Case management redesign saves millions for NM health care plan

Health plan cuts positions, slashes cost of care

When Presbyterian Health Plan merged its commercial, Medicare, and Medicaid managed care products, the case managers decided to take the merger a step further.

"When the organization made a decision to merge the product lines and we were merging the case management departments together, it was the perfect time to go further and look at everything we were doing," says Paula Casey, BSN, MSN, senior clinical project coordinator for case management.

By redesigning the way its case management services worked, Presbyterian Health Plan (PHP) in Albuquerque, NM, was able to decrease its number of full-time employees from 120 to 90 full-time equivalent positions (FTEs) at a savings of more than $1 million in the first year.

In 2001, the revamped case management program was able to document about $6 million in savings generated by case management interventions.

PHP serves just fewer than 300,000 covered lives spread across the entire state of New Mexico. The plan serves a socioeconomically and ethnically diverse population. Many of its members live in rural areas with few health care resources.

At the time PHP reorganized, the product lines all had duplicate departments, including prior authorization, utilization review, member services, claims, health services, and provider services. There were case managers dedicated to inpatient case management, utilization review, and concurrent review, a separate pediatric team that did its own concurrent review, outpatient case managers, an adult team on the Medicaid side, and a dedicated team for the commercial side.

"It was like we had three complete separate businesses. We threw it all up in the air and got all the managers together to think about redesigning so we could deliver better services," she added.

Dorethea Orem’s Self Care Deficit Theory and the Case Management Society of America’s Standards of Practice are the framework for PHP’s case management model, says Jean Calhoun, BSN, MSN, clinical director for case management. Orem’s Theory of Self Care states that the personal care individuals require each day to regulate their functioning and development is a learned behavior. The goal is to give the client as much responsibility for self-care as possible considering his or her condition.1

"I want the nurses to always be thinking of how they can move the member toward optimal self-care," Calhoun says.

The administration encourages national case management certification. About 55% of the plan’s case managers have become certified.

Staff in the newly combined case management department were divided into seven teams: intake and coordination; inpatient case management; ambulatory case management; medical records and research; monitoring and audit; medical directors; and financial/clinical analysis.

The ambulatory case management teams are divided into six components to deal with specialty diagnoses and to handle community-based case management in rural areas. These include high-risk medical team; catastrophic team; high-risk maternal and child team; disease management team; behavioral health team; and regional case management team.

The employees were allowed to choose the team that met their interest.

No one lost his or her job in the process. Some employees chose to transfer to other parts of the health plan. Other positions were eliminated through attrition.

"We had three sets of administrative teams with a large number of managers and supervisors. We were able to eliminate some of the middle management levels. Some went to other positions. Some changed positions within our team," Calhoun says.

When the case managers from all three insurance products were merged into one department, some of the staff were reluctant to change but "we couldn’t get them to go back now. They enjoy the variety of products," Calhoun says.

All of the case managers went through cross-training sessions to learn the various product lines.

"We had to do it more than once. There was a vast amount of knowledge to learn," Casey says.

During the transition period, the managers and directors met weekly to discuss how things were going and what needed to be done.

The system has an intake coordinator who receives referrals, decides which team will be appropriate to manage the care of the referred person, and alerts the team.

Each team worked with Casey over a period of two years to develop its own criteria for which patients would fit into its portion of the continuum of care.

"Once a member hits the system, it’s very easy to get hooked into the right team," Casey explains.

Referrals for case management services come from members, family members, primary care providers, or other portions of PHP.

"We are doing a lot within our health plan to obtain referrals. Anyone who touches the member, whether it’s member service, marketing, or enrollment, may refer to case management," she says.

The inpatient case manager team has been through inservices and knows the criteria for referring patients to the outpatient team.

The inpatient team work daily with the medical director to review cases of hospitalized patients and determine if they are going to need ongoing case management after discharge.

This year, PHP plans to change its focus to a predictive modeling case management system.

Staff are working to identify members who are at risk for expending large amount of health care resources and direct them into case management before the expenditures occur.


1. Orem DE. Nursing Concepts of Practice. Columbia, MO: Mosby-Year Book Inc.; 1995.