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nagement and Decision port Systems

": eting this chapter, you should be able to: ,a r the differenCe between integrated and interfaced systems ss administrative systems used for managerial support

:r ::2 eight types of financial systems used in healthcare 2 ~ different functions of human resources systems r: 3'e different types of patient and employee scheduling systems

ce several facility maintenance systems ::e different types of data collected and used by quality management are and contrast risk assessment and risk management

Health Insurance Portability and Accountability .4.ct .

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Health Level 7 Health Maintenance Organization Medical Care Appropriateness Protocol Magnetic Resonance Imaging National Hospital Quality Measures National Practitioner Data Bank Occupational Safety and Health Administration Potentially Compensable Event Protected Health Information (HIPAA) Quality Management Recovery Audit Contractor Registered Nurse Skilled Nursing Facility Tuberculosis

!S ~-e sed extensively in both medicine and computers. The following $ 2-2 Jsed in this thapter.

-::: - ssion. Discharge, Transfer .: ·~a\lent Diagnosis-Related ::": ~C5 (severity adjusted) -:::_ ts Receivable =: =~e of American Pathologists = : -:::J:erized Axial -:-:;raphy ==-~:'-5 for Disease Control and :-~. ,,~:Ion = - ,,:: ancial Officer ==:= '.'ix Index ==-:~-5 :or Medicare and

=-=::.aIdServices :::=-:-:':::,ICFunds Transfer :::=-:-:':::-,1(Health Record =-: :=:-:ed Health Information - :: =-:-:ro ic Form : _ ,- ~e Equivalent Employee

~=-=':: Ledger -:::::- ,formation Management

HIPAA

HL7 HMO MCAP

MRI NHQM

NPDB OSHA

PCE PHI

QM RAe RN SNF TB

283

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284 CHAPTER 12

FIGURE 12-1 Pie chart created from secondary administrative data.

Information Systems for Managerial Support

Thus far the emphasis of this book has been on primary and secondary patient h Healthcare facilities, however, have many other aspects involved in their operation - of them are computerized.

This chapter introduces additional information systems that support healthcare OJ. are not clinical records. That is not to say the systems do not contain PHI, many of that the purpose of these systems is to support the management of the healthcare ore:o"'-----

As you study this chapter you will realize that there are opportunities to work - tion systems other than HIM and EHR systems. These systems are vital to the maru:~ __ operation of healthcare facilities. The information provides managerial support for operational, strategic, and executive decisions.

Interfaced or Integrated Depending on the vendor, the management and decision support systems dis chapter are either interfaced systems or integrated systems. Interfaced systems are z-~ .•..•••••• hospitals; integrated systems are prevalent in medical offices (called practice G:::::::=;=l" systems):

• Interfaced systems consist of separate software and databases that are linked in puter network. They exchange information with other healthcare systems using E:..- proprietary transaction standard. The software may be from the same or a diffe

OJ Integrated systems share a common database. Data records are read and upd the need for HL 7 transactions. Though programs such as registration and billi _ separate software modules, they are supplied by the same vendor and work us.=e~- seamlessly.

Administrative Systems

In previous chapters we have already discussed two administrative systems, the patieL.;~:::::::=" system and the billing system. In a hospital, the registration system is also called discharge, transfer (ADT) system. The billing system is sometimes called the patie • -'=:.:::l::!1iIIIIIIII accounts receivable (AIR) system.

These two systems may be thought of as the beginning and end of an episode ADT system registers patients before they are treated or scheduled for treatment, system follows the episodes until the patients' account balances are zero.

Just as there are many uses of secondary health records data for research aOC~=::::::••• support, there are many secondary uses for administrative data. In some cases, re ated from the primary administrative data. For example, an aged accounts rec . shows managers how long unpaid balances have been outstanding. In other cases, ~--=:=:l_ datais abstracted and exported into a secondary database. For example, patient ~_!E;:-~=.• could be subtotaled by zip code and the totals exported to Excel. In Figure 12-1, a pi the demographic distribution of patients by zip code.

.------------~-----------------=~------~--------------~--------------------..---

Other

Patients by Zip Code Financial Information Systems Financial information systems are used in all nesses to track income, expenses, assets the businessezz; liabilities owed by the business. These systems'

• An overall accounting system called the gene •••...._=- • Accounts receivable • Purchasing • Accounts payable • Inventory and materials management

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MANAGEMENT AND DECISION SUPPORT SYSTEMS 285

a counting.

:ype of business has aspects that make its financial systems unique: builders buy mate- ~'-crs bill by minutes, and realtors are paid by commission. The healthcare business is

-:::well. Hospitals and medical practices use financial software uniquely suited to health- lions.

edger .ines of business, the general accounting system might include detailed records of daily

s, which are then summed for general ledger reports. Because of the vast quantity of - ~c ords in healthcare operations, this is not done. For example, hundreds of thousands of - are purchased; thousands of patient encounters are billed to multiple insurance plans. re. separate accounting systems or modules are used to maintain and manage various of healthcare financial operations. Those systems then send only summary information to

-- - general ledger is used to produce financial statements and monitor the overall financial :::"the organization. The general ledger for a healthcare facility typically includes only the =0nthly, or quarterly totals from the other financial systems. For example:

- patient accounting system might send the total amount of charges posted for each _ tment, the total amount of contractual write-down adjustments, and the total of yments posted to the GL system daily.

J payroll system might send the gross payroll, withholding amounts, employer taxes, em- :'o'er 401(k) contributions, and so on semimonthly when employee paychecks are printed.

-=-::oc accounts payable system might send the amount of each check to the GL in real time - each batch of checks is printed.

------_._--_._---------------------------, FIGURE 12-2 Sample balance sheet from a nonprofit hospital.

Public Hospital Balance Sheet Assets, Liabilities, and Net Assets

(In thousands) 2009

Assets: Current assets Capital assets, net Other noncurrent assets

$ 35,339 38,305 18,5l3

Total assets $ 92,157

Liabilities: Current liabilities Long-term debt outstanding, net Other long-term liabilities

Total liabilities

$ 27,637 36,621

6,496

$ 70,754

Net assets: Invested in capital assets, net of related debt Restricted:

For debt service Expendable for specific activities

Unrestricted

$ (3,731)

8,109 450

16,575

$ 21,403 I ~====i-_._ ,_ ~.~ "._o. 0·._ .. . .__ ._____ _ .. -'

Total net assets

286 CHAPTER 12

FIGURE 12-3 Aging summary analysis.

1--- I

Days Patient

I Insurance

Totals

There are four principal aspects to a general ledger in a double-entry bookkeeping

• Income: money that has been received; also called revenue • Expenses: money that has been spent I!I Assets: cash, property and things of value that are owned by the business • Liability: amounts that are owed, but not yet paid.

The income and expenses are compared with each other on a report called an in ment or profit and loss report. If the total income is greater than the total expen business has made money. If the expenses have exceeded the income, then the busi money.

The assets and liability are compared with each other on a report called the bal - statement of financial position. The difference between the assets and liabilities is tIE This is sometimes called the net assets. An example of a balance sheet is shown in n_

The board of directors, executives, and officers use these reports to monitor financial health and to make decisions about its future. If the facility is a for-profit ..: investors and owners use these reports to make investment decisions. Banks and a reports to determine creditworthiness. Federal, state, and accreditation organizati information to determine the facility'S financial stability and tax liability.

Accounts Receivable The accounts receivable is the money that is owed to a business. In healthcare, the r---- tern is the patient accounting system. Chapters 9 and 10 described the various rei methods by which healthcare facilities are paid. Most of the reimbursement meth treating the patient, then being paid at a later date after billing the payers azz; Therefore, in all practice management systems and most hospitals, the patient accrS:::::::JII tern and the billing system use the same data records.

Because patient and insurance billing are the main source of revenue for heal~_~ .••• zations of all sizes, a great deal of attention is paid to this. NR and billing data are and analyzed by individuals in billing or collections, managers, supervisors, depar ..._ ••...•• executives, and officers.

Because of the unique nature of healthcare billing, NR reports often separate amounts due from insurance from those due from the patient. Summary aging r used by executives or managers to monitor the collection rate. Detailed insurance ~ may be used by insurance specialists to identify claims that should have been paid Patient-due aging reports may be used to identify patient accounts that are overdue - tify which insurance has already made payments.

Analyzing the accounts receivables by separately aging open items that are due - and thos/e items due from insurance can provide an overview ofmoney due in d!:=~ gories. Figure 12-3 divided the AIR into six aging categories; items due in 30 da

---------------------------------------- GOOD HEALTH ASSOCIATES

Summary Aging Analysis Report (for current period)

0-30 3414.67

18559.94

31-60 61-90 91-120 4750.11 120.01 160.50 2672.00 3985.19 105.6p

7422.11 4106.20 266.10

8846.29 25.40/0 25948.83 74.60/0

34795.12 100%

960.21974.61

Total Patient Due

lTotal Insurance DueTotal AIR

r~' (Includes Payments POl)lcd 'l'hl'1I111411tW 1,1/':00" Guarantor Date of Date Pat Date 0-30 Jl-6O (.1-',1' "1. I ,eo Chll III

Account !Patient Doctor Service Procedure Diagnosis Responsible Ins Billed Days Days Days Days Ouys 1009 Patel, Raj (404) 555-7890

Patel, Raj Dr. Smith 10/31108 35001 441.4 01/03/09 11110108 88.00 Patel, Raj Dr. Smith 10/31/08 99233 428.0 01103/09 11110108 0.90 Patel, Raj Dr. Green 11/22108 99214 428.0 03/16109 01/03/09 6.80 Patel, Raj Dr. Green 11122/08 82465 428.0 03/16109 01/03109 1.20 Patel, Raj 03/31/09 Interest Interest 03131109 0.95

Balance: 8.95 88.90

1257 Natel, Gloria (404) 555-1234 Nate1, GI Dr. Good 09/02108 99214 V22.2 01/03109 11/22108 4.00 Natel, GI Dr. Good 09102108 81000 V22.2 01/03/09 1lI22108 2.80 Natel, GI Dr. Good 09102/08 85014 V22.2 Olf03/09 11122/08 1.80 Natel, GI Dr. Good 10/18/08 99211 V22.2 01/03/09 12101108 2.50 Natel, GI Dr. Good 11/30/08 99211 V22.2 01103/09 12/01/08 2.50 Natel, GI Dr. Good 12/02108 99212 V22.2 01/03/09 12102108 4.00 Natel,GI Dr. Good 01103/09 99215 V22.2 02/01/09 01/03109 10.00 I Natel,GI Dr. Good 01103/09 81000 V22.2 02/01/09 01/03109 7.60 I Natel, Gl Dr. Good 01/03/09 85014 V22.2 02/01/09 01103109 3.60

I Balance: 21.20 17.60

1938 Baker, Harold (404) 555-6354

IBaker, Ha Dr. Smith 11110/08 99212 460 01/03/09 11110108 20.00Baker,Ke Dr. Smith 02127/09 99212 461.1 04/04/09 03/07/09 20.00 t

Baker, Ke Dr. Green 04115109 90642 783.2 04/15109 28.50

BalanC'e: !

48.50 20.00 ; -------~".-.-------.-------------. ---_._-_ .._--- j

FIGURE 12-4 Detailed aging report.

IV 01)....•

-- --------

Accounts Payable Accounts payable systems manage the disbursement of payments for pur•.•~._ authorized. They may also be used to manage payments for recurring ex ities, and insurance and for nonrecurring expenses such as maintenance <&'

Accounts payable systems control the outflow of money for ex They are used to print checks or authorize electronic funds transfer invoices.

Accounts payable reports include not only payments that have been ing purchase orders and forecasts of upcoming disbursements for which committed. .

288 CHAPTER 12

due 31 to 60 days, items due 61 to 90 days, items due 91 to 120 days, items due 121 and items due more than 151 days.

In this example, patient-due items are aged from the date the patient became res patients with health insurance, that is the date the payment from the insurance plan and a balance was due from the patient.

On the next line, the insurance-due items are aged in the same aging categories, are aged from the date the insurance claim was generated.

The totals of the patient-due and insurance-due amounts are given under each at the bottom of the report, the total AIR and the percentage of the receivables due b:- party is listed.

Detailed aging reports are used to analyze or work on specific problem areas, . typically be limited to patient-due or insurance-due responsibilities, and filtered - items that are within a certain range of days overdue. The example in Figure 12 dure and diagnosis code details for every item on the report. Such detail is useful ing to collect overdue payments.

NON-CARE-RELATED AIR Healthcare organizations may also have revenue receivable that is not related to patient care. For example, consider a medical gr building and rents a suite to another doctor's practice, or a hospital that own transcription service and receives payments from doctors. The patient accounting used for these types of transactions. If there are very few of them, they may be _ into the general accounting system or another AIR system may be used.

Purchasing Although it is important for providers to track and collect the money they are important for them to contain costs. One of the ways they do that is throug purchasing systems.

Purchasing systems are used to order supplies, drugs, and equipment. vendors, part numbers, prices, purchase orders, and the amount each dep can track the historical prices the facility has previously paid and the current vendors.

Large hospitals may have more than one purchasing system. The phamze may order separately through a pharmacy ordering system especially suited - Certain other departments may also order independently, though ultim must go through the central purchasing department system to be assign number.

A purchase order is a vendor's assurance that the order is authorized an facility. It is also the control system by which the accounting department being spent, by whom, and how much the business will ultimately owe.

When the ordered items arrive, they are compared to the purchase order rect items and quantities have been received. When the vendor's invoice arrr-; the purchase order to verify that the costs quoted on the order match whar - The invoice is then sent to the accounts payable system to be paid.

MANAGEMENT AND DECISION SUPPORT SYSTEMS 289

ry and lVIate tats Management _~s of healthcare facilities must keep enough supplies on hand to treat patients without

'king. When quantities on hand are too little, a doctor or nurse may not have a necessary __drug. When quantities on hand are too large, too much of a hea1thcare organization's cap-

~ ';' be tied up unnecessarily. r- ._ emory and materials management systems work in conjunction with purchasing systems. '0' control involves deducting from the quantity on hand supplies that are used, and adding system the quantity received as purchase orders are filled.

~ addition to tracking the quantity on hand, inventory systems track quantities on order to : duplicate purchases. Users can also set minimum and maximum quantity thresholds . can be used to generate alerts so that supplies can be reordered before they run out. um quantity thresholds can be used to identify items that are overstocked. Inventory sys-

_, also indicate the quantity to reorder. zr.entory can be tracked across multiple locations or facilities. If, for example, a healthcare

-- ••..zation operates multiple clinics, the quantity on hand can be tracked at each clinic. This _ an overstock of supplies at one facility to be transferred to another facility rather than : a new purchase.

=-spirals may have inventory modules within the departmental software; for example, a . pharmacy might maintain drug inventory through the pharmacy system instead of the

=-0 system used by other departments. - emory data is not only used for monitoring and reordering supplies; it is also useful for

:.Dc historical usage and predicting future needs. If, for example, a hospital uses 50,000 :: atex gloves per year, they may realize savings by purchasing in larger quantities.

is distinctly separate from accounts payable. Payroll has two major aspects, payroll rration and payroll accounting.

-Toll administration deals with the managerial aspects of maintaining a payroll, including

c.2:1agingemployee personnel and payroll information. =:,cnplying with federal, state, and local employment laws . ..-:t:-::eratingreports payroll activities. - eeping records. Federal and state laws require that employers keep certain payroll records

_ specified periods of time. For example, the IRS W-4 form (on which employees indicate -::-tax withholding status) must be kept on tile for all active employees and for four years - s: an employee is terminated.r.;

__-:-ollaccounting consists of these tasks:

= ..=rmining which federal, state, and local tax coverage rules apply to each employee. __zrputing an employee's taxable wages. - culating the amount of employment taxes to be withheld and paid by the employer. ~:-\sj(ing the correct amount of employment taxes with the government agencies. -.-.:...::employment tax returns.

- '.: lating and withholding other amounts such as 401 (k), 529 medical savings, and the ---=- oyee's share of health, dental, and vision insurance.

_ring and distributing paychecks and/or generating direct deposits. -=jng and distributing W-2 forms to employees and 1099 forms to contract workers at

- end of each year.

se of its complexity, payroll accounting for hospitals and medical practices is often p .•••••• _......c\.l by an outside company such as ADP, Paychex, or the medical group's accountant. The

Human Resources Management Systems .J';'

290 CHAPTER 12

healthcare organization must still perform the administrative functions of obtainizs and managing employee information.

Budgeting A budget is an organization's principal tool for financial planning. Budgets t} revenue and expenses for the next fiscal year. Often budgets are based on analy data, which is then adjusted for inflation. For example, data from the invento _ payable system allow managers to measure the quantity of supplies used in _ adjust the costs to allow for price increases, and estimate the dollars that will provide the same level of service in the corning year.

Similarly, payroll data can be analyzed to determine how many and what _ equivalent employee (FTE) hours were used. The number of FTEs at various multiplied by wage and benefit costs to predict labor costs for the corning year.

Finally, planned expansions or new services that can potentially increase revenues can be factored into a budget. For example, if a hospital is opening a ~ or a group medical practice has entered into an HMO contract that guarantees - for a year, a budget allows managers to anticipate revenue and expenses assoc situations.

For hospitals, budgeting typically begins at the departmental level, with •....~.•..•..-""'" department head preparing a list of goals for the coming year and esti achieving those goals. These are then evaluated and included in the ove CPO.

Cost Accounting One managerial tool useful for budgeting is cost accounting. At a departmental . _ supplies, materials, and labor directly used are attributed to the department accounting system. These are direct costs. To this, indirect costs or overhead, ance, utilities, managers' salaries, and so on, are added.

The items we have discussed so far make up the operating budget for 0-- organizations also have a capital budget, which covers items whose value e year, for example, the purchase of a multimillion dollar MRI system, or a •.••....._~ creating an addition to the facility.

Once the budget is completed and reviewed, it is then presented to sernc>r·;,..........- finally to the board of directors for approval.

In healthcare, 60 to 70 percent of the budget consists of personnel costs. Hr-·-·...-111111 agers use computers to maintain personnel records and to create managemez; -_ ••• staff productivity, absenteeism, and vacation time; monitor turnover rate: expenses.

Evaluations Employee retention, promotions, and incentives are based on employee }:e::;;;;::=- tions by managers and self-assessments by employees. Increasingly, hUll.-'.-c;...;.,_ ments are using online forms and tools to conduct and manage employee e •.:...~ •.....•~ reviews.

Training Healthcare employers must train employees in procedures, policies, securi _ skills ranging from using the EHR to using a point-of-care testing devi __"''=:::::::111. Joint Commission and CAP requires employee training and certification. '::;-"--... ••• and completion of training programs can now be tracked by computer.

ee Health .ue environment of healthcare requires regular tuberculosis (TB) tests for all employees.

_ =e health records track immunizations and tests and generate reminders to employees :. a month before they need to be retested or have another vaccine). The human resources ent as well as the quality management and legal departments track and monitor the ~e of on-the-job injuries and subsequent workers' compensation claims.

MANAGEMENT AND DECISION SUPPORT SYSTEMS 291

011 and Continuing Education _ all care providers must hold qualified degrees for their field and must be licensed by _ latory agencies. In addition, care providers must complete a required number of hours

uing education each year. In healthcare, human resource departments track the creden- licenses of all employees who work with patients.

duling Systems

type of administrative system is scheduling systems. Scheduling systems allow for the _ examination and treatment of patients. They are found at the departmental level, where

are scheduled for diagnostic testing, therapy, or surgery. They are also found at the facil- .. such as the patient appointment schedule for a group medical practice. entially appointment systems have these fields in common:

-"':ditional factors are involved in different types of schedules. For example:

- gery departments maintain their own schedules for operating rooms. Surgery schedul- = must factor in preparation and transport of the patient (preop), surgery, and recovery

~~tQ}f.\1'i.mk lJ).lbRiJl.&'Q be allotted between surgeries for the operating room to be .:~""anedand sterilized.

:=:omenursing visit schedules must allow for travel time between patients' homes. - ysician office schedules often overlap patient appointments, relying on the fact that a znrse or medical assistant will attend to patients before the doctor sees them.

Scheduling systems not only provide an orderto the flow of patients, but the scheduling data can be studied to identify bottlenecks, improve workflow, and add efficiencies to

zepattrnent or medical practice. The volume and type of patients scheduled can also be used iet labor and resource needs. Busy medical group practices and hospitals with multiple

atient clinics often have several employees dedicated to .scheduling patient visits, tests, and ures.

-':DULING PATIENTS Medical schedules are not blank calendars. Schedule templates are used ow the user the type and length of appointments that should be scheduled (see Figure 12-5) .

• r s appointment slots are preset for number of minutes andlor certain types of appointments. intment reason codes are used to record why patients are coming. The use of reason codes nly make it faster for the staff to schedule the appointment, but also can determine the

ber of minutes required for the appointment based on reason for the appointment. The job of scheduling appointments is an important one. The allied health professional performs this job is often the first contact the patient has with the medical practice or . A pleasant demeanor, an understanding of the providers' scheduling wishes, and the

ity to work under pressure are required. The scheduling person often does a minimum unt of triage to determine the reason for the appointment and the urgency. The scheduler

st also be familiar with and communicate to the patient the requirements for certain types of

292 CHAPTER 12

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appointments. For example, an MRI cannot be scheduled for patients with pacemakers a in their bodies. The scheduling person must be aware of this and question the patient scheduling the appointment.

Inpatient scheduling is slightly different. A schedule coordinator may handle several ent departments. When a physician orders a test that requires moving patients to another ment, the coordinator schedules a time for the test and arranges for someone to transport from their room to the test and back.

Another type of scheduling is more event oriented rather than time oriented. It thought of as task management scheduling, For example, patients who are not being se - may be discharged to a SNF or rehabilitation hospital. In such a case, the scheduler - arrange with the SNF for the transfer, coordinate the medical transportation, and, finall; firm that the patient has arrived at the intended facility,

STAFF SCHEDULING A completely different type of schedule is used to manage e and providers. Because hospitals are open 24 hours a day, it is necessary to have s - personnel working at all times. Employees are scheduled to work in shifts and may ro - of the week they work. For example, some RNs work four consecutive days, then ha _ days off. The human resources department also tracks and manages vacation sc :::::. employee sick days, and holidays.

Similarly, group medical practices must block a physician's schedules so that pa ie not scheduled on days when the doctor is away. They also must designate another to see that doctor's patients while he or she is away. This doctor is called the coverin ~ cian, Doctors must also be available during off hours if needed. This is known as call." Usually doctors in a group practice take turns being on call. The office ill - _ office administrator maintains the on-call schedule, keeping track of which doctor is each day and ensuring that there is a fair distribution of on-call days among the doct -_ schedule.

Facility and Equipment Maintenance Systems

A number of administrative systems are used to maintain facilities and equipment. These _ systems to track requests for repairs and upgrades to the building, rooms, or various de,IP-=:=:::::!:. Automated systems are used to control heat, air, and energy usage. Repair orders for sysz _

MANAGEMENT AND DECISION SUPPORT SYSTEMS 293

outside service, such as large refrigeration units, are tracked and reported to purchasing sccount payable similar to the process used for materials purchases. 3iomedical, surgical, radiological, laboratory, and other medical equipment must be ser-

-" and tested regularly. Maintenance records must be maintained for Joint Commission and - audits and regulatory agencies. These testing and maintenance records are usually the

sibility of the respective departments and may be a function of the departmental software : for example, the laboratory information system described in Chapter 8.

?ire control and facility security systems are also almost entirely computerized as are -"Jyeetracking and timekeeping systems.

ality Management Systems

FIGURE 12-6 MIDAS+ quality management screen.

rry management (QM) covers a number of different areas related to the operation of the :al and the care provided to patients. The main product of quality management is data

reports used for risk analysis and decision support, by which the appropriateness and .iveness of medical care are evaluated. These include case management, utilization man- ent, physician peer review, NHQM data, incident reports, and hospital mortality and

.:-5ies.Quality management systems not only track and maintain data entered by the QM ent, but also use and analyze data abstracted from patient health records and other

trnental systems. ality management can be used to identify indications for intervention, assess functional-

-"_cr intervention, analyze undesirable outcomes of treatment, and identify opportunities for _vernent. Quality management can also be used by providers to uncover opportunities for _vement and for monitoring their progress over time.

ality management frequently targets specific areas of concern. For example, surgical _:.i ations, transfusions, critical care, obstetrics, or neonatal care are areas that expose the :.alto particular risk. Figure 12-6 shows a quality management screen for a patient who had _.ac arrest following knee surgery.

(Courtesy of MidasPlus, Inc.)

1 agement anagement systems begin by documenting the patient assessment and utilization manage-

The case manager identifies appropriate levels of care and considers alternative therapies __source usage. Utilization management evaluates the case using standard criteria and seeks _- ation from the payer. Case management tracks certification, authorization, and concurrent

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FIGURE 12-7 MIDAS+ case management concurrent review screen. (Courtesy of MidasPlus, Inc.)

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review of the case. It also tracks avoidable days, denials, and appeals. A case manage •.•.•_. __ current review is shown in Figure 12-7.

A standard tool is the Interqualf criteria tool, which addresses admissions, conti ••....•_ .••• and discharge planning with evidence-based criteria that is used and accepted by eMS party payers. Other criteria standards include the Medical Care Appropriatenes (MCAP) and the Millman® guidelines used by managed care plans.

Infection Control Infections are tracked and reported by QM. These include patients admitted with COlllllrr=::::::1I" diseases, hospital-acquired infections, and diagnoses that must be reported to the CDC.

Incident Tracking Incident reports are entered for both patient and non patient incidents. Examples of pari dents include medication errors, slips or falls, surgical mistakes, or adverse results. EAiL-='~·lIII nonpatient incidents include slip or falls by visitors, volunteers, or employees; accide sure to toxic or medical waste; and security problems in or around the facility. In Figure incident of a patient falling from bed is recorded.

Incidents that can result in financial loss or lead to litigation are called potentially rn-""_ able events (PCEs). Incident reports are always filed and maintained separately from ~ health record-in an incident tracking system. Incident reports are recorded immedia _ employees most familiar with the incident.

Patient Relations Most hospitals have a patient relations person or department. Whether the patient ca::::::::'. about the food, the care, or a particular doctor or nurse, it is recorded and responded patient relations person. The QM department reviews and analyzes each patient relation ~. improve care and patient satisfaction and identify patterns or cases that could present a patient or hospital.

Risk Management Risk can be thought of as any incident or circumstance that might result in a loss. The 1 be to a person's property or rights or damage to the person physically, emotionally, or ~=:liL1't. A hospital's loss might be financial or damage to its reputation. The basic functions of ris, •. _ agement are:

• Risk identification • Risk analysis

FIGURE 12-8 MIDAS+ risk management screen records a patient fall.

MANAGEMENT AND DECISION SUPPORT SYSTEMS 295

:oeneral i Witnesses! Outcomesi Attribution I Referrals I Comments I =acility; IMrDAS Medical Center

Date Received: j8i412007 Entered By:

Info Source: IPhysician

18i3l2007 ~ l1 ro

S - IO

-----~_----.

[3100 East

iFall O~t of Bed

16;30 PM Shift: 12Event Date: Time: Event No.: Significance: 12-NODetectable Harm

location: Room: 1127-1

Quantity; 11

Phys. Notified: r Event Type:

,Event Pararr~eter ~ Vision Impaired

Call Light in Reach . Notified Phys. :

::"055 prevention or reduction :laims management.

_ .sk assessment involves analyzing processes and measuring statistical data with the goal of .ving preventable losses and minimizing their occurrences. One example, discussed in er 3, involves risk assessment of computer security to minimize security risks to EPHI data. example of PCE, incident reports are assessed to determine the healthcare organization's

~; for the occurrence. -=::: goal of risk management programs is to minimize loss by reducing risk through preventive

- and measures. For example, the policy of immediately filing incident reports allows man- I to conduct an immediate investigation of facts surrounding the incident. These facts can

tly improve the legal department's ability to defend the case should it be necessary to do so. lL2.-;: management also provides the organization with the'information needed to proactively

'e performance and processes and provide a safer environment for employees, patients, , and visitors.

'.AANAGEMENT Claims management does not refer to the third-party payer claims for sernent discussed in Chapters 9 and 10, but rather to claims against the healthcare arion for incidents, occurrences, or malpractice. It is the legal and administrative

ent of injury claims against the organization. Claims management usually involves the :. steps:

rting of claims to the risk manager, upper management, and the facility's insurance ny investigation of claims

- stering of primary and secondary health records .ation of settlement of claims out of court

-_ement of litigation (if settlement was not reached) - - case outcomes for performance improvement or to create policies to prevent or

future risk.

(Courtesy of MidasPlus, Inc.)

IFact Sheet Oil the National Practitioner Data Bank. NPDB-00921.04.00 (Washington, DC: U.S. Depar •.•."'--~_ and Human Services, July 2008).

296 CHAPTE R 12

Peer Review Peer review in the context of QM should not be confused with the peer review organizati cussed in earlier chapters. In quality management, peer review is used when a patient, employee, or an audit of health records has called attention to an issue relevant to pati - Other providers review the case, procedures, orders, or treatment to determine the app ness and make recommendations.

Hospitals and other eligible healthcare entities must report professional review acti adversely affect a physician's clinical privileges for a period of more than 30 days to the. - Practitioner Data Bank (NPDB).l

Hospitals must also report the acceptance of a physician's surrender or restrictio ical privileges while under investigation for possible professional incompetence or i',r-o-~ professional conduct, or in return for not conducting an investigation or professional z: action.

Hospitals and other healthcare entities may voluntarily report adverse actions taken _ the clinical privileges of licensed healthcare practitioners other than physicians and Revisions to such actions must also be reported.

Recovery Audit Contractors A new CMS initiative that may result in hospitals having to perform risk analysis and c agement functions is the Recovery Audit Contractor (RAC) program, which went inz; January 1, 2010. The goal of the RAC program is to identify improper payments made "",-__ "r care claims provided for Medicare beneficiaries and obtain repayment to Medicare.

Healthcare providers may receive either a request for medical records or a letter l""_~""". that an overpayment be repaid for claims that were submitted to and paid for by _:!" Healthcare providers subject to review under the RAC program include hospitals, phy . tices, nursing homes, home health agencies, durable medical equipment suppliers, and a provider or supplier that bills Medicare Parts A and B.

A key difference between the RAC program and earlier efforts by CMS to audit cl . the recovery audit contractors are private companies, paid a percentage of what the. therefore, they have a stronger incentive to identify and recoup overpayments. Thi - risk of tinancialloss to the hospital or provider more substantial.

In forming a RAC risk management strategy, a hospital might consider taking th ~

• Establish a committee to handle RAC issues. II Set up a procedure or computer system to track RAC requests and ensure they are

within the timelines permitted. • Conduct an internal assessment to ensure that submitted claims meet the Medicare • Prepare and provision the HIM department to comply with RAC requests.

II Create policies and procedures for deciding which RAC denials to appeal.

Although the RAe program appears promising in terms of saving eMS money' _ ing unnecessary overpayments, it can also create a burden on HIM departments -- finances of the healthcare organizations. The best strategy for dealing with RAC ,,,,,-.__ ensure that claims are as accurate as possible when first submitted and that reques recovery audit contractor arc handled efficiently, effectively, and according to proo .•._~ __ policies that have been put in place well ahead of the RAC requests.

Comparative Performance Measure Systems Quality management also involves comparing performance measures to those of facilities. In addition to the NHQM and CM! information available from Medicare, also download data from vendors who contractually provide this service to hospi

A REAL-LIFE STORY

MANAGEMENT AND DECISION SUPPORT SYSTEMS 297

- nctions of a Quality Management Department - Jayme Stewart

Jayme Stewart works in the Department of Quality Management for a large hospital in the Midwest.

Jr quality management department serves decision support, -~ oles our physician peer review process, and performs chart

,'action for core process and hospital quality measures. We use ':: software systems, MIDAS+ and Premier Clinical Advisor. =ase management electronically documents the patient assess-

-=~in MIDAS+; that is, the demographic, social, and psycholog- ::= oatient information. They do the utilization review using an ~-=ace we have to Interqual to determine if the patient meets the --:='ia to be in the hospital. We can then fax directly from

::';5+ to most of our payers :ase management also does a chart audit; they monitor case

=-agers to see if they are fulfilling the requirements of the assess- .=r:. They also enter discharge planning information. We are then

_= co run a lot of utilization-type reports out of MIDAS+. :Ie use another module of the system for physician peer review.

- ,,1 there is an issue about a physician, it is entered into :: tl,s+. We then can track where it is in the process; for example, ~ ~oes to the chief of the department for review and then goes

-==< to the physician in question for comment ~'eparing Joint Commission core process measures is one of the

-~ions of our department. For accreditation, we are required to ect data on high-volume conditions or procedures and submit

~~ data. From this we calculate our compliance. Collecting the ::=:: involves a significant amount of chart abstraction. We have -.02S perform that function because much of the clinical informa- - n a chart is interpretive. They enter the data in MIDAS+.

:Ie can compare our core measure data with national and state - 'orrnance measure data. We also report it to CMS, because you ~ ve a 2 percent reduction in your payments if you don't On the

:;' hand, our Blue Cross Blue Shield plan has incentives that link _ :'1eir pay-for-performance program. If we meet their perfS;)r- ~-~e thresholds, we actually receive an incentive.

:Ie also use a comparative performance measure system from - /endor that has about 150 different statistics that benchmark .', th other MIDAS+ clients. We can look at it by teaching/non-

=: ing hospital. by bed size, by region, or nationally. We take a - :f indicators from the system to report on our hospital-wide -31ce scorecard. We report our hospital-wide mortality rate,

ssion rate, and other things using our data and the bench- ~-<s from them.

; sk management and patient relations use MIDAS+ as well. All <osof risk management events are entered in the MIDAS+ sys-

Events include medication errors, assessment errors, patient 5 hazardous spills, safety issues, and security issues. We have an

online application that allows any employee in the hospital to enter reportable events.

We have a reporting mechanism with hospital-wide distribution set up, so that if a manager's department is involved in one of the reports they receive automatic notifications via e-mail.

Claims management uses MIDAS+ as well; our attorneys docu- ment any potential claims through the point where the risk of a claim or the claim itself is resolved.

As I mentioned, Patient Relations also uses MIDAS+. We enter both complaints and compliments in the patient relations module. We also enter any HIPAA complaints there so that our HIPAA com- pliance officer can track data in the system.

Other data our department tracks includes infection control data, employee vaccinations, TB tests, committee-specific studies, and employee injuries. Our workers' compensation department uses It; also, any report that state or federal OSHA laws require us to generate comes right out. We also track mortality, autopsies, cardiac arrests, and conscious sedations.

We use Premier Clinical Advisor in addition to MIDAS+. It is a severity adjustment clinical benchmarking system. It uses the 3M AP-DRGs (all-patient diagnosis-related groups). It allows us to com- pare our data with that of other hospitals in their database by dis- ease. So we can compare, for instance, pneumonia length of stay, complications, readmissions, or mortality rates for hospitals our size. They also have best performers criteria that allow us to do physician profiling using the severity adjusted data. From that data you can support why a physician has a higher length of stay or higher mortality rate. Severity adjustment adjusts for risk factors and severity of illness.

We are also able to analyze utilization information out of the system to compare utilization to different peer groups. For exam- ple, if we had a stroke patient who had CAT scans every day, but the best performers only have two CAT scans per stay and the evi- dence shows that is effective, then that can impact utilization.

We also utilize a decision support system for clinical cost accounting. With it we analyze financial information, billing data, and. utilization information, such as the length of stay for a specific patient population and cases by attending physician.

OM involves a lot of process analysis, trying to determine how to make things more efficient and how to bring systems into that. My recommendation for students interested in OM is to develop analytical and auditing skills; accounting is very helpful in terms of developing that knowledge. Classes such as applied managerial statistics, performance improvement techniques, and, of course, medical terminology and information systems are helpful.

298 CHAPTER 12

1 '0 .••• ------- --- ----- --.---------~.--------I·~t_______~-~~~

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FIGURE 12~9 High scores on hospital quality measures.

performance data from similar size institutions, hospitals can benchmark themselves agains; best performers.

Figure 12-9 shows an example of a facility performance report based on the quality '- tors discussed in Chapter 11. The hospital's quality improvement measures are compared ( similar hospitals to generate the comparative report.

Hl-lHf-l H~ HHI-1HI-lHH HI-! I-H-lI-lHH~H t-IHI-iHHl-l HI-4HH··;

Chapter 12 Summary

Information Systems for Managerial Support In addition to HIM and EHR systems, other types of infor- mation systems are vital to the management and operation of healthcare facilities. These systems provide managerial support and are the basis for operational, strategic, and exec- utive decisions. , z:

Practice management systems have separate functional modules that are integrated; that is, they share a common database and are produced by the same vendor, Hospital sys- tems are often interfaced; that is, the systems use disparate systems from different vendors with separate databases. These systems exchange data using HL 7 or proprietary transactions.

Administrative Systems Administrative systems include financial, human resource, scheduling, and quality management systems.

Financial Information Systems Financial accounting systems in healthcare typically consist of the following:

• An overall accounting system called the general ledger is used to produce financial statements and monitor the overall financial health of the organization.

A standard accounting practice called the entry method divides the GL into four catego - income, expenses, assets, and liabilities. Inca expenses are reported on an income statemen profit and loss statement. Assets and liabiliti _ reported on a balance sheet or statement of fi::.:==~ position.

• Accounts receivable is the money that is ow business.

• Purchasing systems are used to order suppli services,

• Accounts payable is the money the busines its suppliers and others.

• Inventory is material goods and supplies tha; been purchased.

• Payroll deals with the administration of emp_~::;:: roll information and the payment of wages. ~--~ taxes, and employee benefits.

• Budgeting is used to predict expected inca expenses, usually for one year.

• Cost accounting is used to attribute direct costs to various departments.

,,"-,,"~,.,-,-'rl management department has received an incident report that a visitor slipped -.., ••••..-'-'-.. hospital parking lot and was injured.

_?CE? - . - should be taken immediately? ",-,-.::mres and processes in the facility should be examined?

.'lO\-ements should be made to prevent such accidents in the future? _- - g s should be made to limit liability for similar events in the future?

- :-s:)Jrces Management Systems ce systems maintain personnel records, ations, and records of training and continu- redits, employee immunizations, TB tests,

ed health issues.

: Systems -":-e ill types of scheduling systems are used in s:

xr::-..:~.n! scheduling allows for the orderly exarnina- .!:::}j treatment of patients. Patient scheduling

- making appointments for a length of time _ =-- - e to the reason the patient has scheduled an

::-a;:::!C!a::l' heduling consists of processing doctors' '-: _ ests or services, coordinating with the

_ xrve department, and arranging for an orderly or -s -stant to transport patients from their rooms to

:e;'ETUIJent and back. . ee scheduling systems are used to schedule -"""'1ployeesare working at what time each day.

\b:::::!!:~:::land leave schedules are used by human .J::L=:::::::-..:liS' and department managers to know when

_ _;;es will be gone so that others can be scheduled :e:::::;::n theif duties.

s cheduling in a medical practice includes e doctor's appointment schedule for times

=- at be in the office and arranging for another :.;:> - over" their patients. Doctors must also be

- '<e after hours. Physicians in group practices _~ being "on call." The practice administrator

"':Z:;;::Q:::::::;S- the on-call schedule. - _ _ scheduling must factor in preparation and

_ ::r: of the patient (preop), surgery, and recovery z: • -!IDe must also be allotted between surgeries . ~rating room to be cleaned and sterilized.

=::uipment Maintenance SystemS! ipment management systems are used to

spects of the facility, such as air conditioning,

__ ~ ..._ 31 Thinking Exercises

MANAGEMENT AND DECISION SUPPORT SYSTEMS 299

energy usage, fire control, and security. Other systems track the repair and maintenance of rooms, equipment, and the grounds.

Quality Management Systems The main product of quality management is the data and reports used for risk analysis and decision support. Quality management can be used to identify indications for interven- tion, assess functionality after intervention, analyze undesir- able outcomes of treatment, and identify opportunities for improvement. Quality management can also be used by providers to uncover opportunities for improvement and for monitoring their progress over time _

Quality management systems cover a number of differ- ent areas related to the operation of the hospital and the care provided to patients. These include:

• Case management and utilization management • Infection control • Incident tracking • Patient relations • Risk management • Peer review • Comparative performance measures .

The basic functions of risk management are:

• Risk identification • Risk analysis • Loss prevention or reduction • Claims management

The basic steps of claims management are:

• Reporting of claims to the risk manager, upper man- agement, and the facility's insurance company

• Initial investigation of claims • Sequestering of primary and secondary health records • Negotiation of settlement of claims out of court • Management of litigation (if settlement was not

reached) • Use of case outcomes for performance improvement

or to create policies to prevent or reduce future risk