Understanding the insurance company case manager’s goals can help hospital case managers

While discussing a hospital admission with a case manager employed by a well-recognized national third-party payer, I learned of an interesting revelation that case managers may wish to take note of.

Each insurer-employed case manager is charged with meeting a monthly average length of stay goal set by the individual hospital as well as the aggregate hospital. The insurance case manager receives a weekly report of cases that achieved average length of stay compared to individually-assigned average length of stay goals and objectives. To this end, the case manager knows at any given time where he or she stands in regards to meeting the assigned goals for hospital length of stay.

This insurance company case manager informed me that he is reminded on a regular basis of the ramifications of not meeting the established monthly length of stay goals. In extreme situations, insurance companies will terminate case managers that do not meet objectives.

Depending on the time of month and how the insurance company’s case manager is faring, hospital case managers can expect different volumes of cases designated for medical director review and potential medical necessity denial. There exists a certain realism that insurer case managers and medical directors may err on the side of conservatism when using Interqual or Millman care guidelines and clinical judgment to determine denial of inpatient stays. The bottom line is hospital case managers will need to take inventory of their communication skills and core competencies, including drafting of effective, succinct denial appeal letters—if the hospital charges him or her with doing so as one of their duties.

In this context, hospital case managers should track and trend denials communicated by insurer case managers and understand these case managers need to achieve pre-established average monthly length of stay goals. Hospital case managers must prepare for increased inpatient stay denials given the current economic climate of private health insurers, decreased member covered lives, and resulting decrease in health insurance premium income. Increased medical loss ratios and the number of uninsured and underinsured patients seeking care through the emergency room with subsequent need for inpatient admission can also add to the number of denials.

I am certainly not advocating for case managers assuming additional work. At many hospitals, the administration assigns new tasks and assignments to case managers with the rationale being case managers already “review the record” and thus have the time to take on new responsibilities. Unfortunately, the case management function has become so convoluted that case managers find themselves regularly performing duties that questionably contribute to the role of case management. However, I am advocating for their development and reinforcement of core competencies and skill sets in the art of “forceful” communication and negotiation.