Case managers, utilization reviewers team for cost savings of $3.6 million

Care designs correspond to top DRGs

By tracking length of stay and direct variable cost of care, the case management department at Covenant Health System, based in Knoxville, TN, was able to show a savings of $3.6 million in the first three quarters of last year and a denial rate of less than 1% at most of its facilities.

"We looked at length of stay and cost per case and were able to show that we got a low denial rate because of the case managers working closely with the utilization review staff," says Sandra Marshall, RN, MSN, senior vice president, organizational effectiveness/clinical outcomes for the five-hospital system.

The heart of the case management system is Covenant Health System’s Clinical Resource Management system, which includes 16 care designs, or clinical pathways, for the health system’s top diagnosis-related groups (DRGs). (See sample care design pages (1, 2).)

Teams of physicians, nurses, and other clinical staff from across the system developed the care designs. The team members changed depending on the diagnosis. For instance, pharmacists were on the team that developed the pneumonia DRG.

The team used its computerized decision-support tool to identify physicians with the lowest length of stay, lowest cost, and excellent outcomes, and developed best practices using the successful physicians’ treatment plans and evidence-based medicine research.

"For each DRG, we came up with what we believe was the best care design for any patient in our system, based on best practices and key things we knew we had to do," Marshall says.

The care designs include the core quality measures tracked by the National Hospital Reporting Initiative of the Centers for Medicare & Medicaid Services (CMS) and the Joint Commission on the Accreditation of Healthcare Organizations.

"Our case management work has prepared Covenant Health for public reporting," Marshall points out. For the baseline year, 2002, the system tracked direct variable costs per case and length of stay for each of the 16 DRGs.

Data from the first three quarters of 2003 showed the $3.6 million reduction in costs, a figure that she anticipates will increase as time goes on. "The care designs use evidence-based medicine. It’s going to take a while to get everybody cranking on this," she says.

The health system has been working on its plan for about 2½ years. It took most of 2002 to get all the care designs drafted and ready to go into place, Marshall points out.

The health system has tried to implement clinical pathways without a lot of success in the past. "Part of the work I was charged with when I came here was to help the executive vice president put together a clinical resource model and move it through the system," she continues.

One of the larger hospitals in the system, Methodist Medical Center (MMC) in Oak Ridge, TN, already had an active critical pathway program, called CareTrax, which started in 1993.

At the time the care designs were started, 100% of MMC’s patients were on a CareTrax, either a specific program or a generic track for patients who didn’t fit the regular one, explains Coletta Manning, RN, MHA, CPHQ, director of clinical effectiveness and quality improvement.

MMC adapted the 16 core care designs that were adopted systemwide and has continued using other care designs it already had in place. For instance, the hospital still uses its CareTrax for carotid endarterectomy and myocardial infarction.

The hospital has been tracking length of stay for all CareTrax DRGs since launching the CareTrax program in 1993. Manning’s department pulls data for each medical group, depending on when they meet. The hospital’s orthopedic section meets once a month and also receives its data once a month.

The data include total costs of care and variable direct costs, such as laboratories and X-rays, as well as the reimbursement the hospital receives for the services.

"It’s important for the physicians to see the reimbursement received. We look at what costs we can cut, but if the reimbursement is less than the cost, the hospital is still dead in the water," Manning says.

The physicians are eager to get their data because they show how well they are doing, she adds. "They especially look forward to when we look at how we compare to other facilities."

When patients are admitted to any hospital in the Covenant system with a DRG for which there is a care design, the case managers enter the code into the system.

If the patients come into the emergency department (ED), the case managers get them started on the care design there.

If the patient is being treated by a hospitalist, he or she automatically goes on the care design.

"If the physician is one who doesn’t buy into the pathway idea, when the patient gets to the unit, the case manager manages the care as if the patient were on the pathway, Manning adds.

The system allows the case management department to track what percentage of the patients assigned to a particular DRG had the care plan in use, she says.

The fact that the health system has hospitalists across the system was a big plus when it came to implementation of the care design program, Marshall points out. "Through their contracts, they have an incentive to work with us collaboratively."

The case managers spend a lot of time working with hospitalists at the larger facilities.

The hospitalists receive a report card rating them on the use of the care paths, utilization, patient satisfaction, and compliance in meeting Joint Commission core measures. "We measure them on achieving specific lengths of stay for the DRGs under their purview," Marshall says.

The case managers know the target lengths of stay for each of the 16 DRGs the department tracks. If the patient has a condition covered under the CMS and Joint Commission core measures, they make sure the goals and objectives are being met.

With the core measures, the case managers know by the order set what the core measures, goals, and objectives are. They prompt the physicians to document and make sure that the appropriate measures were taken. For instance, they make sure that patients with congestive heart failure were given ACE inhibitors.

Physicians get letters identifying when patients met the criteria for the core measures and didn’t receive the care.

At MMC, Manning has assigned her case managers by service, giving them expertise in handling the patients whose care they manage; the case manager assigned to cardiology once worked for the cardiology group.

The case managers do concurrent review on all patients and make sure they are in compliance with the core measures. For example, if a patient comes into the ED with a myocardial infarction, the case manager makes sure he or she is on beta-blockers.

The case manager is knowledgeable about cardiology and looks through the chart to see if there is a reason the beta-blocker may be contraindicated. If not, she can check with the physician to make sure it’s ordered or that the reason it’s contraindicated is documented.

"All our case managers are out there on a concurrent basis. If you examine the charts retrospectively, it doesn’t do much good," Manning says.

On a systemwide basis, the case management departments still are working to get all of the patients in the system admitted under the 16 DRGs into the system and continuing to work to get physician buy-in.

The obstetricians bought into the care design system immediately and are 100% in compliance. The orthopedic surgeons have accepted the idea as well. "It’s been easier for the surgeons than on the medicine side," Marshall says.

The system currently is profiling individual physicians by DRG. The profile compares each physician’s direct various cost and outcomes to those of his or her peers. The profiles do not identify the physician by name at present, but most of the medical staff know who they are, she adds. "We are hoping this will leverage the rest of the physicians who haven’t bought into the care design initiative when they see what the guys who are really successful are doing."

The nursing plan of care is automated on the hospital’s case management software. The hospital is moving toward a computerized physician entry program, which the hospitalists will pilot.

The system tracks denial rates each quarter, tabulating information such as what percentage of payers have denials, why they were denied, and who the payer is.

Each facility has a denials management team on which the director of case management serves. The team examines each individual denial to see why it occurred. In as many cases as possible, the team deals with the denial while the patient is still in the hospital.

If the utilization review nurse gets an indication from a health plan that a patient day may be denied, she alerts the case manager.

If it’s a question of documentation, the case manager works with the physician to document appropriately. If the patient is ready for discharge, she cranks up the discharge planning process, Marshall says.

Each case management department in the system gets a monthly length of stay report showing how the department met the targets in length of stay and decrease in direct variable costs. The department meets as a whole and looks at ways to improve on meeting the targets.

"The facilities know what is going on and are able to make sure people are held accountable. Accountability is a biggie with us. Everybody knows what our goals and objectives are and works with the team to get them done," she says.

Dealing with insurance downgrades

One problem Marshall’s staff have been dealing with recently is a push by insurance companies to downgrade days and pay skilled nursing reimbursement for acute care days.

"In my mind, this is unacceptable. I have tried to tell them that acute care facilities are not licensed as skilled care facilities and that if a member receives acute care services, we should be paid for that," she explains.

In some cases, the carrier tells the hospital that the patient’s condition warrants only skilled nursing care, not acute care, and that the patient should be discharged.

"If we have fallen down on the job and not done appropriate discharge planning, we have to own up to that," she says.

The case managers at Covenant Health are assigned by unit and by disease process: The cardiac case manager tracks the heart attack and congestive heart failure patients.

The three tertiary care centers have case managers who are RNs and utilization managers who are a mix of RNs and LPNs.

"Our case managers can do utilization review if necessary, but they are more focused on managing the patient care," Marshall says. The two functions are separate even in the small rural hospitals, she adds.

"We want to make the most of the case managers’ potential to gain leverage in our length of stay," Marshall continues. They are cross-trained to do utilization review, but there is a separate utilization review staff to manage the day-to-day utilization review," she says.

In the small rural hospitals, case managers coordinate the care of patients who frequently use the ED.

Covenant Health Systems has two different case management job descriptions:

  • Case Manager I requires a bachelor’s degree in nursing.
  • Case Manager II requires a bachelor’s degree and certified case manager (CCM) certification and earns significantly higher pay than Case Manager I.

All case managers, even those who have worked for Covenant Health for years, are required to get their BSN and their CCM within three years.