Reimbursement impact of medicaid managed care organizations replacing standard medicaid

To Be or Not to Be (Inpatient Versus Observation): Improving Admission-Status Assignment

BACKGROUND

Observation care is frequently indistinguishable from inpatient care. However, the financial burden of inappropriate status assignment for hospitals and patients can be large. Increased awareness of the potential for financial hardships experienced by patients because of status designation spurred interest among physicians in this improvement project. The goal was to improve the percentage of appropriate inpatient-status assignments from 76% to 90% in 2 years and eliminate observation assignments for patients with hospitalizations >48 hours.

METHODS

Our multidisciplinary team used the Model for Improvement. Interventions included securing a lead physician advisor to the use-review team, improving the process for status review and adjustment, and creating educational sessions and tools for physicians. Data collected included the percentage of appropriate inpatient assignments, percentage of observation assignments for patients with hospitalizations >48 hours, write-off dollar amount per year from denial of payment due to payer disagreement with inpatient status, and resident physician confidence in assigning status.

RESULTS

Appropriate use of inpatient assignments increased from 76% to 84%. Status assignments remaining in observation >48 hours of hospital length of stay decreased by one-half, from 6% to 3%. The write-off dollar amount increased during the study period but decreased by 19% the following calendar year, 2018. Resident self-reported confidence in status designation increased after educational sessions.

CONCLUSIONS

Careful selection of admission status by educated providers and a system to identify relevant cases for status changes can increase appropriate status assignment and, potentially, positively affect the economic burden placed on patients and hospitals.

Managed care gatekeeping, emergency medicine coding, and insurance reimbursement outcomes for 980 emergency department visits from four states nationwide

STUDY OBJECTIVE

We analyzed 980 emergency department visits for 951 patients with managed care insurance to document gatekeeping interactions and compare ED coding with professional fee billing reimbursements.

METHODS

A prospective cohort study was performed at 12 academic and community hospital EDs in 4 states involving consecutive ED patients with managed care insurance. The main outcomes measured were gatekeeper decisions, coding levels, and reimbursement.

RESULTS

Preauthorization for payment was required from managed care gatekeepers for 876 (89%) patients. Authorization was granted for 490 (56%) of these visits and denied in 176 (20%) visits; gatekeepers were not available for 210 (24%) visits. Reimbursement was initially denied for 211 (43%) of the ED visits preapproved by managed care gatekeepers. Reimbursement was initially denied for most (634 or 65%) visits, and downcoding occurred in the other 346 (35%) visits. Appeals for 560 (57%) visits resulted in a decrease in the number of unreimbursed ED visits to 193 and an increase in the number of reimbursed ED visits to 787.

CONCLUSION

Preauthorization gatekeeping is not predictive of whether managed care third-party payers will initially reimburse ED visits. Overall, almost two thirds of all ED claims were initially denied, and reimbursed claims were uniformly downcoded. On appeal, reimbursement was often reinstated or increased, although billing services only appealed about half of ED visits.