Reducing Inpatient Psychiatric Unit Denials: A Case Management Quality Improvement Project

Area of Science:

• Healthcare Management
• Quality Improvement
• Clinical Documentation

Background:

• Inpatient psychiatric units face significant payer denials, particularly within the Length of Stay Write-offs category.
• The Psychiatry Service Line accounted for over 70% of these denials.
• Effective denial management is crucial for financial health and accurate care reflection.

Purpose of the Study:

• To establish a taskforce for analyzing inpatient psychiatric unit denials data.
• To identify root causes of denials and implement solutions for prevention.
• To improve provider documentation to reduce payer denials.

Main Methods:

• A quality improvement project utilizing A3 Lean Approach methodology was implemented at Stanford Health Care.
• Collaboration involved Case Management, Revenue Cycle, Clinical Documentation Improvement, Technology and Digital Solutions, and Psychiatry Service Line leadership.
• Nurse Case Managers specializing in denials management led the project.

Main Results:

• Revenue loss decreased by 42% from fiscal year (FY)19 to FY20.
• A further decrease of 69% in revenue loss was recorded from FY20 to FY21.
• The project successfully reduced payer denials through improved documentation.

Conclusions:

• Improved physician documentation and medical necessity justification are key to preventing denials and accurately reflecting inpatient psychiatric care.
• High-quality documentation correlates with high-quality patient care.
• The project's methodology is reproducible across other acute hospital service lines.