Sound Physicians Industry Report Explores Rising Risks to Appropriate Hospital Reimbursement


Survey data suggests that hospital executives, physician advisors, and case managers are not always on the same page.

Sound Physicians‘ recent nationwide survey provides insights into the barriers hospital case managers, utilization review teams, physician advisors, and hospital executives face in achieving their goals – and the potential for physician advisory programs to deliver solutions.

Hospitals are under mounting pressure to maintain their financial health while improving health outcomes for their patients and maintaining a satisfied and stable workforce. Not surprisingly, survey respondents placed high importance on financial health. Their top focus areas link to efficiency and dollars – appropriate reimbursement, shorter lengths of stay, and fewer denials. But the survey data suggests that hospital executives, physician advisors, and case managers are not always on the same page – or even fully aware of gaps – when it comes to the communication, workflows, and documentation required to improve these key metrics.

These gaps put hospitals at greater risk. For example, over 60 percent of respondents reported a rise in observation rates, but approximately 40 percent were unsure of their percentage of observation discharges, including those performed as Medicare fee-for-service. And 45 percent of hospital executives were uncertain of their annual denial write-off amount.

Getting initial patient status correct and moving these patients to inpatient status, when appropriate (or transferring them safely out of the hospital), is a critical challenge. With pay rates for observation discharges being $3,000 to $6,000 less than an inpatient stay with comparable care, the risk is clear. It makes observation versus inpatient status the new battle line for appropriate and fair reimbursement, particularly since many resources are devoted early in a stay for sick patients who present to the hospital with acute – but yet undiagnosed – symptoms.

To align the goals for a patient’s stay, case managers, physician advisors, and attending physicians need timely communication and documentation about who is in a bed and what their current status is. Well-defined role responsibilities are essential to efficient workflow and accurate patient status. Yet, our report found that 25 percent of case managers find it challenging to get the input they need from the attending physician to change status. Furthermore, there was a range in responses for how quickly an advisor can review a case, how many cases they should review in relationship to total bed capacity, and other key functions.

Our survey results are sparking conversations within hospitals and prompting the discovery of risk for higher denials and lower reimbursement, because documentation, workflows, roles, and behaviors are often unclear and connected. Physician advisors deliver significant value by improving communication and workflow efficiency to prevent low reimbursement and denials in the first place. They have the expertise to support accurate status determinations, turn secondary reviews around quickly, ensure documentation integrity, and even overturn denials. They can provide the resources, go-to knowledge, and leadership to bridge these gaps and effectively connect utilization management and revenue cycle.

Working as an integral member of the hospital team, the physician advisor can be a catalyst for change that significantly improves patient outcomes, staff retention, and hospitals’ financial health. So, with props to David Glaser, it seems that hospitals still haven’t found what they’re looking for in their pursuit of the perfect physician advisory program.

You can download a copy of the full survey report here.

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