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November 19, 2012

Partners in High Finance
By Julie Knudson
For The Record
Vol. 24 No. 21 P. 10

A solid relationship between case management and revenue cycle management can translate into better care and a healthier bottom line.

As hospitals look for ways to improve the quality of care while also boosting revenue, the case management and revenue cycle management (RCM) groups are partnering more frequently. The functions that fall within case management vary by institution and how the group interacts with RCM depends largely on which responsibilities are in case management’s bucket.

Because connections to RCM differ so widely, Steven L. Robinson, MS, PA, RN, CPUR, senior director of clinical documentation improvement (CDI) solutions at Maxim Health Information Services, says case management might have a huge link to RCM in one hospital but little direct influence in another. The two groups will always have an indirect relationship, though.

“For instance, some case managers take on the role of the clinical documentation specialist or utilization review or looking at denials,” says Robinson, adding that at least one-half of all CDI programs are housed in the case management department. In that scenario, case managers are by default a direct part of the front-end revenue cycle.

Steve Everest, executive vice president of Prognosis Health Information Systems, says the healthcare ecosystem is evolving, leading to a shift in the roles played by case management and RCM as well as how those responsibilities fit together and overlap. “As the industry changes and as the landscape changes a little bit with federal funding, case management is being pushed toward understanding the revenue cycle pieces,” he says.

A Shift in Roles
In the past, case managers focused predominantly on the clinical aspects of a patient’s visit. However, today they’re increasingly being drawn into discussions about copays, coverage levels, and a patient’s ability to pay. “The smart hospitals are the ones that are doing that work ahead of the game,” Everest says, meaning the case management team is involved in making sure the current financial picture is what the hospital wants while at the same time ensuring patients get the clinical outcome they need. “We see that line between pure case managers and pure revenue cycle people blurring, and we see people wearing both hats.”

Based on her experience working in the revenue cycle, Carla Engle, MBA, director of product management at Emdeon, says case management’s role was broader several decades ago. “They were being charged with controlling cost by improving quality,” she notes.

Over time, case managers narrowed their focus to utilization review and discharge planning. The pendulum now seems to be swinging back the other way, and case management is once again taking on a wider role. “I see case management really working in all aspects of the revenue cycle,” says Engle, who lists five primary areas where it has the greatest impact: preadmission, admission, concurrent review, discharge, and postdischarge. “There are things that case management does that touch all of those steps.”

The case management team may have strong ties to RCM, but it’s just one group involved in daily decision making, says Diane L Reidy, RN, BSN, MN, MHA, director of the clinical case management department at Lyndon B. Johnson General Hospital in Houston. “We interface with coding; we interface with physicians. There are several departments we work with on a regular basis,” she explains.

Any time a change occurs, such as when new computer programs are deployed that impact the workflow between the functional groups, Reidy says her team meets with RCM and any other affected groups to proactively discuss how they can best work together moving forward. The conversations focus on a “let’s talk about what’s working and what’s not” approach, she says.

The touch points between case management and RCM begin in the preauthorization phase, where Everest says healthcare organizations are increasingly interested in confirming benefit levels as well as a patient’s capacity to pay. The mission to be more proactive in determining a patient’s financial picture is being joined by the hospital’s desire to ensure it has the appropriate facilities and equipment for proper treatment. It’s all about the type of patient, according to Everest. “Who’s their payer? What does that payer expect? And what will the payer tell us about the patient up front before they darken our door?” he says.

Outside the emergency department (ED), where preauthorization is moot, the emphasis is on being proactive. “Case managers are expected to take a role in that and bond with the revenue cycle folks to figure those things out,” Everest says.

Medical Necessity
Upon admission, the collaboration between case management and RCM ramps up, says Melanie Endicott, MBA/HCM, RHIA, CDIP, CCS, CCS-P, an ICD-10-CM/PCS trainer and director of HIM solutions at AHIMA. “That’s when the determination is made if they meet inpatient medical necessity or if they’re an outpatient,” she says.

While the case manager generally is not the sole person determining medical necessity, it’s another link in a chain of instances where case management and RCM work together. “Sometimes the patient may come in as an outpatient and later get converted to an inpatient. Again, that needs to be looked at,” says Endicott, adding that as the patient moves through the process, several factors will affect how much interaction is necessary between case management and RCM. “The more complicated cases will require increased interaction between the case managers and physicians to ensure that the patient’s treatment plan is carried out appropriately so the patient receives the best quality of care,” she notes.

Rather than throwing case management and RCM together and simply telling them to collaborate, Engle says everyone benefits from a carefully constructed plan. “I think there needs to be a clear protocol established about where case management gets involved,” she says.

Engle encourages healthcare organizations to develop policies to define case management’s role and where it intersects on both the clinical and financial sides. This will address case management’s exact responsibilities and identify potential gaps in its relationship with other departments. “The hospitals that have the best practices have a very clearly delineated process about where case management is involved on the inpatient and outpatient perspectives,” she says.

Record Reviews
Establishing a process that includes a thorough review of records is crucial to a strong and proactive communication stream between case management and RCM. Because the majority of inpatient admissions are based on diagnosis-related groups (DRGs), Robinson says it typically falls to concurrent reviewers to identify which working DRG is assigned. As case management and RCM work more closely together, case managers are increasingly involved in that process.

“If case managers take on the role of the CDI specialist, they will assign that working DRG or initiate a discussion to clarify which DRG should be assigned,” Robinson says. The case manager then follows the progression of a patient’s symptoms and diagnoses. If the physician hasn’t provided enough clarity, Robinson says the case manager would then query him or her on specific causes as needed.

Records review—and how case management and RCM work together to ensure documentation addresses the needs of both groups—isn’t something you can set and forget, Reidy says. “Most of our processes have changed because in the latter part of 2010 we implemented an electronic medical record system,” she says. “[As a result], you have to look at everything you’ve been doing in the past and ask why you did it that way. It’s one of the things we’re still polishing.”

Determining which points will be reviewed in the medical records doesn’t involve just case management and RCM. Endicott recommends other functions such as CDI and utilization review also take part. “And it’s not just one person making that decision [of what to review],” she says. “It’s having the experts that know the revenue cycle work with those in case management to determine that checklist.”

Such a process can ensure the necessary information is present and accounted for in the file. For example, are admit orders where they need to be? Were all the complications documented? Is the correct discharge disposition in the chart? “It’s a team approach,” Endicott says. “It’s not just one department doing it.”

The proactive component to records review is perhaps the key benefit to both case management and RCM. “I think the biggest thing is just preventing stoppage from happening on down the line,” Engle says. Rather than expend energy with postdischarge denials and appeals on the back end, thorough reviews by both groups can help business operations flow smoothly. That’s a plus for the administrative process as well as the hospital’s revenue stream. “As they’re doing concurrent record review, they’re really making sure a denial is not going to happen,” Engle explains.

Where do medical necessity and length-of-stay approvals factor into the equation? Engle says the majority of denials she witnessed during her work as an auditor related to medical necessity. “I think case management plays a huge role in ascertaining medical necessity right from the get-go,” she says. “They make sure there aren’t going to be any problems. It prevents those denials on the back end.”

According to Engle, concurrent reviews while the patient is still in-house translate to fewer appeals and denials being triggered. RCM teams often spotlight high-utilization cases that require more resources and longer stays. “Those are the things that, as a case manager, you have to find the balance between the financial side, longer length of stay, and higher utilization of resources vs. patient care,” Engle says.

Location Matters
When it comes to medical necessity and length-of-stay approvals, Everest says urban environments typically lend themselves to higher levels of proactive collaboration between case management and RCM. For example, a client in a large Oklahoma city preauthorizes every account because it makes sense from both the case management and RCM perspectives. “They make sure that they run credit checks on the patient because they are an elective surgery facility,” he says. This strategy also saves the hospital from going through the steps involved in registering patients and preparing them for a procedure only to find out they can’t afford their payment portion. “We’re seeing the case managers get involved with that process—that proactive, up-front process—before the treatment begins whenever they can,” Everest says.

The approach in the community hospital market in rural America differs from that of urban facilities. In the rural setting, Everest says the group of physicians practicing nearby is often quite small, and the patient population being served is typically a known quantity. “It’s almost a given that we know what kind of patients this physician is going to treat, and we know with a high level of probability what their outcome is going to be,” he explains.

Working Arrangements
Discharge dispositions and final diagnoses often are understood early in the process. In those cases, Everest says case management and RCM may work together in a unique fashion. “Some of our clients are opting, if it’s not a significant outlier in terms of dollars, to absorb [the cost] rather than irritate the local community,” he says.

Identifying the number of days allowed in the hospital is generally a function Robinson sees in the realm of case management. “That used to be the old utilization review function, but now it’s largely been incorporated into the role of the case manager,” he says.

If they’re not able to identify the length of stay up front, sometimes they “will also have the responsibility of calling the insurance company to see if the patient is allowed extensions on their stay,” Robinson says. Medical necessity, length-of-stay approvals, and the actual duration of the patient’s stay directly impact the bottom line in the long term. “Revenue cycle does have ultimate responsibility for those functions,” Robinson says.

— Julie Knudson is a freelance business writer based in Seattle.


Relationship Structures in the Real World
Some case management departments report to the chief financial officer or other financial head, but that chain of command seems to be changing.

“By and large, hospitals are getting away from that because they want to separate the quality of care from the financial piece,” says Steven L. Robinson, MS, PA, RN, CPUR, senior director of clinical documentation improvement solutions at Maxim Health Information Services. Most case management groups have a significant amount of autonomy from financial oversight, but there’s no way to get around the fact that money considerations and quality-of-care objectives are indeed interrelated, he says.

Robinson believes forming a relationship in which case management reports through the chief operating officer, chief medical officer, or even compliance is a better structure. “It does keep the finance and the quality a bit more separated,” he notes.

— JK