August 31, 2021

Sound Physicians Industry Report Explores Rising Risks to Appropriate Hospital Reimbursement

Sound Physicians Industry Report Explores Rising Risks to Appropriate Hospital ReimbursementSound Physicians’ 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 back to efficiency and dollars – appropriate reimbursement, shorter length 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 more denials, lower reimbursement, and longer lengths of stay. For example, over 60% of respondents report a rise in observation rates, but approximately 40% are unsure of their percentage of observation discharges, including those as Medicare fee-for-service.  And 45% of hospitals executives were uncertain of their annual denial write-off amount.

Getting initial observation patient status correct and moving these patients up to inpatient when appropriate, OR safely out of the hospital is a critical challenge. With pay rates for observation discharges $3,000 to $6,000 less than an inpatient stay with comparable care, the risk is clear. It makes observation vs. inpatient status the new battle line for appropriate and fair reimbursement.  Particularly since many resources are devoted early in the 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 their current status. Well-defined role responsibilities are essential to efficient workflow and accurate patient status. Yet, our report found 25% 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 do in relationship to total bed capacity, and other key functions of a physician advisor.

Our survey results are sparking conversations within hospitals and prompting the discovery of areas at risk for higher denials and lower reimbursement because documentation, workflows, roles, and behaviors are 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 overturn denials.  They can provide the resources, go-to expertise, 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 the catalyst for change that significantly improves patient outcomes, staff retention, and hospitals’ financial health. So with props to David Glazer, it seems 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 report here.