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CMW sneak peek: Clinical case management--an effective strategy for denials avoidance

Case Management Weekly, August 12, 2009

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The three-year Recovery Audit Contractor (RAC) demonstration project that concluded in March 2008 added fuel to an already contentious process by second-guessing hospitals and physicians in the determination of appropriate patient status for hospital admission. As of March 27, 2008, the RACs’ efforts at identifying alleged overpayments led to the following successes:

• $391.3 million, medically unnecessary services (40%)
• $331.8 million, incorrectly coded (35%)
• $74.3 million, no/insufficient documentation (8%)
• $160.2 million, other (17%)

The classification of medically unnecessary services as a measure and justification of improper payment setting hospital recoupments was unequivocally controversial in the demonstration project and will remain so in the permanent RAC program. Why? The determination of medical necessity for inpatient admission versus outpatient observation is challenging at best, incorporating by definition elements of subjectivity, clinical impression, and individualized medical decision-making.

Check out the August 2009 issue of Case Management Monthly to read the full article, and discover the benefits of becoming a Case Management Monthly subscriber.

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