Using claims data to monitor hospital utilization

Area of Science:

• Health Services Research
• Health Insurance Management
• Healthcare Quality Improvement

Background:

• Controlling healthcare provider utilization is a persistent challenge for health insurance companies.
• Ensuring appropriate inpatient admissions is crucial for managing healthcare costs.

Purpose of the Study:

• To describe a novel system implemented by Blue Cross and Blue Shield of Michigan for controlling provider utilization.
• To detail a dual monitoring approach for assessing hospital compliance with inpatient admission criteria.

Main Methods:

• Implementation of a system placing primary responsibility for inpatient admissions on participating hospitals.
• Utilization of a dual monitoring approach: annual medical record reviews against criteria and quarterly automated universal claims review.
• Development of a cost-effective claims monitor using diagnosis-related group (DRG) characteristics and historical data to estimate inappropriate utilization.

Main Results:

• The described system effectively assigns responsibility for inpatient admissions to hospitals.
• A dual monitoring system, combining expensive annual reviews with inexpensive quarterly claims analysis, was developed.
• The claims monitor provides an efficient method for estimating inappropriate utilization based on DRG data.

Conclusions:

• The Blue Cross and Blue Shield of Michigan system offers a dual approach to control provider utilization.
• Combining medical record review with automated claims analysis provides a comprehensive and cost-effective monitoring strategy.
• This model demonstrates a viable method for health insurers to manage inpatient utilization and associated costs.