Electronic health record (EHR) systems are expensive (about $100,000 for the initial cost) but substance use disorder (SUD) treatment providers have no choice but to buy them if they want to bill Medicaid, Medicare or private insurance companies — that’s what the federal government, addiction treatment organizations and the vendors say.

“The important message is that the day of optional is over,” said Bill Connors, senior vice president of Netsmart, where he is general manager for behavioral health. “This is a business necessity now, to adopt EHRs.”

Of course, a vendor would be expected to say it’s necessary to buy what he is selling. But in the case of EHRs, vendors are the main source of information. As we found in reporting this article, federal officials implementing the Affordable Care Act, which is the driver of the need for EHRs, have little to no information on costs of these systems to addiction treatment programs.

The startup costs are about $100,000, as ADAW learned in interviews conducted last week. Still, there are two ways to mitigate the expense.

  1. Use the cloud: Instead of hosting your own system, which entails buying hardware and software, buy “Software as a Service,” said Patrick Gauthier, director of Advocates for Human Potential Healthcare Solutions. The software is in a “cloud,” meaning that it is hosted by the vendor, and not on your own machine. You don’t need to buy the software or the hardware, which should save you about $100,000 (it would be $200,000 or more with hardware). But you will still have to pay $80,000–$100,000 for the implementation of the service in a one-time fee.
  2. Take advantage of volume buying: If you’re not part of a coalition or organization that can purchase an EHR together, and have lower costs as a result, join forces to create one, said Gauthier.

Gauthier is a consultant to the State Associations of Addiction Services (SAAS), which chose Qualifacts as the EHR provider for interested members (see ADAW, August 1, 2011). Qualifacts is a cloud-based EHR, explained Gauthier. “I’m a big fan of this, because it obviates the need for servers for hosting, and because when Qualifacts does an update, they do it for everyone,” he said. For example, when the new codes for DSM-5 go into effect, Qualifacts will load them for everyone, for no extra fee. “If you host software on your own machine, you have to pay for that,” he said.

Becky Vaughn, CEO of SAAS, said Qualifacts has financing plans so that buyers don’t have to pay the full price immediately. She doesn’t know how many SAAS members have signed up, but acknowledged that Qualifacts is “disappointed” with the numbers. “I keep telling providers that they have to get together” to purchase software, she told ADAW. “I’m not saying Qualifacts is the perfect system for everyone, but it’s good for the medium-size agencies,” she said. Qualifacts did not respond to an emailed request for an interview.

Cautious providers

Vaughn said providers are beset by so much uncertainty that some don’t even want to think about the costs of EHRs. “We’re still struggling — and without the federal money to support this, providers are even more cautious” she said. There are also many acquisitions and mergers, leaving providers to wonder whether a vendor will still be around a year from now.

It doesn’t help that the federal Office of the National Coordinator for Health Information Technology (ONC) and the Substance Abuse and Mental Health Services Administration (SAMHSA) have little to say about EHRs and addiction treatment, said Vaughn. “This just keeps hanging out there, with nobody helping us address the problem,” she said.

We contacted the ONC, where press spokesman Peter Ashkenaz directed us to Kay Springer, a SAMHSA public relations person who sent information about EHRs in general but nothing specific about behavioral healthcare. The general information applies only to psychiatrists and other medical doctors, and nurse practitioners who can prescribe. It does not apply to behavioral healthcare, where there are no financial incentives.

And this is the bind addiction treatment providers are in — they have to buy the EHR but unlike physicians, they get nothing from the federal government to support the purchase. “We have Medicaid expansion going in, and becoming effective next year,” said Vaughn. “We’re told that if you want to bill Medicaid, you’re going to have to have an EHR. We need some help.”

Netsmart is leading the expansion for the meaningful use dollars to LCSWs and other providers, said Connors. “We’re working closely with the National Association of Addiction Treatment Providers and with the National Council,” he said. “We haven’t given up hope.”

Treatment providers are also facing two other big question marks: parity (there is still no final rule, and the interim final rule, although enforceable, is not being publicly enforced) and the budget cuts of sequestration, with possible additional cuts next year.

“It’s slow, complicated, disjointed and frustrating for providers trying to get through this transition,” said Vaughn.

Getting a deal

“Becky Vaughn put together a sweet deal,” said Gauthier of the Qualifacts discount. “My recommendation is follow the leader, and if they put a good deal together, consider what they’ve done.”

Both Qualifacts and Netsmart are certified by ONC, which means that they will be able to do billing of Medicaid.

Primary care was in the same situation 20 years ago that addiction treatment is in today, said Gauthier. “There were a bunch of small mom-and-pops competing against each other,” he said. “Now, with very few exceptions, they have formed IPAs [Independent Practice Associations].” IPAs make it possible to more easily contract with insurance companies.

The initial costs for Qualifacts range from $80,000 to $100,000, said Gauthier. Per-user costs, depending on what is included, would be from $35 to $150 a month.

Netsmart also uses the Software as a Service (or cloud) solution. The fees could range from $25 per user per month to $150 per user per month, Connors told ADAW. “It depends on what you need — not every product is cookie cutter,” he said. For example, do you need inpatient and outpatient? Connors, who came to Netsmart when the company bought Sequest, has many clients in the private sector, including the Betty Ford Center, Marworth and Father Martin’s Ashley. The startup for a Netsmart EHR for an addiction treatment program ranges from $75,000 to $200,000, he said.

‘Like the gold rush’

Sticker shock aside, everyone cautions that there will be lost opportunities — and lost revenues — for programs that don’t implement EHRs. But Gauthier acknowledged this is a time of anxiety for treatment providers. “It’s like the gold rush; it’s speculation,” he said. “That’s the nature of a free market. We just have to accept it. We’re not going to stop healthcare reform. At some point you have to make investments.”

Private programs have more money than public programs that constitute the SAAS membership, and therefore may be better able to afford EHRs, said Gauthier.

The National Council for Community Behavioral Healthcare did not have any information about costs of EHRs, saying centers don’t ask for that information. Michael Lardiere, the National Council’s EHR expert, was not available for an interview. But in terms of cost, centers would “ask each other or a vendor,” said Meena Dayak, vice president for marketing and communications.

In fact, asking “each other” is what the SAMHSA’s Springer recommends as well. “The best way to verify the functionality and usability of a system is to speak to other providers who have already adopted the system about their experiences both with the software and with the vendor,” she said in an email.

Editor’s note: In 2011, we interviewed H. Westley Clark, M.D., then head of information technology at SAMHSA, about EHRs, and discussed the National Council’s $3.8 million technical assistance grant for EHRs as well as SAMHSA grants (see ADAW, October 31, 2011). At that time, his message was “consumer beware.” The message doesn’t seem to have changed. Nobody is going to give you a map that sends you to the perfect solution. You need to find your own way — and pay for it as well. Make sure the vendor is ONC-certified, and ask your colleagues what is working for them.

Bottom line

There is no Consumer Reports for behavioral health EHRs. Addiction treatment programs will have to ask their friends and colleagues to find out where to spend the $100,000-plus they will need to bill Medicaid starting next year.