Signing an EHR Contract? 25 Tips to Control Costs
by Carolyn Hartley
President & CEO, Physicians EHR, Inc.
With the "Meaningful Use" Interim Final Rule (IFR) posted on Dec 30, 2009, physicians now can expect current and prospective EHR vendors to provide data capture and reporting components that help healthcare providers participate in incentive reimbursements. The Meaningful Use IFR estimates hundreds of EHR systems will meet Stage 1 Meaningful Use criteria for 2011, approximately 65 ambulatory systems and 15 inpatient systems1 will meet Stage 2 (2013) criteria, and eight systems could meet all certification criteria now.
Your purchasing options are far from limited to just eight vendors. Your contracts are as much a business tool as they are a purchasing agreement. So while you have good reason to invest in an EHR, also take a look at the 8 or 9 contracts you'll need to support the EHR and negotiation tips to help soften the price tag2.
1 - Interim Final Rule, page 101
2 - As contracts are legally binding documents, be sure to consult an attorney who understands intellectual property licensing.
1) User License
Every vendor's contract defines the "licensed user," or the person who has access to data using a user ID and password. Pricing structures vary according to the definition of user.
Variations in licensing structures:
- One price per MD: Three or more clinical staff who report directly to the MD fall under that license. This typically represents the number of concurrent users that can access the server at any given time. It may seem more expensive, but is the least difficult to manage and may represent the least price overall.
- Tiered price: MD (higher price), Nurse (mid-range fee), and Admin (lower fee) Here, one license is issued to each person, but the price is tiered according to your billing capabilities. An MD pays a higher license, and a nurse or medical assistant pays approximately one-half the licensing fee of an MD. There tends to be more negotiating room in this model, especially if MDs or nurses timeshare.
- Site license: This is typically used for 25+ billing providers in one facility.
- Enterprise license: This includes multiple users in multiple departments, such as in a hospital system.
Tips:
1. Participate in purchasing groups to get a discount.
2. With few exceptions, all EHR vendors negotiate licensing costs.
3. Ask whether nurses or MDs who time-share can get reduced fees.
4. Ask an attorney to review the contract, including terms and conditions that could result in cancellation penalties.
2) Interfaces
Getting all your systems to talk to each other (interface) should be a top priority during the EHR selection and implementation plan. Analyze the vendor's interface costs.
The EHR vendor's contract includes the cost of interfaces. These can run from $150 to $2,500 for a simple interface, such as interfacing the EHR to your scanner or fax machine; and $2,500 to $18,000 for a more complex interface, such as to and from your laboratory information system (LIS).
Most major laboratories will pay for a lab interface. But before you get into the interface queue, the LIS will obtain an agreement that you will use their system for a percentage of total orders.
Tips:
5. Ask the EMR vendor how many times they have interfaced with your PM system or laboratory information system (LIS).
6. Call the lab and ask what an interface between your EHR and their lab typically costs and whether they will cover the costs.
7. Given the price ranges, negotiate your piece of the interfaces (to/from PM system, to/from scanner, fax machine, to/from health information exchange partners such as hospitals, ambulatory surgical centers, radiology, ePrescribing.
8. Learn the cost of ePrescribing transactions. This ranges from pennies to up to $1 per transaction.
3) Hardware Contract
Review the EHR vendor's hardware quote, but due diligence may get you a better price. Check out the vendor's website for hardware specifications the vendor supports, typically provided on the vendor's website. Download this list and give it to your IT team member to match purchases against what the EMR software will support. Hardware includes servers, high-speed scanners, computers, handhelds, computer on wheels (COW), wall mounts, etc. Look for computers that support Windows Version 7 and XP. Vista doesn't perform well with networked computers.
Hardware installation to a wholesaler means assembling the server and software to make it work at their location prior to delivering it to you. It does NOT mean the installation at your location, a difference that will create a significant budget surprise. Clarify the term "installation" with any hardware wholesaler before making the purchase.
Tips:
9. Purchase hardware from a bulk-purchasing group. Include the right to return items you don't need within 30 – 60 days.
10. Include hardware training in the agreement.
11. Purchase the hardware maintenance support agreement.
4) Third Party Software Contracts
Often considered bells and whistles, third party software comes in two categories: necessary and time-savers. Software includes encryption, speech-recognition, password management, Microsoft™ suite, anti-virus, golden image, bar-coding or webcams.
Tips:
12. Purchase the maintenance agreement for all software. Keep an online record of all purchases and users to avoid repurchasing.
13. Consult the EHR vendor to ensure software is compatible.
14. When installing on multiple computers, create a golden image (all software configurations combined), then copy the image onto new computers, a savings of up to 75% of your installation costs.
5) Internet Connectivity and Redundancy Contract
Even if you are on a server-based system, you still need controlled access to the Internet. There are three main types of connections for clinical data connections: business class digital subscriber line (DSL), business class cable, and T1 connection.
You should have redundant back up systems and procedures to ensure that your data will be backed up in multiple locations and securely stored off-site. The need is more acute for the client-server model, which is hosted locally. In the classic ASP model, the system requires continuous Internet connection to communicate with the database.
Tips:
15. A multi-year contract with your Internet provider will net lower fees. Ask for specials, additional services such as secure email or wireless network installation support.
6) Implementation Project Manager
Vendor's implementation (system installation) fees range from $175/hour to $2,500 per day. For a 3-5 MD practice, time ranges are from 300 – 500 project hours. Be wary of "Cut and Run" implementations. A project manager brings experience and guidance to the implementation process and should hand off the implementation to your internal team within 12 to 15 months.
Tips:
16. Negotiate the EHR vendor's implementation cost to a reasonable rate.
17. Monthly contracts are typically less expensive and easier to budget than hourly contracts.
18. Ask the office manager or physician champion to be the primary implementation decision manager, but don't expect them to take on detailed duties of implementation complexities.
7) Training Contract
Training should be included in your licensing and service agreement, but some vendors provide separate online and onsite training contracts. The secret to a staff of happy users can be wrapped up in three words: train, train, train.
Tips:
19. Include additional training hours while negotiating the licensing agreement. Training hours typically are less expensive at the front end than the back end.
20. Ask for the maximum allowable access to online courses.
21. If you hired a project manager, trade vendor implementation hours for more training.
22. Do not skimp on training, especially in developing protocols, templates, or nurse customization.
8) Service Agreement
A service agreement identifies what the EMR vendor will do to maintain the software, including software maintenance, technical support, and upgrades. Most EMR vendors release a new version of their software every four to six months, depending on feedback from users, and federal or state initiatives. Service Agreements may kick in within 30 days following Go-Live, or one year following Go-Live.
Tips:
23. The EHR Vendor regularly provides updates. Ask for one to two years of upgrades in your first year agreement.
9) IT Support Agreement
Hardware installations are your responsibility, not the EHR vendor. If you do not have onsite IT support, request an estimate for the following:
• Installation charges for electrical requirements, cable and phone connections for the system
• Networking design and administration charges related to the set-up and service of client's network
• Hardware onsite installation and maintenance
• Third-party software maintenance for products not provided by the vendor
• Correcting errors that result from changes you or a third-party made to the software. This applies primarily to client-server agreements
• Backup capabilities. This applies primarily to client-server agreements.
• Costs for data conversion or interfaces.
Tip:
24. Consider timesharing hardware and network IT employee with a practice or practices that are in your provider referral network.
10) Terms and Conditions
Most EMR vendors require a minimum two to five year licensing agreement; some require a minimum of 10 years while others believe they must earn your business every day. Irrespective of the contract length, ask about penalties for withdrawing your data. Any vendor interested in preserving its reputation will provide you with data in a common format able to be transitioned to another system, but the withdrawal fee may range from $125/hour for technical assistance to a flat fee of $50,000.
Tip:
25. Hire an intellectual property attorney with a track record of negotiating EHR contracts.
Carolyn Hartley is President, CEO of Physicians EHR, Inc, an educational and project management group that has built EHR educational materials for the AMA, ADA, ASCO, AGA, and Community health centers. Since 2002, she and her co-authors have published key learnings into affordable EHR training curriculum for five national medical groups. |
