The Interplay Between Healthcare Information Technologies and Denied Claims

This study investigates the role of health information technology (HIT) in reducing claim denials, which are a significant burden for healthcare providers in the U.S. We theorize the impacts of electronic health records (EHRs) on claim denials, starting with an examination of EHR adoption and followed by a deeper assessment of how EHRs are sourced both within a hospital and across hospitals in the same health system. We propose that while EHR adoption reduces the likelihood of claim denials by improving the accuracy and completeness of information processing, it can also increase claim denials if EHR applications are sourced from multiple vendors within a hospital or different vendors across hospitals. Using a large-scale dataset of claim records from the state of Maryland from 2012-2016, we found that the greater the EHR adoption by care providers, the less likely a claim is denied. In addition, our findings suggest that EHRs are more effective in preventing denials when a hospital sources EHR applications from a single vendor and when a group of hospitals in the same health system sources EHRs from the same vendor. Additionally, we observed a decrease in claim denials when physicians previously worked in hospitals utilizing EHR applications from the same vendor. This study provides significant theoretical insights into the information systems literature on HIT and offers practical implications for healthcare providers by uncovering the multifaceted roles of EHRs in information processing and compliance.