For case managers, business isn't a dirty word; it's just part of the job

Case managers need to balance patient care, finances

As a case manager, your job involves being an advocate for your patients as well as keeping your hospital's best interests in mind, and that means being informed about the business end of health care.

"Case managers have a blended role. They are patient advocates and hospital advocates, as well, and unlike nurses, case managers need to understand the financial aspects of patient care," says Beverly Cunningham, RN, MS, vice president of clinical performance improvement at Medical City Dallas Hospital.

Case managers need to have balance between what is going on clinically with the patient and the financial ramifications of the particular case, adds Frank Danza, CPA, vice president of revenue cycle management for Northshore Jewish Health System.

"It is important that we as case managers understand that our job is not just utilization review and planning for treatment and discharges. Part of that plan has to include the financial piece," adds B.K. Kizziar, RN, CCM, CLP, owner of B.K. & Associates, a Southlake, TX, case management consulting firm.

Case managers don't always get involved in the financial side of care or patients' reimbursement, but they should, she adds.

Understanding the business side of patient care means having a basic knowledge of the contracts your hospital has with payers, Medicare and Medicaid requirements, the services that each will and will not pay for, and the financial impact of additional time in the hospital for both the patient and the hospital, Danza says.

Insurance companies are scrutinizing claims more intensely than ever. This requires case managers to be more involved than ever before to make sure insurers' requirements are being met, Cunningham points out.

And, to be a true patient advocate, which is the No. 1 duty of case managers, case managers need to know what kind of health care benefits the patient has, what is covered in and out of the hospital, and any kind of limitations, such as maximum annual coverage or maximum number of ancillary benefits, Kizziar says.

Keeping up with the hospital's contracts can be confusing. Northshore Jewish Health System has contracts with 30 different payers, many of which have multiple insurance products. "They pay under different methods and some have outlier provisions and some don't. Some pay a per diem rate and others pay a case rate," Danza says.

Case managers' financial responsibility to their patients begins with providing whatever information the patient's insurance company needs about medical necessity and coordination of care, Cunningham says. "If the case manager fails to call the insurance company in a timely manner, the company may issue a technical denial," she says.

What you need to know

Know the provisions of your hospital's contracts with the payer and understand what they mean. Know the denial process and what will cause a denial.

"Case management directors should educate their staff about insurance contract components and have a working relationship with the person doing the contracting, usually the vice president of managed care," Cunningham says.

Case managers should find out what kind of information the major payers are looking for and at what intervals and understand the criteria used by the insurance company. More payers are using Milliman criteria now, Cunningham says. Some use InterQual and others may use other criteria sets, including homegrown ones.

Case managers also need to understand the underlying implications of the contracts the hospital has with insurance companies.

Danza recommends that case managers work with the hospital's financial staff to ensure that the hospital continues to provide good patient care while protecting the financial interests of both the hospital and the patient.

His hospital system holds routine account meetings and denials meetings during which the financial staff and the case managers look at both the financial and clinical aspects of cases and brainstorm on issues and solutions. The meetings are held weekly at larger hospitals and every two weeks at the small hospitals in the system. They include representatives from admitting, insurance verification, patient accounting, finance, financial counseling, and case management to discuss active cases.

"We have a high level of interaction between the business people and the clinicians to make sure that the financial ramifications of clinical decisions are managed proactively," he says.

The discussions at the meetings are based on real cases. At the denials meetings, the team examines actual cases of discharged patients and discusses ways to avoid denials on similar cases in the future.

The high-risk meetings deal with patients who are in the hospital and whose condition or length of stay makes it possible that the insurance carrier may deny at least part of the care.

"The clinical situation always drives the decision about care but sometimes steps need to be taken to make sure we achieve the appropriate financial outcome. For example, we collaborate on a particular case to determine what things we ought to be doing so we can get the right reimbursement, or we may collaborate on a medically complex patient to make sure we anticipate financial roadblocks that may exist related to future discharge planning decisions," Danza says.

Every function has a defined role in the process and the discussions, he says. For instance, the admitting staff interact with the payers to make sure the insurance remains valid. The case managers present the substance of the case and the treatment plan, including how long the patient is likely to be in the hospital and his or her post-acute needs. The patient accounting department discusses how the hospital is likely to be paid and the financial risks of the case based on the individual payer involved.

"The meetings help us prioritize what the case managers need to do, so they don't, for example, have to spend time appealing denied days that will have limited or no financial impact. When a case is going to have a financial impact on the hospital, the case managers should be appealing the denials," Danza says.

Case managers have an obligation to their hospitals, as well as their patients, to help patients move through the continuum of care as quickly as possible, and to avoid unnecessary costs, Cunningham points out.

"The longer patients stay in the hospital, the more likely they are going to get sick from a hospital-acquired disease. In the future, when payments are decreased because of hospital-acquired issues, the hospital will have to absorb the cost of treatment," she says.

In its final rule, issued in August 2006, the Centers for Medicare & Medicaid Services (CMS) announced its intention to stop paying more for the care of patients who become infected as a result of their patient care than it pays for a patient who does not have a complication. In the interim, CMS has instituted a pilot project that requires hospitals in some states to track and report complications that were not present on admission.

Delays in service may affect not only the hospital's reimbursement but could create a burden for patients who have limited insurance coverage or are self-pay, Cunningham points out.

If case managers see a delay in service, their first communication should be with the attending physician. If that doesn't work, they should pass the information on to their physician advisor.

Collecting data on delays in service and aggregating those can be useful in changing physician behavior, she says. For instance, if a surgeon keeps a hospitalized patient waiting for surgery for three days and it happens just once, that's a lot different from a physician who constantly delays surgery, she says.

Help patients avoid unnecessary costs

Case managers have a responsibility to advocate for their patients and help them avoid unnecessary costs during their hospital stay, Kizziar says.

Case managers should try to influence practice patterns of physicians by utilizing evidence-based practice guidelines, she says.

Cost avoidance is another area where case managers can act as advocates for their patients by helping eliminate tests or procedures that are unrelated to the reason that patient was admitted and are likely to be denied by an insurer.

For instance, a physician may order a colonoscopy for a patient who was hospitalized for pneumonia because the patient never had one.

If the procedure isn't related to the pneumonia and the patient isn't having any symptoms that would warrant a colonoscopy, the insurance company isn't going to pay for the extra days in the hospital while the patient prepares for the procedure, she adds.

"The case manager should go to the doctor and suggest that the discharge orders include the information necessary for the patient to have the colonoscopy on an outpatient basis," she says.

If it's a Medicare patient, the extra days for the procedure can have a dire effect on reimbursement, Kizziar points out.

For instance, if the hospital's reimbursement for the pneumonia DRG is $20,000 and the cost of treating the pneumonia is $17,000, the hospital's profit is $3,000. But if you take the cost of the colonoscopy and additional days of room and board into consideration, it cuts into the hospital's profit or may end up costing the hospital.

Even if the patient has commercial insurance, there is a set sum of money to pay for their care over the year, or over a lifetime, and it's eaten away by having a test in the hospital that could be performed on an outpatient basis, she points out.

To take it a step further, suppose the patient is in her 70s and becomes so dehydrated from the diarrhea caused by the preparation that she falls and breaks her hip. A diagnosis that should have resulted in a five-day stay ends up with a much longer stay and a much higher cost.