Optimal Hospital Operational Strategies

Phase I

Strategies in phase I surround functional and operational design of the hospital to maximize bed utilization and develop an intake and output model that manages regulatory compliance. This phase is divided into four primary components.

Medical Necessity: This component is mandatory for accurate patient classification, compliance, billing, and denials management. Hospital entry points for medical necessity are as follows.

Emergency Department Admissions—divided into Inpatient or Observation status

Cath lab procedures—divided into inpatient or outpatient

Operating Room procedures—divided into Outpatient, 23 Hour extended Recovery (still outpatient) and Inpatient.

The main purpose of these classifications is related to acuity of illness utilizing InterQual guidelines as a basis for the initial classification. These classes have significance in determining a hospital’s level of compliance set forth by the government and also establish a level of organizational confidence in defense of medical necessity determinations for commercial insurers. Significant swings in percentage of patient classification can lead to profound changes in revenue predications and strategies surrounding hospital bed modeling.

The primary determination of level of care (medical necessity) is performed by physicians in conjunction with “Care Management.” Since determinations must be made at the time of admission to the hospital, care management plays a critical role in evaluating both the primary determination and ongoing determinations of medical necessity during a patient's hospitalization.

Optimal design will be dependent on volume of cases and case mix, but strategies need to deploy care management in four primary locations or be linked to them to be effective.

Those locations are:

Emergency Department

Cath Lab

Post-Operative Care Area

Med/Surg Floors

The three primary entry points, and design elements, are for initial determination levels of medical necessity and the med/surg component is necessary for re-evaluation of patients when medical necessity reviews result in a change of patient classification.