Hospital 4

The Challenge

This hospital was experiencing significant overutilization of Observation level of care due to inconsistent daily clinical review processes and limited oversight of medical necessity. Key challenges included:

• Lack of daily clinical criteria and medical necessity validation
• Limited transmission of clinical documentation to payors, resulting in communication delays and limited follow-up
• No standardized process to reconcile physician orders with payor authorizations to ensure each observation day was medically necessary and appropriately authorized
• Inconsistent alignment between physician documentation, services provided, and the level of care billed

Our Approach

bServed implemented a structured utilization management workflow focused on clinical accuracy, payor alignment, and regulatory compliance by:

• Performing daily medical necessity reviews using evidence-based clinical criteria
• Establishing proactive communication with payors to ensure timely clinical updates and authorization management
• Reconciling physician documentation, physician orders, payor authorizations, and actual services delivered on a daily basis
• Ensuring the approved level of care was accurately reflected in the hospital information system to support compliant billing and reimbursement

Results

The implementation created a standardized, clinically driven observation management process that improved documentation accuracy, strengthened payor alignment, and enhanced billing compliance.

• $2,000,000+ recovered within the first three months
• 40% reduction in concurrent denials
• Observation rate reduced from 70% to 30%, with inpatient approval in the high-90s
• 155 observation-to-inpatient conversions in three months
• Improved documentation accuracy and payor alignment
• Enhanced billing compliance and reimbursement integrity

The result was a more compliant utilization management program, improved reimbursement integrity, and reduced administrative burden associated with denial management.