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Downstate Times

The Newsletter for SUNY Downstate
University Hospital of Brooklyn

Moving Forward Under the Affordable Care Act


By Grace Wong
Vice President Managed Care & Clinical Business

The march towards full Statemandated Medicaid Managed Care enrollment continues. Hospital reimbursement systems are transitioning from being calculated on volume and fee-for-service to being calculated on "value-based care" that focuses on performance measures such as reduced inpatient readmissions and average length of stay.

The result of this policy shift is shrinking fee-for-service admissions at all hospitals, including here at University Hospital of Brooklyn, and it has major implications for us.

To enhance revenue collection and ensure timely payment from insurers, it is critical that we focus on improving communication between Downstate's clinical and operational sectors. The pressure to correctly identify insurance status, to contact payers with required patient information for approvals, to bill appropriately, and resolve denials quickly will only increase going forward. We need to work across internal silos to troubleshoot issues as they occur.

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One-day stay admissions present red flags to managed care companies and these cases are at a higher risk of denial.

We also need to increase the use of observation status as a means of providing better, more efficient care to patients. Using observation status instead of direct admission for clinically marginal admissions should lead to a decrease in unnecessary admissions and subsequent denials for payment by insurers. One-day stay admissions present red flags to managed care companies and these cases are at a higher risk of denial.

New "Two Midnight" Rule

On August 2, 2013, the Centers for Medicare and Medicaid Services issued a final rule for FY 2014 fiscal policies, clarifying inpatient hospital admissions guidelines for Part A payment. The "two midnight" rule presumes that inpatient admission is reasonable when a physician: (1) expects the patient-stay to cross two midnights, and (2) admits based on that expectation. Procedures must be on the "inpatient-only" list and clearly documented in the medical record.

One of the ways we have addressed this is by adding an additional case manager in the Emergency Department during peak hours. This has doubled the number of cases admitted to observation status – a trend in the right direction. These efforts should improve Downstate's quality indicator data. Quality metrics are quickly becoming a more integral part of managed care contracting. Improving Downstate's quality scores will be critical to attaining the enhanced rates we have negotiated with several of our insurance partners, including Empire BlueCross Blue Shield, United Healthcare, and Healthfirst.

Our ultimate goal is to improve patient satisfaction, provide the best health care for our patients, and build a stronger hospital.