Aligning Case Management Processes With the Revenue Cycle

Kathleen Miodonski, RN, CCM, Manager, The Camden Group - Print  | 
Case management, with its standards of practice of patient advocacy and resource stewardship and its role as a liaison between patients, payors and the healthcare team, is in a unique position to support the revenue cycle and bridge the gap between a hospital's finance and clinical departments. Hospitals and health systems are facing many financial pressures, including those brought on by the implementation of Recovery Audit Contractor review and denials and the Value Based Purchasing Program outlined by CMS. Many, if not most, hospitals have already experienced RAC denials. Criteria that are measured by VBPP for the process of care have recently expanded to include readmissions. If VBPP is found to be effective in improving quality and reducing costs, additional measures will most likely be added to the CMS program, and commercial payors are developing their own programs. All of this translates into opportunities for case management departments to demonstrate their value within the revenue cycle process.

Case management responsibilities in relation to the revenue cycle

The typical case management department is responsible for utilization management, discharge planning and care coordination, and these functions all relate to the revenue cycle.

Utilization management
Utilization management requires that the payor receives timely clinical reviews of inpatient care and that the reviews contain sufficient information for the payor to make a determination of medical necessity and consequently approve the inpatient stay for payment. In cases where there may be disagreement about medical necessity, effective case managers will facilitate discussion between the physicians caring for the patient and the payor's medical director. In addition, case managers can help to identify patients classified incorrectly as observation or inpatient status and collaborate with physicians to rectify the status according to hospital and regulatory policies.

Discharge planning
Timely and appropriate discharge planning facilitates patient transition to the next level of care and helps to avoid unnecessary extension of the length-of-stay. Unnecessary days can translate to denials of care and a lengthy and frequently unsuccessful appeals process, extending the days in accounts receivable. Case management departments are also responsible for appealing post-billing denials for medical necessity.

Care coordination
Care coordination facilitates care progression and ensures that the inpatient stay is not extended unnecessarily. The case manager coordinates care with the physician, the hospital healthcare team, the health plan case manager and others to ensure that care is appropriate and progresses according to the medical treatment plan. Care coordination also includes discharge follow-up to ensure that services such as home healthcare and medical supplies are delivered. This type of follow-up assists in preventing unnecessary readmissions in the event that the patient is experiencing difficulties or services have not been delivered.

Case management and revenue cycle alignment

The acute care, inpatient experience can be divided into five phases: Pre-Admission, admission, concurrent, discharge and post-discharge. Certain case management activities associated with each of these phases impact the revenue cycle. In addition, there are at least two other areas — health plan contracting and the hospital's utilization management committee — that require active case management participation to yield the best clinical and financial outcomes. The following describe characteristics and case management activities hospitals should see in each phase if case management is successfully aligned with the revenue cycle

Pre-admission phase
The pre-admission phase incorporates all of the activities that occur in the outpatient setting or admissions process prior to the patient arriving in the hospital bed. This would include the activities that occur in the emergency department, admitting office/patient registration and patient bedding process, etc. Look for the following characteristics:

Admission phase
Critical case management functions during the admission phase include admission review for medical necessity and appropriate patient class using standardized inpatient utilization criteria. Case management activities in alignment with the revenue cycle include:

Concurrent phase
The concurrent phase of hospitalization is a busy time for case managers. During this phase, case managers are conduits of communication with physicians, the hospital healthcare team, the patient and family members, the  health plan CM, post-acute providers and community resources. At the same time, they are reviewing the patient's clinical status and progress, documenting their case management plan and interventions, identifying barriers to advancing the medical treatment plan and discharge plan and implementing a plan of action to address these barriers. Alignment with the revenue cycle during this phase includes:

Discharge phase

The discharge phase of hospitalization is an area of focus addressed in many of the Transitions of Care projects. National Transitions of Care Coalition, The Joint Commission and legislation mandating healthcare reform have highlighted the need for clinicians across the continuum of care to communicate with each other as hand-offs occur. Improving care transitions has an obvious effect on the quality of care and now, with the advent of the VBPP, quality measures will have a financial component as well. Case management programs featuring early discharge planning and assertive utilization management demonstrate the following:

Post-discharge phase

The post-discharge phase of hospitalization continues to highlight important activities for case management. Prompt attention to payer requests for retrospective reviews, providing discharge reviews and any additional clinical information required for authorizing inpatient days and follow-up on post-billing denials have a direct impact on the revenue cycle. Case management follow-up with targeted patient populations (e.g. those with readmissions, frequent ED visits or those with chronic diseases) may help to decrease readmissions and improve patient and physician satisfaction. Key case management activities in the post-discharge period that impact the revenue cycle include:

Strategies for aligning case management processes with revenue cycle and organizational goals

The case management department for a hospital should serve to integrate the clinical and financial goals for the organization. Key strategies for aligning a case management program to the revenue cycle include examining staffing performance, processes to maintain current education in case management principles, program goals and outcomes measurement and interdepartmental relationships — especially with finance. Additional strategies for finance leaders to undertake include:

The financial pressures on hospitals introduced by the economy and healthcare reform cannot be ignored. Ensuring that your case management department is a powerful resource and ally in supporting the revenue cycle is a vital approach for success.  

Kathleen Miodonski is a manager at The Camden Group, with over 16 years of experience in case management and utilization management in hospitals and health plans. She has successfully led case management departments through model redesign and implementation and has extensive expertise in hospital operations, managed care, and disease/utilization/case management.

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