of Health
Information
Technology in
Physician Practices

2. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Outcomes
When you finish this chapter, you will be able to:
2.1 Describe the functions of practice management
programs.
2.2 Identify the core functions of an electronic health
record system.
2.3 Discuss the advantages of electronic health records.
2.4 Describe the impact of health information technology
on documentation and coding.
2.5 Discuss how the HIPAA Privacy Rule and Security
Rule protect patient health information.
2.6 Explain how the measures put in place by the
HITECH Act strengthen HIPAA privacy and security
requirements.
2-2

3. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms
• administrative
safeguards
• audit/edit report
• audit trail
• autoposting
• breach
• clearinghouse
• CMS-1500 (08/05)
• computer-assisted
coding
• electronic data
interchange (EDI)
2-3
• electronic funds transfer
(EFT)
• electronic medical
records (EMRs)
• electronic prescribing
• evidence-based
medicine
• health information
technology (HIT)
• HIPAA (Health
Information Portability
and Accountability Act of
1996)

4. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms (Continued)
• HIPAA Electronic
Transaction and Codes
Sets standards
• HIPAA Privacy Rule
• HIPAA Security Rule
• HITECH (Health
Information Technology
for Electronic and Clinical
Health Act)
• National Provider
Identifier (NPI)
2-4
• personal health records
(PHRs)
• physical safeguards
• protected health
information (PHI)
• technical safeguards
• walkout statement
• workflow
• X12-837 Health Care
Claim (837P)

5. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.1 Functions of Practice
Management Programs
2-5
• Health information technology (HIT) is a term
used to refer to the computer hardware,
software, and networks that are used to record,
store, and manage patient health care
information

6. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.1 Functions of Practice Management
Programs (Continued)
2-6
• Most offices use a practice management
program (PMP) to complete routine office tasks,
including:
– Patient scheduling
– Recording patient information
– Creating and transmitting electronic claims
– Receiving electronic payments
– Billing patients
– Creating financial reports
– Collecting on overdue accounts

7. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.1 Functions of Practice Management
Programs (Continued)
2-7
• A clearinghouse is a company that collects
electronic insurance claims from medical
practices and forwards the claims to the
appropriate health plans
• An audit/edit report is sent from the
clearinghouse to the practice, after the basic edit
is complete

8. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.1 Functions of Practice Management
Programs (Continued)
2-8
• Reimbursement
– A walkout statement lists the procedures performed,
the charges for the procedures, and the amount paid
by the patient
– Autoposting is an automated process for entering
information on a remittance advice (RA) into a
computer

9. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.2 Functions of Electronic
Health Record Programs
2-9
• Electronic medical records (EMRs) are
computerized records of one physician’s
encounters with a patient over time
• Personal health records (PHRs) are private,
secure electronic files that are created,
maintained, and owned by the patient
• Electronic prescribing is the use of computers
and handheld devices to transmit prescriptions
to pharmacies in digital format

10. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.2 Functions of Electronic Health
Record Programs (Continued)
2-10
• Electronic health records (EHRs) may include
information from multiple EMRs and have eight
core functions:
1. Health information and data elements
2. Results management
3. Order management
4. Decision support
5. Electronic communication and connectivity
6. Patient support
7. Administrative support
8. Population reporting and management

11. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.3 Advantages of Electronic
Health Records
2-11
• Advantages of EHRs include:
– Increased patient safety
– Improved quality of care
– Greater efficiency

12. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.3 Advantages of Electronic
Health Records (Continued)
2-12
• Evidence-based medicine refers to medical
care that uses the latest and most accurate
clinical research in making decisions about the
care of patients
• The Health Information Technology for
Economic and Clinical Health Act (HITECH) is
intended to promote the use of EHRs in
physician practices and hospitals through the
use of financial incentives

13. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.4 The Impact of HIT on Documentation
and Coding
2-13
• A Workflow is a set of activities designed to
produce a specific outcome
• The process of assigning preliminary diagnosis
and procedure codes with a computer is known
as computer-assisted coding

14. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.4 The Impact of HIT on Documentation
and Coding (Continued)
2-14
• Impact of HIT on Documentation and Coding
– Every service must be documented in order to receive
reimbursement
– Incomplete or incorrect documentation may result in
claim denials or even a federal investigation
– All codes should be reviewed to ensure accuracy

15. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.5 HIPAA Legislation and its Impact
on Physician Practices
2-15
• The Health Insurance Portability and
Accountability Act of 1996 (HIPAA) contains a
number of rules, including:
– HIPAA Electronic Transaction and Code Sets
standards
– HIPAA Privacy Rule
– HIPAA Security Rule
– Final Enforcement Rule

16. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.5 HIPAA Legislation and its Impact
on Physician Practices (Continued)
2-16
• HIPAA Electronic Transaction and Code Sets
standards
– Describe an electronic format that providers and
health plans must use to send and receive health care
transactions
– The electronic transmission of data is called
electronic data interchange (EDI)
– Payment may be via electronic funds transfer (EFT)

17. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.5 HIPAA Legislation and its Impact
on Physician Practices (Continued)
2-17
• Claim Formats
– The HIPAA-standard X12-837 Health Care Claim, or
837P
– The CMS-1500 (08/05) paper claim
• The National Provider Identifier (NPI) is a ten-
position numerical identifier consisting of all
numbers

18. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.5 HIPAA Legislation and its Impact
on Physician Practices (Continued)
2-18
• HIPAA Privacy Rule
– Protects individually identifiable health information
– Mandates rules all covered entities must follow in
protecting patients’ privacy
– Information that can be used to find out a person’s
identification, is referred to as protected health
information (PHI)

19. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.5 HIPAA Legislation and its Impact
on Physician Practices (Continued)
2-19
• HIPAA Security Rule
– Outlines safeguards to protect health information
stored on a computer system or transmitted across
computer networks
– Administrative safeguards: the policies and
procedures that protect electronic health information
– Physical safeguards: the mechanisms required to
protect electronic systems, equipment, and data
– Technical safeguards: the automated processes
used to protect data and control access to data
• An audit trail is a report that shows who has accessed
information and when

20. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.5 HIPAA Legislation and its Impact
on Physician Practices (Continued)
2-20
• HIPAA in the Age of Health Information
Technology
– A breach is the acquisition, access, use, or disclosure
of unsecured PHI in a manner not permitted under the
HIPAA Privacy Rule

21. © 2011 The McGraw-Hill Companies, Inc. All rights reserved.
2.6 The HITECH Act’s Impact on
Privacy and Security
2-21
• The HITECH Act introduced additional privacy
and security regulations, including:
– Breach notification
– Monetary penalties
– Advanced enforcement