UM & CDI Value Equation Quick Reference (O’Brien, SHM 2024) 🔗
Purpose: Align utilization management (UM) and clinical documentation integrity (CDI) to improve hospital value = quality / cost.
⚙️ Core Formula 🔗
Value = Quality / Cost
Improve documentation and utilization → reduce LOS gap → accurate payment & fair benchmarks.
🏥 Key Metrics 🔗
| Metric | Definition | Goal / Impact |
|---|---|---|
| ALOS | Actual average inpatient stay | ≤ GMLOS; optimize throughput |
| GMLOS | Geometric mean LOS per DRG | Benchmark for case complexity |
| CMI | Case Mix Index = Σ (RW × Volume) / Discharges | Higher CMI = higher expected LOS & payment |
| O/E Ratio | Observed vs Expected outcomes | <1 = efficient, >1 = prolonged LOS |
💊 Observation vs Inpatient 🔗
| Category | Payment | Criteria | Notes |
|---|---|---|---|
| Observation (APC 8011) | ~$2,610 | 8+ hrs, outpatient | Lower reimbursement; short stays |
| Inpatient (DRG) | ~$5,600–10,000 | ≥2 MN rule, medical necessity | Includes wage index, DSH, IDME adjustments |
Tip: Use DRG logic to justify inpatient status; avoid “observation drift.”
📈 Case Mix Impact 🔗
Example:
- Pneumonia DRG 195 → RW 0.63 (LOS 2.4d)
- MRSA PNA + RF (CC) DRG 178 → RW 0.99 (LOS 3.3d)
- Sepsis + AKI + Thrombocytopenia (MCC) DRG 871 → RW 1.98 (LOS 5.1d)
➡️ Accurate documentation = appropriate DRG = smaller ALOS/GMLOS gap.
🧾 CDI Essentials 🔗
Document clearly:
- All CC/MCCs (AKI, RF, malnutrition, coagulopathy)
- POA status
- Etiology + acuity (“acute on chronic,” “due to…”)
- Avoid ambiguity (“? sepsis”) → use definitive language
Consistency matters: H&P, progress note, discharge summary must align.
📊 Risk & Benchmarking 🔗
| Concept | Use | Effect |
|---|---|---|
| GMLOS Gap | Identifies excess days | Targets throughput issues |
| CMI | Captures severity | Raises expected LOS & pay |
| Risk Adjustment | Normalizes outcomes | Improves O/E, mortality, cost metrics |
👩⚕️ Hospitalist Actions 🔗
- Track your metrics (LOS, CMI, GMLOS).
- Collaborate with CDI early.
- Teach specificity: “Sepsis due to MRSA pneumonia.”
- Use DRG awareness in documentation.
- Escalate UM/CDI conflicts with data, not anecdotes.
- Reframe LOS goals: align, don’t cut.
💡 Quick Reminders 🔗
- For a hospital with a base rate of $10,000 and an average of 10,000 discharges per year, a .1 ↑ in CMI = ~$10M annual revenue
- Observation LOS >2 MN → justify inpatient.
- CDI + UM partnership = clinical + financial success.
🏁 Key Quote 🔗
“Accurate documentation doesn’t just tell the story—it determines how your hospital gets paid and how your quality is judged.” – Jill O’Brien, MD