Will case managers survive in integrated systems?
How new law dried up revenue stream
By Donna Zazworsky, RN, MS, CCM
Program Director, Home Health & Outreach
St. Elizabeth of Hungary Clinic
Special Projects Clinician
Carondelet Health Network
Tucson, AZ
As the volatile health care market in Tucson, AZ, grew to stage four managed care, in which capitation predominates and the focus on integration is essential, an integrated delivery network approach to cost containment and quality care was imperative. This meant expanding the primary care medical group and adding a management service organization to provide support services such as service authorization and claims adjudication. What happened next at Carondelet Health Network in Tucson is a story that has repeated itself in many other health care organizations and raises the questions: Can integrated delivery networks survive? And how does case management survive as part of an integrated delivery network?
Carondelet initiated its community nurse case management program in the early 1980s. This model consisted of bachelor’s-, master’s-, and doctoral-prepared nurses working with high-risk populations to reduce hospital admissions and readmissions, all the while demonstrating a positive impact on patient satisfaction and clinical outcomes. The success of Carondelet’s model paved the way for other organizations throughout the country to reconsider a proactive approach to case management.
In the early 1990s, Carondelet’s community case management program entered into a capitated contract with the first commercial and Medicare HMO in Tucson to provide case management and home care services for the HMO’s senior enrollees. This experience provided an opportunity for nurse case managers to actually manage the care of a targeted population. While they learned the challenges of managing services for a high-risk population, the information led to the development of guidelines for service referral and the establishment of the community nurse case management mantra: Match the patient with the right service, at the right time, with the right provider, and for the right cost.
At the same time that Carondelet’s case management activities grew in the local managed care market, the organization was selected by the Health Care Financing Administration to be a Medicare Demonstration site for its Community Nursing Organization Project. The project randomly selected study and control groups — 2,000 and 1,000 patients respectively — of Medicare seniors who were not already enrolled in a Medicare HMO. The low- and moderate-risk seniors were assigned to a nurse partner, and those at high risk were partnered with a community case manager. All study group members were reassessed every six months.
The Community Nursing Organization covered Part B services, such as home health nursing, therapy, outpatient services, and durable medical supplies, as well as an extensive array of health screenings and health education services. The nurse partners and case managers initiated and provided oversight of these services.
As the organization continued to manage the care of the Medicare senior group, Carondelet began to assume more global risk contracts with many of the local HMOs. In these contracts, as part of the capitation fee, the community nurse case managers were delegated to provide case management for the plans’ high-risk patients. In other words, the plan or management service organization could refer its patients to the community nurse case managers to manage patient care and help the patients get the services that were most appropriate. In this way, the community case managers became an integral part of the network. They worked closely with Carondelet Medical Group to manage the high-risk HMO patients and with all physicians and hospitals that were involved with their community nursing organization patients.
Meanwhile, the case managers implemented a disease management program and began a networkwide focus on specific targets such as congestive heart failure and diabetes. Their congestive heart failure pilot utilizing community case managers demonstrated a dramatic decrease in hospital readmissions. As a result of the pilot, an acute care and community model was implemented early last year.
Unfortunately, due in part to the changes brought on by the Balanced Budget Act of 1997, Carondelet was no longer able to sustain its capitated contracts with the local HMOs. All parties worked together to build agreements that would preserve patient care; as a result, Carondelet reverted to a fee-for-service model with the HMOs. That meant the delegated services were all taken back, including community nurse case management. The internal revenue stream for case management was gone.
Some of the local HMOs hired a few of Carondelet’s most highly skilled community case managers so that service to the existing case managed patients was not interrupted. Carondelet also redesigned its acute care hospital case management program from a utilization management model to a more extensive case management model. Many of the community case managers accepted the acute care roles; others went on to start their own case management businesses. The Community Nursing Organization received another two-year extension from Medicare, and some of the case managers stayed with the project.
Although Carondelet experienced some difficult decisions, there was no question that the need to preserve the core business of acute care came first. With repositioning and reseeding staff and programs, Carondelet could move forward. The following lessons were learned:
• It is critical to establish mutually agreed-upon outcomes that benefit the patient from both the payers’ and the providers’ points of view. In other words, we not only must strive for patient satisfaction and clinical outcomes, but also for fiscal outcomes that all parties buy into.
• Every program must have a mixture of financial arrangements — fee-for-service, capitation, special carve-outs — so that if a contract is dropped or must be renegotiated, the whole department is not jeopardized.
• Document outcomes and report them regularly to all parties. Have payers and providers be a part of case management’s success and improvements.
(Editor’s note: Zazworsky has partnered with Gerri Lamb, PhD, RN, associate dean, University of Arizona College of Nursing, Tucson, and Toni Cesta, PhD, RN, director of case management, Saint Vincents Hospital and Medical Center, New York City, to create Case Manager Solutions, a consulting and education service for universities and health care organizations. Zazworsky also is a member of Consultant’s Consortium, an international organization of nurse consultants.)
Recommended Reading
Todd WE, Nash D. Disease Management: A Systems Approach to Improving Patient Outcomes. Chicago: American Hospital Association; 1998.
For more information, contact Donna Zazworsky, RN, MS, CCM, Carondelet Health Network, Tucson, AZ. Telephone: (520) 977-7244. E-mail: donnazaz@ aol.com. World Wide Web: www.casemanagersolutions. com; www.nvo.com/cci.
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