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Decreasing Emergency Room and Inpatient Denials through Payor Collaboration Rohit Gulati, MD, FACP, MBA Assistant Vice President, Medical Affairs MedStar.

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Presentation on theme: "Decreasing Emergency Room and Inpatient Denials through Payor Collaboration Rohit Gulati, MD, FACP, MBA Assistant Vice President, Medical Affairs MedStar."— Presentation transcript:

1 Decreasing Emergency Room and Inpatient Denials through Payor Collaboration Rohit Gulati, MD, FACP, MBA Assistant Vice President, Medical Affairs MedStar Union memorial Hospital

2 Health Care Finance Before we begin the question is: Why the increased focus on Health care Finance and Health Economics?

3 The $1.1 Trillion problem

4 Health Care Expenditure: last 30 years


6 What did we as health professionals do about this problem?


8 Why Understanding Profitability and cost is important? Physicians/Providers can no longer be ignorant of health care costs Increased pressure from Payors Increased pressure to lower cost Increased public visibility of outcomes

9 Maryland Hospitals Profitability Depending on the size and profit status of the hospital the Maryland Hospitals have very different margins

10 Profitability Ratios

11 Citigroup Comparative Operating Performance Compensation Ratio Operating Margin Supply Expense RatioBad Debt / Net Patient Revenue * * * * * = MedStar Source: Citigroup database of 245 hospitals and health systems

12 Understanding Hospital Denials Inpatient – Medical Necessity (Mostly managed care) Inpatient – Lack of prior authorization (Mostly managed care) EMTALA – Emergency Room Denials (Mostly managed care)

13 Variation in Medicare Patient Discharge Rates CMS Public Report August 5, 2011 Pittsburgh, PA

14 Hospital Denials by MCO

15 After implementation of efforts to reduce denials

16 What was done differently External collaboration with Payors Internal collaboration within the hospital Change denial management to real time Constant education of Utilization Dept Constant education of Medical Staff Full time Physician Advisor

17 Role of Managed care contracting Managed care department fully aware of what was being done Managed care highly supportive of the process Provided access to key people in the MCO world Coordinated all meetings Instrumental in making this a success

18 External Collaboration with Payor Met with Payors to understand their issues Streamlined how notification of denial was handled Used secure electronic/email communications for working smarter Built a better working relationship with all payors Developed trust

19 Example – Secure Email communication

20 The Internal Collaboration The Internal team has to be bonded together with “superglue” The team includes:  Physician Advisor/VPMA  CFO  Utilization Department

21 A full time Physician Advisor A full time dedicated physician advisor can be vital to hospitals Has to have a full understanding of Severity of Illness and Intensity of Service and National criteria like Interqual and Milliman Since the payment structure in Maryland is different this becomes even more important in this state Besides denials significant impacts can be made on quality, education, LOS etc

22 Role of the CFO The CFO of a hospital system has got to be able to provide real time Denial trend data to the Utilization and Appeals teams In addition the CFO has to understand where to make an impact and use resources wisely

23 “Real time” management of Denials Inpatient concurrent denials should be appealed in real time The appeal within 24 hours is crucial – facts are fresh on both sides Use full time physician advisors to appeal Use help from specialists on the cases DO NOT appeal cases that should not be appealed - take ownership of this loss

24 Education of Utilization Department Meet with UR nurses as often as possible Daily rounds on each floor Streamline UR review to tell the appropriate story UR to inform Physician advisor of potential denial BEFORE the denial happens Physician Advisor to be aware of cases that have potential for denial

25 Constant Education of Medical Staff Think of Medical Staff like the GOP They hate someone telling them how to manage their patients Educate Medical Staff on LOS, Denials, Revenue Be as transparent as possible to get buy in Encourage use of evidence based medicine, cost and value analysis Make sure Staff knows about Quality of Care Initiatives

26 Understanding Cost and Value The distinction between cost and value is very important, You can have high cost and high value Or low cost and low value Problem: High cost, low or no value

27 Do we practice cost effective care?

28 Low Value…HIGH Cost Measuring BNP in patients with clear heart failure on exam and chest x-ray. Performing CT/MRI/Echo to evaluate patients with Syncope with a normal Cardiac/Neuro exam Performing pre-op labs and coagulation studies in healthy individuals Exercise testing in healthy patients when the pre-test probability is low (Think of chest pain r/o MI)

29 High cost….High Value High cost intervention may provide good value if its net benefit is large enough to justify its costs Examples: HAART in HIV patients AICD implants in high risk patients who have a life expectancy of at least 1 year

30 Low cost….Low value Pap smear every 3 years for very low risk women Chest X-Ray preoperatively in healthy adults


32 Value-Based Purchasing is now…. Quality Based Reimbursement (QBR) 1) Payment at Risk 2) VBP Components 3) VBP Measures Process of Care Acute MRI—2 measures Heart failure—1 measure Pneumonia—2 measures Infections—4 measures Surgeries—3 measures Patient Experience Communication with nurses Communication with doctors Communication about medicines Responsiveness of staff Pain management Cleanliness and quietness Discharge information Overall rating 32

33 Maryland Hospital Acquired Conditions Better Performing Poorer Performing

34 Overall Rating of Hospitals in Maryland: HCAHPS Reporting Period – October 2009 through September 2010 Percent of patients who gave their hospital a rating of 9 or 10 on a scale from 0 (lowest) to 10 (highest). HCAHPS Public Report 08052011 OR and LR Prepared by: Corporate Market Research CMS Public Report August 5, 2011 27

35 EMTALA  As managed care numbers increase EMTALA denials are expected to rise  Will have a larger impact on the bottom line, even larger than Inpatient Denials

36 EMTALA Denials – A conundrum  Very hard for payors to justify payment in the ER for a sore throat  Very hard for ER docs to figure out that the patient has a sore throat and not give a RX  Very high level collaboration between Payor and Hospital on this issue  Real time discussion with ER Navigator, PCP and Payor is needed

37 The Future  Increased collaboration between payors and hospitals  Increased visibility of revenues on both sides  Excellent, High Value, Cost effective care  Reduced Medical Errors  Oh…and don’t forget the RAC’s and MAC’s


39 Thank you Questions and Comments?








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