How Hospital Inpatient Utilization Management Shields Against Claim Denials

Hospital inpatient utilization management (UM) is crucial in the healthcare industry, ensuring hospital resources are used appropriately and efficiently. UM involves assessing the necessity and efficiency of the care provided to patients impacting healthcare costs for the patient and the hospital. Effective utilization management processes can significantly impact hospital operations and financial health in several ways. Ensuring compliance with payor requirements contributes to better cash flow when payments are made promptly. Reducing claim denials also promotes better cash flow but, more importantly, it reduces administrative and financial burdens associated with the appeals process.

Understanding Hospital Inpatient Utilization Management Activities

    Hospital utilization management strategies involve systematically evaluating and managing hospital resources. Key activities include pre-admission screening, concurrent review during hospital stays, and retrospective review after discharge. These activities help ensure that medically necessary care is delivered in the most appropriate setting.

    The goals of utilization management include:

    • Ensuring appropriate use of hospital inpatient resources and services.
    • Reducing unnecessary hospital admissions and lengths of stay.
    • Enhancing hospital compliance with payor requirements and regulatory standards.
    • Minimizing financial losses due to claim denials and revenue leakage.

        The Role of Inpatient Utilization Review (UR) in Hospital Utilization Management

          UR is a critical component of hospital UM functions, involving the evaluation of the medical necessity, appropriateness, and efficiency of healthcare services. UR processes include assessing admission criteria, reviewing ongoing patient care, and verifying when a patient has met discharge criteria.

          The Medicare Two-Midnight Rule is a critical regulation in UR, stipulating that inpatient admissions are generally appropriate if the physician expects the patient to require hospital care spanning at least two midnights. This rule, codified for Medicare Advantage Programs (Medicare Part C), guides hospitals in determining the appropriate patient status.

          Education is essential for both hospital UR staff and admitting providers. Education and training for UR staff are vital to ensure they can effectively evaluate medical necessity. Skilled UR staff can make informed decisions that align with payor requirements, reducing the risk of claim denials and ensuring compliance. Training providers to understand UR protocols helps ensure that patient admissions and services meet medical necessity criteria, reducing the likelihood of claim denials.

            How Poor Utilization Review Processes Can Contribute to Revenue Leakage

              Ineffective UR processes can lead to significant revenue leakage for hospitals. UR staff need to review the right patient at the right time, which varies by setting and payor. Failure to complete a timely review can result in claim denials and financial losses. Proper workflows are essential to prevent these issues.

              Medical necessity is a critical factor in accurately determining patient status. Hospitals must ensure UR staff have the skills and knowledge to assess medical necessity effectively and appropriately by payor. This includes understanding clinical guidelines and applying appropriate screening criteria.

              Hospital UR staff benefit from the support of a Physician Advisor. Physician Advisors provide expert medical judgment beyond standard screening criteria. This collaboration enhances the accuracy of patient status determinations and reduces the risk of claim denials.

                How Brundage Group Can Help

                  At Brundage Group, we offer comprehensive services to support hospital inpatient utilization review activities to minimize and prevent revenue leakage. Brundage Group can support your UR department every step of the way. Our unique approach allows our Physician Advisors to seamlessly integrate into the UR workflow where we provide expert guidance, ensuring accurate patient status determinations that comply with payor requirements. Due to the importance of getting a patient in the right admission status as quickly as possible, we also offer utilization review education to enhance the skills of your admitting physicians. Lastly, if a denial is received from the payor, Brundage Group can represent the hospital during the peer-to-peer process and assist with post-discharge appeals.

                  Contact Brundage Group today to learn how we can help your hospital capture earned revenue and optimize utilization management processes.

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