Clinical staff are in short supply while costs are rising and revenues are under more pressure than ever.
That means healthcare systems need to pay close attention to waste and inefficiency in the revenue cycle, and having providers develop a better understanding of inpatient status versus observation when admitting patients is a key to reimbursements and judicious use of physician advisors.
In an October webinar hosted by Becker's Hospital Review and sponsored by Change Healthcare, Linda Everett, MD, medical director of decision support for Change Healthcare, shared strategies for reducing the costs associated with secondary reviews through process improvement and technologies.
Three key takeaways were:
1. There are challenges across the revenue cycle. Key challenges include bed and clinical resource shortages, inefficiencies and rising costs. The nursing shortage has reached a critical point, with as many as 1.2 million new nurses needed by 2030. Inefficiencies are often due to burdensome administrative processes, such as 10 to 30 minutes being required per manual medical necessity review, with up to one third of manually completed reviews containing errors.
And, costs continue to rise, in part due to rising denials and increasing lengths of stay. Currently 21 percent of denials are mid-revenue cycle and the success rate of appeals is declining. Dr. Everett shared data showing that 83 percent of hospitals have not been able to impact length of stay. "Health systems must proactively embrace strategies that address all of these concerns to remain financially solvent while providing excellent care," she said.
2. Significant challenges occur in the hospital admission workflow. A common problem is that patients are initially placed in "inpatient" status, while "observation" may be more appropriate. The reason is a misunderstanding of the definition and intent behind observation level of care. "There's a misunderstanding that observation level of care can only occur in a designated observation unit, or that extensive evaluation and treatment plans can only be executed while in inpatient status, " Dr. Everett said. Also, financial leadership has a misperception "that observation admissions are going to result in lower payments than inpatient admissions regardless of contract," she said.
But that's not the case. The reality is quite the opposite. Observation is simply outpatient reimbursement in a hospital bed and any bed can be an outpatient bed; and the intent of outpatient beds is to evaluate the patient using all tests and procedures to determine appropriate next steps for care.
3. Health systems are encouraged to empower attending physicians and physician advisors to assign and reassign admission status based on the patient’s clinical presentation and response to treatment considering all status designations, not just inpatient status. Then, leverage automation; Change Healthcare's InterQual® AutoReview — a medical review automation solution — to support decision-making and consistency in documenting rationale, improving accuracy and efficiency.
Automation streamlines the straightforward cases, allowing advisors to spend time on more complex ones. Finally, invest in a clinical documentation improvement (CDI) solution. "Without quality documentation, nothing . . . can be effective," Dr. Everett said. "As a former hospitalist, I know I struggled with finding that balance between quality documentation and getting all my work done."
A combination of technology solutions and revenue cycle process changes can yield big returns in efficiency. The impact is reducing costly secondary reviews and the burden associated with them.
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