Transcription firms pledge to show what you're paying for

Peoria (Ill.) Surgical Group pays about $100,000 annually for transcription services, $60,000 of that to two companies that charge 11.5 cents per line. It sounds like a fairly straightforward arrangement, but because the definition of "line" is so fluid from company to company, the group has no idea if it's paying too much for transcription.

The practice could audit the billing by going through all transcribed reports, but that would be too time-consuming and probably cost more than whatever improper charges it might uncover, said Stuart Patty, administrator of the 15-physician orthopedic group. "There's no way I can tell exactly what I am or am not paying for," he said. "I think for the most part, you have to trust the people whom you work with."

But lately, some transcription companies have begun to realize that "trust me" might not be enough. Lack of transparency in billing is a problem that the industry has been attempting to address in recent years in response to clients' demands. The trend toward transparency won't necessarily lead to lower prices, observers say, but physicians should get a better sense of what they're paying for.

A work group of the Medical Transcription Industry Alliance, which represents transcription companies, soon will explore developing a billing standard for the industry, said the alliance's president, Sean Carroll.

Right now, depending on the company or transcriptionist, a physician could be charged by the line, by the page or by the report, making it difficult to compare different company's rates. Plus, depending on how many characters a company puts in a line, the definition of a line or a page could be different from transcriptionist to transcriptionist.

While the industry as a whole starts work on billing standards, some individual companies are pledging to make it easier for physicians to figure out their transcription bills.

On June 7, Mount Laurel, N.J.-based MedQuist, which bills itself as the world's leading transcription company, announced that it is dropping a line-counting method it characterized as ambiguous in favor of "more verifiable and clearly defined" alternatives.

Earlier this year, MedQuist disclosed that problems with its billing system had caused it to overcharge some clients. The Securities and Exchange Commission is investigating the publicly traded company, which is cooperating with the investigation. But MedQuist's recent moves are unrelated to the company's billing problems, said Terry Cameron, the firm's vice president of marketing.

Standards once existed

Transparency and standards in transcription billing were supposed to have been settled long before now.

In 1994, the American Assn. for Medical Transcription, a group representing individual transcriptionists, recommended a 65-character count as a definition of a line in an attempt to set an industry standard. But the association renounced that definition in 1998 because companies routinely misapplied it, said Lea Sims, AAMT's director of communications and publications.

Today, it is common practice in the fragmented transcription industry to charge doctors and hospitals by the line. But the definition of a line depends on whether a company counts only visible keystrokes, such as letters or numbers, or counts so-called hidden keystrokes, such as bold type, underline type and spaces. Another problem is that companies use a variety of billing methods, including charging by the page and report.

"All of this would be solved if the industry associations that purport to represent us would simply come up with a single solid method and then have people sign up to it and submit to external audits," said David Iwinski Jr., CEO of Acusis, a Pittsburgh-based transcription firm. "If they would do that, this problem would go away overnight."

Setting standards again

Two years ago, MTIA released a statement of principles to promote best billing practices. But for the most part, it's still left to individual companies to make their billing more transparent. For its part, AAMT likely will not engage in any more definitions for billing, Sims said.

MedQuist's solution is to offer its physician and hospital clients a choice of up to nine "billing units of measure." At this time, the company isn't publicly disclosing the billing methods it's using except to clients, Cameron said, adding that they aren't new to the industry.

Those measures will include per-line billing, but the country's largest transcription firm won't use the "AAMT line billing of measure" any longer because its ambiguity leaves it open to interpretation, Cameron said.

In addition, the company is shifting customers to a Web-based transcription platform where they can check how the company arrived at its billing, Cameron said. The platform also will give customers "full visibility into the inner operation of the full dictation all the way to billing or transcription for every document," Cameron said.

One way physicians can sidestep the issue is to use electronic medical records software systems, which vendors and proponents of the technology say can eliminate transcription costs overnight.

But whether EMRs can be used to wipe out transcription costs depends on physicians stopping dictating cold turkey, experts said.