Closing the Gaps: Modernizing SNF Admissions and Medical Necessity Workflows for Better Patient Outcomes

‍The Current Issue: Post-Discharge Gaps

Post-discharge care coordination is in disarray across much of the U.S. health system. As soon as patients leave the hospital, a labyrinth of communication unfolds between payers, SNFs, home health agencies, primary care, and specialty providers. Central to this process is the determination and dissemination by clinicians of “medical necessity,” This is a designation that dictates everything from payment approval to care eligibility.

In practical terms, medical necessity must be evaluated by clinicians and then clearly communicated to multiple parties. Yet today, too often:

• Data and rationale are buried in lengthy hospital notes, discharge summaries, and EMR forms.
• SNFs wait hours, sometimes days, for documentation or approvals.
• Payers receive incomplete or illegible paperwork, leading to denials, delays, or costly audits.
• Crucial care instructions or follow-up needs, such as wound protocols or therapy regimens, are missed, lost, or poorly routed.

Despite every organization’s best intentions, the lack of standardized, timely, and accessible communication and/or engagement creates cracks where patients and dollars fall through.

Why Do Post-Discharge Gaps Exist?

Why does this crisis persist, even as healthcare technology evolves? The answer rests on legacy workflows and systemic fragmentation:

• Decentralized Recordkeeping: Hospitals, SNFs, and payers operate on their own EHR platforms, rarely interoperable, with different terminologies and requirements.
• Human-Dependent Processes: Determination of medical necessity often relies on busy clinicians who must sift through reams of documentation, manually selecting, summarizing, and forwarding key details.
• Regulatory Complexity: Medical necessity is shaped by federal and state laws, Medicare interpretations, and payer-specific criteria - each demanding specific documentation and rationale, none consistently standardized.
• Volume and Velocity: With readmission penalties and bundled payments, SNFs and payers are handling more cases at greater speed, exacerbating risk when information isn’t shared promptly or accurately.

Each day, skilled nursing operators, discharge planners, and case managers wrestle with these inefficiencies, wasting valuable time and resources and jeopardizing care continuity.

The Consequences

The consequences of broken medical necessity workflows are severe:

• High Denial Rates: When medical necessity is not documented or communicated precisely, payers routinely deny claims, resulting in lost revenue and financial strain for SNFs and health systems alike.
• Readmissions: Gaps in discharge instructions and failed follow-ups are a leading driver of hospital readmissions - a metric that Medicare and many payers link directly to reimbursement penalties and public quality ratings.
• Compliance Nightmares: Auditors focus heavily on medical necessity in post-acute documentation. Any missing rationale, ambiguity, or delayed reporting exposes organizations to fines, clawbacks, and lawsuits.
• Patient Harm: At the frontline, patients suffer when orders are unclear, medication changes don’t make it to the care team, or therapy plans are never initiated due to paperwork snags.

It’s tempting to treat inefficiency as an annoyance, but lurking beneath are deeper risks:

• Information Overload: The average discharge summary can run over three lengthy pages. Clinicians must manually search for the “medical necessity” elements - a misstep could mean the difference between skilled coverage and denial.
• Provider Burnout: Redundant data entry and endless paperwork drive disengagement, staff turnover, and even clinical errors, exacerbating the broader healthcare workforce crisis.
• Data Security: Piecemeal emailing, faxing, and uploading of patient documents increases risk of HIPAA violations, breaches, and legal exposure. Over 400 healthcare breaches were reported in 2025 YTD, which affected ~30 million individuals. Civil penalties range from $100 to $50,000 per violation with an annual cap of $1.5 million
• Fragmented Accountability: When communication fails, who is responsible? SNFs blame hospitals, hospitals blame payers, and payers cite missing documentation. The absence of clear ownership undermines collaboration and damages reputations.

Doing nothing is increasingly unaffordable:

• Financial Leakage: Industry estimates put the annual denial rate for SNF claims around 17%; even modest improvements in documentation and communication could mean millions in recovered revenue.
• Operational Bottlenecks: Manual workflows translate to wasted hours, higher labor costs, and operational bottlenecks that slow admissions and discharges.
• Regulatory Exposure: State and federal agencies are ramping up audits of SNFs and hospitals, targeting incomplete or inconsistent medical necessity documentation.
• Lost Business Relationships: Payers and partners will look elsewhere if your facility can't guarantee compliance, timeliness, and transparency.

The downstream consequence is a vicious cycle: delayed authorizations → lost revenue → staffing cuts → worse clinical performance → more denials → etc.

Consider a typical discharge: Mrs. Jones, age 82, transfers from hospital to SNF with a complex hip fracture. Her SNF team needs a clear pathway of care, authorization for therapy, and documentation to support ongoing skilled intervention. Delays or confusion immediately raise the risk of readmission, denied payment, or regulatory trouble, not to mention delays in the much-needed care for Mrs. Jones.

The External Pressures

The sector is not standing still. External pressures are accelerating transformation:

• Value-Based Care: CMS and private payers are transitioning from fee-for-service to value-based models, rewarding organizations for outcomes. This makes proper medical necessity documentation and seamless post-acute communication non-negotiable.
• Digital Health Investments: Post-pandemic policy and capital flows spurred rapid EHR upgrades, telehealth adoption, and a push for interoperable data standards.
• AI and Automation: New healthcare platforms are leveraging artificial intelligence to automate document review, extract summaries, and flag missing information in ways humans cannot.
• Patient Advocacy: Patients and families are demanding transparency about care decisions, eligibility, and ongoing coordination after discharge.

Still, the mere existence of technology isn't enough. Many offerings address only a slice of the problem (e.g., EMR note sharing, secure messaging) without transforming workflows end-to-end.

A Solution for Post-Discharge Gaps: Olio’s Care Coordination Platform

Olio's platform is designed for the post-acute ecosystem, offering a comprehensive solution for care coordination, case management, and transitions of care.

Key Features:

• Universal Connectivity: Olio links hospitals, SNFs, payers, and caregivers in real time, ensuring instant access to discharge instructions, orders, and documentation.
• AI Document Summarization: Olio's AI Summarization is a tool to help clinicians and staff more efficiently access and review information - never to make clinical designations or payer decisions. Clinical determinations of medical necessity remain with licensed clinicians exercising professional judgment; Olio simply facilitates faster access to the information they need. Olio’s latest enhancement takes lengthy hospital notes and discharge paperwork and summarizes them into a summary. No more manual sifting or lost details. Clinicians can now get through lengthy documentation much faster which leads to faster decision-making. (Important: Olio AI Summarization will not introduce new information or make assumptions beyond the provided sources, nor will it make any decisions or recommendations.)
• Automated Alerts and Tracking: Every document, approval, and care coordination activity is tracked, timestamped, and auditable, closing the loop for regulatory demands.
• Data at Your Fingertips: Olio tracks results in real-time and instantly shows how your partners, such as Home Health, are performing. More clarity. Better alignment. Stronger outcomes.

Benefits for SNFs:

• Potential for reduced denial rates due to improved documentation workflow.
• Streamlined workflows, freeing staff for direct patient care.
• Robust compliance safeguards for all transitions.

Benefits for Health Systems:

• Potential for fewer readmissions through seamless post-acute follow-up.
• Faster discharges, improving bed turnover and throughput.
• Automated reporting to payers and regulators.

Benefits for Payers:

• Complete, accurate, and timely data for claims review.
• Lower audit exposure; enhanced member outcomes.
• Improved network collaboration and quality rankings.

Informed by collaboration with leading SNFs and hospital systems across the U.S., Olio delivers the results the sector needs.

Conclusion:
The process of determining and communicating medical necessity post-discharge need not remain broken. SNFs, health systems, and payers can seize a new era of coordination, compliance, and clinical excellence with Olio’s care coordination solution. Those who act decisively will protect their margins, reputation, and most importantly, their patients.

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