CM process redesign focused on level of care

Initiative supports the physician's choices

At Cheyenne (WY) Regional Medical Center, recovery audit contractor (RAC) determined that a significant number of surgical one-day inpatient stays should have been billed as observation. In response, the hospital has begun an initiative to redesign its case management program to significantly address level-of-care issues and to become the department for care coordination and patient flow.

In January, the hospital's RAC reviewed surgical one-day stay cases that were billed as inpatient and determined that a large portion of the cases should have been billed as observation. Those cases could lead to a high dollar offset, according to Victoria Choate, RN, CCM, RN-BC, CCP, PAHM, vice president of performance excellence and chief quality officer. The cases included defibrillator implants, pacemaker implants, and renal artery angioplasties. Physician documentation was a big issue in the RAC denials, Choate says.

"When we reviewed the level-of-care orders from the attending physicians, we found a lot of variation. We knew from the RAC review that our system was not working well," she adds.

The hospital is redesigning its case management process to better support the physician's identification of the correct level of care, Choate says. "The initiative is not so much about what case managers can do to fix the level of care but rather, it's ultimately to re-engineer how care is delivered," she says. In the past, the case managers reviewed the orders at the time the decision to admit was made and advised the physicians as to level of care. Now, they review the admission after the patient is admitted to confirm the physician's decision.

"The Center for Medicare and Medicaid Services [CMS] is very clear about level of care orders. The level of care order must be written by the physician at the time the physician has examined the patient, and it must be based on what the physician knows about the patient and expects what his or her needs will be," she says.

Choate worked with a team that included the hospital's physician advisor for case management, the chief medical officer, and the chief revenue cycle officer to create a guide for admitting physicians to use in determining level of care. They wrote the content for the guide, which was published by the hospital's marketing department. "We recognize that physicians need to own the level-of-care decision, and we're providing them some simple tools to determine what level of care is appropriate," she says.

The level-of-care guide includes an inpatient decision tree that allows doctors to look at the timeframes and intensity of patient needs for observation and inpatient care. It includes what diagnoses are appropriate for observation and what are not, as well as the Medicare Inpatient Only list for surgical procedures, which is used by some commercial payers. The team worked with the hospital's Medicare Fiscal Intermediary (FI) to determine what it was looking for in the way of documentation, and the team included that information in the physician guide.

The hospital gave the guide to every physician with admitting privileges and to the emergency department physicians. "Often the emergency department physicians call the community physicians for advice on the level of care because the community physician is aware of the patient's medical history. That's why it's so important for all physicians to understand about the level-of-care criteria," Choate says.

The guide includes information about expectations of major local payers. For example, a commercial HMO limits observation to 24 hours and changes the claim to inpatient if 24 hours and one minute is billed. Another payer follows Medicare's inpatient-only list to determine medical necessity after surgery.

The hospital implemented a special order form for level of care on Aug. 1, 2011. The team educated the physicians and the office staff, beginning with the highest volume admitters first. They collected any older order forms and replaced them with the new level-of-care form. "We met with every department in the hospital and the medical staff executive committee to get buy-in," Choate says.

In the past, physicians simply wrote "admit" on the order form without consistent consideration of the level of care. From their standpoint, the patient would get the same care no matter what level of care was in the medical record, Choate says.

In today's healthcare environment, the old kinds of orders are no longer good enough. Documenting why the care is clinically required is as important as documenting what care is required. Physicians can't just write that a patient is being admitted because it's medically necessary. They have to document whether the patient should be in observation or admitted, and why, she adds.

The team developed a single level of care form that all physicians are required to use to admit a patient. Only about 20% of patients are admitted to the hospital by hospitalists. Physicians in the community who are directly admitting the patient to the hospital can complete the level-of-care form and fax it to the access center, or they can telephone the order to the nurses in the center.

The form has three level of care options for the physician to select from: inpatient admission, observation care, and outpatient in a bed. Every level of care has a simple definition. "We wanted to be very clear from the commercial payer perspective and Medicare's perspective that all admissions are appropriate and necessary or that they are what we call safety admissions: patients who come into the emergency department but cannot safely be sent home," Choate says.

When case managers review the patient chart and disagree with level-of-care orders, they call the attending physician. If the physician is unavailable, the case is referred to the case management department's physician advisor. If the physician advisor hasn't returned the call in an hour, the case manager contacts the Executive Health Resources, a Newton Square, PA-based physician advisor company with which the hospital contracts.

"The purpose of engaging the outside firm is to expedite the ability to ensure that the patient is in the correct level of care if our physician advisor is unavailable. We want the case manager at the bedside, doing reviews, not making multiple telephone calls. Any questionable orders move up the chain very quickly," she says.


For more information contact:

  • Victoria Choate, RN, CCM, RN-BC, CCP, PAHM, Vice President of Performance Excellence and Chief Quality Officer, Cheyenne (WY) Regional Medical Center. E-mail: