Hospital's plan assures correct admission status

Initiatives includes check and balances

Faced with an audit that eventually revealed millions of dollars in Medicare overpayments for short-stay patients placed in the wrong admission status, Saint Joseph's Hospital in Atlanta began a series of proactive steps to correct the problem, educate staff, and assure that InterQual criteria are applied correctly.

"We knew that the processes were broken. As soon as we learned that we were aware of the situation in the summer of 2005, we created a team to look at where we needed to make improvements," says Valerie Barckhoff, the hospital's vice president for revenue cycle.

In December 2007, the hospital agreed to pay $26 million in overpayments and interest for Medicare claims spanning a six-year period. The overpayments were for the care of patients who were admitted as inpatients but who did not meet inpatient criteria.

To ensure that patients are placed in the correct admission status, the hospital set up a multilayered process. Here's how it works:

After a patient is admitted, the case manager on the floor reviews the chart and verifies admission status within one business day.

A team of representatives from the business office, health information management, and care management meets every day and reviews every zero- and one-day-stay patient covered by a government payer to double-check that they met inpatient criteria

If they determine that the admission status was not correct, they notify the physician and patient and instruct the business office to bill Medicare Part B services.

The business office also reviews all zero- and one-day stays for government patients. They look into the account documentation to make sure that the notes from the zero- and one-day-stay team are in the system prior to releasing the claim.

As an external control, the hospital contracted with McKesson to conduct monthly quality audits to determine if InterQual criteria were applied correctly.

"We've improved dramatically. When we first started the quality audits, we scored in the low 80th percentile. Now, we were in the upper 90s and Saint Joseph's is holding themselves to the highest standard of InterQual application," Barckhoff says.

The process improvement team, led by Barckhoff, included representatives from the revenue cycle management department, case management, health information management, and the business office.

The project's oversight team, the CEO, CFO, and the chief nursing officer, was involved in the initiative to understand where the process breakdowns were occurring and be involved in the decision making, she says.

The team began by looking into whether patients with zero- and one-day stays were admitted in the appropriate status and examining the reasons the admission status was not correct, then suggesting ways to improve the process.

Improvements that were implemented include regular audits to assess case managers' understanding of InterQual criteria, shifting utilization review from a peer review committee back to the reinstated utilization review committee, contracting with a physician advisor company specializing in Medicare issues, and fully integrating case management into the revenue cycle department.

"The team found that there was a lack of communication among departments, the processes were broken, and we had not been actively monitoring admission status for short-stay patients," Barckhoff says.

What to look for in order sets

One of the first steps was to review more than 1,000 order sets and look at how they might affect the patients' admission status. The team met with the floor nurses and discussed the scenarios in which each order set would be used. They eliminated some of the order sets and revised others.

"We wanted to make sure that the order sets gave physicians the option to pick outpatient or observation status. We cleaned them up and fine-tuned them so we don't lead the physician to a particular admission status," she says.

As part of the team's efforts to identify breakdowns in the case management process, industrial engineers from the revenue cycle department shadowed the care managers and mapped out what they did on a daily basis. Their goal was to analyze how the processes flowed and where they were breaking down.

"We started the old-fashioned way by following the care managers, talking with them and gaining a better understanding of what they did on a day-to-day basis. We looked at whether the case managers were following the hospital's policies and what kind of controls we needed to put in place to ensure that they could do so," she says.

For instance, hospital policy calls for case managers to review all admitted patients within one business day and to apply InterQual criteria correctly. The engineers found that some care managers gave managed care patients priority over Medicare patients.

"They had the idea that Medicare documentation was not as important because we were paid on the DRG system so these patients were falling to the bottom of the work list. It was simply a matter of emphasizing that Medicare expects us to ensure that medical necessity criteria are met," she says.

The hospital hired McKesson representatives to educate the staff on InterQual criteria.

Tying CMs to revenue cycle

When the Department of Justice began its audit, the hospital already had moved responsibility for overseeing case management from the chief nursing officer to the CFO. As part of the process improvement initiative, case management was fully integrated into the revenue cycle department.

"Case managers are key in impacting the bill and are part of the revenue cycle. The administration is very supportive of what the case managers need to do from the business perspective. Before they were in this department, some case managers didn't fully understand the impact they have on the billing process, how important patient status is, and how important it is to conduct utilization review with the managed care company," Barckhoff says.

As one step in the process, the hospital reinstated the utilization review committee. "We had temporarily shifted to a peer review model for utilization review. We returned to a traditional model," she says.

The hospital outsourced its physician advisor function, contracting with a physician advisor company that specializes in Medicare issues. The consulting physician advisor firm is still under contract but the care managers don't use them nearly so often, Barckhoff says.

"We feel our internal utilization review committee can now help guide care managers but there is an occasional anomaly that falls out of their areas of expertise," she says.

The biggest challenge was educating all the parties involved in determining admission status, she says. "Educating the physicians became a grass-roots campaign. Because we have a large cardiac population, we saw more opportunity with chest pain and provided education at the cardiology section meetings."

Under the Corporate Integrity Agreement with Medicare, clinicians, including all physicians who practice at Saint Joseph's, must undergo two hours of documentation training.

"Our doctors have such long-term relationships with their patients that they weren't putting everything they knew into the chart. We are working with them to get them to enhance their documentation and include all the information we need to bill correctly," she says.

As part of the agreement, Saint Joseph's will participate in a Medicare demonstration project aimed at streamlining assignment of patient admission status. The Case Management Protocol program, which went live March 3, moves the primary responsibility for determining patient status from the physician to the care manager. The demonstration project has been under way in Florida but Saint Joseph's is the first Georgia hospital to participate.

CMs at Saint Joseph's

Saint Joseph's has 25 care managers who are assigned by unit and who cover the hospital seven days a week. They cover the emergency department, working shifts that coincide with the peak times for patients. About 35% of St. Joseph's emergency department patients are admitted.

Case managers are required to achieve certification within one year of the time they become eligible.

Before the short-stay process improvement initiative began, case managers had a caseload of 28 to 32 patients. It's now 24 and slated to drop to 15 this year.

"When care managers have a workload of 32 patients, there's no way they are going to do their job well. We worked hard to get that number down and have gotten approval to hire seven more care managers in 2008. With the new Case Management Protocol demonstration project, their job is going to get more intensive," she says.

(Editor's note: For more information, contact Valerie Barckhoff, vice president for revenue cycle, Saint Joseph's Hospital, e-mail: