Recommendations for improving utilization review and denial management to reduce LOS

An organization’s utilization review (UR) and denial prevention and management functions work across all three care transition phases to ensure continuity of care and accurate payment for that care. These two functions support patient flow throughout an organization, and their effective management can make a critical difference in LOS. To address an increase in denials and multiple issues with payers, hospitals should consider centralizing these functions. Centralization requires maintaining a standardized process with a common electronic health record across all hospitals in a system. Although it can take time to build such a model, the effort offers clear benefits.

For example, by centralizing data from hospitals across a system, the system can draw upon a larger data set to identify patterns in LOS-based denials that can lead to earlier identification of criteria that are driving denials by different payers. This, in turn, can help pinpoint variations in processes that may be driving higher denial rates at particular  hospitals, in particular service lines or with particular physicians, and serve as a guide to improvements across the system that reduce both LOS and denials.

Additional benefits of a centralized approach include:

• Consolidated reporting.
• The ability for facility-to-facility comparisons.
• A common connection with the business office to provide one source of information for all hospitals.
• Elimination of the need for separate efforts by R staff at each hospital to keep abreast of rules issued the Centers for Medicare & Medicaid Services and those adopted by commercial health insurers.

The success of a centralized process depends on the existence of an integrated communication plan and clearly defined roles and responsibilities. The goal of a centralized UR process is to enable the UR specialist to look ahead to see what is needed to get approval, or what may trigger a denial, and to communicate with the physician and other relevant stakeholders to support compliance with the appropriate criteria. The process also should identify the escalation/governance processes to resolve any issues that arise.^a

a. Christie, E., Thomas, M.B., “Weighing the Pros and Cons of Offsite Utilization Review,” Hospital Case Management, June 2018.