By Jeni Miller

Challenged with employing enough staff in case management departments, the need for expertise in every role, and the increased requirements from payers, case management leaders are evaluating centralizing utilization review. This centralization carries both benefits and challenges, some of which are amplified because of the current healthcare climate.

Centralized utilization management (UM) involves separating the utilization management function from the bedside hospital case manager role. Sometimes, staff who are refocused to utilization management only are moved off site, or remain on site but separated in an office or other space. Either way, these staff members focus on these three types of utilization management:

  • Prospective: Before patients arrive at the hospital;
  • Concurrent: The day-to-day review of hospitalized patients;
  • Retrospective: Managing patients who have been discharged from the hospital.

“Hospitals vary in how they manage the UM functions. Some hospitals have UM specialists only doing UM on admission; others may have the UM specialists performing UM on certain payers,” says Beverly Cunningham, RN, MS, ACM, partner and consultant at Case Management Concepts in Dallas. “This can be quite confusing for both physicians in knowing who is responsible for the UM function and the case management department staff, as the UM function is dependent on some social work functions as well.”

Gain Consistency

However, there are several reasons health systems have chosen to consolidate their UM functions. First is the multitude of payers, each with their own ways of determining medical necessity criteria.

“It can be confusing and time-consuming to keep up with all the rules, both by commercial payers, state payers, and the federal government,” says Cunningham.

In addition, it is difficult to fill all the case manager positions in hospitals. When the UM component is removed from the bedside RN case manager role, these staff members often can work from home, says Cunningham.

This allows the RN case manager at the bedside to focus more on care coordination, clinical discharge planning, and resource management, says Cunningham. Giving the UM functions to another case manager allows them to act as specialists and become experts in understanding payer requirements.

Brian Pisarsky, RN, MHA, ACM, is senior vice president at Kaufman Hall, a consulting firm in Chicago.

“[Centralizing] can more easily align payers and facilities,” says Pisarsky. “Everyone knows who is talking to whom. You have one person or group of utilization management staff who deals with one payer for the whole system. With greater consistency in communications between the payer and the health system, the health system is more likely to get paid and diminish costly denials.”

Pisarsky notes many hospitals are simply seeking a more consistent approach across the enterprise, allowing for common goals and objectives across the system.

Data analysis is one way to gain more consistency, which is another factor hospitals consider in the decision to centralize, says Pisarsky. If this is a goal for a particular health system, it is important to have a solid backup plan in the event of an interruption to service or power.

Health systems can use compiled data from across their facilities to drive decisions at their organization. “For example, if data show that there has been an increase in denials from a certain payer, this can drive conversations with the payer to determine the cause of the increase,” Pisarsky says.

“The level of detail that is available when data from all facilities are consolidated is often much higher, leading to an improvement in reducing denials before they occur,” says Pisarsky. “There’s no winning with denials — if you don’t get paid the first time, it takes time, energy, and money to get it worked out after the fact to make it right.”

Denials not only create more work for the hospital case manager, but also create frustration for the patient by potentially adding out-of-pocket expenses, affecting their length of stay, or holding up their discharge plan.

Avoid Another Silo

Although consolidation and centralization can help make data more accessible and useful, opponents point out that it could create another silo, leading to longer stays and more denials due to lack of quality communication between UM professionals and bedside case managers.

“It definitely has the propensity to add another silo,” says Cunningham. “UM is a time-sensitive function, often dependent on the specialist having conversations with the physician. This adds more work for the physician, in answering communication from the specialist, as well as the RN case manager in the hospital.”

Cunningham says slower or nonexistent communication also can cost the hospital more money.

“When the time-sensitive function is lost, there is the opportunity to have a patient in observation service level of care, when they could possibly have been transitioned to inpatient,” she says. “The hospital then loses the higher-paid level of care reimbursement because observation service is typically paid less than inpatient. This is especially true in the case of Medicare patients and the Two-Midnight Rule.”

Pisarsky agrees, and reiterates the need for solid communication when utilization management functions are centralized or otherwise moved off site.

“Without direct patient interaction or time with peers, utilization management professionals must focus on constant communication with on-site case managers as well as department leadership,” says Pisarsky. “Otherwise, yes, it could create silos or longer stays because utilization management is not seeing what is going on firsthand with the individual patients on the unit.”

Similarly, putting someone with clinical knowledge on the floor can be crucial to ensuring the process flows smoothly. If a hospital moves the UM functions under finance, it can present extra challenges the team will need to discuss and mitigate.

“This can be challenging because there are now two different departments responsible for this very important function that is not only focused on finance, but [also] the clinical aspect of the patient,” says Cunningham. “Finance leaders do not understand the clinical focus of the UM function. [At the same time], the RN case manager in the hospital still has the responsibility to understand UM and its role for each of their patients. If the UM function does move under finance, the case management leader should work very closely with the leader of that UM function.”

The Effects of COVID-19

Regardless of whether organizations and professionals desire it, COVID-19 has forced many to provide off-site UM. In those situations, not all data may be centralized, but the necessity for carrying out the UM role from home is a reality for many.

“Right now, the kids are at home, people are adjusting to life away from the health system, and it’s been a big change,” says Pisarsky. “Lack of relationships and face-to-face communication — and case management is really a face-to-face relationship — means that the team of case managers, physician advisors, social workers, and case management leadership needs to be in continual discussion to iron out all the wrinkles. I would say a weekly face-to-face communication plan is needed to transition toward leading practice.”

On the administrative side, the effects of COVID-19 on UM remain prominent. Hospitals are working to find ways to manage these effects.

“COVID has really impacted every function in a hospital,” says Cunningham. “Some payers have decreased the UM expectation of hospitals. However, it is still the responsibility of the hospital to manage the utilization component for patients. We do not know yet how payers will be reviewing for denials of patients in the hospital during this public health emergency.”

During and after COVID-19, hospital case managers — especially those engaged solely in the utilization management role — have the opportunity to use their skills for the benefit of the patients and hospital. Some tricks of the trade can help make for a more efficient process, regardless of whether UM is centralized.

For those who are focused on the UM role, Pisarsky advises starting the utilization review earlier in the morning and not letting it fall to the bottom of the priority list.

“I know sometimes something has to give in the very hectic world of case management,” he says. “If this falls to bottom of the priority list, then the hospital doesn’t get paid and it compounds the resources required from everyone. Utilization management is as important now as it has ever been, so getting it right is important. The good thing about centralized utilization management is that we get better at something if we do it every day — and we can use data to drive our decisions.”

Cunningham stresses the importance of excellent communication and attention to the UM function as a priority. “Case management leaders need to ensure that collaboration among staff is present and that there is a sense of urgency in this function,” she says. “There should be adequate staffing to allow for both the UM specialist and the RN case manager to have time to communicate and collaborate.”

Understanding the advantages to centralizing utilization management functions as well as the potential pitfalls puts hospitals and case managers in a position to make the best informed decision to maintain successful case management programs.