Reengineering the Utilization Management Model: Part II of a Two-Part Series

By Tiffany Ferguson, LMSW, CMAC, ACM, FCM

In Part I of this series, we explored why the traditional utilization management (UM) model is no longer sufficient to meet today’s regulatory and operational healthcare demands. The proposed removal of the Medicare Inpatient-Only (IPO) List, continued expansion of Medicare Advantage (MA), and increasing payer scrutiny have shifted the UM process from a retrospective review function to one that must proactively support level-of-care decisions and denials prevention.

Typically, hospital UM programs assign utilization review (UR) specialists by nursing unit or service line, creating workflows in which clinicians spend much of their day moving from one patient to the next based solely on location, operating off a patient list. While this model is familiar and operationally comfortable, it often obscures the actual work requiring attention at any given time. It also assumes that every hospitalized patient requires the same level of UR intervention each day, which is rarely the case.

An adaptive UR model organizes staff according to the work being performed, rather than the physical location of the patient. Specialized teams focus on distinct operational responsibilities, such as pre-admission surgical review, emergency department and direct admission reviews, observation management, concurrent inpatient reviews, and post-discharge prebill denial and authorization reconciliation. Each function requires different clinical expertise, review cadence, and workflow priorities, allowing staff to develop greater proficiency while creating standardized processes across the organization.

One area where this redesign becomes particularly valuable is the surgical population. As reliance on the IPO List diminishes, UR will need to start shifting toward evaluating patients with significant medical complexity before surgery occurs, not just immediately after. A dedicated preoperative work queue, reviewed approximately two weeks before scheduled procedures, allows UR specialists to identify patients who may require inpatient hospitalization based on clinical factors, rather than procedure alone. Early collaboration with surgeons, physician advisors, and scheduling staff supports more accurate patient status decisions, timely MA authorizations, and stronger clinical documentation – before the patient ever enters the operating room.

Observation management represents another opportunity for specialization. Observation patients often require a much higher level of monitoring than traditional inpatients, because progression-of-care needs and conversion decisions frequently occur within hours. Assigning dedicated staff to observation services creates a simulation of an observation unit without having to necessarily co-locate patients in the hospital. This works well, especially for hospitals where it is physically impossible to create a dedicated observation unit. Historically, observation workflows have focused heavily on identifying patients approaching the second midnight to determine whether inpatient conversion is appropriate. However, this represents only one component of observation management. Dedicated observation specialists can proactively address progression-of-care barriers, reduce unnecessary delays, help facilitate timely discharges, and improve patient throughput. This team is also well-positioned to oversee extended recovery patients and other outpatient-in-a-bed (OPIB) populations, creating consistency across bedded outpatient services.

Emergency department UR similarly benefits from a specialized approach. Evaluating patients at the point of entry allows medical necessity concerns, physician advisor consultations, and level-of-care determinations to occur before avoidable denials develop. Traditional models often delay these reviews, because staff believe that insufficient clinical information exists early in the encounter. However, advances in clinical decision support, artificial intelligence (AI), and real-time electronic documentation have made earlier intervention both practical and beneficial. Today’s UR specialist is no longer simply applying medical necessity criteria; they are serving as a real-time clinical resource, educating providers, collaborating with emergency physicians, and supporting accurate admission decisions before patient status becomes difficult to correct.

Building an adaptive model requires organizations to reconsider who performs the work. UR specialists should spend the majority of their time applying their clinical expertise, collaborating with physicians, physician advisors, and addressing complex medical necessity issues. Many administrative activities, such as authorization tracking, payer portal updates, fax management, scheduling peer-to-peer discussions, and post-discharge authorization reconciliation can often be delegated to trained UR technicians or other non-licensed professionals. This top-of-license approach allows the seasoned clinicians to focus on activities that require professional expertise while improving overall operational efficiency.

Technology serves as the foundation that connects these specialized workflows. Electronic medical records (EMRs) and UR technology are quickly replacing manual tracking spreadsheets with automated work queues and methods for prioritization that identify patients requiring review, notify physician advisors of escalation requests, monitor pending authorizations, and alert staff when status changes or payer requirements require action. Rather than relying on emails or secure chats, UR teams can build transparent electronic workflows for which each step of the review process is visible to case management, revenue cycle, clinical documentation integrity (CDI), and physician advisors. This level of visibility not only improves communication, but also creates valuable operational data that organizations can use to identify trends in denials, authorization delays, outpatient and observation utilization, physician advisor interventions, and throughput opportunities.

Healthcare delivery continues to evolve rapidly, and UM programs must be designed to evolve alongside it. Staffing models should reflect review demand, rather than traditional Monday-through-Friday schedules; incorporate remote and hybrid work environments, where appropriate; and adjust productivity expectations based on the complexity of each review function, rather than applying a single productivity standard across all roles. Success should be measured by meaningful outcomes such as reduced denials, improved authorization performance, shorter observation and bedded outpatient stays, cleaner claims, and stronger physician engagement.

Why the Traditional UR Model No Longer Works: Part I

By Tiffany Ferguson, LMSW, CMAC, ACM, FCM

In many hospitals, utilization review (UR) still operates much as it did 20 years ago. Reviews often begin only after a patient has been admitted or a procedure has been completed. Nurses are assigned by unit, physician advisors are consulted primarily for status conversions or peer-to-peer reviews, and much of the work is tracked through spreadsheets, emails, and manual lists.

Although this model has served organizations for years, today’s technology environment has fundamentally changed the role and expectations of utilization management.

The phased removal of the Medicare Inpatient-Only (IPO) List, continued growth of Medicare Advantage (MA), and increasing payer scrutiny have exposed the limitations of a reactive UR model. Rather than asking whether a patient met criteria after admission, organizations now must identify the appropriate level of care earlier in the patient’s journey and actively support their physicians, who are documenting the clinical rationale for those decisions.

This shift requires UR to evolve, not just from a compliance standpoint, but also into an operational strategy that simultaneously supports patient progression, physician decision-making, and revenue integrity.

While medical necessity criteria remain an essential component of the review process, they should not be viewed as the endpoint of utilization management. As technology continues to advance to support increased scale and UR production, professionals should start considering how their position is going to shift – and reevaluate what requires a nurse to fill a supportive role for items such as sending clinicals and inputting payer responses.

For top-of-license performance, the role of the UR specialist will be moving to evaluate and support the information that may be part of the patient’s record, but was not captured in the patient’s provider documentation. This subtle but important shift transforms UR from an auditing function, checking the boxes for “met” and “unmet” reviews, into a collaborative clinical partner that works alongside providers, clinical documentation integrity (CDI), case management, and physician advisement to improve documentation, ensure the appropriate level of care, and prevent avoidable denials before claims are submitted.

Many organizations continue to rely on disconnected spreadsheets, email communication, and manual tracking processes that create unnecessary rework and limit visibility into the UR process. These fragmented workflows make it difficult to measure physician advisor involvement, identify authorization delays/denials, or provide meaningful operational feedback across clinical and revenue cycle teams.

Technology vendors, electronic medical record (EMR) workflows, and work queues allow organizations to automate referrals, monitor medical necessity milestones, and create transparent communication – and tell a data story across the continuum of the clinical and revenue cycle. Thus, the ideal UR specialist is not necessarily the seasoned nurse, but someone with effective communication and technology skills.

Healthcare has reached a pivotal moment wherein UR can no longer function solely as a retrospective review mechanism. By shifting interventions earlier, strengthening physician collaboration, and focusing on operational efficiency, rather than status correction, hospitals can improve compliance, reduce denials, and better support both patients and providers.

Physician Advisors: Leaders, Champions, Educators

By Juliet Ugarte Hopkins, MD, ACPA-C

Physician advisors should be involved in far more than secondary status reviews and peer-to-peer calls. They must stand out as leaders, resources, and champions of their case and utilization management teams, and be recognized as educators and problem-solvers for their hospitals’ medical staff. If you’re a physician advisor and this doesn’t sound like your role, or if you work with a physician advisor, but this description is way beyond their professional line of sight, it might be time to reconsider the position’s goals and requirements.

There are many iterations, facets, and ranges of scope involving the physician advisor role within hospital settings. But one thing should be clear: when addressing escalations from case or utilization managers about real-time patient status, physician advisors must understand the Medicare Two-Midnight Rule inside and out. This includes the exceptions, how MCG or InterQual criteria fit in, and a firm understanding of the Centers for Medicare & Medicaid Services (CMS) definition of “medically necessary hospital care.” Physician advisors should be their hospital’s expert and trusted resource about the Rule, ready to answer questions from anyone within any department in the hospital or health system.

This knowledge should not be kept to themselves. It is imperative for physician advisors to educate their admitting clinicians about the Rule. Why? Because of the Code of Federal Regulations, Title 42, Chapter IV, Subchapter B, Part 412, Subpart A, 412.3: “…an individual is considered an inpatient of a hospital, including a critical access hospital, if formally admitted as an inpatient pursuant to an order for inpatient admission by a physician or other qualified practitioner…the order must be furnished by a qualified and licensed practitioner who has admitting privileges at the hospital…who is knowledgeable about the patient’s hospital course, medical plan of care, and current condition. The practitioner may not delegate the decision (order) to another individual who is not authorized by the State to admit patients, or has not been granted admitting privileges applicable to that patient by the hospital’s medical staff.” 

The Code is very clear: clinicians are required to understand the Medicare Two-Midnight Rule and appropriately assign their patients to inpatient or outpatient status with observation services. True, this status-determining modality won’t be appropriate for everyone – for example, patients covered by commercial plans – but it will compliantly capture those covered by Medicare. 

What about utilization or case managers? Shouldn’t they assist with status determination efforts by providing guidance to clinicians when needed? Absolutely – which is why physician advisors should also ensure that they educate these teams. The goal is not for the utilization managers to direct the status decision to the clinicians and expect a blind co-sign of an inpatient status or observation service order. They should serve as an extension of the physician advisor when working with medical staff, enforcing and amplifying their knowledge about the Medicare Two-Midnight Rule and medical necessity. Only after a physician advisor has comprehensively and routinely provided education to utilization managers and clinicians alike can the two teams work collaboratively to assign appropriate patient status at the time of hospitalization, and in the following 24-48 hours.

While they may not remember or even be aware of everything pertinent from a utilization and case management standpoint, when it comes to CMS rules and regulations, physician advisors should be well-versed in how to find the answers, when asked. Additionally, they should understand how specific processes they are involved with relate to the Conditions of Participation, conditions for coverage, and so on. 

If something is going awry within case or utilization management, if a step is missing within a CMS-mandated process, or if it’s discovered that there is misunderstanding about a concept within a specific group or involving a single individual, physician advisors should be all over it.

No, they cannot boil the ocean or right every wrong. But as leaders, experts, educators, and collaborators, they should persistently strive to offer solutions or make corrections. Under essentially every circumstance, physician advisors are most effective when working in lockstep with their partners in case and utilization management leadership.

Like the partnership with medical staff, persistent and routine communication and collaboration is a must.

Even if “only” participating in their hospital’s peer-to-peer process, there is much to gain here as well, if a physician advisor is truly invested. Is the initial denials assessment process as efficient as it should be? Are the qualifiers directing the decision of which cases are escalated to peer-to-peer versus which are re-billed as observation, producing favorable results? Track and assess outcomes on a routine basis, and consider how statusing efforts might be influencing the trends.

If there’s an opportunity for improvement or conflicting concepts leading to suboptimal results, the physician advisor should take the lead on brainstorming a corrective or alternative course of action with their utilization, denials, and even medical-staff partners.

Physician advisors are team captains and should demonstrate passion and dedication for their role, thriving when collaborating with all members of the hospital’s care and administrative teams. 

Are You Sick Enough? A Look at New Medicaid Work Requirements

By Tiffany Ferguson, LMSW, CMAC, ACM, FCM

The Centers for Medicare & Medicaid Services (CMS) recently issued an Interim Final Rule with Comment (CMS-2454-IFC) implementing the Medicaid Community Engagement Requirement established under Public Law 119-21, referred to by CMS as the Working Families Tax Cut (WFTC) legislation. Beginning no later than Jan. 1, 2027, certain adults ages 19 through 64 will be required to complete at least 80 hours per month of qualifying activities, including employment, education, job training, or community service, as a condition of Medicaid eligibility.

While much of the public discussion surrounding Medicaid work requirements has focused on employment, the more significant operational questions may center on implementation, verification, and access to care. For healthcare organizations, the issue is less about whether beneficiaries should work and more about how states and providers will determine eligibility for work.

The rule applies to non-pregnant adults between the ages of 19 and 64 who are not entitled to Medicare and receive coverage through Medicaid expansion populations or certain Section 1115 demonstrations.

Individuals may satisfy the requirement through multiple pathways. In addition to qualifying activities, beneficiaries may demonstrate compliance through earnings equal to at least 80 times the federal minimum wage, which equates to approximately $580 per month in 2026. Activities may be combined to meet the monthly threshold. States are required to verify compliance with application and renewal. If compliance cannot be verified, states must provide notice and allow beneficiaries 30 calendar days to demonstrate compliance or establish that they qualify for an exemption before denying or terminating coverage. Failure to do so may result in disenrollment, although individuals may reapply at any time.

At initial application, states may require individuals to demonstrate compliance during one to three months preceding enrollment. At renewal, beneficiaries must show compliance for one or more months during the prior eligibility period. These lookback periods introduce an entirely new layer of eligibility complexity.

Who is Exempt?

Congress excluded several populations from the requirement, including pregnant and postpartum individuals, indigenous peoples, certain caregivers, individuals already satisfying Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF) requirements, and persons considered medically frail. States may also grant temporary hardship exceptions for individuals receiving inpatient hospital services, traveling for specialized medical care, residing in areas experiencing nationally declared disasters, or living in counties with high unemployment.

Who Determines Medical Frailty?

Perhaps the most important question raised by the rule is not who must work, but who determines when someone is unable to.

The Interim Final Rule requires states to use all available reliable information, including adjudicated claims and encounter data from the previous 12 months, before requesting additional information from beneficiaries. States must verify not only that a diagnosis exists, but that the condition significantly impairs the individual’s ability to comply with the community engagement requirement. Beginning Jan. 1, 2028, self-attestation for medical frailty may generally be used only once, when claims data are unavailable. Subsequent determinations may require additional documentation. This distinction is critical.

According to the ruling, possessing a diagnosis alone does not automatically establish medical frailty. The rule requires evidence that the condition meaningfully limits the person’s ability to meet the requirement. Consequently, physicians and other clinicians may increasingly be asked to certify not simply the presence of cancer, chronic pain, depression, substance use disorders, or cognitive impairment, but the functional consequences associated with those conditions. This would likely be similar to disability determinations and Family and Medical Leave Act (FMLA) certifications, wherein providers may find themselves completing forms, supplying medical records, and responding to requests from state agencies.

Healthcare organizations are already facing increasing administrative responsibilities; the addition of Medicaid work requirement exemptions introduces another layer of documentation and additional risk of administrative burnout.

Providers may be asked to certify medical frailty or functional limitations, verify temporary inability to work following hospitalization, respond to state requests for information, and/or participate in appeals processes when eligibility is denied. These responsibilities are unlikely to generate reimbursement and may disproportionately affect safety-net hospitals, rural providers, and organizations serving large Medicaid populations.

Access to Care Concerns

Although CMS has committed approximately $200 million in grants and announced more than $600 million in private-sector technology support to assist implementation, this is going to be a significant lift to operationalize. Perhaps the greatest concern associated with work requirements is not whether beneficiaries are employed, but whether otherwise eligible individuals may lose coverage because of administrative complexity.

Past experiences with Medicaid work requirements demonstrated that coverage losses often occurred because individuals could not navigate reporting requirements, not because they failed to satisfy them. Individuals with behavioral health conditions, unstable housing, low health literacy, transportation challenges, or limited access to technology may encounter difficulties complying with complex documentation requirements, even when they qualify for exemptions.

Coverage interruptions may result in delayed care, medication nonadherence, increased emergency department utilization, avoidable hospitalizations, and rising rates of uncompensated care for providers.

CMS views the Community Engagement Requirement as a pathway toward economic independence and poverty reduction. Whether these goals are achieved will depend not only on employment opportunities, but also on how effectively states and healthcare systems operationalize the requirements without creating unintended barriers to care.

Case Management Corner: Improving Post-Partum Discharge Outcomes

By Kelly Bilodeau

When a new mother leaves the hospital, it doesn’t just mark the end of a hospital stay; it’s the beginning of a complex, decades-long relationship.‍‍ ‍

Recovery from childbirth often occurs alongside around-the-clock care for an infant, and many variables affect the success of the transition, including the physical and mental health of the mother, the support structure at home, and the temperament and health of the baby. This means that there’s really no such thing as a routine discharge after childbirth, said Kalie Wolfinger, LCSW, manager of clinical services at Phoenix Medical Management.

The transition home also marks a crucial window when case managers and social workers can intervene to improve outcomes in mother and baby pairs. But doing so may require additional training and a rethinking of traditional discharge procedures, Wolfinger said.

Traditional hospital discharges prioritize checklists and narrow safety-based education on topics such as safe sleep strategies and car seat safety. But they often don’t focus on other critical strategies such as up-close patient mental health assessments, promoting bonding and attachment, and looking for signs of past trauma that may hinder healthy parenting, Wolfinger said.

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Maternal challenges linked to poorer outcomes

Maternal health issues are common in the weeks and months after birth, and can affect a child’s short- and long-term trajectory. As many as 20% of women who have given birth experience symptoms of postpartum depression, according to Brown University Health, and rates of the disorder have doubled over the last decade, according to a JAMA analysis. It’s not just an issue that affects the mother. One 2025 study found that infants whose mothers experienced postpartum depression had double the risk for developmental delays during the first year.

Other common issues that social workers and case managers should screen for include:  

• Maternal anxiety

• Substance use disorders

• Intimate partner violence

• Social determinants of health (e.g. poverty, housing insecurity)

Social workers and case managers can assess patients for these risk factors using a  trauma-informed and culturally sensitive approach. Observation helps gauge maternal-infant bonding and interactions.

Building infrastructure for better transitions

Providing this type of critical assistance to mothers goes beyond traditional discharge planning. It’s not just about ensuring equipment is ordered, prescriptions are filled, and follow-up visits are scheduled, but about creating bridges for patients to access outpatient services and early intervention, Wolfinger said.‍‍

It’s not always easy to create these ties, because structural barriers often get in the way. Hospital systems often don’t support this type of work and community resources may be fragmented, she said.‍‍

Social workers and case managers can also encounter thorny legal issues. It’s a delicate balance to prioritize maternal rights while safeguarding infant wellbeing. Hospitals often have standardized protocols and risk management guidelines to reduce the potential for errors and protect against potential liability, but trained professionals also need to be able to rely on their own gut instincts during patient interactions, Wolfinger said. ‍‍

Mothers may also have a disincentive to share concerns about their mental health or substance use disorders with caregivers, fearing that doing so may trigger mandatory reporting requirements or intervention from child protective services.

Specialized training can equip professionals with the tools they need to navigate these issues, ensuring better support for at-risk mother and child pairs. “Getting it wrong can have long-term consequences,” Wolfinger said. “But getting it right can have a major impact on both mom and baby over time.”

Case Management Corner is your go-to source for insightful discussions on relevant topics in case management. Through an engaging interview-style format, our team members share their expertise, experiences, and best practices to keep you informed and empowered. Whether you're looking for industry updates, practical strategies, or real-world perspectives, we bring you valuable conversations designed to enhance your knowledge and support your professional growth. Stay tuned for expert insights straight from the field! Kelly Bilodeau has been a longtime writer for HCPro’s Case Management Monthly. 

Centralized Post-Acute Authorization: Improving Efficiency, Reducing Administrative Burden

By Marie Stinebuck, MBA, MSN, ACM

As healthcare organizations face increasing pressure to improve efficiency and reduce administrative burden, many are reevaluating how post-acute care authorizations are managed. Traditionally, nurse case managers and social workers have spent significant time gathering clinical documentation, navigating payer websites, and communicating with insurance companies to secure authorization for skilled nursing facilities, inpatient rehabilitation facilities, long-term acute care hospitals, and home health services. While these tasks are essential to patient progression, they are highly administrative and often divert professional staff from more complex clinical and discharge planning responsibilities.

A centralized post-acute resource center (PARC) authorization process offers an effective solution. By consolidating post-acute authorization activities into a dedicated workflow supported by specialized staff, hospitals can streamline operations, reduce delays, and allow case managers and social workers to focus on patient-centered interventions. In this model, the PARC team may consist of authorization coordinators, case management assistants, or utilization review technicians who assume responsibility for obtaining post-acute authorizations.

These team members are trained to access payer portals, upload clinical documentation, complete required forms, and monitor authorization status. Because many payers now offer online portals with standardized submission tools, much of the work can be completed electronically without lengthy phone calls or fax transmissions. Use of these portals also decreases manual processes and helps prevent errors associated with manual workflows. In the case of a denial, the PARC team can support appeals and resubmission of clinical documentation for a lower level of care, as needed.

It is vital to create standardized work related to portal use for training and education. The PARC team will likely use multiple payer portals, each with unique guidelines and processes for managing authorization requests. Key elements to include in standardized work include the regional contact person for each portal, instructions for obtaining access for new users, and support line contacts for troubleshooting issues that may arise.

The centralized process begins when the case manager or social worker identifies the appropriate post-acute level of care and confirms the patient’s discharge plan. Once the receiving facility is selected and confirms its ability to accept the patient, the case management team provides the necessary clinical summary and anticipated discharge details to the authorization support team. From there, the support staff manage the end-to-end authorization process, including submission, follow-up, and communication of approval information to the care team and receiving provider.

Using payer portals significantly reduces manual work. Clinical documentation can be uploaded directly from the electronic medical record, templates can standardize submissions, and dashboards allow staff to track pending requests in real time. This approach minimizes duplicate data entry, decreases errors, and creates greater transparency into authorization turnaround times. Organizations can also develop work queues to prioritize urgent discharges and assign tasks based on workload.

Centralization delivers several important benefits. First, it improves efficiency by allowing a smaller group of trained staff to develop expertise in payer-specific requirements. Second, it reduces discharge delays caused by missed submissions or inconsistent follow-up. Third, it enhances staff satisfaction by removing administrative tasks from nurses and social workers, enabling them to devote more time to clinical assessments, family discussions, and care coordination.

Ultimately, a centralized PARC team can support both operational and clinical goals. By leveraging payer portals and assigning administrative tasks to support staff, healthcare organizations can reduce unnecessary manual work, accelerate discharges, and maximize the value of professional case management resources.

Case Management Corner: Use Your EMR To Revamp UR Communication

By Kelly Bilodeau

Healthcare is rapidly evolving, but utilization management (UM) still often relies on outdated communication and documentation strategies, such as emails and faxes based on unit-based assignments and static patient lists. These outmoded exchanges struggle to keep pace with the demands of the modern revenue cycle.

It’s time for a change, and luckily, the needed transformation is not one that requires high-cost new technology, just smarter use of your facility’s existing electronic medical record (EMR).

“Most hospitals already possess the technology needed to transform their UM programs; they simply need to reimagine how those tools are used,” said Sara Williams, vice president of clinical strategy at Phoenix Medical Management.

Repurposing existing tools

It’s possible to transform UR by reapplying existing EMR tools, such as reporting systems and communication platforms, to make the necessary shift toward proactive, connected workflows, she said.

Improving communication with these tools will do more than just streamline processes. It can help build bridges between bedside care, hospital operations, and the billing department. Using the EMR can also help ensure that the physician advisor’s clinical judgment, correct payer terminology, and verification of medical-necessity criteria are captured in the patient’s medical record. This is not always possible using legacy tools such as spreadsheets or anecdotal documentation, Williams said.

“Physician Advisors and UR nurses must be equipped with tools that allow their work to be visible, measurable, and aligned with organizational outcomes,” she said.

EMR systems can ensure continuity and follow-through by formalizing the documentation process using EMR-integrated UR tools and interactive dashboards. This allows UR nurses and physician advisors to easily communicate to build a clinical record that will withstand payer scrutiny and draw a straight line from patient admission to final claim resolution.

Providing support for a new model

However, like any technological leap, this change requires human support. Organizations need to ensure that UR team members are still engaged and collaborating with one another, particularly as more work is done outside the hospital.

Collaborating closely with the analysts who support your EMR is a key first step in transitioning documentation and workflows from spreadsheets and external resources into integrated EMR tools. These analysts have access to the latest available system capabilities and can help incorporate those features into your existing workflows to optimize documentation, streamline communication within the system, and enhance both reporting and overall documentation efficiency.

Working remotely has advantages, but it also carries risks, Williams said. With this in mind, organizations should develop tools and training to ensure that physician advisors and UR nurses can carry out concurrent reviews, work together effectively, and understand and meet payer-specific requirements, Williams said.

“Done right, the digital tools provided by the EMR can help Physician Advisors and UR leaders to optimize performance and advance organizational excellence.”

Case Management Corner is your go-to source for insightful discussions on relevant topics in case management. Through an engaging interview-style format, our team members share their expertise, experiences, and best practices to keep you informed and empowered. Whether you're looking for industry updates, practical strategies, or real-world perspectives, we bring you valuable conversations designed to enhance your knowledge and support your professional growth. Stay tuned for expert insights straight from the field! Kelly Bilodeau has been a longtime writer for HCPro’s Case Management Monthly. 

Sub-specialization – Physician Advisory’s Next Big Move?

By Juliet Ugarte Hopkins, MD, ACPA-C

When many physician advisors began their careers 10, 20, or even 30 years ago, their focus involved communication. Communication between case and utilization managers and medical staff, first and foremost, but also between leaders of these departments and hospital executives. 

Physician advisors have persistently served as bridges between two admittedly broad categories of individuals within health systems: Those who have vast medical knowledge but little business or operational knowledge, and those whose breadth of expertise is the reverse. 

Trusted, timely, and reliable communication grew even more important with the enactment of the Medicare Two-Midnight Rule in late 2013 as hospitals were suddenly faced with audits, citations, and financial penalties from the Centers for Medicare and Medicaid Services (CMS).  Physician advisors’ skill as effective communicators quickly morphed them into outright educators related to the specifics of patient statusing, medical necessity, and hospital service utilization. 

Next came collaboration with clinical documentation integrity (CDI) teams to ensure queries were addressed by medical staff in a timely manner and also, again related to the role as educator, translating coding requirements for capture of specific diagnoses in the electronic health record in a way doctors can understand.

Most recently, as Medicare Advantage enrollment ballooned with more and more payors utilizing some form of automated algorithms or artificial intelligence to deny cases for Inpatient status, the world of addressing payor denials via peer-to-peers (P2Ps) and written appeals has grown exponentially within the last five years.  Once an occasional or strategic move to fight particularly egregious or high-dollar cases, the deluge of denials with associated P2P opportunities has led some hospitals to aggressively engage to fight off the onslaught.  Physician advisor participation in P2Ps has led to the most black-and-white representation of the role’s return on investment (ROI) for hospitals and health systems. 

Unlike ensuring compliance with CMS Conditions of Participation (CoPs), preventing avoidable days by heading off delays in discharge due to patient request, or steadily decreasing the number of Condition Code 44s and W2s by teaching admitting clinicians how to use the Two-Midnight Rule, there is a clear “A + B = C” breakdown of the financial benefit associated with P2Ps. Unsurprisingly, this has resulted in many physician advisors watching their day-to-day responsibilities shrink to an almost singular focus – fighting payor denials via engagement of the P2P process.

While this might prove to be the clearest demonstration of a physician advisor’s ROI, it absolutely can’t be their only responsibility. Shifting their spotlight to denials and P2Ps leaves a vast swath of the other important work physician advisors have historically led or at least been an integral part of. Unfortunately, many hospitals and health systems don’t recognize the compliance and operational risk associated with removing their physician advisors from this kind of work until it’s too late. This can result in escalating Observation rates and/or short stay Inpatient rates, declining collaboration between medical staff and utilization/case management teams, and increased presence of sub-standard documentation. Instead of allowing your physician advisor or physician advisory team’s prior successes to disintegrate into dust, consider modeling the clinical division of scope via sub-specialization.   

As identified for many years by the American College of Physician Advisors and other experts in the field, standard physician advisor coverage of case and utilization management needs – including CMS rule compliance, education tailored to clinicians, case managers, utilization managers, and bedside nurses to name a few, and close collaboration with case/utilization management teams as their clinical champion – is one physician advisor per 250 hospital census. It’s important to note this doesn’t include participation in P2Ps or comprehensive collaboration with and support of the CDI and coding teams. While in years past, solo or even system physician advisor programs could manage the bandwidth of participating in a few P2Ps a week and addressing a handful of unanswered CDI queries in addition to their case/utilization management duties, this is no longer possible due to the sheer volume of medical necessity and clinical validation denials seemingly sent by all payors, all day, every day.

Hospitals are finding that opportunities related to fighting these denials in addition to the ever-present need to ensure compliance with the CoPs require the evolution of specialized physician advisory roles. While the traditional 1:250 coverage for CM/UM responsibilities remains the same, additional bandwidth is required based on volume and modality of addressing denials and pursuing P2Ps. Depending on volume and method of assessment prior to reaching the physician advisor, this could easily support at least an additional 0.5 FTE for a P2P physician advisor serving a 250-bed hospital. Similarly, additional FTEs could be beneficial for dedicated support and collaboration with CDI teams related to targeted education to medical staff about Case Mix Index (CMI), creation of unified clinical definitions, and review of mortality and quality metrics.

Instead of attempting to maintain the traditional scope of physician advisory function and leadership while cramming in a half dozen or more P2Ps a day and squeezing in whatever spare time might be left in the week to optimize CDI initiatives, consider this alternative. It will allow your physician advisors the appropriate focus and attention to their work and specialization in each designated role will ultimately foster pointed expertise and mastery.

CMS Proposes Knee/Hip Replacement Episode-Based Accountability For All

By Tiffany Ferguson, LMSW, CMAC, ACM

The Inpatient Prospective Payment System (IPPS) Proposed Rule for the 2027 fiscal year (FY) signals another major acceleration in Medicare’s transition toward mandatory value-based care.

Among the most significant proposals is the Centers for Medicare & Medicaid Services (CMS) plan to expand the Comprehensive Care for Joint Replacement (CJR) Model nationwide through a redesigned version referred to as CJR-X. While many organizations may view this as a return of a familiar bundled payment program, such as those already in the Transforming Episode Accountability Model (TEAM), the Proposed Rule will force all hospitals into episode-based accountability.

CMS is proposing that CJR-X begin Oct. 1, 2027, aligning performance years with the federal fiscal year. CMS has indicated that this change is intended to better synchronize future policy updates with the annual IPPS rulemaking cycle, as they continue to make modifications. Hospitals already participating in TEAM, specifically those with lower extremity joint replacement (LEJR) episodes, would be exempt from CJR-X until TEAM concludes.

According to CMS, the original CJR model generated $112.7 million in Medicare savings during performance years six and seven while maintaining quality outcomes, including stable emergency department utilization, readmissions, mortality, and complication rates. CMS now appears ready to operationalize these lessons nationally.

Under the Proposed Rule, eligible beneficiaries would include those enrolled in Medicare Parts A and B who have Medicare as the primary payer, thus not encompassing those enrolled in Medicare Advantage (MA) or other managed care arrangements. CMS also proposes excluding Medicare beneficiaries as a result of end-stage renal disease (ESRD).

This exclusion of MA beneficiaries is operationally important. While many hospitals are heavily focused on MA utilization management (UM) challenges today, CJR-X remains rooted in traditional Medicare Fee-for-Service (FFS) payment methodologies. Organizations will need to manage two parallel realities: dealing with increasingly restrictive MA authorization oversight while simultaneously assuming broader financial accountability for FFS joint replacement episodes.

Additional Beneficiary Notification Form Proposed

One of the more operationally impactful proposals involves beneficiary notification requirements. CMS is proposing that hospitals participating in CJR-X provide written notification to every eligible beneficiary prior to discharge from the anchor hospitalization or outpatient anchor procedure. The notification must explain the CJR-X model, reinforce beneficiary freedom of choice, describe data-sharing practices, explain access to claims data through Blue Button, and disclose any financial relationships between the hospital and CJR collaborators.

This requirement elevates the importance of discharge planning and patient education workflows. Hospitals will need standardized processes to ensure compliant delivery of this new notification, documentation of receipt, and alignment with broader patient choice obligations under the Conditions of Participation. Case management and patient registration departments will likely become central operational owners of this process.

The proposed episode design is expansive. CMS proposes including all Medicare Part A and Part B services furnished during the 90-day post-discharge period related to the LEJR episode. This includes physician services, inpatient and outpatient hospital care, skilled nursing facility (SNF) services, inpatient rehabilitation, home health, outpatient therapy, hospice, durable medical equipment (DME), laboratory services, and Part B drugs and biologics, unless specifically excluded. For case management and utilization review (UR) teams, this further reinforces the need to move beyond siloed discharge planning models, toward longitudinal episode management strategies. The traditional hospital-only mindset is increasingly incompatible with CMS’s value-based direction.

CMS proposes excluding certain readmissions and diagnosis categories, including oncology, trauma, organ transplant, ventricular shunt cases, and select Major Diagnostic Categories such as pregnancy, newborns, HIV, and ophthalmologic disorders. CMS also proposes excluding certain high-cost technologies, including IPPS new technology add-on payments and Outpatient Prospective Payment System (OPPS) pass-through device payments.

CMS has also proposed canceling bundled qualifying episodes if the beneficiary dies during the 90-day period, loses eligibility criteria (such as changes in coverage), experiences an extreme and uncontrollable circumstance event (natural disaster), or enters overlapping TEAM-related episode scenarios. While these provisions offer some financial protection, they also introduce additional documentation and tracking complexity for organizations managing episode reconciliation.

Thus, the post-discharge management plus the quality reporting requirements will also pull in new quality management team members.

SNF Three-Day Waiver

One of the benefits of this program is CMS’s proposal to utilize the three-day SNF waiver program for this patient population. Under CJR-X, hospitals could discharge eligible beneficiaries to SNFs without a qualifying three-day inpatient stay. However, the SNF must meet CMS quality requirements, including maintaining at least a three-star overall rating for seven of the previous twelve months. This proposal carries significant implications for discharge planning and post-acute network strategy.

Hospitals will need active oversight of SNF quality ratings, stronger preferred provider network management, and real-time visibility into qualifying facilities.

Failure to appropriately discharge patients to qualified SNFs could result in denied SNF payments – and financial liability shifting back to the hospital. It was very clear in the proposed ruling that hospitals, not patients, would “eat” this cost if a patient is sent to a SNF facility outside of the waiver guidelines prior to their three-day inpatient stay. CMS described in the ruling a potential patient notice for those going to a SNF under a CJR-X episode of care; however, it was unclear how this was going to be operationalized, or if this would come directly from CMS as an official form.

For many organizations, this further accelerates the evolution of case management from a reactive inpatient discharge function to a proactive population health and post-acute strategy role. Hospitals participating in CJR-X will likely need stronger integration between case management, quality, physician advisors, finance, analytics, and post-acute care navigation teams.

Physician advisor programs may also see expanded responsibilities under CJR-X. Historically focused on status determination and denial prevention, physician advisors could increasingly become involved in episode stewardship, post-acute utilization oversight, avoidable readmission reduction, and alignment of clinical documentation supporting episode complexity and resource utilization.

This proposal reinforces CMS’s broader strategic direction across value-based care initiatives. The operational alignment between CJR-X and TEAM demonstrate CMS’s intention to standardize episode-based methodologies across multiple mandatory models. Although still only under the “proposed” phase, with some minor adjustments or refinements likely pending, it will be important to anticipate that this program is coming. 

The Impacts of Starting the Admission Order with the ED Physician

By Tiffany Ferguson, LMSW, CMAC, ACM

Increasing pressure to improve emergency department (ED) throughput has led many hospitals to adopt workflows in which ED physicians initiate inpatient or outpatient observation orders prior to a full evaluation by the attending physician.

While this approach is often intended to start the clock for care progression, reduce ED congestion by organizing patients who require hospitalization, and align with Centers for Medicare & Medicaid Services (CMS)-related door-to-decision expectations, it introduces significant downstream risks that impact compliance, revenue integrity, and operational efficiency.

At its core, this practice raises concerns about whether admission determinations are being made with sufficient clinical context to support the medical necessity required for hospitalization.

Under guidance from CMS, inpatient admission decisions must be based on medical necessity and the reasonable expectation that a patient will require hospital care spanning at least two midnights, as outlined in the Two-Midnight Rule. CMS further expects that the admitting practitioner has adequate knowledge of the patient’s condition to support this determination, and that this expectation is clearly documented in the medical record.

While ED physicians are clinically capable of initiating care, they often do not yet have the full diagnostic workup, longitudinal history, or specialty-specific insight that the attending physician can provide once the patient has been more comprehensively evaluated. Initiating an inpatient order prematurely may therefore result in a status that is not fully supported by medical necessity at the time it is written.

Compounding this issue is the misalignment of internal performance metrics and regulatory intent. CMS-defined ED throughput measures focus on the entire patient journey, including the median time from ED arrival to ED departure for admitted patients, as well as the interval from the decision to admit to the patient’s physical departure from the ED.

These measures are designed to evaluate access, timeliness, and system flow; however, in practice, they may unintentionally incentivize premature admission orders to demonstrate efficiency, rather than ensuring accurate clinical decision-making. While ED throughput metrics may appear improved, patients may remain boarded in the ED for extended periods, hours or even days, waiting to be officially hospitalized, highlighting a disconnect between metric performance and actual care delivery.

One of the most prevalent consequences of ED-initiated admission orders is increased status conversions. By starting the process with the ED physician to capture the timing of the order, the clinical review for appropriate admission status becomes secondary, occurring after the fact by utilization management (UM), physician advisors, and the attending physician. This sequencing increases the likelihood of status conversions, as well as Condition Code 44s (CC44s).

While CC44 is an appropriate compliance mechanism, overutilization is often a signal of systemic issues in admission practices. Each occurrence requires additional physician involvement, administrative effort, and documentation, further contributing to operational burden.

These frequent status changes create confusion for bed placement teams, disrupt workflow, and ultimately reflect inefficiencies in front-end decision-making, rather than true improvements in throughput.

Another unintended consequence is the premature communication of patient status to payers. Many hospitals initiate authorization requests or send notices of admission shortly after an inpatient order is placed. When that order is entered by the ED physician and later changed following UM or physician advisor review, payers receive inconsistent information regarding the patient’s status.

This can result in rework, delays in authorization, and increased denial risk, particularly in an environment where payers are enforcing shorter timelines for clinical submission and concurrent review.

In conclusion, while ED physician-initiated admission orders may be intended to improve throughput, they often introduce unintended consequences that negatively impact compliance, revenue cycle performance, and care coordination. CMS guidance is clear that inpatient admissions must be supported by medical necessity and appropriate physician judgment.

Physician advisors and UM teams should consider the return on investment of moving further upstream to influence ED admission decision processes, ensuring that status determinations are accurate, timely, and supported from the outset.

Sepsis A Proposed Addition to the Hospital Readmission Program

By Tiffany Ferguson, LMSW, CMAC, ACM

The Centers for Medicare & Medicaid Services (CMS) continues to expand its focus on hospital readmissions in the FY 2027 IPPS (Inpatient Prospective Payment System) Proposed Rule, introducing sepsis as a new condition within the Hospital Readmissions Reduction Program (HRRP). This proposed addition demonstrates CMS’s continued emphasis on outcome metrics, by including one of the most common diagnoses for hospital readmission. According to sources listed in the ruling, such as AHRQ Report to Congress (September 2024) and Pub-Med meta-analysis by Shanker-Hari et. al (January 2020), sepsis remains one of the most frequent principal diagnoses among adult inpatients, with more than 2.2 million hospitalizations annually and an estimated 30-day readmission rate approaching 21 percent. These rates place sepsis alongside other HRRP conditions such as heart failure and chronic obstructive pulmonary disease (COPD), reinforcing CMS’s rationale to address both high-volume and high-cost conditions with targeted oversight.

If finalized, this measure would be implemented beginning with the 2029 HRRP program fiscal year (FY), using a performance period from July 1, 2025 through June 30, 2027. Notably, the measure will include both traditional Medicare and Medicare Advantage (MA) beneficiaries, continuing CMS’s effort to standardize quality measurement for all Medicare beneficiaries. As CMS advances its Meaningful Measures 2.0 Seamless Care Coordination, with a focus on patients receiving timely and coordinated care, there is also an emphasis on reducing the risk of errors and improving overall patient outcomes. The inclusion of sepsis in HRRP would further emphasize the importance of longitudinal care models that extend beyond the inpatient setting.

The addition of sepsis to HRRP also introduces several immediate implications for case management, utilization review, and physician advisor teams. Sepsis must now be approached not only as an acute clinical event, but as a condition requiring ongoing management across the care continuum. Discharge planning expectations will shift further upstream, requiring earlier identification of high-risk patients and more proactive coordination of post-acute services. Hospitals will need to ensure that follow-up care is not only arranged, but accessible and timely, particularly within the first week after discharge, where evidence suggests that meaningful reductions in readmissions can occur.

Additionally, CMS’s own analysis demonstrates variation in performance across hospital types, with higher readmission rates observed in teaching hospitals, safety-net hospitals, and those with higher Disproportionate Share Hospital (DSH) percentages. This variation highlights the influence of social complexity, resource availability, and care coordination infrastructure on outcomes. As a result, organizations will need to evaluate not only their clinical pathways, but also their ability to address the broader factors that influence recovery following sepsis.

A critical component of this proposed rule, which carries significant implications for clinical documentation integrity (CDI) and coding teams, is the methodology for risk adjustment. CMS proposes adjusting for a broad set of patient-level factors, including age, comorbid conditions, frailty indicators, transplant status, and clinical markers of severe sepsis, as well as the aggressiveness of infectious organisms. These variables are derived not only from the index hospitalization, but from claims spanning up to 12 months prior, including inpatient, outpatient, and physician encounters, as well as diagnoses documented as present-on-admission. CMS also called out that they will be excluding complications that arise during hospitalization from risk adjustment, as CMS considers these to reflect the quality of care delivered, rather than the patient’s underlying risk profile. This distinction places increased scrutiny on hospital performance and reinforces the importance of accurate, complete, and timely documentation at the point of admission.

The accuracy of risk adjustment, and ultimately the hospital’s performance under HRRP, will depend heavily on the capture of comorbidities, severity indicators, and present-on-admission conditions. Incomplete documentation or missed secondary diagnoses in the proposed ruling would not only impact case mix index or reimbursement; they may directly influence readmission performance metrics and associated financial penalties. This is particularly relevant given the use of hierarchical logistic regression modeling, which compares a hospital’s predicted readmissions based on its case mix to the expected readmissions at a national average. Hospitals with higher-than-expected readmissions will generate an excess readmission ratio greater than one, resulting in potential payment reductions.

Operationally, this means that CDI programs must expand beyond DRG optimization, if they have not already done so, as CMS doubles down with a focus on quality. This will require accurate representation of severity, organ dysfunction, and underlying risk factors. Coding teams must also ensure alignment with clinical definitions and documentation, particularly as sepsis continues to be an area of scrutiny across payers.

In conclusion, the proposed change reinforces the need for hospitals to shift from reactive, inpatient-focused workflows to proactive, coordinated care models that integrate clinical decision-making, quality documentation, discharge planning, and post-discharge follow-up. Organizations that continue to rely on fragmented, inpatient-focused processes will likely struggle to meet performance expectations, while those that invest in comprehensive, data-driven care coordination strategies will be better-positioned to succeed under CMS’s current objectives.

Denied in Real Time: Rethinking Patient Advocacy in Medicare Advantage

By Tiffany Ferguson, LMSW, CMAC, ACM

As we move deeper into analysis of the upcoming proposed rule changes by the Centers for Medicare & Medicaid Services (CMS), many hospitals are still grappling with the unintended consequences of what initially appeared to be strengthened patient protections under CMS-4208-F (MA 2026 Final Rule). While CMS reinforced transparency, standardized notice delivery, and beneficiary appeal rights, the downstream response from Medicare Advantage (MA) plans has shifted utilization management pressures back onto providers, tightening clinical, operational, and financial controls.

A prominent example is the policy implemented by Aetna, which reflects a significant departure from traditional inpatient denial workflows. More broadly, MA plans have introduced several notable operational changes, including the elimination or restructuring of denial-triggered peer-to-peer (P2P) pathways, compressed clinical submission timelines, and a shift toward modified payment methodologies on typical Diagnosis-Related Group (DRG) contracts.  

It remains unclear whether this shift is primarily a response to provider behavior following CMS-4201-F implementation, wherein hospitals increasingly escalated concurrent denials to P2P when the Two-Midnight Rule was perceived to be met. Or it may have been driven by CMS-4208-F’s expectations regarding real-time beneficiary notification through the Integrated Denial Notice (IDN). Most likely, it is a combination of both forces that has prompted MA plans to recalculate their strategies.

The IDN is designed to consolidate multiple denial communications into a single, standardized notice that clearly outlines both coverage and payment determinations, along with associated appeal rights. CMS requires MA plans to issue the IDN whenever an adverse organization determination occurs, including during concurrent review. The intent is to reduce confusion and ensure that beneficiaries receive consistent, actionable information when services are denied, reduced, or terminated.

This requirement has significant implications for hospitals. When an MA plan denies an inpatient level of care while the patient is still hospitalized, that determination must be treated as an adverse decision, with full notice and appeal rights. CMS guidance reinforces that patients must be informed in a timely and meaningful way, even while still receiving care, so they have the opportunity to act on those rights during the hospitalization.

However, this creates a practical challenge. If the patient is already admitted and receiving care, how is the IDN effectively delivered in real time? MA plans are unlikely to hand-deliver notices, and reliance on mailed communication introduces a high likelihood that the patient will be discharged before receiving notification. This gap creates a disconnect between regulatory intent and operational reality.

This is where hospitals may need to consider a more proactive role.

While the responsibility for issuing the IDN remains with the payer, hospitals are often the only party physically present with the patient at the time of the determination. As such, it may be reasonable and operationally necessary for hospitals to notify the patient that their MA plan has issued a denial of an inpatient level of care – and to reinforce their right to appeal.

At that point, an important question emerges: should hospitals also provide the Appointment of Representative (AOR) form (CMS-1696)?

Providing the AOR form at the time of a concurrent denial would allow the patient to designate a representative, such as a family member (or, where appropriate, hospital staff) to assist with the appeals process. While CMS does not require hospitals to distribute the AOR in this context, integrating it into the denial workflow represents a practical strategy to support patient transparency and access to the member appeals process.

Embedding the AOR alongside awareness of the IDN could offer several advantages. It ensures that patients and families are not only informed of the denial, but equipped to act. It creates a pathway to pursue appeals through the member process, which necessitates continued accessibility, given the increasingly constrained provider appeal channels. Most importantly, it aligns with CMS’s broader intent: that beneficiaries are not only notified of their rights, but meaningfully supported in exercising them.

Admittedly, this approach introduces additional operational considerations. Incorporating another form into case management and utilization review workflows requires training, standardization, and clear role delineation. However, as payer pressures intensify through reduced reimbursement, limited concurrent resolution opportunities, and evolving denial methodologies, engaging patients and families as active participants in the appeal process may represent a necessary shift.

CMS Proposes Removal of Homelessness as a CC

By Tiffany Ferguson, LMSW, CMAC, ACM

In the FY 2027 Inpatient Prospective Payment System (IPPS) Proposed Rule, the Centers for Medicare and Medicaid Services (CMS) has introduced a notable and potentially controversial change: the removal of homelessness and related housing instability ICD-10-CM Z codes (Z59 series) from the Complication or Comorbidity (CC) list.

If finalized, this policy would reclassify these codes from CC back to non-CCs, effectively eliminating their impact on MS-DRG assignment and reimbursement. This proposal is described in the proposed ruling as a broader recalibration by CMS, one that re-centers the inpatient prospective payment system (IPPS) on clinical severity rather than social complexity.

Historically, CMS has used CC and MCC designations to capture the relative resource utilization associated with secondary diagnoses. In reviewing the Z59 codes, CMS acknowledged that internal data analysis showed values approaching a CC-level resource impact.

However, the agency ultimately concluded that these codes represent social circumstances rather than medical conditions and therefore should not drive severity classification.

CMS described a parallel in the ruling to its FY 2008 IPPS reforms, when chronic conditions without acute exacerbation were removed from the CC list.

The underlying rationale used was that CC/MCC designation should reflect the expected resource consumption required to treat an underlying medical condition, not the presence of social risk factors alone.

Operational and Financial Implications

For hospitals, this change is far from symbolic. The Z59 codes, particularly homelessness, have increasingly been leveraged to capture the complexity of discharge planning, prolonged length of stay, and increased care coordination efforts to manage patients’ medical conditions. The removal as CCs will have several downstream effects such as a decrease in reimbursement, an impact to CMI, and a loss of coded recognition for social complexity.

While CMS acknowledges that patients experiencing homelessness require increased resources, it stops short of allowing that complexity to influence payment. Instead, the agency emphasizes that resource use should be captured through documentation of acute medical conditions.

Frankly, this creates a practical tension. Hospitals are still expected to manage the very real throughput, discharge, and care coordination barriers associated with homelessness and housing insecurity, but now this will be without the corresponding reimbursement recognition.

Not unlike the prior trends we have seen with this current administration, CMS is continuing to draw a clear boundary between medical care and social determinants of health.  

The comment period is open now through June 9, 2026.

Giving the Advanced Beneficiary Notice (ABN)

By Tiffany Ferguson, LMSW, CMAC, ACM

The Centers for Medicare & Medicaid Services (CMS) has released updated instructions for the Advance Beneficiary Notice of Noncoverage (ABN) Form CMS-R-131, extending the form’s expiration date to March 31, 2029 while making only minor clarifications to the accompanying instructions.

While the update does not introduce significant policy changes, it serves as an important reminder about the role the ABN plays when Medicare coverage is uncertain.

The ABN is issued to Medicare fee-for-service beneficiaries when a provider believes that Medicare may deny payment for a particular service. The notice must be presented before the service is provided, allowing the beneficiary to make an informed decision about whether to proceed with care and accept potential financial responsibility if Medicare does not cover the service.

The newly released instructions primarily focus on clarifying existing guidance, rather than introducing new requirements. CMS has reinforced several longstanding expectations, including:

• The ABN must be issued before the item or service is provided;

• The notice must clearly identify the specific service or service category that may not be covered;

• Providers must include a reasonable estimate of the cost the patient could be responsible for; and

• The beneficiary must be given adequate time to review the notice and choose an option.

The updated instructions also improve formatting and readability, making it easier for staff to understand how each section of the form should be completed.

One area where the ABN may become particularly relevant is when hospitals are dealing with patients who have been cleared medically from the emergency room, but may not have an ideal discharge plan due to social reasons. This can involve tugging on provider heartstrings and internal alarms, along with a misguided sense that bedding the patient will solve a housing or caretaker issue. Examples may include patients who lack a safe discharge environment, need temporary supervision, or require placement assistance, but do not meet Medicare’s inpatient or observation medical necessity criteria.

In situations where a traditional Medicare beneficiary is being bedded for social reasons, such as an outpatient in a bed, an ABN may be used to notify the patient that Medicare is expected to deny payment – and that they may be responsible for the cost if they choose to proceed.

For case managers and utilization review teams, these situations often arise during discussions about discharge barriers such as homelessness, caregiver absence, or placement delays, either after treatment, in the ED, or after observation services have been completed. While the patient’s social needs may be significant, Medicare coverage decisions still remain tied to medical necessity requirements.

Issuing an ABN in these circumstances helps ensure transparency with the beneficiary while protecting the hospital from financial liability, when services are known to be outside Medicare coverage parameters.

Although the updated ABN instructions involve only minor revisions, they highlight the importance of maintaining strong frontline workflows. Registration staff, case managers, utilization review nurses, and financial counselors should all understand when ABNs are appropriate and how they must be completed.

According to CMS guidelines, common audit findings for noncompliance continue to include:

• Issuing ABNs after services have already begun;

• Using vague or blanket descriptions of services; and

• Failing to include a reasonable cost estimate.

Ensuring proper ABN use supports clear communication with patients about coverage limitations and allows them to make informed decisions about their care.

Connecting Medical Necessity and Clinical Documentation

By Tiffany Ferguson, LMSW, CMAC, ACM

Hospitals often approach clinical documentation integrity (CDI) and utilization review (UR) as separate operational functions. CDI teams focus on ensuring that documentation accurately reflects patient acuity and supports coded diagnoses, while UR teams evaluate medical necessity and appropriate admission status.

Both groups spend a significant amount of time demonstrating their return on investment to their healthcare organizations, often through competing metrics such as increasing case mix index (CMI), decreasing observation rates, or improving physician-to-physician (P2P) overturn rates.

While UR, CDI, and physician advisors all face an uphill battle to define their value, these labels often place them in a reactive framework that unintentionally silos their work. The measure that should align all three functions is much simpler: ensuring that hospitals are appropriately reimbursed for services rendered and care delivered.

So, how do organizations move toward that vision?

While there may not be a single solution, there are opportunities to leverage the data generated by both CDI and UR teams to create a more unified operational story. One of the most valuable opportunities lies in analyzing cases where indicators from both CDI and UR appear simultaneously.

For example, hospitals can review cases with both a CDI query and a UR screening when clinical guideline criteria were not met. These cases often signal documentation gaps that affect both admission justification and diagnosis support. While the patient may have been clinically appropriate for hospitalization, the documentation’s clinical picture may not have been strong enough to clearly support inpatient status, weakening the hospital’s ability to defend the case during payor review. Regardless of the outcome, both teams often expend additional effort through queries, secondary reviews, or appeals.

Similarly, cases that include both payor denials and unresolved CDI queries can provide valuable insight into documentation patterns that increase denial risk. Reviewing these cases collaboratively allows organizations to determine whether the issue stemmed from unclear physician documentation, insufficient clinical evidence in the record, or misalignment between the documented diagnosis and the patient’s clinical presentation.

P2P discussions also represent an underutilized learning opportunity. When cases requiring P2P review also include CDI queries related to diagnosis clarification, it often signals that both medical necessity and documentation clarity were challenged by the payor. Capturing these cases and analyzing trends across CDI and UR teams can help identify recurring documentation gaps that can be closed by targeted provider education.

Another area worth examining is short length-of-stay cases that receive clinical validation denials. When payers question whether a coded diagnosis is supported by the clinical record, the broader issue may also include whether the inpatient admission was clearly justified. Reviewing these cases through a joint CDI and UR lens can help identify opportunities for shared learning and process improvement.

The real value of this collaboration lies in the feedback loop created for physicians. Rather than CDI and UR teams delivering separate or fragmented messaging, hospitals can develop unified dashboards that highlight correlational trends between medical necessity determinations, CDI queries, denials, and appeals. This approach allows organizations to provide clearer, more consistent provider education that addresses both medical necessity and documentation clarity.

Practical strategies may include physician tip sheets, focused case reviews, or brief educational sessions highlighting denial trends and documentation best practices. When providers understand how documentation supports both accurate diagnosis capture and medical necessity justification, the medical record becomes a stronger and more defensible representation of each patient’s clinical story.

How AI Is Reshaping Case Management

By Marie Stinebuck, MBA, MSN, ACM

One of the greatest challenges facing case management today is not a lack of clinical expertise; it is a lack of time. Case managers are navigating increasingly complex patients, payer requirements, post-acute placement barriers, and social determinants of health (SDoH), all while being expected to move patients safely and efficiently through the continuum of care.

At the same time, hospitals are operating under tighter margins and heightened regulatory scrutiny. In this environment, one of the most underutilized tools available to case management departments is artificial intelligence (AI) and advanced analytics. When implemented thoughtfully, AI does not replace the heart of case management: advocacy, clinical judgment, and interdisciplinary coordination. What changes is when we intervene, where we focus our attention, and how we scale our impact.

Historically, case management workflows have relied on retrospective metrics such as monthly length-of-stay (LOS) reports or post-discharge readmission data. While valuable, these measures tell us what has already happened. AI-enabled tools shift the focus to what is likely to happen. Daily LOS risk alerts, real-time readmission probability scores, and predicted patient complexity allow teams to identify risk earlier in the hospitalization.

This shift moves case management from reactive problem-solving to proactive risk mitigation. Instead of discovering discharge barriers on day four or five, predictive models can flag potential delays within the first 24–48 hours. Whether the risk involves post-acute placement challenges, prior authorization requirements, transportation limitations, or limited caregiver support, early identification enables early intervention and thus prevents avoidable days.

Predictive risk stratification models can analyze large volumes of clinical, demographic, and utilization data to identify patients at higher risk for readmission, complications, or extended LOS. Rather than completing a full initial assessment on every patient at admission, technology can help screen low-risk individuals and prioritize early interventions for high-risk patients.  

This approach is especially relevant when considering that a small percentage of Medicare beneficiaries account for a disproportionate share of healthcare spending. Aligning case management resources with this high-risk population improves efficiency while supporting compliance with Centers for Medicare & Medicaid Services (CMS) discharge planning requirements under the Conditions of Participation, 42 CFR §482.43.

Rule-based analytics also support case management in the emergency department. Advanced tracking tools can identify high utilizers or “boomerang” patients who return shortly after discharge. Early visibility allows for timely utilization review, accurate admission status decisions, and discharge planning conversations that begin at the point of entry, rather than at the point of exit.

Looking ahead, the importance of predictive analytics will only increase. As Medicare Advantage (MA) populations become integrated into broader quality and readmission accountability structures, hospitals will face greater financial exposure related to avoidable utilization. Proactively identifying risk and closing care gaps in real time will be critical to both quality performance and fiscal stewardship.

Ultimately, success is not defined by simply adopting new technology. It is defined by transforming workflows to support earlier intervention, reducing administrative burden, streamlining authorization processes, and ensuring safe, supported transitions across the continuum of care.

When paired with clinical expertise and ethical advocacy, AI can enable case managers to operate at the top of licensure and at the pace modern healthcare demands.

Driving Reliable IM Compliance Through Standardized Processes

By Marie Stinebuck, MBA, MSN, ACM

The delivery of the Important Message from Medicare (IM) is a longstanding regulatory requirement intended to inform Medicare beneficiaries of their inpatient status and their right to appeal a hospital discharge. While most case management and utilization review teams understand the basic timing requirements for delivery, confusion often arises around the operational details that follow issuance of the second IM, particularly when a patient elects to request an expedited discharge appeal through the Quality Improvement Organization (QIO).

IM delivery is a process ingrained into every case management program. In this article, we will address some of the most common areas of confusion related to IM delivery requirements and the process for delivering the IM letter. IM delivery does not require a professional license. This is a logistical task that should be performed by support roles such as the case management assistant. The RN and social worker roles should be reserved for assessing and developing the plan of care for the most complex patients requiring case management services.

National benchmarking indicates that hospitals achieve an average 80–85% delivery compliance rate for the second IM, which is generally considered an acceptable threshold for demonstrating a reliable and sustainable process for notifying Medicare beneficiaries of their discharge appeal rights. While organizations should always strive for continuous improvement, maintaining compliance within this national range reflects a standardized workflow that accounts for real-time discharge variability and patient availability.

If your organization is still struggling with a low compliance rate, consider creating achievable goals for your team and celebrating incremental improvements. For example, a 10% improvement over a six-month period with outlined process enhancements will steadily increase your compliance percentage. Accrediting organizations are looking for a consistent, compliant process that demonstrates continued improvement, not perfection.

Confusion still exists regarding whether the second IM requires a patient signature at the time of delivery. If the follow-up paper notice is a copy of the originally signed IM provided at admission, an additional signature is not required. However, if a blank or unsigned IM is issued as the follow-up copy, a signature must be obtained from the patient or their authorized representative. CMS encourages hospitals to document delivery through initials or staff verification within the patient record to demonstrate compliance with notification requirements. Delivery also requires documentation in the patient’s medical record.

Questions also arise regarding the timing of delivery on the day of discharge. CMS outlines in Section 200.3.4.2 of the Medicare Claims Processing Manual the requirement for delivery of the second IMM within two days of discharge. Guidelines allow delivery of the letter no sooner than two days before discharge and allow delivery of the follow-up IM on the day of discharge. However, this practice cannot occur routinely. When the IM is delivered on the day of discharge, the hospital must allow the patient to remain inpatient for at least four hours following delivery to provide adequate time to consider or initiate a QIO appeal request. Patients who agree with the discharge plan are not required to remain hospitalized during this period.

Hospitals are also prohibited from pre-scheduling delivery of follow-up IMs on certain days of the week, such as issuing all notices on Mondays, Wednesdays, and Fridays. This practice violates CMS Section 200.3.4.2 instructions requiring delivery no more than two calendar days prior to the anticipated date of discharge and may conflict with Conditions of Participation related to patient rights. If a patient receives a follow-up IM but remains hospitalized two days after delivery, an additional follow-up IM must be issued prior to the next proposed discharge date.

The IM letter outlines the patient’s ability to appeal their discharge if they feel they are being discharged too early or do not feel they have a safe discharge plan in place. A Medicare beneficiary must submit a timely request for QIO review of their discharge. When this occurs, the patient cannot be held financially responsible for any portion of their inpatient stay while the QIO is conducting its review. Financial liability may only shift to the patient after the QIO issues its determination regarding the appropriateness of discharge. The patient must be made aware that their discharge has been upheld and that they will be held financially responsible for their continued stay the following day beginning at noon. If the patient elects to remain in the hospital after the QIO denial, the hospital must notify the patient that Medicare coverage has ended and inform them of their potential financial responsibility, typically through issuance of a Hospital-Issued Notice of Noncoverage (HINN 12).

Patients do have the option to pursue a second appeal related to their discharge. Medicare coverage does not automatically continue during the second-level appeal, known as reconsideration through the Qualified Independent Contractor (QIC). Once the QIO upholds the hospital’s discharge decision in the first-level appeal, Medicare coverage for the inpatient stay ends as of the effective date determined by the QIO. The patient becomes financially responsible for the stay, as discussed above, beginning at noon the following day after their discharge appeal has been denied. Although the patient may choose to remain hospitalized while pursuing a second-level appeal, the hospital may begin holding the patient financially liable for inpatient services received after that effective date. This represents a key distinction from the first-level QIO appeal, during which Medicare continues to cover the inpatient stay and the patient cannot be held financially responsible while the review is in progress.

Understanding the regulatory requirements surrounding IM delivery is essential to ensure both patient rights and organizational compliance are maintained. While the process itself is operational in nature, failure to adhere to timing, documentation, and appeal notification requirements can result in compliance risk and financial liability for the organization. Establishing standardized workflows, delegating delivery responsibilities to appropriate support roles, and maintaining consistent documentation practices will support sustainable compliance with CMS requirements while allowing licensed case management professionals to focus on complex discharge planning and care coordination activities.

Reference: Medicare Claims Processing Manual

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CMS Updates Medicare Outpatient Observation Notice (MOON)

By Juliet Ugarte Hopkins, MD, ACPA-C

On Friday, February 20, 2026, the Centers for Medicare & Medicaid Services (CMS) officially reauthorized the Medicare Outpatient Observation Notice (MOON). The MOON informs Medicare and Medicare Advantage beneficiaries that they are receiving Observation services as Outpatients rather than being hospitalized as Inpatients. Hospital compliance and case management teams along with physician advisors must be aware of this recent update to the notice to ensure seamless implementation and avoid regulatory penalties.

CMS updated the Office of Management and Budget (OMB) expiration date to February 28, 2029.  Fortunately, when CMS updates the OMB expiration date on a required notice, hospitals are not expected to pivot overnight. They can continue using existing stock of the expired MOON for 60 days until April 20, 2026, at which point the new form should be used. Hospitals still utilizing the old version of the MOON after this deadline risk compliance violations.

The purpose of the MOON remains unchanged; however, it does look a bit different from the last version. As before, it requires some reasoning about why the patient is not in Inpatient status. There is space in a white box on the first page of the form to include this information and hospitals can even add standard, printed verbiage to which staff can write in more specifics pertaining to the patient. Given many hospitals may rely on non-clinical staff to deliver this notice, the most simplified options to include may be the best ones, such as:

1. Your physician has determined a period of observation services will be needed before they can determine if your medical condition [EHR-inserted diagnosis code] requires further treatment as a hospital inpatient, based on Medicare policy, or if your medical condition can be treated as an outpatient followed by discharge from the hospital.

2. Upon further review of your hospital admission, your physician and the hospital have determined that your medical condition [EHR-inserted diagnosis code] does not meet Medicare inpatient criteria. As a result, your physician has ordered the discontinuation of inpatient services and initiation of outpatient observation services.

While transitioning to the newly dated form, hospital staff must ensure they continue to meet CMS's procedural requirements for the MOON. Namely, delivery is required for all patients covered by Medicare as primary or secondary coverage in addition to patients covered by Medicare Advantage (Medicare Part C) plans; it is required for all patients who have received at least 24 hours of Observation services while in Outpatient status (but can compliantly be given to patients who have received less than 24 hours); it must be delivered to the patient no later than 36 hours after Observation services begin; there must be a clearly documented clinical reason explaining why the patient is receiving Outpatient Observation services rather than being admitted as an Inpatient; providing the physical document is not enough – the written notice must be accompanied by an oral explanation to ensure the beneficiary fully understands the financial and clinical implications of their status as Outpatient.

To facilitate the transition to the updated MOON, hospitals should reference the following official CMS resources:

• FFS & MA MOON: This is the primary portal for the most up-to-date form downloads. Hospitals can access the latest English and Spanish versions of the MOON, available in both standard and large-print ZIP files.

• Beneficiary Noticed Initiative (BNI): Compliance officers should use this page to monitor the "What's New" section for any upcoming policy shifts regarding the MOON or other critical discharge notices.

• CMS Manual System Pub 100-004 Medicare Claims Processing Transmittal 3695 Change Request 9935: Though this reference is on the older side, it remains the definitive primary reference for form completion requirements, delivery protocols, and documentation standards.

Hospital compliance and IT departments should update their EHR systems as soon as possible with the new version of the MOON and prepare updated workflows to integrate the new MOON before the 60-day grace period expires on April 20, 2026.

Can Any Physician Enter an Inpatient Order?

By Juliet Ugarte Hopkins, MD, ACPA-C

Let’s talk about the term “attending physician.”  The simplest definition is the physician primarily responsible for a hospitalized patient’s care. 

While there may be many physicians and other practitioners involved in the hospital care of a single patient, there is only one designated “attending physician.”  This individual generally owns the responsibility of creating the initial documentation about the patient’s hospitalization – the History and Physical, or H&P – in addition to the final Discharge Summary. 

Many times, they also are considered the ringleaders of the patient’s care – deciding when specialists need to be involved and if specific investigations, testing, or imaging must take place during the hospitalization or if they can wait until after discharge in the outpatient setting. 

While there’s one attending physician listed on a patient’s record, clearly, that physician isn’t working 24 hours a day, seven days a week. They have at least one peer designated as a covering physician while they are not available. This is almost always a member of their practice team or medical group. 

Generally, this individual is “covering” multiple patients of more than one attending physician during overnight or other hours when the attendings are not on service. Their work shift in the hospital starts with a report of some sort whereby the attending physician briefly describes the patients’ reasons for hospitalization, gives a brief update of their current condition, lists specific concerns which might materialize over the coverage timeframe, and so on. 

Commonly referred to as a “sign-out,” this report from the attending physician to the covering physician serves to give the covering physician a basic introduction to the patients they may be called about by nurses or others on the medical team during the coverage period. 

A call about a patient generally requires the covering physician to at least review the most recent documentation if not also physically examining and speaking with the patient to make appropriate decisions about how to address new situations or assess changes in condition. On the flip side, the covering physician might not hear anything about most of the patients signed out to them from the attending physicians and therefore, won’t even review the charts. Despite this, they are considered the point-person for the medical team and the physician to call in place of the attending physician. But does this include questions about patient status?

Per the Code of Federal Regulations, Title 42, Chapter IV, Subchapter B, Part 412, Subpart A, Section 412.3, “…an inpatient admission is generally appropriate for payment under Medicare Part A when the admitting physician expects the patient to require hospital care that crosses two midnights…The expectation of the physician should be based on such complex medical factors as patient history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event.” Similarly, per the Medicare Benefit Policy Manual, Chapter 1, Section 10.2, “The order must be furnished by a physician or other practitioner (“ordering practitioner”) who is…knowledgeable about the patient’s hospital course, medical plan of care, and current condition at the time of admission.”

Granted, the Medicare Benefit Policy Manual also states, “CMS considers only the following practitioners to have sufficient knowledge about the beneficiary’s hospital course, medical plan of care, and current condition to serve as the ordering practitioner: the admitting physician of record (“attending”) or a physician on call for him or her, primary or covering hospitalists caring for the patient in the hospital, the beneficiary’s primary care practitioner or a physician on call for the primary care practitioner, a surgeon responsible for a major surgical procedure on the beneficiary or a surgeon on call for him or her, emergency or clinic practitioners caring for the beneficiary at the point of inpatient admission, and other practitioners qualified to admit inpatients and actively treating the beneficiary at the point of the inpatient admission decision.” However, it’s important to note this extensive list of physicians and practitioners involves those who could “have sufficient knowledge about the beneficiary’s hospital course, medical plan of care, and current condition” and does not indicate all these individuals fit the bill as a provider who can compliantly assign the patient to Inpatient status.

Let’s get back to the covering physician who is working in the hospital overnight. They have a baseline, relatively minimal understanding of the patients in their charge from the attending physicians who were working during the day. If they are called from someone on the medical team with a question about a patient, that covering physician will undoubtedly perform at least a cursory review of the day’s documentation from the attending and consultant physicians. They might also review the latest radiological reports and lab values before making any decisions about next steps in the assessment of the patient or changes to the plan of care. In this instance, if the covering physician completes their assessment of the patient and documents how they are addressing the question posed to them, it could be considered appropriate for them to address the issue of patient status. Their more thorough review of the patient’s hospital course, current condition, and plan of care would meet the description outlined in the Code of Federal Regulations and the Medicare Benefit Policy Manual.

Now, let’s think about the covering physician’s knowledge of and involvement with the patient before anyone on the care team asks them to assess or intervene. Remember, the sign-out they received from the attending physician was likely minimal, with only the most high-level points shared in the event an emergency developed. Does the covering physician have the breadth of knowledge about the patient’s hospital course, current condition, and plan of care to qualify them for placement of an Inpatient status order? 

If the patient is about to cross a second midnight or has already crossed a second midnight and clearly, they’re still receiving medically necessary hospital services, the answer seems to be yes. The Centers for Medicare and Medicaid Services already indicated in the Fiscal Year 2014 Inpatient Prospective Payment System Final Rule, “the decision to admit becomes easier as the time approaches the second midnight, and beneficiaries in medically necessary hospitalizations should not pass a second midnight prior to the admission order being written.” Therefore, even if a covering physician isn’t intimately knowledgeable about a patient’s hospitalization or plan of care, they would likely be able to identify the patient continues to require hospital services and appropriately enter an Inpatient order if asked to do so. 

In contrast, if a covering physician is asked about a patient who has passed zero or only one midnight, the patient details allowing valid determination of Inpatient assignment likely will not be known. As such, a utilization manager contacting a covering physician in the evening hours for an Inpatient order in this scenario is unlikely to be a compliant practice. Similarly, a physician working for a medical group who scans all of their practice’s hospitalized patients in the electronic health record and enters Inpatient orders for each patient who is about to or has passed a second midnight would not be compliant. 

Keep in mind, neither of these scenarios are specifically called out in the formal Medicare rules or regulations. It’s advised you take time to consider this situation and talk it through with your own hospital utilization management and compliance teams to come to a final decision on practice within your institution.

CMS Rural Health Transformation Program

By Tiffany Ferguson, LMSW, CMAC, ACM

The Centers for Medicare & Medicaid Services (CMS) has launched the Rural Health Transformation (RHT) Program, a $50 billion, five-year federal initiative to strengthen healthcare delivery in rural America and expand access to quality care. A centerpiece of this effort is helping rural systems weather structural financial challenges and promote innovative care models, workforce development, and technology adoption.

Yet, as policymakers and rural health stakeholders grapple with this opportunity, much of the conversation has centered on how the RHT Program fits into a broader policy environment marked by significant cuts to federal Medicaid funding. Understanding this relationship is critical to assessing the program’s real impact on rural health systems.

It cannot be discounted that the RHT Program, authorized under Public Law 119-21, is a significant contribution to rural America, directing up to $10 billion per year from the 2026 through 2030 fiscal years (FYs) to help states reimagine and transform rural health delivery systems. The goals include expanding preventive care, stabilizing providers, building workforce capacity, and deploying innovative models of care. Each state must submit a detailed transformation plan that demonstrates how it will use funds in alignment with program goals. CMS has also provided extensive guidance and FAQs to clarify eligibility, application requirements, allowable uses, reporting, and partnership approaches.

However, while the federal government was enacting the RHT Program, Congress passed significant reductions in Medicaid funding, primarily through broader budget and reconciliation legislation. Estimates suggest that Medicaid could be cut by roughly $911 billion to more than $1 trillion over 10 years, according to KFF, with rural areas shouldering a disproportionate share of that burden. In rural counties, where Medicare and Medicaid are the primary payors for hospitals and clinics, these cuts could translate into millions of people losing coverage and facilities facing revenue shortfalls.

So, the question remains, can the Rural Health Transformation Program offset Medicaid cuts?

When Congress created the RHT Program as part of broader health policy reforms, lawmakers included the $50 billion fund in part to respond to concerns about Medicaid cuts and rural hospital closures. CMS’s own public statements have framed the program as addressing rural healthcare challenges in a period of federal spending change. However, the RHT funding is temporary (five years), while Medicaid cuts are longer-term. This timing mismatch means the RHT Program isn’t a direct financial replacement for Medicaid funding. Several analyses, including research from the KFF and other health policy experts, indicate that the total RHT Program funding represents only a fraction of projected Medicaid losses in rural areas.

Unlike Medicaid reimbursements, which directly support care provision and provider revenue, the RHT Program is intended to transform care delivery and build long-term sustainability. That means spending on workforce development, digital infrastructure, and preventive initiatives areas that can strengthen systems, but do not directly replace revenue lost through Medicaid reimbursement cuts.

Experts caution that while the RHT Program can help rural systems adapt and innovate, it isn’t structured to be a direct financial backstop against Medicaid reductions.