EXECUTIVE SUMMARY
As reimbursement tightens and payers issue ever-changing rules, it’s essential for hospital case managers to be involved in the revenue cycle by managing patients on admission, or even before they arrive, and following them through their hospital stay, ensuring that payer requirements are met so the hospital can get appropriate reimbursement.
- Case management directors should meet regularly with representatives of the financial side of the hospital to discuss reimbursement issues and review the portion of insurance contracts that relate to the responsibilities of case managers.
- Case managers should cover all access points of the hospital to prevent denials before they occur by ensuring patients meet inpatient criteria and are place in the right status.
- Case managers should review every patient every day to make sure the days of hospitalization are authorized, that appeals are conducted concurrently, and that the discharge plan continues to meet the patient’s needs.
- Hospitals need to provide continuous education to make sure that case managers understand the changing payer rules and regulations to know what each payer requires, and how and when to appeal.
Today’s hospitals have to perform a balancing act between the clinical and financial sides of healthcare, focusing on providing top-quality care while following payers’ ever-changing rules and regulations and maintaining the bottom line.
“Many hospitals operate on very tight margins and they can’t afford to lose revenue. If hospitals, especially large tertiary hospitals, don’t manage patients at the front door or before they get in the front door and manage their care throughout the stay, they are in danger of not being paid appropriately,” says Brian Pisarsky, RN, MHA, ACM, associate director at Berkeley Research Group, headquartered in Emeryville, CA.
“One of our recommendations is to have case managers cover all points of entry seven days a week and prioritize coverage during the busiest admission timeframes, at the least. It’s worth the financial expenditure to get the status right on admission, rather than waiting until the next day or missing the admission altogether,” he says. (For more on covering points of entry, see related in this issue.)
Getting patient status correct up front and getting them discharged as quickly and safely as possible has significant financial effects for hospitals, Pisarsky points out. So does starting discharge planning on admission, he says.
In the hospital setting, it’s case managers who walk the tightrope between clinical accountability and fiscal health of the organization, which makes it imperative for them to be involved in the revenue cycle, says Mindy Owen, RN, CRRN, CCM, principal owner of Phoenix Healthcare Associates in Coral Springs, FL, and senior consultant for the Center for Case Management.
“The work that case managers do is essential to making sure that the coding is accurate, the bills drop in a timely manner, and revenue is coming in the door,” Owen says. “Case managers have a huge responsibility to make sure that every nuance about the patient’s condition and care is included in the patient record, and it’s all done correctly so the case can be coded appropriately,” she adds,
Having the case management department aligned with and collaborating with the revenue cycle team to manage reimbursement issues is integral to the financial health of hospitals, says Teresa McNulty, RN, BA, ACM, IQCI, director at Huron Consulting Group, a Chicago-based healthcare consulting firm.
She recommends that hospitals have a formal structure that designates how representatives from all the key components of the revenue cycle come together and discuss how each component can affect the revenue stream, she says. “The financial and clinical goals should always be integrated but, in some hospitals, case managers and the revenue cycle team are not connected,” she adds.
Owen recommends that hospitals establish a revenue cycle committee that meets regularly to discuss reimbursement issues. “These committees are most effective when they are co-led by someone in a management position from the central billing office and somebody in a management position from care management,” she says.
Revenue cycle meetings should include representatives from patient access, finance, billing and collection, information management, case management, contracting, the denials appeal team if it is a separate entity, and a physician, usually a physician advisor, who participates in clinical reviews, McNulty says.
Every component of the revenue cycle should understand how their area’s work affects the rest of the team, she adds.
For instance, if the coder has to wait for more information from the physician to record an accurate code, it affects the days the case stays in accounts receivable. If the status or level of care isn’t right at the point of entry, or the documentation doesn’t support it, the case may be denied.
If case managers are not aware of insurance company requirements, they could miss a deadline for a continued stay review and the insurer could issue a technical denial. (For more on what case managers need to know about contracts, read on in this issue.)
Case managers play a valuable role in the revenue cycle, particularly when it comes to monitoring denials, identifying trends, and determining how to prevent the same thing from happening in the future, says Beverly Cunningham, RN, MS, consultant and partner at Oklahoma-based Case Management Concepts.
“Case managers need to be part of the hospital denial management team and work with the team to understand the reasons for denials and implement initiatives to avoid them,” Cunningham says. (For more on preventing denials on the inpatient side, see article on daily reviews, read on in this issue.)
She suggests that the case management department must analyze their denials on a regular basis, determine what the key issues are, and determine how those affect the revenue cycle. Produce reports that show denials as a whole, denials by category, by each component of the process, and then work with the committee to determine what each component of the revenue cycle needs to do to improve the process.
Denials should be reported to the utilization review committee, the denials management team, and the physician advisor, as well as individuals who were involved in the care that was denied, Cunningham says.
“If the hospital physician advisors don’t know what doctors are involved in denials, they can’t make improvements. If physicians don’t know they are involved in a denial, they also can’t make improvements,” she says. Case management directors should inform their individual staff members when their cases are denied and educate them on ways to avoid denials in the future, she adds.
Hospitals need to have a mechanism for standard reports to be shared across all entities. “This is the only way to ensure that you don’t leave money on the table,” McNulty says.
One big roadblock to sharing information is that in many hospitals, the case management software is separate from the software used by the revenue team, McNulty says. “All of the data may be available, but part of it is in the admission and billing software and part in the case management software,” she says.
In some hospitals, the finance department and case management have an antagonistic relationship, Cunningham says. “The finance people feel like case management isn’t doing a good job of preventing denials, and part of the reason is that there is not good integration of data between the two departments,” she says.
That’s why when hospitals get denials, they need to understand the root cause in order to prevent the same thing happening in the future, Cunningham says.
For example, the financial office may get a denial because of “medical necessity.” “There are so many reasons for a denial that can be lumped under medical necessity and some may not have anything to do with case management. For instance, the denial may be because the patient didn’t meet criteria on admission, it might be a delay of care, or it might be because the patient didn’t meet criteria for the intensive care level of care,” Cunningham adds.
In addition to looking for opportunities to improve hospital processes, case managers should track and trend payer issues and hold the payers responsible, McNulty says.
“Case managers and utilization review nurses should be well-versed in what is expected of them and share the information with the contracting team when the payer is not following contract requirements for review submission and has unrealistic expectations,” McNulty says.
There may be instances when the case management team intervenes with the payer and overturns concurrent denials prior to discharge without the finance team being aware that it happened, McNulty says.
Case management departments should track and trend concurrent denials and appeal efforts to identify payer issues and to capture work effort that went into preventing a denial, McNulty adds. “This data should be shared with finance and contracting so they can address issues with payer representatives and work on solutions,” she says.
Internal collaboration is essential to identifying problematic payers and insurance issues that cause case management concerns. The case management department should collaborate with the finance and contracting departments, Pisarsky says. He recommends case management directors be on the list of leaders who review every contract as well as meet regularly with financial representatives to talk about issues, common contract verbiage, and give input into any pending contracts.
“The case management director and the team have a lot of valuable information to provide in contracting. They should be directly involved in the contracting process and part of an ongoing conversation with payer representatives,” McNulty says.
When case managers are at the table as the contracts are developed, they often can point out problematic language, Owen says. For instance, insurers may require a concurrent review within 24 hours of admission. But nobody will be at the payer office on weekends to accept the information, so they end up denying the care on a technicality, Owen says.
“If case managers are not at the contracting table, there’s nobody to make sure that the contracts aren’t asking the impossible,” Owen says.
In her role as an interim case management senior director at a large academic medical center, Owen has worked with the contracting department to get case managers involved in that part of payer contracts that affects the case management process.
“I told them I don’t need to look at all 70 pages of legalese, but I do need to know what’s related to care management and what the care management team is accountable for,” she says.
Contracting staff routinely do not realize why case management input is so critical, Owen says. “The director of case management should be able to articulate why case management has to be involved in contracting in a way that people with a legal and financial responsibility can understand,” she says.
Owen recommends that case management directors make their case by focusing on denials.
“Any time you talk about denials, you’re talking about having to redo what has been done in the first place. It adds another layer of staffing, another layer of inefficiency, and the hospital can’t expect to get the revenue back in a timely fashion,” she points out.
Case management directors should point out that when contracting and case management work together on an effective contract with requirements that case managers and utilization management nurses can meet, the hospital won’t have as many denials.
“It all revolves around the financial piece, and that’s the approach case management directors have to take,” she says.
Today’s hospitals have to perform a balancing act between the clinical and financial sides of healthcare, focusing on providing top-quality care while following payers’ ever-changing rules and regulations and maintaining the bottom line.
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