Do We Really Need Multiple Medical Record Reviewers?

Utilization review (UR) activities have been around for decades. The scope of the activities run the gamut from a backward glance at physician documentation to ensure that the patient’s clinical picture and proposed interventions match the best-practice scenarios promoted by MCG and IQ, to real-time peer review by a team of physician advisors.

Whatever the strategy, the mission is the same: to ensure effective and efficient utilization of facilities and services, to eliminate payment delays and case denials by the payers, and to maintain a healthy revenue flow. 

While these hospital-based activities have been chugging along since the early 1970s, the oversight environment has evolved dramatically during that time. For example:

  • Health insurance companies have become quite adept at creating complex proprietary clinical practice guidelines that overlap or run contrary to standard sets such as IQ or MCG.
  • Payers have developed AI algorithms that can quickly identify cases ripe for DRG downgrades.
  • Payers use practice profiling systems using data pulled from multiple decision-support record-keeping systems, which enables comparisons between and among providers and beneficiary peer groups.
  • Insurers utilize high-performance, rules-driven platforms that automate clinical reviews.
  • Payers routinely evaluate their formularies to promote the use of evidence-based and affordable pharmaceuticals.
  • Insurance companies have developed decision support profiling platforms that pull information from multiple sources to enable comparisons between and among provider and beneficiary peer groups.
  • Payers incorporate technical requirements into boilerplate contracts, which may limit ability of the payee to submit fully compliant claims or recoup unpaid claims.

Unlike these advances on the payer side, the process of hospital UR remains pretty much the same today as it was in the early 1970s. Medical record documentation is reviewed against clinical practice guidelines by medical professionals, typically RNs; physicians are contacted, begged, or cajoled into changing or editing documentation to justify level of care admission and treatment; and appeals are written when the payer denies a claim. The one variable that has changed is the presence of a physician advisor, who, depending upon the organization, serves as internal source to oversee reviews by the UR team, contacts the offending physician, serves as liaison with the payer’s medical director to challenge denials, and often chairs the generally perfunctory utilization review committee.

With the exception of some pockets of success, mostly initiated by revenue cycle consultants who zealously rely on data to target opportunities for improvement, payer denials have soared, and hospitals have yet to take the offensive against payer strategies.

According to a 2017 analysis by the Nashville-based Change Healthcare, approximately 9 percent of claims, with a value of approximately $262 billion, are initially denied annually. This translates into an average of $4.9 million per hospital. Using actual hospital data, our firm has frequently identified first-pass denials that reach double digits, resulting in back-end costs of approximately $118 per claim to resubmit or appeal payer decisions.

There has been no shortage of hospital effort to manage all the moving parts associated with a successful UR program, but work to date has often focused on team performance and automation of activities intended to reduce administrative errors – which, according to the San Diego-based Centra-Med, account for roughly 63 percent of first-pass denials. While this is important, to combat the payer initiatives mentioned at the start of this article, hospitals must seize opportunities that are available internally to counter medical necessity denials as well. Failure to realize the benefit from the investment in medical documentation improvement is an expense waiting to happen. 

Clinical documentation improvement programs gained a foothold in hospitals around the time the MS-DRGs were introduced. Greater specificity of each MS-DRG code warranted, it was thought, review of medical documentation to promote inclusion of each possible contributing diagnosis. The provision of hospital level of care may be reasonable and medically necessary for a given patient, but unless the documentation reviewed by the payer clearly reflects that need, chances are, the claim will be denied.

In the second edition of The Hospital Guide to Contemporary Utilization Review, Ronald Hirsch, MD and Stefani Daniels report that most traditional clinical documentation improvement (CDI) programs are focused on capturing complications and comorbidities (CCs) and major CCs (MCCs) – a practice that recently found Maury Regional Medical Center the subject of a U.S. Department of Justice (DOJ) lawsuit for fraud resulting in a $1.7 million settlement. Glenn Krauss, a nationally recognized subject matter expert on CDI, has been relentless in his call for an overhaul of these traditional programs in favor of programs that target the clarity and integrity of medical documentation.

Both utilization review and clinical documentation specialists are reviewing the same medical documentation. The UR specialists are trying mightily “to ensure the patient status is correct and supported by the clarity of the medical documentation,” while CDI specialists, for all intents and purposes, are trying to capture greater specificity of the patient’s condition by scouring the chart for diagnoses that may or may not be relevant to the case and contribute to the primary diagnosis. The lack of efficiency and collaboration between these two groups results in multiple messages going back and forth to physicians throughout their day from both groups, potentially for the same patients, in a reactive format. The documentation miss has already occurred, and the physician is reactively responding to the query, denial, or appeal. 

Physicians are often not schooled on the financial implications of their medical documentation. Historically, hospital executives have been reluctant to tackle the issue of denials with physicians, and rarely share this data with members of the medical staff. Typically, the expectation of improvement falls on the revenue cycle team after the record is determined complete…a major investment in re-work! Yet, revenue for both the hospital and medical office is a direct result of the quality, clarity, and completeness of medical documentation.

Operationally speaking, we believe that facilities must use data to examine the root cause of medical necessity denials so that the approach is proactive rather than reactive, on the collection side. The data should be shared with the medical staff via a strong utilization review committee that includes CDI attendance. Furthermore, in keeping with the quality principle of “do it right the first time,” hospital executives should consider reorganizing utilization review and clinical documentation resources from traditional roles to a single team evaluating medical documentation on a real-time basis. One knowledgeable individual working in partnership with a physician is a more efficient means of addressing the process and goals of both UR and CDI programs. 

There was a time when the path between submitting a claim for hospital services and receiving payment for the care and treatment provided was straightforward. Those simpler days are gone. We have found that physicians want to understand the nuances of medical documentation requirements, and they want to know the implications that medical documentation has for their patients and their organizations. In our experience, physicians prefer “doing it right the first time,” rather than going back and correcting their work because of rules they do not know or understand.

Hospitals, Accountable Care Organizations (ACOs), and outpatient facilities depend upon a healthy revenue flow. Unless each practitioner is aware of the financial implications of its medical documentation, it remains outside the sphere of quality improvement.


Stefani Daniels, MSN, ACM, CMAC

Stefani Daniels is the founder and senior advisor to Phoenix Medical Management, Inc, a boutique consulting firm that specializes entirely on case management and utilization review. Ms. Daniels is a member of the editorial board of Lippincott's Professional Case Management journal and co-author of the popular text The Leader's Guide to Hospital Case Management and The Hospital Guide to Contemporary Utilization Review and a contributing author to the 2nd and 3rd edition of CMSA's Core Curriculum for Case Managers.

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