How automating medical necessity can improve utilization management

The healthcare industry is riddled with opportunities to automate clinical processes.

Part of this opportunity stems from the growing prevalence of EHRs over the past decade. As of 2017, 80 percent of U.S. hospitals had adopted EHR systems through CMS' Meaningful Use program.

This article is sponsored by Change Healthcare.

"EHR adoption has moved technology forward in the healthcare arena, especially when it comes to clinical data," said Nilo Mehrabian, vice president of product management at Change Healthcare.

However, Ms. Mehrabian noted there is room for improvement. She identified utilization management in the emergency department as one such area that could benefit from automation, as the current process is both time-consuming and costly.

Ms. Mehrabian highlighted the barriers to effective utilization management and shared how hospitals can tap automation to conduct more efficient medical necessity reviews during a May 11 roundtable discussion at Becker's Hospital Review Health IT + Clinical Leadership Conference in Chicago.

Current utilization management trends

Hospitals increasingly recognize the value of certified case managers to ensure patients receive efficient, high-quality care in the most appropriate setting. The number of employers seeking certified case managers grew from 25.9 percent in 2004 to 40.2 percent in 2014, according to a CCM report.

Hospitals are also staffing case managers in the ED to better prevent inappropriate admissions, improve patient flow and decrease claim denials.

To assess the frequency and potential benefits of utilization management in the ED, Change Healthcare surveyed more than 1,200 hospital employees in April 2018. Nearly two-thirds of respondents (64 percent) reported staffing their EDs with case managers, and 24 percent said a case manager was available 24-7. A majority of respondents (87 percent) also reported positive outcomes tied to ED case management.

The ED director at a large academic medical center in the Northeast said her ED staffs utilization managers eight hours a day. However, staff members at the hospital's patient placement center are tasked with conducting the medical necessity review, which may occur after the patient has left the ED.

"I think we're missing some things by not doing [medical necessity reviews] earlier on," the ED director said. "Having worked in a number of EDs as a consultant, I find having a case manager in there 24 hours a day makes a whole lot of difference."

Barriers to effective utilization management

While case managers prove a valuable addition to the ED staff, many hospitals do not have the financial or human resources to staff these positions, let alone around the clock, according to Ms. Mehrabian. On average, certified case managers earn $75,000 to $85,000 annually, which can put a strain on hospitals' labor budgets, according to Ms. Mehrabian

"Resources have always been and will continue to be a challenge," she said. Some hospitals may struggle to find promising job candidates in the anticipated nursing shortage, as the American Nurses Association expects more than 1 million nurses to retire over the next two decades.

Time is also a major obstacle, according to Ms. Mehrabian. Medical necessity reviews can cause administrative burden, which prevents case managers from spending time on other patient care areas.

"If our case managers' time was freed up, they'd focus on discharge planning," said the system lead physician advisor of an academic teaching hospital in the Midwest.

Another challenge is the reactive nature of traditional utilization management. For example, the medical director of a nonprofit hospital in a U.S. territory said his facility is unable to staff ED case managers on the weekends. As such, a patient who visits the ED on a Saturday may be admitted as an inpatient before a utilization manager can conduct a medical necessity review Monday to decide whether the admittance was necessary. Hospitals seek to avoid unnecessary admissions, as they can drive up care costs and put hospitals at risk for penalization under CMS' 30-day readmission program.  

Room for automation

"We seek to create a more proactive, versus reactive, case management process," Ms. Mehrabian said.

Change Healthcare released InterQual AutoReview, a software solution to automate the medical review process, in February 2018. InterQual AutoReview pulls necessary clinical data directly from the EHR and creates a medical review within providers' case management systems. The software also sends notification of a patient's appropriate care determination back to the EHR for clinicians to access.

The technology not only expedites the medical review process and translates into administrative savings, but also frees up case managers' time to focus on patient care. Ms. Mehrabian estimated the software saves case managers at least four minutes per medical necessity review.

The technology is designed to address the straightforward medical necessity reviews, only alerting case managers to more complex cases that require their attention. "This gives time for case managers to work on these exceptions, versus some of the lower hanging fruits the automation can tackle," Ms. Mehrabian said.

While Change Healthcare is still in the early stages of rolling out InterQual AutoReview, the company envisions its technology bridging the gap between payers and providers.

"Our goal is to create a system where this automation occurs, the data is automatically sent to the payer through our technology, which then returns the authorization," Ms. Mehrabian said. "Payers often tell us they will accept criteria points if they know the data came directly from the EHR. This is really exciting for us, and we're looking forward to partnering with payers and hospitals to make this happen."

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