E-records may end fraud.

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Only a small percentage of the estimated 4 billion healthcare claims submitted annually in the United States are fraudulent, but the total cost of fraudulent or improper claims is substantial.

The National Healthcare Anti-Fraud Association estimates that in 2003 alone, at least 3 percent--$51 billion--of the nation's healthcare expenditures were lost to outright fraud. Other estimates by government and law enforcement agencies place the loss as high as 10 percent of annual expenditures, or $170 billion each year.

The Foundation of Research and Education of the American Health Information Management Association recently issued two reports detailing how health information technology can address the growing problem of healthcare fraud.

The reports are the result of a six-month project commissioned by the Office of the National Coordinator for Health Information Technology within the Department of Health and Human Services (HHS) that involved two main tasks: 1) a descriptive study of the issues and steps in the development and use of automated coding software that enhance healthcare anti-fraud activities; and 2) identifying best practices to enhance the capabilities of a nationwide interoperable health information technology infrastructure to assist in prevention, detection, and prosecution in cases of healthcare fraud or improper claims and billing.

"These reports show that information technology can change the way we think about preventing fraud and abuse," said National Health Information Technology Coordinator David J. Brailer. "Information technology can give us new tools to reduce healthcare fraud losses."

According to the Centers for Medicare and Medicaid, fraud may take different forms, such as incorrect reporting of diagnoses or procedures to maximize payments, fraudulent diagnosis, and billing for services not rendered. In addition, patterns of inaccurate claims that may be interpreted as fraudulent can unknowingly be submitted.

A set of guiding principles presented in the reports includes:

* A standard minimum definition of a legal health record must be adopt ed for electronic health records (EHRs).

* EHRs and information available through the National Health Information Network (NHIN) must fully comply with applicable federal and state laws and meet the requirements for reliability and admissibility of evidence.

* EHR standards must define requirements to promote fraud management and minimize opportunities for fraud and abuse consistent with the use of EHRs for patient care.

* Fully integrate and implement fraud management programs and advanced analytics software in interoperable EHRs and the NHIN to achieve all of the estimated potential economic benefits.

* Data required from the NHIN for monitoring fraud and abuse must be derived from its operations and not require additional data transactions.

Each of the guiding principles is accompanied by a set of recommendations as the group begins working to develop recommendations for HHS for achieving digital and interoperable health records within 10 years.