Should utilization review report to patient care or revenue cycle?

There is no one-size-fits-all answer to where the utilization review function should report, according to HFMA CFO Forum members. Whether healthcare finance leaders are considering a single employee or a team, a small hospital or a major health system, they have options.

Asking for small-scale advice

“In our small facility with a census of 10 to 12, our utilization review position currently reports to our patient care department. We are looking to change this approach to have our utilization review position — an employee who deals with inpatients, observation, swing bed stays and criteria, and insurance needs — report to our patient financial services manager in the revenue cycle department,” explained Steve Alger, CFO of Lakes Regional Healthcare, Sioux Falls, South Dakota.

Several Forum members had made the very same move. “We had a similar experience moving utilization review under revenue cycle several years ago, and it has produced much more successful results,” noted Michael L. Taylor, vice president, revenue cycle management, Cincinnati Children’s Hospital Medical Center.

Another HFMA Forum member noted that when utilization review reported through the patient care department, it was a struggle, but moving the function under revenue cycle was successful. The utilization review team still respects the needs of patient care staff and works closely with physicians and inpatient units, but they are able to focus on utilization review.

Relying on collaboration

A number of experts weighed in with the idea that a variety of reporting structures for utilization review could be successful in a productive work environment. That is, if different areas of the hospital understand each other, communicate and routinely work well together, the specific reporting department is less important.

“I think it is less about the direct reporting relationship and more about achievement of the goals,” stated Pat Keel, senior vice president/CFO, St. Jude Children’s Research Hospital, Memphis, Tenn. “However, regardless of where utilization review reports, it needs to at least have a dotted line to revenue cycle, and share the goals as they relate to the revenue cycle.”

Another HFMA Forum member said that utilization review had always fallen under her organization’s chief of nursing. She and her colleagues in revenue cycle have open lines of communication with the team and work closely with them. Reporting lines seem to be less of an issue if there is good communication between the teams.

Choosing the right model

With financial professionals successfully locating utilization review under patient care, revenue cycle and even the chief of nursing, it’s clear that the right model depends on the specific organization.

One Forum contributor, formerly of the Cleveland Clinic, pointed to the organization’s role in ensuring utilization review works as part of a productive whole. “I think there is no perfect place to locate utilization review. I have watched hospitals create programs under finance, administration, operations and even patient experience. Although the reporting arrangement makes a difference in day-to-day management, the organization’s governance and strategy for the changing healthcare environment are more important,” explained Lyman Sornberger, chief healthcare strategy officer, Lyman Healthcare Solutions, LLC, Cleveland.

“The healthcare system educates employees, promotes the organization’s vision and branding, and builds teamwork and appreciation for all of its areas. These efforts support not only utilization review, but also coding, care management and revenue cycle management, all of which have so much overlap now and will have even more in the future.”

Interviewed for this article:

Steve Alger is CFO, Lakes Regional Healthcare, Sioux Falls, South Dakota, and a member of HFMA’s Iowa Chapter.

Michael L. Taylor, vice president, revenue cycle management, Cincinnati Children’s Hospital Medical Center, and a member of HFMA’s Southwestern Ohio Chapter.

Pat Keel, FHFMA, senior vice president/CFO, St. Jude Children’s Research Hospital, Memphis, Tennessee, and a member of HFMA’s Tennessee Chapter. 

Lyman Sornberger, chief healthcare strategy officer, Capio Partners LLC, Sherman, Texas., and a member of HFMA’s Northeast Ohio Chapter.