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November 2013

Case Managers Show Their Worth
By Lisa A. Eramo
For The Record
Vol. 25 No. 15 P. 26

Case managers certainly play a crucial role in today’s health care environment. Among a case manager’s strengths is the ability to effectively guide the patient through his or her stay, reduce fragmentation in care delivery, and increase the quality of services provided.

However, are chief financial officers (CFOs) aware of the vital role played by case managers? Are hospitals measuring the return on investment (ROI) of their case management department?

Hospitals didn’t begin to understand the value of case management until the 1980s when reimbursement shifted from fee for service to diagnosis-related groups, says Debra McReavy, MHA, RN, director of health care solutions at Kforce Healthcare in Tampa, Florida. “Then the role of case manager went to the forefront,” she says. “Previously, the role had been somewhat hidden. If you were looking for an ROI of a case manager in those days, you would have probably had trouble finding it.”

Today, accountable care organizations (ACOs) are the next game changer in the health care industry, prompting hospitals to take a closer look at case management’s ROI and how they can capitalize on the unique skills of case management professionals. “In accountable care organizations, I think it’s easier for the CFO to see the value of what a case manager is doing,” McReavy says. “In accountable care organizations, there’s a focus on quality. If you’re providing services to the patient in a timely, efficient, and effective manner … that has an impact on reimbursement and the financial measurement of the ACO.”

Even without taking ACOs into account, today’s health care environment is one in which every dollar counts. “Everybody has to justify their existence,” says John Rubio, West regional director at Simpler Consulting in Pittsburgh, who says CFOs are becoming more interested in process improvement that can make the organization more profitable and productive. Case managers play a huge role in process improvement because they often are the process coordinators, he notes.

Measuring ROI
Experts agree that case managers play a crucial role in hospital operations, yet correlating their contributions to measurable outcomes is easier said than done. To better measure their value, consider the following tips:

Look more closely at length of stay (LOS). LOS drives the cost per case, says Jose Bustillo, senior sensei and executive coach at Simpler Consulting, adding that effective case managers begin thinking about discharge the moment the patient is admitted. This allows for a timely discharge that reduces the likelihood of additional costs for the hospital, he notes.

Angela Hilycord, RN, CCM, a senior consultant at Blue and Company in Indianapolis, agrees: “Case managers work very hard to get that patient through the hospital. It ends up being a team effort, but a lot of times that case manager needs to be the driving force on that team.”

Hilycord says CFOs should ask the following questions regarding case management and LOS:

1. Did the case manager’s intervention and contact with postdischarge facilities allow for a timely discharge?

2. Did the case manager intervene to reduce unnecessary days? If so, calculate the cost of the additional unnecessary days.

3. What would the outcome of the case have been if a particular case manager had not intervened?

Ideally, EMRs would allow hospitals to compare the actual LOS with the expected LOS or the LOS that a particular payer is willing to reimburse, Bustillo says. The EMR could help hospitals project whether a particular stay is expected to meet or exceed the target, making it easier to justify the ROI of a particular case manager.

Although it’s a somewhat laborious process, CFOs can perform a manual review of each intervention rendered during a particular patient’s stay to better understand the contributions of a single case manager. Though not yet offered on the market, Bustillo says single-source plans of care in which all providers document can increase efficiency as well as allow hospitals to more easily identify case managers’ interventions, when they occur, and any subsequent positive effects on care delivery.

Consider reimbursement. Case managers may not directly contribute to reimbursement, but they often work with the revenue cycle team to ensure correct coding. They also play a key role in other financial aspects. “The quality measures and discharge planning all relate back to what the hospital is going to get reimbursed either by penalty or by bonus,” Hilycord says.

Include patient outcomes. LOS could denote a positive outcome, as could high patient satisfaction scores, Hilycord says. Case managers obviously contribute directly to both of these factors, she adds.

Measure quality of care. Unlike LOS, measuring quality is more nebulous, McReavy says. A reduction in hospital-acquired conditions or an increase in recovery audit contractor recoupments may be two indicators, but they’re only clues as to the actual increase in the quality of care provided.

Value-based purchasing requires hospitals to capture various quality metrics; however, extracting this information from the EMR in a format that can be manipulated is not easy, says Bustillo, who hopes hospital reliance on such data will “force EMR providers and health organizations to simplify access to the information.”

Outsourcing Case Management
In these lean times, many hospitals are considering outsourcing various functions. However, case management seems to be the exception, McReavy says. Some hospitals may outsource the specific function of determining patient status (ie, identifying whether patients meet inpatient criteria for admission), but many retain other case management functions (eg, discharge planning, utilization review, capturing quality measures, clinical documentation improvement) in-house.

Outsourcing may be a viable option for hospitals that can’t recruit qualified case managers because of shortages. McReavy cautions that these facilities must maintain resources to manage the outsourced function, though. “Hospitals are still responsible and accountable regardless of whether you outsource the function,” she says. “So if you’re still going to have the risk associated with it, make sure you have the resources to manage it.”

Proving One’s Own ROI
Must case managers prove their own ROI? McReavy says case managers always should think about highlighting the unique skills they bring to care delivery, particularly when it comes to ACOs. “Being in the forefront comes with a fair amount of responsibility,” she says. “This responsibility includes working with physician and hospital leadership to identify new improvements in care delivery.”

Case managers are crucial in terms of maintaining compliance, Hilycord says. Not only do they help prevent readmissions, but they also ensure compliance with medical necessity and patient status, including the Centers for Medicare & Medicaid Services’ new 48-hour requirement for inpatient status as outlined in the Inpatient Prospective Payment System final rule.

Going forward, case managers’ contributions will become apparent, McReavy says. “Case managers are key in their focus on the delivery of quality services,” she says. “As we move to ICD-10 and there’s more scrutiny of documentation and EMRs, you will see case management play a larger role in prior authorization and coordination and delivery of care.”

According to Hilycord, tracking data and interventions will be key in ensuring a healthy ROI. “If you’ve got a good utilization review committee, the policies and procedures are written in order to make the documentation and tracking of data easier and can help justify that case manager’s value to the hospital,” she says.
But is it reasonable to document every intervention? “I don’t know, but how are we going to justify our value if we don’t?” Hilycord asks.

— Lisa A. Eramo is a freelance writer and editor in Cranston, Rhode Island, who specializes in HIM, medical coding, and health care regulatory topics.