Best Practices in Utilization Management

Best Practices in Utilization Management

Utilization management (UM) helps ensure “the patient meets pre-established criteria to support the ordered status, the level of care being delivered, and the physician documentation in the medical record,” according to Toni Cesta, PhD, RN, FAAN, partner and consultant with Case Management Concepts.

Thankfully, the process of determining the appropriate level of care/setting is not arbitrary — rather, case managers can access certain criteria to guide them through these determinations, whether the patient is in acute care, sub-acute care, home care, or any other level in the care continuum.

Ideally, the case manager’s UM role integrates discharge planning, care coordination, and resource management. It takes place on the unit where the case manager can interact directly with the care delivery team. It also is important for departments and hospitals to develop policies for UM procedures at the outset.

To increase the likelihood of provider reimbursement, case managers should:

  • Reconcile the patient’s clinical picture and interventions with the level of care they are receiving. This also will help ensure contractual, governmental, and state regulations are met.
  • Collaborate with the physician if the first review of medical necessity does not reveal a match. The physician can help ensure proper documentation is in the medical record.
  • Escalate to the physician advisor if the previous physician does not add additional documentation to the medical record. It may be determined the patient might need a higher or lower level of care.

The first task is ensuring medical necessity criteria are met, both at the patient’s admission and through the duration of their stay. This is easier to track at admission if medical necessity is reviewed at each of the hospital’s entry points. This includes:

  • emergency department;
  • patient transfers from other hospitals;
  • direct admissions;
  • patients placed in a bed following ambulatory surgeries/procedures;
  • patients requiring an unplanned bed placement following a day surgery.

Using software or another objective system to determine medical necessity will provide a more accurate picture. Using critical thinking, following the medical necessity criteria, and adhering to department policy closely rather than relying on gut feelings or assumptions is best practice. Planning and scheduling reviews at appropriate intervals also increases the likelihood of a medical necessity match and reimbursement.

“Each patient account must be closed after discharge, which includes the final determination by the insurance company for authorized days and a medical necessity note by the case manager regarding the appropriateness of the patient stay for all days,” Cesta explains.

The case manager should include a note if they agree with any denied days, but they should not include UM documentation in the medical record; instead, that detail should be placed in a separate database.

Case managers should take the time to format and submit complete clinical information to the payer in a timely manner. Simply cutting and pasting the medical record and sending it decreases the likelihood of supporting the patient’s medical necessity. Rather, use an organized and completed form based on the outline available from the medical necessity criteria provider.

Cesta recommends using “requirements for frequency and format of transmitted medical necessity information being sent to the payer based on contract contents” rather than the request of one payer case manager. Mistakes can happen when a payer case manager “informs a hospital of a new policy by the payer for clinical review processes that, in fact, may not be an actual policy supported by the contract,” she adds.

Collaboration with physicians, consultants, and physician advisors helps ensure consistent documentation, while monthly medical necessity meetings give the whole team a chance to discuss payer challenges and expectations that can affect the patient. Case managers also should know the Two-Midnight Rule and work with physicians “to ensure appropriate documentation is present to meet the medical necessity requirement established by CMS, particularly as patients are admitted via the emergency department,” Cesta says.

At times, a patient may not meet the continued stay medical necessity criteria, regardless of whether the physician agrees. Case managers can provide Hospital Issued Notices of Non-Coverage, which may be issued before admission or during the hospital stay.

There also is a notice that may be provided “when care is being delivered that is unrelated to the reason for which the patient was admitted, such as a colonoscopy ordered for a patient admitted as an inpatient for pneumonia,” Cesta explains. “The colonoscopy could be appropriate for the patient, but not in the hospital setting as it is unrelated to the reason for admission.”

Cesta and her team have found it often makes a difference for patients when a case manager discusses the potential denial of payment. “The patient has a better understanding of the implication of not proceeding with discharge and, as a result, may proceed with the discharge plan,” she notes.

According to the Medicare Conditions of Participation, utilization review and Titles XI, XVIII and XIX of the Social Security Act require each participating hospital to create a utilization review committee. The committee’s goals should include responsibility for the review and management of utilization review data, such as:

  • length of stay data and targets: departmental/physician/unit/other;
  • review and approval of any practice guidelines;
  • review of avoidable day data;
  • review of denial/appeal data;
  • report from physician advisor, including physician advisor activities and effect;
  • outlier cases, based on extended lengths of stay and extraordinarily high costs;
  • cost per case as a part of the evaluation of the value-based reimbursement metric of Medicare Spending Per Beneficiary;
  • Program for Evaluating Payment Patterns Electronic Report updates and/or trends.

Whether offered bi-weekly or monthly, a recurring medical necessity meeting chaired by the physician advisor or case management leader provides a time to review operational issues relating to the case manager’s UM function. According to Cesta, example agenda items could include:

  • length of stay by service line, case manager, unit, or physician;
  • avoidable delay discussion;
  • contracts, including current language and updates;
  • payer relationships, including onsite reviewer policies and processes, if onsite reviewers present;
  • medical necessity audit results, including Two-Midnight Rule self-audits;
  • denials by service line, case manager, unit, or physician: admission denials, concurrent denials, final denials, technical denials;
  • saved days and saved denials;
  • physician advisor report, issues, or concerns relating to physician advisor process. The physician advisor should attend this meeting, as able;
  • Policy review of new or updated policies. Invited guests could include the director of managed care contracting and alternating primary payer representatives.