By Jeanie Davis

As hospitals grapple with ever-changing utilization review (UR) guidelines from CMS and consolidate with other facilities, many are centralizing their UR operations.

Under a centralized model, an offsite UR nurse or case manager is alerted when a new patient is admitted and sees all the documentation necessary to determine whether the medical record supports the patient’s status. The offsite reviewer then works with the patient’s physician or an onsite case manager to receive payer authorization. Offsite reviewers do not see the patient; instead, they complete their review with the electronic medical record and conversations via email or phone with the onsite clinical team.

Centralized UR establishes a standardized common process across facilities, which is a key benefit for multihospital health systems, explains Brian Pisarsky, RN, MHA, ACM, a senior vice president for Kaufman Hall’s Performance Improvement consulting group.

“In a large system, individual hospitals will often have their own UR processes. Some might be very good, but some might be poor,” he explains. “A centralized UR process allows a health system to bring leading practices together. The health system can also establish specialists among the UR staff, with dedicated experts for specific payers who understand their payer’s contracts and processes. This helps ensure more claims approvals and less denials.”

Centralized UR does not reduce the need for clinical case management, but it can free the case manager (who may have a default UR function) to focus on coordinating care, discharge planning, and preventing readmissions, Pisarsky adds. “Utilization review needs to be timely and done every day. It can fall to lower priority if the case manager has too many responsibilities.”

Pisarsky’s consulting team has seen more hospitals revamping their processes in a move toward centralization. He also has seen a greater focus on contracts to circumvent denials. “We’re seeing hospital organizations working with their revenue cycle teams to understand their managed care contracts and UR processes, looking specifically at claims approvals, denials, and appeals,” says Pisarsky. “It can make a major difference in improving their denial rates.”

Because centralized UR involves offsite reviewers interacting with onsite clinical teams, lines of communication and accountability must be thought through carefully. Pisarsky offers these tips for successful implementation of a centralized UR function:

• Focus on due diligence. Work to improve your claims process at every step, he advises. Examine past denials to better understand why they occurred. “Historical data from each payer can be leveraged to improve systems hospitalwide. This can be especially beneficial for smaller hospitals when they join a larger system,” says Pisarsky.

Focus specifically on the big-dollar claims first to understand what went wrong, then move to tighten denials on smaller claims. Analyze the details of the contract to see where discrepancies exist and educate UR and case management staff on contract specifics. Where can the UR process be improved? How can patient care teams improve their performance? These are important factors that must be addressed to prevent future denials.

• Respect the contract’s timeline. Does the contract request a specific time frame for notifications, authorizations, and appeals? If a patient is admitted on a Friday at 4 p.m. and that time frame will fall on a weekend, is UR staff available to cover it? “Many hospitals don’t have a weekend protocol in place,” says Pisarsky. “We’re seeing some managed care companies that require this information over the weekend and will not wait until Monday morning. Hospitals may need a process in place for weekend coverage.”

• Establish one centralized contact point for payers. Denials carry a deadline for appeals, but too often, a letter of denial will get lost in the health system, says Pisarsky. This is especially true in large multihospital systems where there often is confusion about where denial letters “land.” Whose desk or office receives them? Who is accountable for moving this information forward? To whom should the information be sent, and within what time frame?

Each hospital in the system may have its own UR office and business office, and the health system’s corporate office also may receive these letters. This confusion can slow the appeals process and could result in missing an appeal deadline. If a centralized UR office is established as the contact point for all payers, this will help limit the number of claims denials that get lost in the health system.

• Identify a liaison with physicians. When an admission is concurrently denied, who talks to the attending physician for additional information or to set up a peer-to-peer review? Does a staff member at the centralized UR location call the physician, or does the onsite case manager have the discussion? “Those details need to be worked out,” says Pisarsky. “I find the hospital case manager, who collaborates with the doctor on a daily basis, often has the best results. If it’s a call from an offsite UR team, someone the doctor might talk with once or twice a month, it’s just not as effective.”

This decision might also be dictated by the contract. Some payers require the attending physician to complete the peer-to-peer review or appeal. Knowing the details of contracts is vital.

• Identify a team leader for implementation. Centralization can pay off in terms of claims and authorization approvals. But it takes a team to develop the new processes, says Pisarsky. “Case management departments need a team leader who takes on the entire project, which can be disruptive for an organization. They need someone who understands the big picture and all the details that must be worked through and who understands the importance of centralized reporting and the power of data.”

Communication is the key to these system changes, Pisarsky adds. From admission to discharge, the process of notifications to payers and day-to-day reviews are facilitated via communication. “A centralized process gives each hospital department and each payer a specific person to call, rather than working with multiple individuals at different hospitals,” he says.

Although centralized UR can offer many benefits, the decision to centralize is individual to each hospital or health system and should be objectively evaluated in light of an organization’s willingness to change and to establish the processes necessary to effectively manage a centralized UR function. Once a decision to centralize is made, the goals and expectations for all involved should be communicated clearly and reviewed often to ensure that implementation stays on track and the goals of centralization are achieved.