Making It Count: A Quality Improvement Project to Improve Pediatric Hospital Billing at a Community Hospital

Community pediatric hospital units are closing nationwide because of financial strain. Appropriate designation of hospitalized patients as inpatient (IP), rather than observation, increases hospital revenue. Clinicians often lack knowledge of bed status. Our aim was to improve the appropriate IP status designation of pediatric patients at a community hospital from a baseline of 18% to 60% by July 2022.

Our team of community Pediatric Hospitalists and Utilization Management (UM) specialists used the Model for Improvement. The most impactful interventions included identification of 8 diagnoses to admit in IP status and meetings with UM to automate IP conversions for certain diagnoses. Our primary measure was the percentage of patients with IP status at discharge. Our balancing measure was the number of IP denials by payers upheld after appeal. Statistical process control charts were used to analyze the primary measure.

The mean percentage of pediatric patients with IP status at discharge increased from 18% to 59%. Denials by payers doubled over the study period, but 76% of the denials were reversed by peer-to-peer or written appeal. At this rate, the project could tolerate 4 denials for every additional IP admission.

Our improvement process was associated with a meaningful increase in the percentage of pediatric patients with IP status at discharge without a significant increase in upheld payer denials. Improvement work focused on appropriate bed status of hospitalized patients may be one avenue to improving community hospital sustainability to serve patients closer to their homes.