Today’s case managers have to be aware of the financial piece in every aspect of the patient stay in order to be a good steward of their patients’ benefits and make sure they get the services they need, says Pat Wilson, RN, BSN, MBA, assistant vice president for case management and transplant services at Medical City Dallas Hospital.
“Case managers need to understand the revenue cycle, which includes how the hospital is being paid, what they are expected to provide to the insurer, and how to appeal when an insurer denies a stay and the patient is still in the hospital. They have to understand commercial insurance and government payers, what services they will cover for each individual patient, whether patients are in or out of network, and whether the reimbursement is on a per diem basis or a DRG payment,” she says.
If case managers know a patient’s benefits upfront, they can develop a plan to meet his or her needs, she says.
For instance, if a patient still meets inpatient criteria but has exhausted all of his Medicare days, the case manager can talk to the physician and determine if there is an alternative level of care that would still meet the patient’s needs, she says. Or if a patient has no funding for post-acute services and poor functionality, the hospital, in the best interest of the patient, may need to prolong the length of stay to provide additional services normally provided at a lower level of care, such as physical therapy, speech therapy, or occupational therapy, Wilson adds.
Case managers need to understand the payers, whether it’s Medicare, Medicaid, or a commercial payer, and how each payer generally reimburses for certain services, according to Karen Hornsby, CPA, associate director of revenue cycle at Berkeley Research Group, an Emeryville, CA, healthcare performance improvement firm.
They need to know if patients are in or out of network and whether reimbursement is on a per diem basis or is a DRG payment. For instance, if case managers know that when the hospital is reimbursed on a DRG basis it will receive the same reimbursement whether the patient stays three day or four days, they will optimize the care and ensure that the entire stay is medically necessary, she says.
It’s possible for a case manager to be coordinating the care of two patients with the same diagnosis and the same physician but whose insurance provides quite different resources, says Donna Hopkins, MS, RN, CMAC, vice president at Novia Strategies, a Poway, CA-based healthcare consulting firm. It’s the case manager’s job to know the benefits and work with the patient, the insurance company, and the post-acute providers to make sure that each patient gets what he or she needs, she adds.
Case managers need to know what the expenses are for patients’ care after the discharge and who is going to pay for them, Hornsby says. They should understand the financial impact for patients if they go out of network for post-acute care and explain to patients that their deductible or co-pay may be impacted if they choose a different provider, Hornsby says. “Unintentionally directing patients to out-of-network providers may have a serious effect on patient expenses and then on satisfaction with their stay,” she says.
When patients no longer meet medical necessity for an acute level of care and they have no funding or limited funding, it’s a challenge for case managers, Hopkins says.
“They are up against the family who wants the best care for the patient, and the physician who doesn’t want to move the patient. They can’t create resources for patients with no funding. This is just another reason to know from the day of admission what benefits patients have and what services they are likely to need and plan accordingly,” she says.
Start to educate new case managers on payer requirements as soon as they are hired and make sure they have the information they need about insurance contracts and that they understand how Medicare and Medicaid work, Wilson suggests.
“If they don’t understand the contract language and know what information the insurance company wants and when it’s due, they are already set up for failure. We try to develop bullet points with pertinent information that is important for our staff to know,” she says.
“In a perfect world, case managers would have access to all commercial contracts and have time to delve into them to find out exactly what benefits their patients have,” Hopkins says.
Since that’s not always possible, she suggests working with the contracting department to create a color-coded grid of essential information about each payer’s covered benefits and utilization review requirements.
With the emphasis on reducing readmissions and the Centers for Medicare & Medicaid Services’ move toward paying one lump sum for an entire episode of care, case managers have to look beyond the hospital stay and be familiar with resources outside the hospital walls, Hornsby says.
“In recent years, acute care organizations have been focused on reducing the length of stay, but that may not be appropriate in many cases today. It is a new day, and a few more days added to the length of stay could prevent costly post-acute placements, reduce total costs, thus positively influencing the hospital’s performance on the Medicare expenditure per beneficiary portion of value-based purchasing,” Hopkins says.
“In the case management world, we have to move our thinking beyond the current acute care episode and fragmented delivery system and assess the best value, not only for the organization, but most importantly, the patient,” Hopkins says.