Sharp HealthCare has “presumptive approval” for level-of-care authorization requests, speeding up the entire revenue cycle process.
Frustrated by the extra staff time required to appeal level-of-care requests that were denied but approved after the appeal process, Sharp HealthCare tried a new approach: granting payers real-time access to members’ electronic health record (EHR) data. This allows the payer to check the record to determine whether the case meets medical necessity for inpatient status.
The experiment started with a single payer. “We immediately saw a reduction of denials,” says Gerilynn Sevenikar, vice president-hospital revenue cycle, for the San Diego-based health system.
The new process means that Sharp staff no longer spend time gathering and submitting clinical information to justify a level-of-care authorization request. Rather, Sharp enjoys “presumptive approval” for requests, and the entire revenue cycle is sped up. Accounts receivable greater than 90 days for this payer dropped from more than 35 percent of claims to less than 10 percent.
Best of all, the work — on both payer and provider side — associated with denials, appeals and approvals-after-appeal is eliminated. “On occasion, the payer reaches out for clarification but these calls are infrequent,” Sevenikar says. “As long as the case meets medical necessity for inpatient status, we never hear from the payer.”
The problem
Sharp sought to streamline the concurrent review process, whereby it seeks payer authorization for a patient to be treated as an inpatient versus observation status or for the appropriate level of care, such as medical/surgical versus intensive care unit.
Several payers, particularly Medicaid managed care plans, were routinely denying requests, prompting Sharp to submit additional clinical information to support an appeal. More than 90 percent of cases appealed were eventually approved.
“It was evident that there was a lot of rework for both the provider and the payer,” Sevenikar says.
The solution
To address the problem, Sharp sought to obtain “presumptive approval” for its level-of-care decisions by providing payers real-time direct access to the information they needed to approve.
“The thought was that if we open the EHR, then the paradigm has flipped,” she says. “Instead of an admission being presumptively denied pending an approval, the (clinical) information is readily available and should result in a presumptive authorization.”
At a meeting with one payer, Sharp presented data showing that more than 90 percent of initial denials were eventually approved. Sevenikar’s team also discussed the administrative and financial burden associated with appealing denials. They proposed the following actions:
- Provide the payer with real-time access to a limited set of HIPAA-compliant EHR data.
- Ask the payer to agree that Sharp’s level-of-care decisions would have “presumptive authorization” unless the payer notified Sharp of intent to deny.
- Require that if the payer issued an intent to deny, the payer would allow peer review (always clinician-to-clinician; physician-to-physician, if necessary) to discuss the clinical status of the health plan member.
Sharp Healthcare sets the following parameters for payer access to EHR data:
- The record is open 12 hours after the patient is admitted.
- The payer is provided a specific call line for clarification questions or to discuss the possibility of a denial.
- The payer agrees to Sharp’s “presumptive approval” language.
- The payer has access only to the information that would have been provided by request previously; access to social work notes, for example, is not granted.
- The record closes 30 days post-discharge.
- The payer can only see information related to the member’s current visit.
After a successful trial with the initial payer, Sharp has extended EHR access to other payers. As part of this innovation, Sharp collaborates with payers to identify other data about their members that they would like to receive on a daily basis. These have included the following information:
- The admit list of the payer’s members from the previous day
- Daily census report
- Prior-day discharges
- Emergency department encounters with discharge summaries
- Daily list of observation patients
Lessons learned
EHR access does not work well with all payers. After one payer was granted access to member data, members of its utilization management team started calling Sharp with requests to change patient status from “inpatient” to “observation.”
“The frequency of the requests became notable, and it became clear that they were focused on payment reductions versus proper payment for care provided,” Sevenikar says. “We quickly removed their access and are still in discussions regarding the conditions of access.”
An unexpected side effect of the new process: an uptick in audits for DRG validation. Because Sharp has high-quality coding, this has not resulted in any takebacks, and Sevenikar already has an idea on how to address the issue. “Our next area of opportunity will be to open the record for post-discharge clinical review,” she says.
Sharing patient/member data in this way requires trust between payer and provider and can only happen if both parties agree on how information will be used, Sevenikar says.
“As we increase transparency with patients, we need to be confident enough to increase transparency with our payers,” she says. “If we can agree that our primary interest is the care delivery to their member and our patient and that our overarching desire is to reduce expenses that do not directly contribute to the clinical care, then the area of denial management becomes fertile ground for process improvement.”
Interviewed for this article:
Gerilynn Sevenikar is vice president, hospital revenue cycle, Sharp Healthcare, San Diego.
