Increase Your Bottom Line by Eliminating Physician Driven Denials Olakunle Olaniyan MD President Case Management Covenants
Escalating cost of care Physician Driven Denials Denial drivers Working with physicians Strategic use of data Service level interventions Diagnosis level interventions Institutionalize through CQI Peer to peer 1
Escalating Cost of Care In working with physicians and other clinicians it is often important to get everyone on the same page in terms of the importance of managing cost. Physicians often argue that the rising cost of care has nothing to do with them. It is helpful to share data that is difficult to refute. At the minimum they understand that the relenting pressure for them to manage cost will not go away anytime soon. 2
Billions Escalating Cost of Care Total National Health Expenditures, 1980 2011 (1) $3,200 $2,700 $2,200 $1,700 $1,200 $700 $200 Inflation Adjusted (2) 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Total National Health Expenditures, 1980 2011 (1) 3
Percentage of GDP 13.2% 13.5% 13.8% 13.7% 13.9% 13.8% 13.7% 13.7% 13.8% 13.8% 14.5% 15.4% 15.9% 16.0% 16.1% 16.2% 16.4% 16.8% 17.9% 17.9% 17.9% Escalating Cost of Care National Health Expenditures as a Percentage of Gross Domestic Product, 1991 2011 (1) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 9, 2013. (1) CMS completed a benchmark revision in 2009, introducing changes in methods, definitions and source data that are applied to the entire time series (back to 1960). For more information on this revision, see http://www.cms.gov/nationalhealthexpenddata/downloads/benchmark2009.pdf. 4
US Quality of Care Vs. Developed Countries 5
Healthcare spending breakdown 2010 6
Impact of MND on Hospitals Hospital operating margins average between 2% and 4% from 1991 to 2011. In the same period 25% to 40% of hospitals reported negative margins. Medical necessity denials typically average between 1% and 6% of operating revenue. As a result Medical Necessity Denials often are the difference between a positive margin and a negative margin. 7
Physician Impact on MN Denials Almost every thing that occurs in the hospital setting requires a physicians signature. Physicians decide when to admit, where to admit, how soon to discharge and where to discharge to. They decide where care is provided and how efficiently. Medical Necessity denials are focused primarily on where care is provided and how efficiently. It makes sense that any denial reduction efforts should focus primarily on physician behavior. 8
Benefits of Changing Physician Behavior Building a culture where physicians are accountable for quality and cost of care has tremendous benefits beyond just denials. Not only do denials drop significantly. You will also see additional benefits including a reduction in overall cost of care. This will strengthen competitive positioning in a bundled payment environment. 9
Getting Physician Buy in This is probably the most difficult part of the process for several reasons. Physicians do not like to be told what to do. Many believe denials negatively impacts care. They have had little financial incentive to reduce denials until recently. Given the increasing demand to see more patients for the same income, denials are at the bottom of their priority list. 10
Getting Physician Buy in Physicians are competitive amongst themselves, they like to win. They are trained statisticians, data oriented and logic driven. They will listen to other physicians and colleagues they respect. Tapping into some of these attributes may facilitate the engagement process. 11
Physician Engagement Work with groups of physicians rather than individual physicians, this harnesses their competitive spirit. Individual physicians rarely drive meaningful volume, and when they do, they are usually too important to mess with. The impact of any intervention is much greater with groups rather than individual physicians. Groups generate more data, quicken re-measure time and improve statistical significance. 12
Physician Engagement Any engagement should have VISIBLE C-suite support, especially the Top Doc and CFO. It is critical to get the Top Docs support as well as the support of Department heads. They have other priorities so this can take some time. Once critical buy in has occurred, a working team of clinicians is put together to develop necessary interventions. Frequent visits and show of support by the executive team is very helpful in driving the process. 13
Physician Engagement The work team is typically comprised of the physician adviser, Physician department heads, Case Management and discharge planning. A qualified physician or physician consultant must lead the team. It will be difficult to make progress without a physician leading the team. Goals are set based on what the data shows and should be initially simple and easily attainable. Maintaining physician engagement and involvement is more important than the final result. 14
Data Analysis Use statistically significant denials data to identify key drivers of physician denials. Pay particular attention to service and diagnosis data. The data should be presented preferably by a physician colleague. Agree on areas of focus based on impact on revenue and ease of implementation. 15
Data Analysis We recommend using denials data for the following reasons: It is timely and addresses the issue at hand Immediately available and easy to collect A steady flow of data enables frequent re-measurements It is credible and reliable For Most hospitals, the data can be extracted from denied accounts with minimal resources and effort. 16
Data Analysis Data analysis should focus on diagnosis and service level data. Service could comprise specialty services like ID in a large hospital or Internal medicines, in a smaller hospital or even group practices. The goal is to group like physicians together. Once we identify diagnosis drivers by service, we can drill down to individual records to look for patterns and trends. 17
Develop Interventions Once we identify physician drivers of denials, we develop interventions to address them. There are 2 types of data driven interventions. Service level interventions which tend to be very specific and are best suited for large academic centers. Diagnosis level interventions which are centered around guideline development and can be used for most hospitals. 18
Example of service level data Service Admits Denied Total Days Denied Cardiology Infectious disease Cardiac Surgery Pediatrics Neurology General Surgery 86 180 51 172 44 164 30 70 30 62 18 46 19
Service analysis Select services with high denials. Examine diagnostic trends and LOS. Select individual records for review. Perform root cause analysis to identify denial drivers. Look for actionable solutions. 20
Example 1 Infectious disease We found many cases of pneumonia denied. Most did not meet pneumonia severity index criteria for admission. PSI is a clinical guideline accepted by physicians. Recommended in service using PSI. Follow up in 6 months to assess progress. 21
Example 2 Cardiac surgery We found no particular diagnostic patterns. We did find that many cases were denied in the middle of stay, these were mostly ED admissions not elective cases. We found many of the denials were for delay in procedure. Recommended closed CM interaction with Physicians. Follow up in 6 months to assess progress. 22
Example 3 pediatrics We found many denials for constipation. We found many admissions for severe constipation denied. Adequate outpatient therapy had not been provided. Recommended pre-admit screen to ensure OP therapy failed. Follow up in 6 months to assess progress. 23
Clinical Pathways Development of Clinical pathways In addition to service analysis, clinical pathways that incorporate medical necessity admissions criteria can be developed based on diagnosis data. Clinical Pathways are more suited for smaller facilities were service analysis may be impractical. Select Pathways based on Diagnosis data and records review findings. Start with 5 inpatient diagnosis and 5 ED diagnosis. Select diagnosis with high revenue impact as well as clear medical necessity criteria. 24
Physician Education ED Clinical pathways ED clinical pathways would be based on frequently denied diagnosis with 1 or 2 day LOS. The pathway would focus primarily on admission criteria versus observation or ED care. ED physicians would be involved in developing the pathways. ED case managers would be beneficial in driving compliance. ED Clinical pathways are also an excellent tool for 2 mid-night rule. 25
Physician Education ED Clinical pathways diagnosis. Examples of ED diagnosis from a 2014 analysis are below. GASTROINTEST HEMORR NOS HB-SS DISEASE W CRISIS CHEST PAIN ASTHMA GALL BLADDER DISEASE 26
Physician Education Example of ED Clinical pathways Lower GI Bleed Observation or OP with workup expected Requires ONE of the following findings for admission: Hematochezia Melena PLUS one of the below: HCT < 25% (0.25) or Hb < 8.3g/dl (83 g/l) Platelets < 60,000/cu.mm(60x10 9 /L) or >1,000,000/cu.mm(1000x10 9 /L) Heart rate 100-120/min, sustained Postural hypotension, Syncope PT 1.5x ULN or INR 2.0 PTT 1.5x ULN Disorientation Agitation Increasing irritability Increasing lethargy 27
In Patient Clinical pathways Physician Education IP Clinical pathways are based on denials with 3 or more days LOS with denials at the end of stay. The IP pathway would focus primarily on discharge criteria and appropriate discharge planning. Physicians and CM should be involved in developing the pathways. IP CM are critical in driving compliance and assisting physicians with use of the guidelines. CM rounds are very helpful as part of the implementation and adoption process. 28
Physician Education In Patient Clinical pathways diagnosis: Examples of IP diagnosis from a 2014 analysis are below. PNEUMONIA, ORGANISM NOS ABDOMINAL PAIN DIABETES MELLITUS CELLULITIS URIN TRACT INFECTION NOS CHF NOS 29
Physician Education Example of IP Clinical pathways: PNEUMONIA, ORGANISM Discharge criteria Temperature declining Improved respiratory dynamics Breathing comfortably off oxygen Sputum culture results reported Blood cultures negative Discharge plans and education understood Oral hydration, medications, and diet 30
Physician Education Implementation of Clinical pathways Once guidelines are implemented there must be adequate case management oversight to ensure full adoption. The fact that physicians support the guidelines does not mean they will use it consistently. In fact it is safe to assume they will not. Despite their support, it is not a priority for them. Case management involvement on a daily basis, as well as regular case management rounds provide the support infrastructure to encourage full adoption by physicians. 31
Physician Education Continuous quality improvement Once processes are implemented, it is necessary to monitor to ensure they are working. Case management monitoring provides immediate feedback on how well the processes are working. Regular meetings to access and finetune will be necessary. Repeat analysis to measure progress as soon as there is sufficient data to do so in a statistically sound manner is also necessary. Institutionalize by using technology solutions and CQI. 32
Physician Peer to Peer Key areas of Focus may include the following: Train physicians on effective peer to peer interactions with payer medical directors. Establish pre-determined effective line of communication between payer medical directors and physician peers. Establish immediate peer to peer for denials case management feels should not be denied. Provide immediate feedback and re-education for cases denied appropriately. 33
Thank You We appreciate the Opportunity to present to all of you today. We realize that with the many changes in Heath care coming this year, Reducing and overturning Medical Necessity Denials is becoming an increasingly important source of revenue recovery. If you have any questions please feel free to contact me at o.olaniyan@cmcovenants.com. 34
Speaker Biography Olakunle Olaniyan, MD MBA FACP FACPE President Case Management Covenants LLC Dr Olaniyan is a Practicing Physician leader with over 20 years experience, managing escalating medical cost and increasing profitability in the healthcare industry. His experience as a consultant at William Mercers healthcare practice, and a senior executive at both United Health Group and Cigna HealthCare, uniquely qualify him to help clients identify areas of opportunity and implement best practices that drive value and profitability. 35