The utilization rate is the percentage of patients who receive a certain service or procedure out of the total eligible population. For example, if you have 100 patients who are eligible for a colonoscopy, and 80 of them get one, your utilization rate is 80%. A high utilization rate may indicate that you are providing adequate preventive care and screening, or that you have a high-risk population. A low utilization rate may indicate that you are missing opportunities to prevent or detect health problems, or that you have barriers to access or quality. You can use benchmarks and guidelines to compare your utilization rate with industry standards and best practices.
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HEDIS Measures from NCQA are performance indicators that one can compare their plan's performance to national standards. For example, in 2022 the national average for follow up after hospitalization for mental illness within 7 days post discharge was 46.5% in commercial PPO but only 27% in Medicare PPO. Therefore, there is a higher utilization rate in the commercial PPOs versus the Medicare PPOs for this HEDIS Measure.
The denial rate is the percentage of requests for services or procedures that are denied by the payer or the UM program. For example, if you have 100 requests for MRI scans, and 20 of them are denied, your denial rate is 20%. A high denial rate may indicate that you are not following the payer's policies and criteria, or that you are requesting unnecessary or inappropriate services. A low denial rate may indicate that you are complying with the payer's requirements, or that you are using evidence-based guidelines and protocols. You can use feedback and appeals to identify and address the reasons for denials and improve your UM documentation and communication.
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It is of great importance that you understand the guidelines of the payer that you are requesting authorization for. Guidelines today for managed care will not be the same 6 months from now. It is important that your team has awareness of any changes in payer guidelines. Education in regard to medical necessity is also key.
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Sadly with AI or automated online utilization methods, the office (usually a staff person) will quickly learn which boxes to check to get an approval. This results in the need for retrospective audits. Charts have to be collected or audited in the office, information there compared to the information entered and a evaluation of appropriate vs inappropriate requests. I am certain this is just as costly at upfront UM and not as effective.
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It is time to flip the old model of mother-may-I, to point of care decision support. This simple change enabled by AI could instantly approve up to 80% of orders.
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In my experience, a high denial rate is often impacted by a myriad of factors. It may indicate that a patient was admitted to the appropriate level of care but there is a need for more robust or specific documentation to support medical necessity (i.e. Two Midnight Rule). It may indicate a need for continuing education for UR staff to increase proficiency and appropriateness when applying payer guidelines (MCG, InterQual, LOCUS, ASAM). It could indicate a need for improvement in the organization's authorization process itself. Also, there are those cyclical ebbs and flows where there is an unexplained increase in denials by one specific payer indicating an opportunity for us as providers to partner with the payer.
The length of stay (LOS) is the number of days that a patient stays in a hospital or other facility for a given episode of care. For example, if a patient is admitted for a hip replacement surgery, and is discharged after four days, the LOS is four days. A high LOS may indicate that the patient has complications, comorbidities, or delays in discharge planning. A low LOS may indicate that the patient has a smooth recovery, a low-risk profile, or an efficient transition of care. You can use benchmarks and guidelines to compare your LOS with industry standards and best practices.
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In the behavioral health space, length of stay can be a challenge because there is the delicate balance of having enough authorized days to actually attain treatment goals but avoid unnecessarily prolonged treatment at a higher level of care. In these instances, low length of stay does not necessarily indicate a smooth recovery but rather may point to an increase in patients leaving AMA or treatment being cut short due to insurance denials.
The readmission rate is the percentage of patients who are readmitted to a hospital or other facility within a specified time period after a previous discharge. For example, if you have 100 patients who are discharged after a heart attack, and 15 of them are readmitted within 30 days, your readmission rate is 15%. A high readmission rate may indicate that the patient has poor quality of care, inadequate follow-up, or unresolved health issues. A low readmission rate may indicate that the patient has high quality of care, effective coordination, or improved health status. You can use benchmarks and guidelines to compare your readmission rate with industry standards and best practices.
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Appropriate and comprehensive discharge planning, beginning at admission, including patient and caregiver education and assessment of SDOH is key to preventing readmissions.
The patient satisfaction is the degree to which a patient is satisfied with the care and services they receive from the UM program and the health care providers. For example, if you have 100 patients who complete a survey after a UM intervention, and 90 of them rate their satisfaction as high or very high, your patient satisfaction is 90%. A high patient satisfaction may indicate that you are meeting or exceeding the patient's expectations, preferences, and needs. A low patient satisfaction may indicate that you are falling short of the patient's expectations, preferences, and needs. You can use surveys and feedback to measure and improve your patient satisfaction.
The cost savings is the amount of money that is saved by the UM program through reducing or avoiding unnecessary or inappropriate services or procedures. For example, if you have 100 requests for CT scans, and 10 of them are denied by the UM program, and each CT scan costs $1,000, your cost savings is $10,000. A high cost savings may indicate that you are maximizing the value and efficiency of your health care resources. A low cost savings may indicate that you are wasting or misusing your health care resources. You can use financial analysis and reporting to calculate and communicate your cost savings.
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Due to the complexity of coding, the clinical approval processes within the UM/PA need to constantly be updated. With the lag time between the practice of today and the most rigorous clinical studies taking years to update the overall process. This update is difficult on both the provider and payer side. Pricing in the 'cost savings' is very tricky. If AI optimizes both the clinical accuracy and the clinical workflow then if should benefit both parties.
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This calculation can be tricky. What is the cost of the current manual review system? How much time is wasted in manual review? How much wasted with no-shows driven by denials? What is the cost to patients and the system in delayed care? What is the cost in poor customer experience? All this should be factored in. Is it time for a change? Can AI be the driver?
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Risk mitigation and claims cost. Enhancement of continual survey readiness (not just lip service, but actual continuous PI and accreditation readiness), these activities while associated with some upfront cost will increase profitability, revenue, growth, patient and staff satisfaction while organically mitigating risk.
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