Practice Management

Top 10 things physician advisors want hospitalists to know


Is it true that observation patients receive higher hospital bills?

It is a common misperception that a designation of “observation” class means that a patient’s medical bill will be higher than “inpatient” class. In 2016, CMS changed the way observation class patients are billed so that, in most scenarios, patients do not receive a higher hospital bill when placed in “observation” class.

How do I approach a denial from a payer?

Commercial payers review all hospitalizations for medical necessity and appropriateness of care received during a patient’s hospitalization. If you receive notice that all or part of your patient’s hospital stay was denied coverage, you have the option of discussing the case with the medical director of the insurance company – this is called a peer-to-peer discussion.

Dr. Sarah Stella, University of Colorado at Denver, Aurora

Dr. Sarah Stella

We recommend reviewing the patient’s case and your documentation of the care you provided prior to the peer to peer, especially since these denials may come weeks to months after you have cared for the patient. Begin your conversation by learning why the insurance company denied coverage of the stay and then provide an accurate portrayal of the acuity of illness of the patient, and the resources your hospital used in caring for them. Consider consulting with your hospital’s physician advisor for other high-yield tips.

How can care management help with ‘nonmedical’ hospitalizations?

Care managers are your allies for all patients, especially those with complex discharge needs. Often patients admitted for “nonmedical” reasons do not have the ability to discharge to a skilled nursing facility, long-term care facility, or home due to lack of insurance coverage or resources and/or assistance. Care managers can help you creatively problem solve and coordinate care. Physician advisors are your allies in helping create system-level interventions that might avert some of these “nonmedical” admissions. Consider involving both care managers and physician advisors early in the admission to help navigate social complexities.

How can hospitalists get involved?

According to CMS, the decision on “whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital … can typically be made in less than 48 hours, usually in less than 24 hours.”3 In reality, this is not black and white. The “2 midnights” has brought a host of new challenges for hospitals, hospitalists, and patients to navigate. The Society of Hospital Medicine released an Observation White Paper in 2017 challenging the status quo and proposing comprehensive observation reform.4

We encourage hospital medicine providers to more routinely engage with their institutional physician advisors and consider joining the SHM Public Policy Committee to become more involved in advocacy, and/or consider becoming a physician advisor.

Dr. Singh is physician advisor for Utilization & CM in the division of hospital medicine at the University of Colorado at Denver, Aurora. Dr. Patel is a hospitalist and assistant professor of medicine at the university. Dr. Anoff is director of clinical operations and director of nights for the Hospital Medicine Group at the University of Colorado at Denver. Dr. Stella is a hospitalist at Denver Health and Hospital Authority and an associate professor of medicine at the university.


1. What is a physician advisor? 2017 Oct 9.

2. Barry P. Medicare: Inpatient or outpatient. AARP Bulletin. 2012 Oct.

3. Goldberg TH. The long-term and post-acute care continuum. WV Med J. 2014 Nov-Dec;10(6):24-30.

4. Society of Hospital Medicine Public Policy Committee. The hospital observation care problem. Perspectives and solutions from the Society of Hospital Medicine. 2017 Sep.


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