Team approach avoids denials and saves millions

Work cooperatively with business office, clinics

In 1999, Presbyterian Hospital of Dallas had a denial rate of 1.12% of gross revenue at year end. The denial rate began to decline steadily following the implementation of a denials management team and process improvement teams, both of which include members of the case management staff. The process has saved millions of dollars. For fiscal year 2003, the denial rate has dropped to 0.2% of gross revenue.

"Implementation of a denials management team and identifying where in the process we could improve to prevent denials has made a huge difference," says Kathy Sorce, MS, RN, FNPC, clinical resource manager at the 866-bed facility.

The denials management task force is made up of representatives from departments responsible for admitting patients, coding patient data, assessing medical necessity of admissions and procedures, billing for services, and processing denials. The business office runs daily reports, and the appropriate department takes immediate action in each case, providing appropriate follow-up to overturn the denials. "We’ve seen a huge decrease in dollars denied in the last few years," she says.

As the business office receives denials, whether from insurance, Medicare, or Medicaid, they are coded as to the cause. The goal is to complete an analysis of the denial and, if the hospital submits an appeal to the payer, to do so in fewer than 30 days from the receipt of the denial.

Case managers are responsible for reviewing and appealing the medical necessity denials.

"Case managers often know that these denials will come in. Many times, there are already notes in the patient file that we agree. There may have been a patient or family or physician issue that kept the patient a day longer," Sorce explains.

Case managers write appeal letters for the denials, using a blank template and plugging in pertinent data, then attaching whatever parts of the medical record are needed.

The denials management task force analyzes trends in denials and suggests changes to correct any glitches in the process.

Representatives from case management sit in on the process improvement committees for each service line. The committees are made up of disciplines involved in the care of patients for that particular service line and include physicians, nurse managers, staff nurses, pharmacists, therapists, and an administrator.

"They are the clinical liaison link with what is going on, and they fill a vital role in process improvement," Sorce says.

For instance, the medical process improvement committee looks at issues involving how the patients move through the continuum of care. One problem the committee tackled was the number of patients whose lengths of stay were extended while they waited for their therapeutic anticoagulation status. The committee recommended establishing a coumadin clinic, which allows patients to be discharged early and go to the clinic for proper monitoring.

"The case managers often know where the delays are occurring in the hospital, and they are in a position to see where the process can be improved," Sorce continues.

Other process improvement teams include oncology, women and child services, surgical services, cardiology/cardiovascular services, and pain management.

"Part of what we look at is what’s going on in terms of length of stay. Case managers can identify trends and know if we see an improvement in length of stay or see length of stay creeping up. They are able to respond to the questions about what is happening and what is being done," she explains.

The process improvement committee meets monthly or every two months, depending on the needs of the group. It looks at clinical indicators by the Joint Commission on Accreditation of Healthcare Organizations and the Centers for Medicare & Medicaid Services and works on improving compliance with the indicators as well.

One group looked at the referral process and how soon patients were getting consultation for rehabilitation or skilled nursing facilities.

"These consults can result in a one- or two-day delay. We have focused on the discharge planning process to make sure that the nursing units, in coordination with social work and case management, are doing discharge planning rounds in the best way. We hold the staff and the case managers accountable for managing length of stay," Sorce notes.

Three years ago, the hospital had only five utilization management coordinators for the whole facility. The utilization management coordinators worked with the insurance company on continuing stay review and authorization so the hospital was assured payment. Clinical documentation specialists were responsible for reviewing the documentation of the physician and making sure the documentation represented the resources used.

"It wasn’t enough. We expanded the program out of necessity to be able to truly manage the patients’ length of stay and their needs while they are in the hospital," she says.

The hospital redesigned the program, combining the utilization management and documentation roles and cross-training the staff to perform both roles.

"It didn’t make sense to have one person reviewing the chart for appropriate documentation and another for medical necessity. The previous design was a more narrow focus than true case management in terms of managing care, working with physicians and ancillary staff, and making sure the patients received the care they needed in a timely manner," Sorce adds.

Now the hospital has 17 case managers who are assigned by service line. The hospital’s social workers team with case management to manage the patients’ lengths of stay and handle discharge planning. On a daily basis, case managers run a work list of patients in their area. They are responsible for admission and continuous stay review. They make sure all new patients meet admission criteria.

They handle an average of 30 to 35 patients at a time and set priorities based on patient conditions, diagnoses, and anticipated length of stay. They attend discharge planning rounds on their units.

"The case managers are one of the driving forces in discharge planning. They talk to the staff nurses to find out how the discharge planning is going and to assure that the patient will be discharged when they need to be. In cases where the patients have needs in the community, they collaborate with the social work staff," she points out.

Four case managers are assigned to the hospital’s cardiac program, two each to surgery and medical and two to orthopedic surgery.

The case managers are based near the nursing unit. If a patient is transferred from one unit to the next, the case manager hands off the case to her colleague on that unit.

"It’s working well. We’ve been able to reduce the caseloads of the individual case managers. They’re able to review cases on a timely basis," Sorce says.

The department tracks the number of retrospective reviews it has to do following a request for information from payers.

"We’ve seen a dramatic decrease in retrospective review and medical necessity denial. The staff are on top of any cases where it looks like there is a potential for denial," she adds.

The case managers turn in a case sheet at the end of every case and report on a monthly basis.

At Presbyterian Hospital of Dallas, a lot of the work done by the care managers is manual. A patient management system has a place to enter free text notes to describe exceptions or problems, such as difficult cases or insurance issues, Sorce says.

"We have adopted some other measures, such as denials that we track. I can run an automated report on the back end and see where there are avoidable days and denials," she says.

Working with case management teams from 12 other hospitals in the Texas Health Resources System, Sorce and her staff are in the process of helping evaluate vendors for a systemwide case management electronic record system. Target for implementation is 2005.

"With a true electronic record, you can see not only this episode of care but can look at a longitudinal basis and find out what health issues have previously been addressed and look more in depth than the current episode of care," she adds.