Before switching to document scanning software, life on the job for Irene Magee and the staff at Northeast Home Medical Equipment was one of endless searches, paper cuts, and “the wall from hell.”

The wall from hell was actually two walls of old metal filing cabinets, where paper was hopefully filed or stacked unfiled, and you spent a lot of time digging for things,” says Magee, the company’s vice president/director. “I can’t tell you how many paper cuts I got digging through files that were too full and had to be archived, and rearranging the drawers because the files did not fit within the letters anymore, and year-end, going through and trying to clean out all the sales so you could just keep your active rentals. It was a lot of touching paper multiple times. You had lots of people looking for different things on different days, and you could only hope that some of the stuff would turn up.”

When that system ran its course, the Green Island, NY, company switched from paper files to electronic files in April 2003. Document scanning software is growing in use, as more offices turn to the technology to create a paperless environment and remain competitive in the industry.

Documents are scanned in as is, allowing users to look at an actual document without tracking down the paper file that holds it. The HME industry generates a tremendous amount of paperwork due to the nature of the business. Those documents need to be referred to by all departments in a company for various reasons, and are therefore constantly retrieved and refiled. This creates a need for multiple filing cabinets, supplies, and personnel—all of which cost money. “From the volume of the activity that you are doing every day, questions are bound to come up. There are lots of times that you have to look at the patient’s record to know exactly what happened,” Magee says. “Today, I just click on their file and up on everyone’s desktop in the office is every single patient file, every page. I can see exactly what was documented.”

While generic software programs are available for document scanning, the system Northeast selected is designed specifically for the medical industry. Generic software programs may not be as efficient for the health care industry because the paperwork involved in other industries is often not as complex. There can be a huge cost to set up a way to adapt the generic system to the specific needs of the health care industry.

No matter what type of system is used, however, once a document is scanned, retrieval will be more efficient than with paper. At Northeast, documents are now scanned into the system into a standardized record format. The system looks and acts just like a paper file. After scanning a document into a file created for a customer, the user drags and drops the scanned papers into it. “It just fit like a glove,” Magee says. “It is very customizable, so you can really set it up to fit your company. It is such an easy program to get the concept of and to use. There is no learning curve for the staff. There is no massive implementation plan to develop.”

Now the staff scans documents, from intake orders to delivery confirmations, into a customer’s file and handles it electronically for such things as billing. “Whether that would be to an outside billing company, like we use, or to the next department [in-house], as far as document imaging and management is concerned, it is as simple as that. There is no handling, there are no extra copies, there is no getting stuck on someone’s desk. You touch the paper once and then it is just a click away,” Magee says.

With reimbursement down and other cuts at every turn, providers have to look inside their organization to determine how to run their businesses more efficiently as is. One way to do that is to cut the expense of processing claims, and the only way to do that is to become more efficient, which is where imaging software comes into play. “We are a relatively small company. I can’t imagine a huge company,” Magee says. “We have continued to grow over the last 2 years, and have decreased the amount of time we are spending on files, not increased it.”

Scanned documents make work flow more efficient by streamlining procedures. Electronic documents can be accessed from any on-site or off-site computer screen, making it helpful for companies with multiple locations—each location can access the same file when needed, eliminating the need for copies. When questions arise, the user can pull up a document immediately, instead of searching the office for it, to resolve issues faster.

Document retrieval methods can be specified to individual needs or preferences. With an electronic filing system, a user can run reports or searches to track down a document that was misfiled. When a paper document is misfiled, the possibility exists that it cannot be tracked down.

Scanning also lessens the chance of making mistakes, such as transposing numbers, when entering information into a system.

Controlled access to the documents makes an office HIPAA-compliant. Companies can decide whether to keep original documents after using the scanning software. Paper documents can be stored by control number for easy retrieval on-site or off-site.

Document scanning has evolved from its initial use when the hardware was expensive, as was hard drive space, which had to handle large scanned images. But the size of the images has gotten smaller, and the cost of hard drive space and the scanners themselves has also gone down. The scanners are also more efficient than they used to be.

One expert in the document scanning area estimates that 20,000 documents are equivalent to a four-drawer lateral filing cabinet, which is roughly equivalent to one gigabyte of hard drive space—making document scanning a huge space saver.

Besides efficiency on the business end, the scanning system can also improve customer service efficiency, as companies can track down information quicker than with a paper file. “If you can fax something, you can scan successfully. It’s as easy as that,” Magee says. “From there, once you have scanned it in to the file, every person you need to have it, has it on their desktop.”

Besides efficiency, cost is an equally important factor when considering whether to conduct business electronically. Companies can lose time and money on supplies and staff needed to handle paperwork—spending countless time searching for documents that are not where they should be, and wasting the staff’s productivity efforts.

Northeast Home Medical Equipment had a full-time person dedicated to filing the multitude of paperwork required for processing and billing orders. “That was just a never-ending job,” Magee says, adding that the employee used to spend 100% of his time filing, and now spends maybe 40% of his time scanning and the rest on fixed-asset management. “That’s a huge savings for us,” Magee says. “We did not eliminate that position, but we needed that resource in other areas. I don’t work less because I don’t have to chase records, but I spend time doing other things that make more sense for me to do.”

The software company that Northeast used came on-site to load the software into the computer system, and gave a few hours of training. “They left, and the staff members were up and running,” Magee says. “It is so easy that if you know how to use your mouse, you can get into the patient chart and take a look.”

Northeast has in-house technical support, but has also worked closely with the software vendor on any suggestions or problems. Northeast targeted priorities when the staff started the conversion process. “We started with a pie-in-the-sky ideal way we thought we should do it. And then we got more realistic as we went along,” Magee says.

All new work was scanned in immediately, and eventually the files of all active customers were scanned into the system as well—a process that took about a year to complete.

Before installing the software program, the company’s days outstanding were in the high 50s, but last year, it averaged 48. “A lot of that was from not having to handle the paper,” Magee says. “It certainly helps us process any kind of issues with denials. It helped us reduce significantly the time we spend in doing chart audits. We could actually focus the audit more on what we were looking at once we got the chart, rather than spending the day gathering the chart.”

While Northeast Home Medical Equipment can attest to the benefits of document scanning and the paperless environment, there are providers who are resistant to switching. Resistance is often due to not completely understanding how the system works, and a fear of change. Some companies cannot envision working without the tactile sensation of paper and are leery of undertaking the process of going paperless.

The initial costs of setting up such a system are also a concern. “Having gone through it, I think it is short-sighted, if it is related to the initial investment, because I think you far exceed what you invest in it in productivity on the back end,” Magee says. “It is looking for new ways to deliver services out there in a more efficient manner. Under competitive bidding, we are not going to survive as a small provider unless we are a lean and mean organization.

“If you are only looking at whether you can lay somebody off to recoup the investment, that is what I think is shortsighted,” Magee continues, “because really where you are going to recoup the investment is when you [look at] paying everybody in your building for how many times it takes to go searching for a document when they should be doing patient care or actively collecting your outstanding. In thousands of ways, that adds up.”

Other software options to increase efficiency include a billing package and electronic CMNs, which replace the paper CMN sent to a doctor for signature with an electronic one for an electronic signature.

Scanning software systems are expected to continue improving, including the automatic storage and retrieval of documents with optical character recognition, where the system can actually read the document and know where to file it. Handwriting-recognition software is also becoming more efficient, but still not enough to rely on it.

Some imaging systems allow for notes and alerts to pop up on screen, and allow a user to white-out a portion of the document, or cut and paste items. When choosing an imaging software program, Magee has some advice for the HME industry. “The person you pick to be your scanning person is critical to your success,” Magee says. “They have to be incredibly detail-oriented. They really make you or break you.”

She also advises others to develop a good backup plan. Northeast Home Medical Equipment has automatic backup systems to safeguard its files, including taking backup tapes off-site every night, and running different backup tapes for a week’s rotation.

Most important, Magee advises providers to “know your own process.”

“You need to know whether it really fits you or not,” she says. “With an electronic patient record, you have to go for it. What I found is you can’t do it just a little bit. From the day they loaded that software, we never hand-filed another document into those files. We committed to it, and we planned out how we were going to convert the existing files, but no new activity ever went back to a paper filing system.”

Danielle Cohen is associate editor of Dealer/Provider.