Phoenix Weekly Brief: CM & UM Insights

Despite having two full years to modernize, the newly released PEPPER is 99% identical to prior versions.

Sometimes referred to as “conditions of payment,” these requirements must be met in order for federal health plans to pay a healthcare facility for their submitted claim.

As these codes lose their “inpatient-only” protection, hospitals can no longer rely on the procedure itself to justify status and inpatient-level reimbursement.

This expansion is key, as we continue to see access to care issues in ambulatory settings, particularly in rural communities and areas with limited access to behavioral health services.

The decision follows a significant volume of public comments that reflected a wide diversity of perspectives on the value, burden, and future direction of SDoH measurements.

Entities that had structured workflows around “SDoH risk assessments” should start to revise terminology, documentation templates, care-coordination services, and quality-improvement frameworks to align with “upstream driver(s)” language.

While medical teams focus on treatment, social workers ensure the care plan is realistic and respectful of how the patient lives.

The increased financial strain on these households amplifies the challenges faced by healthcare teams that already manage fragile social conditions.  

These common misconceptions and misguidance promise increased hospital margins and case mix index (CMI) but actually wreak havoc on utilization review efforts and lead to massive increases in MA denials. 

According to the AMA, there is an estimated 12–16 million people who are projected to lose coverage nationwide.

The discharge planning evaluation is designed to capture the clinical, functional, and social factors that influence a safe transition of care.

Ensuring the process is clear, consistent, and patient-centered helps protect both patients and providers while supporting accurate coding and revenue cycle integrity.

While automated systems are helpful, case managers shouldn’t rely exclusively on these tools.

The interpretive guidelines emphasize that hospitals must assess each patient’s likely need for healthcare, non-healthcare, and community-based services following discharge.

While the policy aims to streamline approvals and reduce outright denials, it raises substantial compliance questions under CMS regulations regarding medical necessity determinations, appeal rights, and contractual payment terms.

This early screening allows sufficient time to complete evaluations and develop discharge plans that truly support patient needs, goals, and preferences.

As discharge delays and struggles continue with social and custodial issues, hospitals must strike a balance between patient care, regulatory compliance, and financial stewardship.

CMS confirmed that beginning in FY 2027, the Hospital Readmissions Reduction Program (HRRP) will expand to include Medicare Advantage (MA) patients, not just traditional Medicare (FFS) beneficiaries.

The data captured through social risk screenings is not simply a regulatory checkbox; it remains essential for ensuring safe and effective care transitions.

In the review for FY 2024, CMS identified concerning trends, including improper billing and hospices not being fully operational at their registered addresses.

While case management was once primarily the domain of nurses, who perceived the job as a step up from the bedside, that changed during the COVID-19 pandemic.

This clearly states that hospitals may not default to CC44 or CCW2 to address lack of utilization review (UR) coverage, physician advisor coverage, or medical staff education about patient status assignment. Unfortunately, this continues to be a strategy for many hospitals challenged with staffing limitations.

WISeR is the first push to pair broad-scale, claims-based utilization analytics with Medicare Administrative Contractor (MAC)-directed pre-payment medical necessity review for professional and outpatient services.

This realignment allows QIOs to focus on broader quality improvement initiatives, while MACs, already responsible for various audit and compliance efforts through the existing Targeted Probe-and-Educate (TPE) program, will bring greater oversight to short-stay reviews.