Clinical administrative tasks, encompassing clinical documentation integrity (CDI), utilization management (UM), prior authorizations, and the processes for clinical denials and appeals, are a significant expense, comprising 15-30% of healthcare spending in the U.S. These services can impact patient care quality, revenue streams, and financial outcomes, and addressing these inefficiencies presents an opportunity to reclaim as much as $265 billion annually.
The challenge in enhancing these services often stems from a combination of factors, including resource shortages, reliance on manual processes due to outdated technology, and increasingly complex authorization and documentation requirements resulting in a higher volume of denied claims. Discrepancies between clinical operations and revenue cycle management (RCM) further exacerbate these issues, creating communication silos that drive up costs and decrease productivity among clinical and health information management (HIM) teams.
Inadequate clinical administration not only diverts resources away from focusing on patient care but also causes delays and losses in reimbursement, hinders the adoption of innovations and new technologies, and leads to provider burnout, patient frustration, and financial strain. To overcome these barriers, a unified effort among HIM, revenue cycle, and clinical care leadership is essential, promoting better communication and a collaborative approach that aligns with modern patient-centered care and reimbursement models.
Addressing Existing Challenges of Clinical Administrative Burdens
- Clinical Documentation Integrity (CDI): Effective CDI ensures that medical documentation accurately reflects the care provided, supports correct coding, and prevents financial penalties. Hospitals with strong CDI initiatives have experienced improvements in quality and financial outcomes. Nevertheless, the success of these programs is often hindered by professional shortages and the complexity of medical documentation. However, challenges, including a shortage of experienced professionals and the complexity of documentation, can hinder the success of CDI programs. Inadequate or inaccurate documentation can lead to improper coding, claim denials, and, subsequently, financial and compliance risks.
- Utilization Management (UM): UM aims to guarantee care appropriateness, quality, and cost-effectiveness through processes like medical necessity review and care coordination. Although crucial, UM faces challenges like outdated processes and staffing shortages, which can lead to regulatory non-compliance and negatively impact patient care and satisfaction. Effective UM requires a balanced approach, integrating comprehensive data and coordination across departments to improve compliance, reduce denials, and ensure quality patient care.
- Clinical Prior Authorizations: Although intended to ensure high-quality, cost-effective care, prior authorizations often result in significant administrative burdens, including substantial costs and delays in treatment. The American Medical Association (AMA) reports that physician practices complete 43 prior authorizations per physician per week on average, with physicians and their staff spending an average of 12 hours weekly on the process. The lack of evidence-based criteria in authorization decisions further complicates matters, calling for reforms to streamline these processes to reduce administrative burdens to increase focus on patient-centered care.<
- Denied Claims: With 89% of health systems reporting an increase in denied claims, this issue represents a growing challenge. Denials not only impose financial burdens but also disrupt patient care continuity. Given that approximately 90 percent of denied claims are preventable, proactive measures are needed to address problems before denials occur and to reduce the substantial administrative time—averaging 51 minutes—required to appeal each claim.
- Peer-to-Peer Reviews: Peer-to-peer reviews involve a direct conversation between the attending physician and a representative from the insurance company to discuss and align the plan of care with reimbursement criteria. Challenges persist, particularly when the reviewing physician lacks the specialty-specific expertise needed to review and understand medical evidence and guidelines.
These challenges underscore the need for more effective management strategies in clinical administration to improve financial outcomes and patient care continuity. Collaborative efforts, improved technology adoption, and policy reforms can bridge the gap between clinical care and administrative efficiency. Download our whitepaper to learn more and watch for our next article in this series for best practices to deliver quality patient care while ensuring financial stability.
