Revenue Cycle Management Journal Source: The Academy of Healthcare Revenue
Renewed Focus on Case Management
January, 2007 – As the interest in pay-for-performance grows among private and government payers, some hospitals are looking at their case management programs as an effective tool to improve their quality of care and to reduce healthcare costs. Pay-for-performance generally connects reimbursements for providers to both the quantity and the quality of services they provide. Case management has traditionally served as a means to follow up on care given in the inpatient setting. However, with the increase in pay-for-performance and quality improvement initiatives, case management is being seen as an effective way to track patient care throughout all care settings. Case management can thereby serve as a means to deliver a high standard of care while reducing costs through lower readmission rates, fewer ED visits, and earlier transfers of inpatient hospitalizations to home-based services.1 This has created the need for improved IT capabilities to track patient care across multiple care settings, and for highly-trained clinicians who are able to analyze both clinical and financial data in order to make cost-effective healthcare treatment decisions.
An effective case management program can lead to several benefits, including improved quality of patient care, more efficient utilization of healthcare resources, and increased patient satisfaction. Case management is particularly useful for patients who are frequent healthcare utilizers, as they can represent a significant portion of a provider’s healthcare expenses. In fact, a recent study found that approximately 1 percent of the population was responsible for 22 percent of total healthcare spending in the U.S.2 By effectively allocating facility resources based on clinical and financial management decisions, providers can significantly improve their efficiency and financial health.One study analyzing the difference between hospitals with and without case management programs found that providers with case management programs typically outperformed those that did not have them, as the graph below shows.
Healthcare IT is seen as a fundamental tool for maximizing the capabilities of case management. However, technologies such as electronic medical records may not contain financial data, which can prevent case managers from accurately assigning an appropriate course of action for patient care. Another barrier to better coordination between clinical and financial case management is that it can be difficult to obtain patients’ data from a multitude of sources, such as outpatient clinics or physician offices.
Case management has traditionally been administered by nursing staff or social workers, which emphasizes the importance of educating these individuals on the revenue cycle and its impact on hospitals’ ability to provide high-quality patient care. Nursing staff may be primarily focused on the clinical considerations of patient care without placing a high priority on the financial implications of recommending a care program for a patient. One industry expert suggests that “administrators add the skill of information management to the case management function…by training nurse case managers in data mining and financial analysis methods.”3
There is a significant need for clinical staff members working as case managers to be trained in payer requirements and other revenue cycle processes. For example, if a physician wants to do an additional test for a pneumonia patient covered by Medicare, and that test is not medically necessary for the DRG assigned, then a case manager should point this out to the physician and recommend that the test be administered on a different date so the hospital can be reimbursed. Case managers must be educated to understand the business side of healthcare in order to make decisions that will improve quality of care as well as reduce the overall costs of care.
Intermountain Healthcare, located in Salt Lake City, Utah, created a “case management plus” program for patients with comorbidities. The program utilizes specially-trained RN case managers and IT systems designed to track and manage patient care. An internal study conducted by Intermountain Healthcare’s leaders found that diabetic patients participating in the case management program had a 20 percent reduction in hospitalizations after two years.4 Other facilities have also utilized case management programs to prescribe beneficial treatment plans for patients with chronic conditions such as asthma, heart failure, cancer, and more.
An optimized case management program can be a key component for providers in reducing the costs of care and tracking clinical outcomes for pay-for-performance or quality reporting requirements. Providers that are able to create a robust case management program by educating clinical staff on the revenue cycle and designing IT systems that can gather and analyze patient data will have a significant advantage in efficiently utilizing facility resources, improving patient care, and increasing revenue. 1 Jeffrey P. Harrison, “The Effect of Case Management on U.S. Hospitals,” Nursing Economics, March/April 2004.
2 Steven B. Cohen and William Yu, “The Persistence in the Health Expenditures Over Time: Estimates for the U.S. Population, 2002-2003,” AHRQ, May 2006.
3 “The Case for Quality: Effective Clinical and Financial Case Management,” Healthcare Financial Management, June 2005. 4 Gina Rollins, “Updating an Old Standard,” Hospitals & Health Networks, August 2006.
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The Academy of Healthcare Revenue is a membership-based community that provides healthcare leaders with objective research focused specifically on the healthcare revenue cycle. Members receive an unlimited supply of all research--including benchmarking and best practice reports, implementation tools, monthly journals, attendance to virtual conferences, and more--designed to enable them to improve their revenue cycle processes and financial health from within. Furthermore, The Academy's membership offering is tailored to team members throughout the revenue cycle, from executive leadership to patient access, coding, billing and collections, and clinical staff, helping to drive process improvement efforts revenue cycle-wide. Revenue Cycle Management is one of four journals written by The Academy of Healthcare Revenue monthly.
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