Utilization Review and Pediatrics: The Shift to Value-Based Care

Pediatric free-standing health systems are uniquely different from adult hospitals not only in direct patient care delivery but in a variety of ways bearing on the business end of providing health care. As the landscape of reimbursement has consistently changed over the years, so too have the ways in which we view utilization review and management.

Many of the underlying standards and principles of efficient utilization review for hospitals are underpinned by the Centers for Medicare and Medicaid Services (CMS). While there are certainly some children insured by Medicare and some insurers who adhere strictly to Medicare practices, there are profound differences.

Managed Care Organizations (MCOs) are most often contracted to provide administrative support as well as to assist those enrolled in meeting necessary health maintenance standards, disease management, and overall coordination of care. Government funding of children’s healthcare is dominated by state Medicaid plans. The Utilization Management team on the payer side seeks to manage costs, while the Utilization Review team on the hospital side is focused on ensuring full reimbursement at the correct level of care.

As pediatric hospitals are some of the last remaining recipients of fee-for-service (FFS) contracts, the focus of interactions between the two sides of this equation has been around medical necessity, determinations of approved days, countering denials with appeals, and working to ensure all clinical information is transmitted successfully between the two sides.

As the environment of health care reimbursement has already shifted for adult hospitals, pediatric health systems are moving more fully into value-based care, which will significantly impact the way in which Utilization Management is conducted. Payment models are moving through upside risk, shared savings, and full capitation. Along with those changes comes the need to look at care differently–to shift from acute episodic care and to focus more intently on illness prevention and health maintenance.

In pediatrics, this is starkly different than adult medicine. Children’s health is more often negatively affected by congenital illnesses, environmental factors beyond the patient’s control, and accidents/trauma. The movement away from the hospital and into primary care results in a more holistic view of the child and family. While congenital illnesses cannot be changed, some common consequences of pediatric chronic illnesses can be impacted. Pediatric health care is uniquely positioned in many ways to support and manage these changes. For example, the American Academy of Pediatrics has published standards for well-child visits, immunization schedules, and screenings, such as for lead levels at prescribed intervals. These frequent contacts with primary care also have the desired benefit of detecting sequelae of illnesses, other diagnoses, and new issues early in the child’s course.

Other aspects of pediatrics make value-based care a bit more difficult, such as social determinants of health that impact not just the patient but the entire family. Health systems are motivated to become true partners within communities and to invest in solutions that produce results. While some of these can be impacted with well-organized and fully resourced-assistance, not all psychosocial aspects can be addressed by a health system.

These changes in pediatrics are already taking root in our own health system. We have begun taking stock, evaluating current work, and designing/implementing new processes to meet patients/families where they are in the continuum of health. Through this evolution, we have worked to bolster the coordination and management of care delivered to our patients/families. Utilization review processes are slowly changing in accordance with the broader landscape. We continue to receive a fair number of denials; however, we’ve partnered our case management (CM) nurses with the utilization review (UR) nurses to more comprehensively and proactively manage denials of admissions and levels of care.

The UR nurse will alert the CM nurse at the moment when criteria are not met or if the payer does not agree with the requested level of care. As the CM nurse is an integral part of the bedside care team, (s)he is able to quickly communicate with the physicians and providers so that peer-to-peer reviews can be most efficiently accomplished. Our hospital boasts a very low adjusted denial rate (0.2 – 0.3% of patient days) due to this collaborative and collegial approach. Further changes have been incremental but quite impactful. The Hospital Authorization team routinely submits elective requests for procedures, medications, and surgeries from payers.

A UR nurse has begun reviewing the clinical information on some cases that are flagged for likely denials or partial approvals. In having a clinician review the information, the inclusion of relevant information can be added to ensure approvals and to preemptively avoid denials/need for peer review. As value-based care contracts begin to include the delegation of care coordination and, eventually, capitation payment models, the Utilization Review team will likely become a source of insight and clarification of not only medical necessity but also to more actively engage in conversations about the site of service, length of stay and preventable readmissions.

As more and more pediatric care is delivered through value-based contracting agreements, health systems need to remain flexible and resilient in meeting the care needs of their patients/families while focusing on where best to spend valuable resources. Investing in a strong Utilization Review team that can pivot from determinations around the medical necessity of emergency care to concentrating work around proactive support of the right level of care at the right time for the right reasons.