Utilization Management-an Invaluable Asset

Alison Boone stands as an accomplished and dynamic professional with a proven track record within the healthcare industry. With over two decades of experience, she has played a pivotal role in shaping the landscape of utilization management. Boone's expertise extends to a profound understanding of industry-wide criteria, including qual criteria and MCG criteria, rendering her an invaluable asset in guiding the utilization management team. Transitioning from roles such as Manager of Case Management to Director of Utilization Management, Boone has consistently excelled and continues her journey to further enhance her achievements. Currently, she serves as the Director of Utilization Management at Tufts Medicine.

Could you discuss some of the challenges prevalent in the industry?

Each hospital must ensure an adequate number of utilization management nurses to meticulously assess each incoming case, determining the precise level of required care. Unlike doctors, who may lack specialized skills in this domain, these nurses serve as vital gatekeepers, utilizing industry-standard criteria like qual criteria or MCG criteria. Medicare and commercial insurers continually evolve their interpretations of observation and inpatient care levels, necessitating nurses to remain up-to-date and undergo annual education on care levels. Hence, it is crucial for them to diligently review incoming admissions daily, evaluating the prescribed level of care by the doctor and identifying any discrepancies.

One of the primary challenges lies in altering orders, particularly for Medicare patients. While physicians can readily adjust orders for commercial insurance cases, modifying orders for Medicare patients involves strict adherence to specific rules and regulations. For instance, if a doctor erroneously prescribes inpatient care for a Medicare patient who should have been placed under observation, it triggers a protocol known as code 44. This process involves coordination with the physician advisor, who must be a part of the hospital's utilization management committee.

The nurse engages in comprehensive discussions with the physician advisor to confirm the suitability of observation as the preferred course of action. Subsequently, they communicate with the attending physician, elucidating the discrepancy and seeking agreement to change the order to observation. The physician advisor documents this correction and notes that the case should have initially been categorized as observation. However, the nuances of Medicare reimbursement dictate that payment is only applicable for observation hours after the corrected order. If the patient has already spent time in the hospital, that period is relegated to outpatient charges.

What initiatives have been implemented to address these challenges?

One significant development from the past year was the implementation of the two-midnight rule by the CMS Institute, specifically for Medicare cases. This rule simplifies the determination of inpatient status: if a patient is expected to remain in the hospital for more than two midnights, they automatically qualify for inpatient care, contingent upon medical necessity. 

However, this rule does not apply uniformly to Medicare Advantage and commercial payers. Commercial payers often adopt a stringent approach, leading to frequent denials and requiring departments to equip themselves with a sufficient number of appeal nurses to effectively challenge these denials.

Upon encountering a denial, a crucial step involves engaging in discussions with the attending physician, potentially leading to a peer-to-peer discussion with the insurance company. If unsuccessful, the process advances to crafting an appeal letter within a 48-hour timeframe, providing comprehensive medical information to support the case for inpatient care.

Another aspect of denial management involves addressing readmission denials, a concern for hospitals nationwide. Insurance companies' increased denial of readmissions has necessitated a focus on preventing unnecessary return visits by enhancing discharge planning and patient compliance. Appeals for readmission denials are viable only if subsequent stays are for different medical issues and were not preventable. The appeal letter meticulously details the patient's condition, emphasizing the potential risks if the patient is not readmitted.

Envisioning the future of this industry, what do you anticipate?

I foresee escalating challenges within the healthcare system, particularly with the rising costs of hospitalizations prompting insurance companies to seek cost reduction strategies, potentially leading to increased denial of various medical services. While AI's presence in utilization management grows, relying solely on AI systems for comprehensive case assessments remains concerning due to their lack of depth and medical knowledge. Therefore, nurses retaining their pivotal role in clinical reviews becomes imperative.

Looking ahead, increased collaboration between utilization managers and physicians, specifically physician advisors, appears promising. Hospitals recognize the significance of a robust physician advisor who acts as a liaison between healthcare professionals and insurance companies, involving educating doctors, representing them in reviews, and facilitating communication.

Are there any final thoughts you would like to share with the readers?

I emphasize the pivotal role utilization management nurses play, especially considering the challenges physicians face when making initial orders for patients entering the hospital. Utilization management nurses, readily available in both the emergency room and medical units, prove invaluable amid the time constraints and complexity faced by emergency room physicians. Their presence aids in ensuring comprehensive assessments and appropriate orders for patient care.