Centra

LYNCHBURG, VA - JUNE 28: The Centra Lynchburg Medical Center, pictured on Tuesday, June 28, 2016 in Lynchburg, Va. (Photo by Jay Westcott/The News & Advance)

The unanticipated costs of Centra’s new electronic medical health record system continue to mount, as Centra now issues hundreds of mea culpas to patients for billing errors and delays.

Rolled out in September 2018, Cerner was intended to improve patient care, efficiency, care coordination and outcomes. Instead, the system has rejected claims, delayed billing, issued incorrect bills and even led to a handful of patients being prematurely sent to collections for lack of payment.

Although the problems became apparent as soon as the system was turned on, officials said because of the length of the billing cycle — anywhere from 30 days to six months — it took a couple of months for Centra to recognize the magnitude of the problem. According to Centra, the bulk of the problems were because the system was rejecting claims for a variety of reasons, many erroneously.

By the time Centra decided to temporarily shut down billing and collections for departments using the new system this July, 2,200 incorrect statements had been issued, according to Centra spokesperson Diane Ludwig. On average, she said, Centra issues 26,451 statements monthly. Centra said everyone who received an incorrect bill has been notified.

According to the Virginia attorney general’s consumer complaint online database, no billing complaints have been lodged with the state against Centra in light of the recent billing problems. The only billing complaint on the database is from May 2018.

In recent years, health care systems in Missouri, Kansas, North Dakota, Canada, New York, Wisconsin and Virginia all have reported billing problems following the implementation of Cerner, with some providers taking legal action to recoup losses.

Asked last week if Cerner would cover financial losses caused by the system, Centra CEO Dr. Andy Mueller pointed to a non-disclosure agreement between Centra and Cerner and said, “We’re aligned in partnership to try to get this rectified. And we’re both motivated around the same things.”

Cerner representatives did not respond to email inquiries this week.

Mueller said Centra plans to continue the planned rollout of the system in 2020.

Because of the inconvenience the billing problems have caused patients, Centra is giving those effected a 5% discount, which will be reflected in statements that began going out last Friday.

Ludwig said every statement will include a letter that briefly explains the delay and the resulting discount. With these new statements, the billing cycle starts anew and not from the point of service, which in some cases could have been up to a year ago, she said.

To further help patients, Centra’s customer service staff has undergone additional training to be more empathetic, understand Cerner and be clear with patients when answering billing questions. Centra’s online bill pay portal — already in the works — also has launched, which officials hope eases the payment process. Patients also can now pay bills at their medical providers’ office, which previously was not possible.

Between the July shutdown and Friday, when billing resumed at sites using Cerner, Centra recorded more than 13,660 visits. Centra is unable to say how many patients are affected because one patient may have more than one visit with a provider.

In trying to describe what went wrong, Mueller said the billing system is “almost like tossing a key into a lock.”

“If the key isn’t designed to fit just perfect, then it gets rejected. And that’s the way these health care bills are to the ... payers is if there’s one little tiny problem with the bill — and the level of complexity that’s required to appropriately diagnose, code, and document for these bills is very complicated — it gets rejected,” he said.

A rejected bill essentially must be sent back to the start to determine where the glitch is. In some cases codes were incorrectly entered by Centra staff but in many cases a glitch in the system rejected claims that had been accurately entered. Mueller said there was no one code or diagnosis causing claims to be rejected, but a multitude of unreplicatable factors working together to lead to rejections.

When asked about the financial implications for Centra, Mueller said those remain unclear.

He also cannot say how much the 5% discount will cost Centra because how many patients will pay their bills is unknown. Centra arrived at the discount amount by trying to “figure out what we thought would be reasonable and fair, and not put us in jeopardy. And so we kind of did at-worst case, best case and try to understand what it might be. But those are honestly, to a certain degree, speculative.”

The first phase of Cerner’s installation — a $73.5 million capital investment — has been implemented at all five hospitals and about 60 ambulatory sites. In 2020, the second phase will include implementation at the remaining ambulatory sites and post-acute facilities.

In Centra’s financial disclosure statement for the six months ending in June, right before billing was temporarily halted, Centra reported Cerner, “slowed the billing cycle,” and “drove an increase in days in accounts receivable and reduced cash reserves.”

The statement shows Centra with a negative operating margin of 1.73% compared to a 2.24% for the same period in 2018.

“While all of this has been hard on our patients, our caregivers, it has created a lot of anxiety. At the same time, the health system is still in improving financial condition and none of this should inhibit our ability to return to sustainable financial performance long term. People don’t need to be nervous, Centra’s not gonna fold because of this. This is not gonna change that trajectory. We’re headed in the right direction,” Mueller said.

“I have significant expectations for continued and improved performance of our revenue cycle by the end of the year.”

Amy Trent is the city editor. Reach her at (434) 385-5543

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Amy Trent is the City Editor. Reach her at (434) 385-5543

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