Utilization Committee Challenges for Small Hospitals

For most hospitals the Utilization Committee (Utilization Review or Utilization Management) is a standard part of doing business. These committees can be very valuable in terms of confronting the most challenging element of managing a hospital. Hospitals are extremely dependent on physicians and must find ways to influence physician’s behavior in order to stay compliant with regulations and to maintain appropriate revenue. Physicians are often not completely informed of these issues and the Utilization Committee is extremely educational.

For small hospitals, however, these committees can be challenging. The Joint Commission requires a Utilization Committee, but not all small hospitals are Joint Commission accredited. The Center for Medicare Services (CMS) also requires a utilization review process as a Condition of Participation (CoP) for any hospital that participates in the Medicare Prospective Payment System. Therefore, the Utilization Committee is a challenge that must be met.

Critical Access Hospitals (CAH’s) may get an exception from this requirement in certain cases. If a Quality Improvement Organization (QIO) has assumed the utilization review process or if CMS has determined that the utilization review process established by the state under Title XIX of the Social Security Act are superior the procedures required in The Joint Commission Standard LD.04.01.01 for CAMCAH, and has required CAH’s in that state to meet the utilization review plan requirements under 42 CFR 456.50 through 42 CFR 456.245. Outside of these exceptions, even CAH’s will have the requirement for utilization review.

As in life, the “80/20″ rule is typically the norm among the medical staffs. This means the 20% of the staff does 80% of the work. With a small medical staff, this could result in a very few physicians doing most of the heavy lifting. A few necessary committees can stretch the staff. There are some things that can be done to maximize the valuable time of the physician, stay compliant and get some much needed help for the hospital and education for the physician.

A good approach to the Utilization Committee is to streamline the committee as best possible. While there are specific roles of this committee which are spelled out by CMS, there are ways to cover it all and still get the most out of the physician’s time.

The committee must be comprised of at least two physicians who are either a doctor of medicine or osteopathy. When the medical staff is small, there is a higher likelihood that the physician on the committee will have one of their own patients reviewed. Having two physicians will assure that the cases can be effectively reviewed. More, however, is always better. Broader input from the physicians will improve the quality of the review, but the opportunity to enlighten more physicians on utilization issues can be hugely valuable also.

Other members of the committee should be appropriate hospital staff members. These members should be selected carefully and with a focus on keeping the total number of committee members to a minimum. These members may include representatives from Case Management, Billing/Coding, RAC Compliance, Quality or others relevant to the process. Of course, this may all be accomplished by one or two staff members in small hospitals.

There are three specified roles of the Utilization Committee. These are all related to the medical necessity issue.

1) Admissions: The committee should review the appropriateness and medical necessity of inpatient admissions and observation admissions. This review can be done at the time of admission, during the stay or post-discharge. The level of care should be a focus. This can be done on a sample basis and does not need to occur on every admission. The goal is to confirm that the hospital’s process and the physician’s understanding of the process is where it should be. If not, the committee should be responsible for the plan to make the necessary changes.

2) Duration of stay: The committee is expected to review cases that are true “outliers” defined by CMS under the Prospective Payment System. The role of the committee on this point is less clear. Certainly the committee should confirm that the patient’s medical condition justifies continued stay at the same level of care. The ability to intervene here is very sketchy. Trends for specific service lines, treatment areas are physicians should be identified and specifically addressed.

3) Professional services provided, including drugs and biologicals: Here again, the only cases that need to be reviewed are those that are deemed to be outliers based on extraordinarily high costs as determined under the Prospective Payment System. The goal here is to promote the most efficient use of facilities and services. Drugs (specifically antibiotics) and therapeutic biological agents can be extremely costly. Stewardship with regard to those agents can be a very healthy endeavor for the hospital.

While these are the required activities of the committee, there are usually other opportunities to share information, educate physicians and improve hospital proficiency. Unfortunately, most smaller hospitals done include the medical staff in discussions regarding the hospital’s revenue issues. This can be a great time to review the Recovery Audit Contractor (RAC) activity for the hospital. Denied payments outside of RAC could be reviewed Clinical documentation improvement may fit well in this committee as well.

Make certain that the information presented at the committee meeting is fully prepared in a dashboard fashion prior to the start of the meeting. When possible, send the data out to members prior to the meeting for review. Keep the meeting succinct and to the point. Save any case reviews to the end of the meeting and excuse any members who are not completely necessary to the review. The physician’s practice and patient’s private health information should only be exposed to those integral to the discussion. Try to allow time in the agenda for dialogue. Remember that discussion among the medical and hospital staff over utilization issues will always the overriding goal