Utilization Management Engagement Recovers $1.8M in Additional Revenue in the First 90 Days

Client Profile:

One of the largest health care systems in the Midwest, with nine hospitals and a provider network of over 3,000 physicians.

Challenge:

The Utilization Review (UR) function in the emergency department (ED) serves as a critical component to ensure whether a patient is placed as inpatient or observation. Establishing the UR team to manage patient status at the point of admission is imperative to minimizing denials. Too often, hospitals waste resources by overlooking the need for staffing nurses that are trained and dedicated to UR, leading patients to be incorrectly placed and ultimately denied for those claims.

This health system merged with another major health system and resulted in a nine-hospital system, subsequently leading to inconsistent processes, systems, expectations, goals, staffing, and key performance indicators (KPIs).

After the merger, the health system incurred an average of almost $500,000 per month in denials and an unusually high observation rate (29%). The utilization management (UM) process was not effective because the staff available were not proficient in UR and care management guidelines, and there were staff shortages. As a result of these challenges, there were disparate processes and results across departments.

Solution:

McBee deployed a team of UR nurses and consultants for six months to address the critical utilization gaps. During this time, McBee provided:

1. Departmental assessments to identify staff competency, process consistency, and UR tools
2. A team of clinical and operational consultants to fill the gaps in ED coverage and support leadership for those teams
3. Staff training on effective UM process, care management guidelines, effective interaction with physicians, and the importance of UM on the revenue cycle
4. Real-time coaching for the physicians on the quality and completeness of documentation and fostering significantly better understanding of criteria
5. KPI refinement through:
   1. Reviewing current KPIs
   2. Determining weaknesses
   3. Updating and revising KPIs
   4. Monitoring and tracking
   5. Reporting
6. Redeployment of the health system’s staff and managers into the field after intensive training
7. Ongoing oversight and review of documentation and processes

Results:

By implementing improved processes, physician and staff education, tailored operations strategies and increased admission reviews, this engagement slashed observation rates by a third. As a result of working with UR staff to achieve correct patient status assignments, the health system experienced a $1.8M revenue improvement in the first three months of the engagement. Denials were reduced by over $300,000 per month by placing patients in the proper status. In addition to a more than 9:1 return on investment, McBee improved compliance, closed leadership gaps, and streamlined management responsibilities.

VIEW CASE STUDY HERE.