Too often in healthcare, critical teams operate in parallel: They do essential work but miss opportunities to amplify impact through collaboration. Nowhere is this more evident than in the relationship between Clinical Documentation Integrity (CDI) and Utilization Management (UM).
Both functions play critical roles in ensuring that hospitals and health systems are reimbursed appropriately and that patient medical necessity is documented and explained.
Yet, in many organizations, CDI and UM operate in silos. This unintentionally:
- Creates inefficiencies
- Misses key documentation opportunities
- Risks revenue leakage
With intelligent automation and real-time communication, aligning CDI and UM unlocks powerful outcomes for nurses and physicians alike.
CDI + UM — Two sides of the same coin
Clinical documentation integrity
The CDI team ensures that the clinical story of each patient encounter is thoroughly and accurately captured in the documentation. This enables coders to assign the correct diagnosis and procedure codes, ensuring the submitted claim reflects the true severity and complexity of care delivered.
Utilization management
UM teams, meanwhile, focus on determining whether the care being provided meets the criteria for the appropriate status — most commonly, inpatient (IP) versus observation (OBS). In a value-driven environment, where payers closely scrutinize medical necessity and length of stay, UM decisions directly impact reimbursement outcomes.
Utilization management is crucial in healthcare because it supports appropriate, efficient, and effective care for patients. By evaluating the medical necessity and appropriateness of care location, UM staff ensure that patients receive efficient services and optimize resource allocation, promoting high-quality care delivery and accurate reimbursement.
CDI + UM
Although the focus of their work differs, the work of CDI and UM is deeply interdependent — especially as CMS ramps up their audits on Medicare services. Amid ongoing efforts to scrutinize inpatient claims where the length of stay is two midnights or less, pressure on health systems to justify inpatient status continues to increase.
When patients are initially placed in inpatient status and later downgraded to observation, CDI reviews — typically focused on inpatient documentation — become unnecessary. Any time a CDI specialist reviews a case that ultimately downgrades, this only leads to wasted CDI effort. It also creates confusion for providers who may have acted on documentation queries that no longer impact reimbursement.
Conversely, delayed upgrades to inpatient encounters:
- Result in a shorter window of opportunity for CDI review
- Increase the risk that insufficient documentation could result in loss of revenue and increased risk of denial
Closer alignment between these teams supports capture of defensible documentation, reduces revenue leakage, and strengthens an organization’s audit readiness.
Why collaboration matters between CDI + UM
Collaboration and frequent communication between CDI and UM teams allow organizations to align the appropriate patient status (identified by UM) with the documentation needed to justify the level of medical necessity and corresponding reimbursement (captured by CDI).
Organizations leveraging Waystar’s solutions see improved physician engagement, with a 54% drop in average query response time from our mobile app. Waystar clients leveraging both CDI and UM experience a:
- 40% average reduction in unnecessary CDI reviews, or cases that were reviewed by CDIS but downgraded to OBS
- 5.8-hour reduction in the time it takes to upgrade a patient from OBS to IP on average
These results are not accidental; they’re the product of intentional alignment supported by technology that ensures the right cases are reviewed by the right team at the right time.
Checklist for effective CDI+UM collaboration
AI-driven prioritization
Identifies the highest-impact cases, guiding UM and CDI teams to focus efforts where they’ll deliver maximum clinical, financial, and workflow value.
Real-time status updates
Automatically moves cases between CDI worklists when patient status changes — removes when downgraded to observation, immediately eligible for review prioritization when upgraded to inpatient
Enhanced documentation visibility
CDI queries prompt more specific clinical documentation that assists UM nurses to validate inpatient criteria. Properly documented conditions like actively managed heart failure or sepsis strengthen the clinical case for admission.
Readiness through Prebill Anomaly Detection
In addition to CDI and UM staff efforts to shore up the medical record, Prebill Anomaly Detection provides another layer of critical protection, ensuring documentation accurately reflects patient status before claims are submitted. As part of the Waystar platform, end-to-end visibility into the entire patient journey creates a closed-loop system that continuously feeds CDI and UM teams. This enables organizations to ‘shift left’ — capturing more, earlier in the patient stay — while still surfacing the highest-impact opportunities pre-bill to support a more accurate, defensible, and efficient revenue strategy.
Going past reimbursement to better care
When CDI and UM collaborate, the benefits extend beyond reimbursement. Documentation specificity:
- Improves provider communication
- Supports continuity of care
- Contributes to more accurate population health insights
In fact, when the medical record is clear and accurate, hospitals can improve care planning and discharge coordination, all of which leads to a better patient experience.
Ready to learn how Waystar’s CDI and UM solutions can drive outcomes for your organization?
