Becker's Hospital Review

13 Executive Briefing Sponsored by: Taming Medical Necessity Challenges With Physician Advisor Programs I n the evolving value-based reimbursement environment, healthcare providers are required to justify their care decisions, proving them necessary, reasonable and founded on evidence-based standards of care. Yet many physicians on the front lines already feel spread thin, and their primary focus is treating patients. Nonetheless, patient status determinations — inpatient, outpatient (observation) — and clinical documentation remain integral to hospitals' financial and quality objectives. To help bridge this gap, hospitals and healthcare organizations are tapping physician advisors to provide evidence-based patient status recommendations, improve clinical documentation, manage denials and foster greater collaboration between physicians and case managers. Initiating a physician advisor program comes with challenges — gaining administrative support, finding the right person for the job and gathering the appropriate resources, to name a few — but with a few key considerations in mind, hospitals can develop a program suited to their organization and start improving staff satisfaction, utilization review consistency and revenue integrity. Medical necessity remains a top challenge Recouping complete, appropriate and timely reimbursement from commercial payers and government health plans is no small feat. Physicians must provide clinical documentation for services based on Medicare's national and local coverage determinations, which may differ from commercial payer standards used to demonstrate medical necessity. Many health systems find it challenging to appropriately record and document patient status and level of service. In fact, CMS estimated in 2016 it improperly paid approximately 11 percent of claims from July 2014 to June 2015 — totaling just over $41 billion in improper payments, according to the Medicare Fee-For-Service 2016 Improper Payments Report. Lack of documentation, including that to support medical necessity, was cited by CMS as the single most common cause of improper payments. However, improper payments are more than just a headache for regulatory agencies — they make a significant dent in provider budgets too. Commercial insurers also place a premium on clinical documentation and evidence-based medicine when determining medical necessity and levels of service. Clinical documentation that fails to meet a payer's standards results in claim denials, which are often labor-intensive and costly for providers to appeal. Despite the financial drain associated with improper patient status documentation, few physicians register the importance of their role in the process, according to Kurt Hopfensperger, MD, vice president of compliance and physician education at Optum Executive Health Resources. Furthermore, physicians may not understand the nuances and financial consequences of various patient statuses, such as that of observation versus inpatient. "It's the most important nonclinical decision a physician makes about a patient when they come into the hospital," Dr. Hopfensperger says. "Many times physicians will even view medical necessity as a waste of time. They see themselves treating patients the same way, regardless of their inpatient or outpatient status while in the hospital." To further complicate the issue, rules and regulations on medical necessity and patient status determination are complex and ever-changing, making it difficult for providers to keep up. Consider the two-midnight rule, which Medicare has modified multiple times since first introducing in 2013. "Every year we have [new] inpatient and outpatient rules, which tally thousands of pages for Medicare alone," says Dr. Hopfensperger. How physician advisor programs can fill the gaps Many hospitals and healthcare organizations use physician advisor programs to address these challenges. For example, Milford (Mass.) Regional Medical Center, a 145-bed nonprofit hospital serving more than 20 communities, noticed high observation rates and ineffective patient status designations were negatively impacting the quality and cost of care. The organization found that deploying case managers to better educate hospitalists about patient status determination was ineffective in influencing or changing physician documentation behavior. The hospital ultimately designated a hospitalist to champion medical necessity determinations and work as a liaison with case management to improve patient status recommendations. Here are four notable benefits of a physician advisor program, according to Dr. Hopfensperger. 1. Physician advisors can fill gaps left by screening tools and act as an intermediary to translate adjusted recommendations to attending physicians. Many commonly used commercial screening tools have limitations — and their websites typically warn of this, according to Dr. Hopfensperger.

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