Outsourcing Hospital Medical Transcription Services with

CBay Systems, Ltd.

Monica Tadak, RHIA, Manager

Caroline Rader, Associate

KPMG, LLP

 Abstract

 Quality of medical documentation is critical to the success of a healthcare facility due to external and internal market forces found in healthcare today. External forces such as government regulations and insurance company documentation requirements continue to affect the need for quality medical documentation. With the onset of the Health Insurance Portability and Accountability Act (HIPAA), the confidentiality of medical documentation is critical in maintaining compliance with government regulations. The growing trend of insurance companies requiring documentation to support charges has a direct effect on hospitals’ reimbursement. Internal forces such as reductions in staffing levels, capital expenditures, and a shortage of qualified medical transcription applicants can hinder the hospitals’ ability to provide quality medical documentation, which in turn can result in a decrease of overall receivables. Outsourcing medical transcription services is a growing trend in the health information management industry that has been shown to be successful in managing market forces.

 Introduction

 Identifying the healthcare industry’s growing need for outsourcing medical transcription services, CBay Systems, Ltd. (CBay) invested resources capable of addressing the needs of the hospital environment, as well as the physician and clinic environments. The Annapolis, Maryland based company provides medical transcription services to large physician practices and hospitals throughout the country. Service levels include all medical specialties, as well as specific aspects of documentation such as history and physical reports, discharge summaries, operative and stat reports.

 Products offered by CBay include CBayScribe™, the TAeSeries® and A+Network provided in a joint venture with Arrendale Associates, Inc.[1] CBayScribe™ allows for physician practices and clinics to have the same level of transcription services typically found at larger hospitals. The transcription and editing facilities utilized by CBay’s larger client hospitals is also used to complete the volume of transcription services for CbayScribe™’s physician practices and clinics. Physicians can dictate reports using hand held digital recorders, analog phone lines, a personal digital assistant (i.e. PDA), or a CBayScribe™ recorder, which allows for direct dictation into a personal computer. Currently, CBay is the only company to commercialize voice capture and transcription document delivery from a PDA. The CBay developed software, CBayPDAChart, allows for the dictation and retrieval of documents from a PDA. Documents can also be retrieved from a secure website, which is password protected. Benefits of the CBayScribe™ service include the ability to dictate from a variety of locations wherever the physician may be in the clinical area, compliance with the proposed HIPAA requirements, guaranteed twenty four hour turnaround time, and quality of that received by larger hospitals.

 The TAeSeries® and A+Network products areis the most widely utilized service that CBay offers. The combined product allows for dictation, transcription, document management, physician electronic signature and electronic patient record storage. Users have the ability to access secure Internet-based databases. The databases are encrypted to meet the proposed HIPAA requirements. Features of the TAeSeries® and A+Network products include triple encryption for HIPAA privacy compliance, scalable system configurations based on the size of the facility, and elimination of the need to purchase or maintain hardware or software equipment for dictation, transcription, or faxing. Healthcare facilities save thousands by not having to maintain hardware and software.

CBay supports a twenty-four hour, seven day a week operation providing continuous transcription coverage and technical support for all product offerings. Physician dictations are typically captured by the use of a toll free number that physicians can access from any phone. However, CBay offers clients the flexibility to also dictate from a personal hand-held device or existing hospital dictation equipment. The voice data is transmitted to India, where CBay certified medical transcriptionists reside. The difference in time zones allows for the turnaround times from dictation to transcription to remain true to the facility contract. Every report that is transcribed is quality checked by other staff members, including physicians. CBay’s standard quality policy is derived from the American Association for Medical Transcription (AAMT) standard of a 98% accuracy rating. To aid in facilitating this accuracy rating, CBay has developed a training and certification program for the domestic and off-shore transcriptionists. The training program consists of medical transcription practice and theory, which occurs in a six-month time period. Transcription theory is modeled after the AAMT standards, while medical terminology and practice is taught by qualified physicians. Language specialists are included in the training program to instruct English, with an emphasis on American speech. At the conclusion of the training program a certification examination is conducted. Only certified transcriptionists are allowed in live production of any CBay product. Workshops are conducted regularly to provide continuing education.

 CBay products utilize a Windows® based software program that enables dictated medical records to be transmitted electronically to the client, routed by facsimile or paper to carbon copied physicians, and remain available indefinitely in a protected database. By tailoring to the individual needs of the facility, CBay offers clients the choice of having the database server at the facility or it may be housed and maintained at the A+Network ASP data center. Transcribed dictations are batched and directed several times a day to a dedicated printer at the client site. All electronic transmissions are encrypted and provide an audit trail which tracks all activity, including who has accessed a transcribed report, which complies with proposed HIPAA requirements. CBay also provides systems training to facility staff and continued technical support. Any corrections or modifications to previously transcribed documents are handled at no charge to the client. Supplies such as, paper and toner for the operation of the printers at the client site are also provided by CBay. Turnaround times are established at the industry standard, but can be negotiated by the facility. Typical turnaround times for high volume reports are shown in Table 1. below:

 

 

 

 

 

  Table 1. Average Turnaround Times for Transcribed Reports

 

 

Other reports such as those received for cardiac catheterization, progress notes, and clinical services have an average turnaround time of twenty-four hours.

 The cost of services provided is based on a per line charge with a cost typically below that of larger medical transcription companies providing a similar service. The cost of the service is based on a sixty-five character net line of transcription, while competitors prices are based on a gross line of transcription. CBay defines a character as any number, symbol, letter or function key necessary for the final document. When determining the total number of lines transcribed all characters are calculated and divided by sixty-five. However, the italics, underscore, bold, shift key, and any other formatting characters are not included in this calculation. The initial software set up is performed by CBay in collaboration with the facilities’ Information Technology Department and is included in the negotiated price. Additional licensure fees are assessed as needed. Importantly, when using the ASP model the cost of hardware is also included into the per line charge. In non-CBay supported environments, hospitals are charged $300 - $400k for the dictation system hardware including license fees, and $100 - $200k annually for maintenance of the hardware itself.

 A document management software package which accompanies the transcription service is also included in the per line charge of the ASP model. The document management system provides the Health Information Manager at the facility with the tools necessary to monitor turnaround time from the time of dictation through the time the hard copy report is received. A unique and versatile component of this system is a report writer, which allows the Manager to customize various reports, such as: all documents that were transcribed by the type of report (e.g. discharge summary, operative report), and the number of lines transcribed.

 Review of Hospitals - A Case Study

 KPMG, LLP (KPMG), an independent company that provides advisory services to the healthcare industry, conducted studies at two of CBay’s clients based in Central Florida. Both hospitals report a positive business relationship, significant cost savings from the sixty-five character net line transcribed methodology and capital and software integration costs, and excellent client service from the transcription company by utilizing the TAeSeries® and A+Network ASP model. Neither hospital is utilizing the electronic patient record service.

 In the first case study, KPMG interviewed Bayfront Medical Center (Bayfront). Bayfront is a Level II trauma center with 550 beds employing 450 board certified physicians. Prior to the implementation of CBay’s services in December of 2000, the Medical Center engaged a large nationally recognized transcription vendor. The search for a new vendor was prompted by poor customer service and billing inconsistencies. The vendor contract stated the hospital would be charged per line, based on sixty-five characters. When prompted the vendor was unable to justify the dollar amount charged for transcription services. For example, the number of lines billed could not be reconciled against the number of lines transcribed. The Health Information Managers at Bayfront indicated they are pleased with the prompt customer service and faxing service that CBay provides, as well as the ability to view the status of the reports. Managers specified that the greatest benefit of CBay’s service compared to the previous vendor, is the significant cost savings. Since contracting with CBay, Bayfront has realized an annual cost savings of approximately $200k, which translates to a total savings of $600k for the entire contract period. This significant cost savings is attributed to the lower per line charge when compared to the previous transcription services vendor.

 In the second case study, an interview was conducted with the Director of Health Information Management (HIM) at St. Anthony’s Hospital (St. Anthony’s). St. Anthony’s is a full service acute care hospital with 415 beds that employs more than 500 board certified physicians. St. Anthony’s had previously contracted with the same vendor as Bayfront. The Hospital experienced the same poor customer service and billing inconsistencies. The previous vendor was also inconsistent with the turnaround times on reports as negotiated in the vendor’s contract. Since February 2001, St. Anthony’s has utilized CBay’s transcription services. The Director of HIM reported significant annual cost savings of $120k, for a total savings of $360k for the entire contract period. Additional savings have also been realized due to the mailing service provided by CBay. Without this service an additional part time employee would be required to manage the mailing volume to carbon copied physicians, costing the Hospital an additional $8,250 (0.5 FTE) annually. The Director also noted prompt customer service, as well as receiving transcribed reports in a timely fashion, as presented in the contract agreement.

 The report writer provided by CBay has assisted both facilities in auditing the company’s billing methodologies. The ability to produce reports to include the actual numbers of lines transcribed by work type and/or individual report was mentioned as a positive attribute by Managers of both sites. Neither Manager reported changes to current operations in order to successfully implement CBay’s transcription services and document management software. The format and options of both computer applications are similar, therefore eliminating the need for timely instruction. CBay was able to customize screens, dictation templates, and reports to ease the transition. The value added options that CBay brought to each Hospital has improved the overall workflow. Any concerns and issues of each Hospital are addressed during weekly scheduled telephone meetings between CBay and the Hospital. During the weekly meeting, communication logs prepared by Hospital staff members are reviewed with the dedicated CBay account representative. Both Hospitals have experienced prompt action and appreciate the ability to access CBay staff regularly. Other Managers in the HIM Department also complimented the transcription service.

 At both facilities, the transcribed reports are available on-line and accessible by designated staff members. This is especially helpful to the coding staff who need access to the medical document. Coding managers interviewed indicated improved process flow and increases in productivity.

 Evaluating the Results

 To measure the results of the transcription services provided by CBay, KPMG reviewed turnaround reports, sample transcribed reports, and interviewed medical transcription staff at each of the Hospitals involved in the case study. A review of the average turnaround time reports provided by CBay for each Hospital confirmed that the turnaround times were in compliance with the contract. In some instances, the turnaround times were less than the time expected, per the contract.

 When CBay’s services were compared to other competitors’ product information published on the Internet, the CBay product and benefits match and/or exceed that of larger transcription service companies. Table 2. below illustrates the comparison of CBay to other vendors marketing similar services:

Transcription Services Vendor	Pricing Methodology	Turnaround Times	HIPAA Compliant	Windows® based software	Report Writer	Faxed Reports to Physician Office	Mailing of Reports to Physician Office
CBay	Per 65 character net line transcribed	Industry standard	Yes	Yes	Yes	Yes	Yes
Competitor A1	Per 65 character gross line transcribed	Industry standard	No	No	No	Yes	No
Competitor B2	Per 65 character net line transcribed	Based on where transcription is performed (e.g. USA or India)	Yes	Yes	Yes	No	No

 

Table 2. Vendor Comparison Table

 

 

 

 

¹ Competitor A: Previous vendor at case study hospitals.

² Competitor B: Competing vendor in similar markets, utilizing international transcriptionists.

 A comparison of reports from CBay and the previous vendor revealed that both reports were of the same magnitude and format. This was due to the customizations made by CBay to ease the transition into a new software system. The greatest benefit provided by CBay to the Hospitals over other competitors is the lower price per line transcribed and the ability to audit the billing methodology.

 KPMG found that each Hospital realized significant cost savings due to the lower cost of the service provided, when compared to the previous vendor contracted at each Hospital. Prior billings were compared to those received from CBay. The annual cost savings for both hospitals is $320k or $960k total savings for the three-year contract period. Significant savings of approximately $300-$400k were also realized since neither Hospital was required to purchase dictation hardware when CBay’s services were implemented.

 KPMG also found that any changes made to the daily operations of the Hospitals due to the implementation of the CBay TAeSeries® and A+Network services yielded positive results. Hospital management and staff were pleased with the turnaround in receiving reports, the availability of reports for coding and filing, prompt customer service, and the overall quality of transcribed reports.

 Conclusion

Today more than 154 physician practices and hospitals utilize CBay’s and A+Network’s transcription services and software products. The company continues to enhance the software application’s functionality and further advance itself in the medical transcription industry, such as complying with the upcoming HIPAA guidelines. CBay’s commitment to the confidentiality of medical documentation together with the ability to provide prompt customer service at a cost lower than competitors, will advance the company’s standing in the industry. Future services planned for CBay include value added product lines to address coding, claims processing, billing and receivables management. The continued joint venture with Arrendale Associates, Inc. will provide the foundation for these services. The A+Network is capable of and will be valuable in providing the technology platform that will allow for tracking a patient encounter from the time of patient registration to the final receipt of payment from the insurance payor. CBay Systems, Ltd. looks forward to providing the healthcare industry with an “end to end” solution.

 Additional information on the products available from CBay Systems, Ltd. can be found on the company’s websites, www.cbaysystems.com and www.cbayscribe.com. Company information for Arrendale Associates, Inc. can be accessed at www.aaita.com.

  KPMG performed an analysis based on information supplied by CBay Systems, Ltd. and CBay client hospitals involved in the case studies. Information was obtained from CBay marketing materials and through individual interviews of CBay staff and clientele. The accuracy of claims made by Cbay was not verified, other than by supporting documentation and interviews conducted with CBay client hospitals.