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A new study led by health economist Jianjing Lin from the University of Massachusetts Amherst and Dr. Keith A. Joiner of the University of Arizona College of Medicine sheds light on the economic benefits of Electronic Medical Records (EMRs) in hospitals. Contrary to concerns that EMRs might drive up healthcare spending by enabling hospitals to overbill Medicare, the research demonstrates that these systems enhance billing accuracy and actually reduce underpayments from the federal health insurance program.
Published in Contemporary Economic Policy, the study highlights that hospitals with advanced EMR systems saw an 11.7% reduction in Medicare underpayments compared to those without. This suggests that EMRs improve the accuracy of medical coding, which helps hospitals recover more legitimate reimbursements. Notably, the study found no evidence that EMRs facilitated “upcoding”—the practice of inflating billing codes to secure higher payments from Medicare.
“This technology is helping hospitals capture more legitimate reimbursements rather than facilitating improper billing behavior,” said Jianjing Lin, the study’s lead author.
The research focused on inpatient care claims submitted to Medicare from 2009 to 2015, a period when the adoption of EMRs was encouraged through federal incentives. Lin and Joiner analyzed data from the Medicare Recovery Audit Program, examining 3.5 million audits from around 70% of U.S. hospitals. They assessed how the implementation of advanced EMR systems impacted improper payments, defined as both overpayments and underpayments.
The study also revealed that different types of hospitals experienced varying benefits from EMR adoption. For-profit hospitals saw the most significant reduction in underpayments, with an average decrease of 49.6%. Teaching hospitals also benefitted, with a 36.7% decline in underpayments on average. This underscores the value of EMRs in improving billing accuracy, especially in complex cases.
The findings support the concept of “complete coding,” where EMRs enhance billing by capturing a comprehensive set of clinical data. According to the study, policymakers could use this evidence to refine health care reimbursement models and incentivize further EMR adoption across hospitals.
However, the research also highlights the complexity of the Medicare billing system. Despite the advantages of EMRs, providers still face challenges in achieving accurate documentation due to the administrative burdens of Medicare’s billing criteria. The authors suggest that future reforms should focus on simplifying the billing process while promoting the use of advanced health IT solutions.
“The fixed costs to implement EMRs are high, and there is certainly a learning curve,” said Lin, “but our research shows that in the long run, the technology has the potential to benefit healthcare providers.”
Disclaimer: This article is based on a study published in Contemporary Economic Policy by Keith A. Joiner et al., entitled “Shall we blame health IT for Medicare overpayments? New evidence from Medicare recovery audit program” (2025). The views expressed in the study are those of the authors and do not necessarily reflect the views of Medicare or related organizations.
