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Three strategies to reduce denials and downgrades in the emergency room

January 12, 2024 Article 4 min read
Sharon Ulep
As payer criteria change and observation volumes rise, hospitals are experiencing costly denials and downgrades. Collaboration between your emergency department and utilization review teams can ensure a proper patient classification — before writing the admission order.
A doctor and nurses looking at a tablet

Hospital emergency departments (EDs) are challenged to keep pace with ever-changing payer admission criteria. But since your facility’s bottom line takes a hit with each downgrade or denial, it’s imperative to take a proactive stance.

If your business office is trying to recapture lost dollars from denials and downgrades on the back end, it’s consuming an extraordinary amount of staffing resources. Instead, focus on the front-end: engaging your utilization review (UR) team before ED providers write an admission order.

Hospital EDs tend to have more resources focused on the case management side of the equation — helping patients get discharged safely with arrangements made for home care, follow-up appointments, and social services as needs dictate. Yet we often see EDs overlook the equally important interaction with UR. This is a missed opportunity since UR has a superpower your ED should be leveraging: understanding payer criteria and knowing how to appropriately classify patient status, whether for admission, observation, or discharge.

UR has a superpower your ED should be leveraging: understanding payer criteria and knowing how to appropriately classify patient status, whether for admission, observation, or discharge.

Consider these three strategies to help your hospital reduce payer downgrades and denials stemming from incorrect patient classifications made in the ED.

1. Strengthen communications between your ED and UR

To reduce ED downgrades and denials, your ED must work with UR to determine whether a patient meets the criteria for inpatient admission. This should be a collaborative practice completed when ED provider decides to place an admission order. If the patient meets criteria, UR can confirm that admitting them to an inpatient bed is appropriate and can assign the correct patient classification and working diagnosis-related group (DRG).

If UR determines the patient doesn’t meet inpatient criteria, the ED can assign the patient to observation status and move them out of the ED. Not only does this prevent a subsequent downgrade or denial; it also frees up an ED bed and helps the care team better manage patient flow.

The relationship between ED providers and your UR team should be consultative in nature, with the UR and ED teams in continuous communication. UR can support ED providers by letting them know specifically why a patient does or doesn’t meet criteria for a particular patient classification and what the provider can do to ensure criteria are met. Skipping a consultation with UR raises the risk of getting it wrong.

Your ED providers should engage UR early to determine a patient’s classification, and UR must be available to provide real-time input to guide the decision. Consider supportive tools such as a text messaging system between ED providers and UR or “sticky note”-type features in your electronic medical record (EMR) system. When it comes to reducing downgrades and denials, real-time communication isn’t a luxury — it’s essential.

2. Standardize ED provider documentation

A close working relationship between the ED and UR needs to be supported by clear and detailed medical record documentation by the ED provider. Standardizing key portions of provider documentation ensures UR has the information it needs to:

  • Conduct an initial review of the patient’s insurance.
  • Determine criteria for inpatient or observation status.
  • Provide an accurate patient classification at the time of admission.

Your UR team can only assess and determine an appropriate patient classification status when they have adequate ED provider documentation in front of them. An ED provider might know a patient needs an inpatient bed, but if payer-specified tests haven’t been ordered and documented in the medical record, the patient may not meet criteria for admission. When UR is in close communication with the ED, it can provide guidance to ED providers on additional criteria to be met, further documentation and diagnostics needed on a case-by-case basis. Your UR team is much better equipped to call the correct patient classification when it has the right medical documentation from your ED providers, and this reduces denials and downgrades.

Remember that observation status isn’t a diagnosis — it’s a payer classification. Put another way, your ED clinicians are experts in diagnosing their patients and, through comprehensive, standardized documentation in the patient’s EMR, your UR team is expert in using that information to assign the proper classification.

Observation status isn’t a diagnosis — it’s a payer classification.

3. Leverage the EMR system

Use the EMR to drive the worklist for the UR team to review during the ED’s busiest hours, typically 5 p.m. to 11 p.m. By creating a running worklist of ED cases for review, the UR team can readily perform an initial review quickly — before a provider assigns a classification.

Designate an ED-specific UR resource — be it an individual or a group — and ensure that resource is available to cover the ED during peak times. This allows UR to review criteria for admission in real-time, rather than making retrospective changes to a patient’s classification after an order has been placed.

If scheduling UR staff during peak ED hours is a challenge, consider using a remote UR team that can review documentation and run criteria during high-volume periods.

In conclusion

Observation volumes are rising for hospitals due to changes in payer criteria, increasing the likelihood of costly denials and downgrades. Focusing on the front-end helps protect your bottom line, but it takes a real partnership between your ED and UR teams. The efforts will pay off if you can identify the classification right — the first time.

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