Handling transitions of care: Strategies for successful referral management

Martha Thorne_1
Martha Thorne, Senior Vice President & General Manager, Population Health, Allscripts

Transitions – when patients move from one care setting to another – represent a state of vulnerability for both the patient and the healthcare organization. Patients need referrals to the most appropriate provider in a timely, seamless fashion so they get the level of care they need. They need to be referred to the right place at the right time, every time.

Providers also need precise transitions of care to avoid negative effects on cost and quality scores. As the industry shifts from fee-for-service models to value-based care, referrals become an increasingly important financial decision.

Visionary healthcare leaders are pursuing strategies to better manage their referral and care transition processes. New point-of-referral technologies can help providers improve transitions of care, for better clinical and financial results.

123 million opportunities to get it wrong

It is challenging to achieve appropriate referrals every time when there are literally millions of opportunities to get it wrong. Based on a recent study and observations from our databases, about one in 10 ambulatory visits and one in three hospital discharges will result in referrals to other care providers. (1) For the United States, which has about 35 million discharges and 1.2 billion office visits each year, this translates into about 123 million referrals annually. (2)

Preferential referral patterns – those based on sending patients to familiar care venues with established relationships – will not be sufficient as the number of referrals continues to increase. For example, the Centers for Medicare and Medicaid Services (CMS) will soon expect 100 percent of patients to leave the hospital with a referral to their physician or other specific instruction for follow-up.

To be effective, each referral should consider all available options, filtered by what will work best for that specific patient. The right referral requires a provider to answer questions such as:

  • Is it clinically appropriate for this patient?
  • Does the facility have the right staff, processes and track record for this particular need?
  • Will it be covered by this patient’s insurance?
  • Is it convenient geographically for this patient?
  • Are there non-clinical partners that can meet critical aspects of this patient’s care?

Once providers resolve these questions, they must use data-driven approaches to referrals to meet the expectations of value-based care arrangements, including bundled payments, accountable care, transitions-of-care incentives and readmission penalties. All of these factors can significantly impact a healthcare organization’s financial bottom line.

Harnessing data with technology to improve referrals

Our consumer experiences outside of healthcare tell us that it is possible to take staggering amounts of data and present a simple list of options, tailored to the individual. Online shopping sites, for example, present products “you might also like” based on a combination of factors, such as retailer ratings, purchasing patterns and your search history.

Technology can correlate data to help providers offer the best referrals for each patient, too. The right technology can access vast networks of providers and begin to whittle it down, based on what that patient needs.

Let’s look at an example using a common procedure: knee replacement.

According to recent reports, hip and knee replacement surgeries account for more than 400,000 procedures annually and total costs exceed $7 billion. (3) CMS is developing a mandatory bundled-payment initiative, called Comprehensive Care for Joint Replacement (CJR), to reward and penalize hospitals based on their outcomes for these procedures. (4)

The goal of the program is to reduce Medicare expenditures and enhance the quality of care for beneficiaries. Hospitals must make successful referrals to reduce complications and readmissions of these surgeries, which is a key component of CJR.

Here’s how good technology can make a difference. Referral management software can research which rehabilitation services have experts in knee-replacement therapies and good quality scores.

Technology can narrow the list further by which providers accept this patient’s insurance and are in a convenient location for the patient. With access to the right networks, software can add referrals for other components of the care plan, such as crutches or other durable medical equipment for the recovery period.

When patients leave the hospital with comprehensive, tailored care plans and referrals, they are more likely to have positive outcomes. They are less likely to have complications or be readmitted to the hospital.

The hospital also benefits, because a healthier post-surgery population helps earn value-based rewards from alternative payment models, CJR, which will continue to increase in number. In January 2015, HHS announced its goal to move 50 percent of Medicare payments to alternative payment models by 2018. (5) It is likely that similar mandatory models will be implemented through the CMS Innovation Center over the next year.

Addressing unique challenges of chronic disease referrals

Patients with chronic diseases require more resources from health care. Studies estimate that just five percent of U.S. patients create 50 percent of the costs. (6) Two out of every three Medicare beneficiaries have two or more chronic diseases, which often requires multiple caregivers in multiple specialties. (7)

Coordinating care and referrals for this patient population is especially daunting, because the sickest patients tend to have incredibly large care teams. Consider that a patient with co-morbidities typically sees 16 physicians each year. (8) Coordinating a go-forward plan for these patients can be challenging, but holds the largest promise of cost efficiencies.

To succeed in managing population health, organizations must actively manage referrals for patients with chronic diseases. This is especially true when a patient transitions from the care of one team member to another. One meta analysis of four disease areas showed that “care teaming,” or making sure clinicians are effectively working together, can reduce the impact of disease by 21 percent. (9)

Keeping referrals within network

Some healthcare leaders estimate that between 20-30 percent of their patients ultimately leave their network during care transitions. This loss renders the care team less able to ensure patients get the best possible care – and less able to track patient progress and monitor follow-up.

When patients see out-of-network ambulatory or post-acute providers, healthcare networks are unable to capture the revenue that would otherwise be associated with patient care.

The right technology can make a difference quickly. For example, to improve population health management and increase satisfaction among its provider community, a Pennsylvania medical center started using an ambulatory referral management platform. Within 10 months, the organization reported more than 28,000 referrals, a 216 percent increase in referral volume. Better communication and referrals with outpatient physicians has helped reduce readmissions and returns to the emergency room.

Handling transitions of care

Precision transitions of care are important for best clinical and financial results. Organizations that want to succeed in a value-based-care environment must invest in strategies that enable them to refer patients to the right place at the right time, every time.


  1. Michael L. Barnett, MD; Zirui Song, BA; Bruce E. Landon, MD, MBA , 2012. Trends in Physician Referrals in the United States, 1999-2009 (Internet) http://archinte.jamanetwork.com/article.aspx?articleid=1108675 [Accessed 18/03/2016]
  2. National Center for Health Statistics, 2016. Hospital Utilization (in non-Federal short-stay hospitals) (Internet) http://www.cdc.gov/nchs/fastats/hospital.htm [Accessed 18/03/2016]
  3. The Health of America Report, 2015. A Study of Cost Variations for Knee and Hip Replacement Surgeries in the U.S. (Internet) http://www.bcbs.com/healthofamerica/BCBS_BHI_Report-Jan-_21_Final.pdf [Accessed 18/03/2016]
  4. Centers for Medicare & Medicaid Services, 2016. Comprehensive Care for Joint Replacement Model (Internet) https://innovation.cms.gov/initiatives/cjr [Accessed 18/03/2016]
  5. gov, 2015. Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value (Internet) http://www.hhs.gov/about/news/2015/01/26/better-smarter-healthier-in-historic-announcement-hhs-sets-clear-goals-and-timeline-for-shifting-medicare-reimbursements-from-volume-to-value.html [Accessed 18/03/2016]
  6. National Institute for Health Care Management, 2012. The Concentration of Health Care Spending – NIH CM Foundation Data Brief (Internet) http://www.nihcm.org/pdf/DataBrief3%20Final.pdf [Accessed 18/03/2016]
  7. Centers for Medicare & Medicaid Services, 2016. Chronic Conditions Overview (Internet) https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Chronic-Conditions/ [Accessed 18/03/2016]
  8. Thomas Bodenheimer, M.D., 2008. Coordinating Care — A Perilous Journey through the Health Care System (Internet) http://hwww.pcpcc.net/files/Bodenheimer%20NEJM%203-6-08.pdf [Accessed 18/03/2016]
  9. Alexander C. Tsai, PhD, Sally C. Morton, PhD, Carol M. Mangione, MD, MSPH, and Emmett B. Keeler, PhD, 2011. A Meta-Analysis of Interventions to Improve Care for Chronic Illnesses. (Internet) http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3244301/ [Accessed 18/03/2016]

Allscripts, care transition, patient transitions, point-of-referral technologies, readmissions, referral management, Referral management software


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