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Taking care of hospitalized patients also means taking care of business
Be aware of financial implications for patients, facility
As a case manager, your job involves being an advocate for your patients as well as keeping your hospital's best interest in mind. That means you need to be informed about the financial aspects of patient care.
"The things we do, the decisions we make, and how we interact with patients all are tied to the financial health of the patients as well as to the hospital's bottom line," says Charleeda Redman, RN, MSN, ACM, executive director of corporate care management for the University of Pittsburgh Medical Center. "Doing what is right for the patient is the most important reason why care managers need to understand the business side of healthcare."
Clinical decisions are what drive patient care, but case managers need a basic knowledge of the contracts the hospital has with payers, the services that each will and will not pay for, each payer's requirements for ensuring medical necessity, and the financial impact of additional time in the hospital for the patient and facility, adds Beverly Cunningham, RN, MS, vice president, clinical performance improvement, Medical City Dallas Hospital, and partner and consultant in Case Management Concepts, a case management consulting firm based in Dallas.
When the Centers for Medicare and Medicaid Services (CMS) rolls out value-based purchasing, case managers also will need to understand how the hospital will be impacted financially by readmissions, by mortality, and by all the quality measures on which the hospital's payment will be based, Cunningham adds. Brian Pisarsky, RN, MHA, ACM, CPUR, corporate director of case management at DCH Medical Center and DCH Northport Medical Center, both in Tuscaloosa, AL, says, "Case management is where the clinical and the financial aspects of healthcare meet. Case managers need to have a clinical understanding of why patients are in the hospital and what care is appropriate, but they also have to make their decisions on financial as well as clinical issues." (For details on the case management department's revenue integrity team, see story, below.)
Case managers need to know how the hospital is paid so they can follow all the payer requirements and ensure that the hospital gets paid appropriately, Pisarsky says. "I want everyone who comes into the department to know that we talk about finances in this department. Medicare pays one way, Medicaid a different way, and commercial insurance companies pay in multiple ways," he says. "Case managers need to know the difference in order to do their work effectively and efficiently."
Case managers can't develop an appropriate plan for patient care without taking the insurance benefits into consideration, Redman points out. For example, Medicare patients don't have the same co-pays for observation services as they do for an inpatient admission. The same situation is true of many patients with commercial insurance, Redman points out. "We no longer can take it for granted that patients have certain benefits," she says. "Companies are changing their employee benefits every year. Patients who had a skilled nursing benefit may no longer have it, or they may have a limited benefit. Care managers need to know what each individual patient's benefits are."
Don't make any assumptions that because patients are employed by the same company and have the same insurance, they have the same benefits, Redman says. "During open enrollment, companies offer employees a variety of packages," she says. "The benefit structure is different depending on what the employee selects." (For tips on tailoring a discharge plan around a patient's benefits, see story, below.)
At the University of Pittsburgh Medical Center, care managers work closely with the patient access department to find out the specifics of the benefits for their patients as they develop the patient's discharge plan. "One person can't know everything about every patient's benefits, but we have the resources available so the care managers can get the knowledge they need and plan appropriately," Redman says. (For details on how care management and finance collaborate, see story, below.)
At Medical City Dallas, a multidisciplinary team meets twice a week and reviews the cases of high dollar patients and those who are unfunded or underfunded. The team has noticed an increasing number of patients whose insurance has an unlimited lifetime maximum but an annual maximum of $100,000 for inpatient care. Cunningham tells of one patient who needs a transplant, but her insurance policy has a $100,000 limit on transplants, which is a figure that won't cover the cost of the transplant or the cost of the post-transplant care. "It's very important for case managers to understand all the aspects of their patients' benefit plans," she says. "We need to look beyond what their patients need during the current episode of care and be a good steward of their benefits to ensure that they will have coverage for post-acute care. This is very important for patients with complex disease processes or procedures, such as transplants or ventricular assist devices."
Case managers need to understand the implications for the patient and the hospital if patients experience delays in service that result in a longer length of stay, Cunningham adds. Delays in service not only may affect the hospital's reimbursement, but they also could create a financial burden for patients. Most patients, whether they have commercial insurance or are covered by a government plan, have a financial limit or a benefit allowance, and many will have to pay a percentage of the hospital charges, Cunningham points out. For example, consider the example of a patient who is supposed to fast before a procedure, but he receives his lunch tray and eats the meal. He has to stay in the hospital another day. Also, if members of the radiology staff are so busy that they bump a patient and nobody intercedes, it increases the length of stay and has the potential to impact the patient and the hospital financially, Cunningham adds. Another example is when family members delay the discharge because plans haven't been made for a post-acute facility. They need to understand that they are using up the patient's benefits, Cunningham says.
"If patients don't progress through the continuum in a timely manner, we're not being good stewards of their resources," Cunningham says. "There is a responsibility to be a good steward of patients' resources among the entire treatment team, but the coordination falls back on the case manager."
When patients stay in the hospital longer than necessary, there's no added value, she says. In addition to being a financial issue for the patient and the hospital, the longer stay becomes a patient safety issue as well, Cunningham says. Patients have an increased chance of experiencing a fall or getting sick from a hospital-acquired disease, she explains.
Case managers also need know the hospital's cost-per-case and be aware of the overall cost of care. This information enables them, for example, to work with physicians in choosing less expensive but still appropriate medications for the patients. Cunningham and a hospital pharmacist meet with the hospitalist team every month and talk about the cost of various medications. "We ask them to consider other more cost-effective medicines if they will work as well as the more expensive medications," she says.
As CMS and commercial payers make changes in documentation requirements and medical necessity criteria for procedures, case managers need to stay up to date, Cunningham says. For example, Medicare has made the medical necessity criteria more stringent for four procedures: carotid stents, implanted defibrillators, bariatric surgery, and certain types of pacemakers. "Patients having these procedures have to meet certain criteria or Medicare will deny payment for them," Cunningham says. "This means the documentation has to be in place before the procedure is performed and it has to translate into an ICD-9 code. In the past, patients never had to meet criteria for these procedures. They had them and CMS paid for them. Now case managers need to have a good relationship with the physicians and work with them when they order these procedures."
As she consults with hospitals, Cunningham has observed that case managers don't always give out the Hospital Issued Notice of Non-Coverage (HINN) when a patient is receiving a test or procedure that is unrelated to the reason for which he or she was hospitalized. For example, a patient is admitted with pneumonia, and the family requests a CT scan of the abdomen to determine whether his cancer is progressing. If a procedure for a Medicare patient isn't related to the reason for admission, it rolls into the Medicare Severity-Diagnosis Related Group (MS-DRG) and the hospital's costs for the patient stay go up. If a procedure requested by the family isn't related to the hospitalization, case managers should inform the family that they are responsible for paying for it and should offer them the option of having the procedure as an outpatient, she says.
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Ensure patients' needs are met after discharge
Look for affordable alternatives
When case managers develop a discharge plan, they should take the financial implications for the patients into consideration and look for options that the patients can afford, says Brian Pisarsky, RN, MHA, ACM, CPUR, corporate director of case management DCH Medical Center and DCH Northport Medical Center, both in Tuscaloosa, AL.
Case managers need to understand what every patient's plan covers and doesn't cover and what co-payments or deductibles the patient might have to make. If the patients don't have coverage for the post-acute care or can't afford the co-pay, they are at risk for emergency department visits and readmissions, Pisarsky adds.
At his hospitals, case managers work with the insurance companies, community agencies, and other organizations to come up with alternatives when patients can't afford what they need after discharge. For example, if patients need medication after discharge and don't have coverage or they are in the Medicare Part D donut hole, the case manager might be able to set them up for medication assistance through a pharmaceutical company. If the patient's insurer won't pay for a certain medication or it is not on their formulary, the case manager works with the physician to determine if a different medication or generic brand that is covered by insurance would be as effective.
Sometimes patients don't have home health or nursing home coverage and they are too sick to go home, but they don't qualify for inpatient rehabilitation. In those cases, the case manager can contact the insurance company and ask if there is a way to flex benefits so the patient can receive rehabilitation services in a skilled nursing facility. "It costs less to send a patient to a nursing home than to keep them in the hospital, or pay for multiple hospitalizations or emergency room visits," Pisarsky points out.
Sometimes, if all else fails, the case managers can arrange for the patient to receive additional physical therapy and other services while they are in the hospital. Their family members can attend the sessions so they can continue them at home. "Most of the time when they encounter difficult discharges, case managers talk to the insurance company case manager to work out arrangements," he says. "There's no cookie-cutter process for this because patients don't have the same benefit or needs after discharge, but there are creative ways to get patients what they need after discharge. We need to think outside the box."
Work closely with the business office
Frontline CMs see issues that affect bottom line
As executive director of corporate care management for the University of Pittsburgh Medical Center, Charleeda Redman, RN, MSN, ACM, takes an active role in contracting and business issues. Redman is the liaison between care management and the integrated health system's contracting department and represents care management at the biweekly meetings of the chief financial officers of the system's 20 acute care hospitals.
"What care managers encounter in our day-to-day duties drives what our hospitals need to do to stay competitive," she says. "We track payer issues on a day-to-day basis and report any trends to the contracting department."
Redman meets regularly with the contracting department to report any issues with payers that arise in the care management department. She works with the department to ensure that the hospital is being paid in the way the contract is written and to point out any problems that could be avoided when the contract is renegotiated. For example, the team analyzes day-to-day concurrent denials and how they are tied to the way payer contracts are structured, then uses that information when contracts are renegotiated.
"In our health system, care management collaborates with the contracting department to ensure that contracts with payers are managed appropriately. As care managers, we see the payer issues first-hand, and I relay the information to the contracting department," she says. "Our goal is to ensure that we are paid appropriately and to avoid any issues in which payers do not act in accordance with their contract." For example, some payers tend to micromanage patient care on a day-by-day basis when their contract is structured a different way. Redman relays the information to the members of the contracting department, who discuss the situation with the payer and use the information when renegotiating a contract.
Some payers have contracts to pay on a per diem basis and spend a significant amount of time on day-to-day management and micromanagement of the patient care. "This is overwhelming to the care managers who work with the payers," Redman says. "Our contracting department will approach the payer and suggest that a case rate might be a more appropriate type of payment."
When contracts are being negotiated or renegotiated, members of the contracting department rely on input from the care management department to ensure that the contracts are not unduly restrictive to the hospitals' ability to manage patients' care, she says. "I have an opportunity to see many of the contracts they negotiate to understand how the payers are held accountable," Redman says.
She is notified when any contract or payer changes come through contracting or the business office, and Redman shares the information with the care management directors of each hospital. The frontline case managers in each hospital are educated on how contracts are negotiated and given the basics of each contract.
When Redman meets with the chief financial officers for each hospital, she updates them on payer trends. "We look at how level of care determinations and other issues impact revenue and how process changes and new payer requirements affect the hospital's bottom line," she says.
Any time there are changes in the medical necessity criteria set, Redman brings it back to the revenue cycle team so they can conduct an analysis of how it will impact the hospitals, she says. For example, when InterQual moved some inpatient procedures to its list of procedures that are appropriate only on an outpatient basis, Redman notified members of the revenue cycle team. They determined how the change was going to affect admissions and what it would mean to the organization.
Revenue integrity team follows the patient stay
CM department ensures reimbursement
At DCH Regional Medical Center and DCH Northport Medical Center, both in Tuscaloosa, AL, the case management department includes a revenue integrity team that reviews the patient record through the entire stay until the final, correct payment has been posted and verifies that the hospital is being paid appropriately.
The revenue integrity team includes three nurses and four business office patient financial service experts who know how claims get paid and how to work with insurance companies. The team, which is part of the case management department, analyzes underpayments and denials to determine if the hospital was paid for services that were precertified. They determine the best way for the hospital to get paid, whether it's by reviewing the case with the insurance company, correcting the coding, or appealing it.
"We know from the time of admission through the final payment what we need to be paid," says Brian Pisarsky, RN, MHA, ACM, CPUR, corporate director of case management services. "We look at every case to determine if the patient got the services he or she needed, and that we are being paid exactly for the services the patient needed and received and not one dime less."
The case management department begins following patients before admission and follows them throughout the stay, Pisarsky says. The pre-certification case manager makes sure the patient's stay is precertified and that all pertinent information is in the record. The emergency department (ED) case manager follows patients coming in through the ED until they are in a bed. The department includes utilization review nurses who interact daily with case managers and social workers.
Throughout the stay, case managers enter all patient reviews and approvals into the software, which allows the revenue integrity team to track the patient throughout the stay. "We attempt to cross every 'T' and dot every 'I' from pre-admission through discharge to make sure we will be paid appropriately and the patient gets the world-class care they deserve," Pisarsky says. "It takes the entire team."
If it appears that the hospital is not paid appropriately for a claim, the software system has documentation to show whether the patient's admission was precertified in the right amount of time and if the insurance company was called to approve services the patient received. "If our records show that we got everything approved in a timely manner and the hospital isn't being paid what we contracted to be paid, we appeal," Pisarsky says.
If there is a pattern of behavior on the part of the insurance company, the team works closely with the contracting department to ensure that the hospital gets paid appropriately. For example, one insurer specified InterQual for medical necessity, and then hired a third-party company to review admissions and verify that the precertification was correct. The third-party auditors didn't follow InterQual criteria and erroneously denied some of the cases that met medical necessity. "We reviewed the cases and determined that they did meet InterQual medical necessity criteria, and then contacted the insurance company," Pisarsky says. "We would have lost tens of thousands of dollars on each case if we hadn't been watching."
The revenue integrity team reviews random cases coordinated by each case manager and social worker each month to make sure the documentation is correct and the precertification information is accurate. If there is a trend that results in denials, Pisarsky educates the entire staff. If the problem is with an individual employee, the supervisor discusses it with the employee. "Every employee is audited every month," he says. "Sometimes, particularly with new employees, they aren't sure how to input the information into the computer system. We re-educate these individuals to put the right number in the right block so our records will be accurate and complete."
DCH Health System assigns some of its utilization review nurses to work exclusively with a large health plan that has about 500 admissions a month, and the system has delegated DCH to conduct its own utilization review. "They audit us to make sure we are doing it correctly," Pisarsky says. "Even if it costs more to have individuals assigned to do their utilization review, it's worth it to avoid any potential error up front, which would cost us a lot more in the end."