From Silos to Synergy: Why CDI and UM Must Evolve – Together

Too often in healthcare, critical teams operate in parallel – doing essential work, but missing 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 adequately.

Yet, in many organizations, CDI and UM operate in silos – unintentionally creating inefficiencies, missing key documentation opportunities, and ultimately risking revenue leakage. At Iodine Software, we’ve observed firsthand how aligning these two teams – supported by intelligent automation and real-time communication – unlocks powerful outcomes for nurses and physicians alike.

Two Sides of the Same Coin

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.

UM teams, meanwhile, focus on determining whether the care being provided meets the criteria for the appropriate status – -most commonly, inpatient 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 are able to ensure that patients receive efficient  services and optimize resource allocation, promoting high-quality care delivery and accurate reimbursement.

Fran Jurcak, Chief Clinical Officer, Iodine Software

Although the focus of their work differs, the work of CDI and UM is deeply interdependent and this will become increasingly important 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 CDIS reviews a case that ultimately downgrades, this only leads to wasted CDI effort but can also create confusion for providers who may have acted on documentation queries that no longer impact reimbursement.

Conversely, delayed upgrades to inpatient encounters results in a shorter window of opportunity for CDI review and increases 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

Collaboration and frequent communication between CDI and UM allows 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).

Consider this:

Organizations leveraging Interact see improved physician engagement, with a 54% drop in average query response time from the Interact mobile app 

Iodine customers with IodineCDI and IodineUM experience:

• 40% avg reduction in unnecessary CDI reviews, or cases that were reviewed by CDIS but downgraded to Obs

• 5.8 avg hour reduction in the time it takes to upgrade a patient from Obs to IP

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.

An Effective CDI-UM Collaboration Strategy Includes:

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: Cases automatically move between CDI worklists when patient status changes—removed 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.

Pre-bill readiness through AwarePreBill: In addition to CDI and UM staff efforts to shore up the medical record, AwarePreBill provides another layer of critical protection, ensuring documentation accurately reflects patient status before claims are submitted. But beyond that, the platform offers end-to-end visibility into the entire patient journey, creating a closed-loop system that continuously and 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.

More Than Reimbursement – It’s About Better Care

When CDI and UM collaborate, the benefits extend beyond reimbursement. Documentation specificity improves provider communication, supports continuity of care, and 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.

Healthcare leaders can no longer afford to let CDI and UM operate in parallel lanes. The future belongs to organizations that can integrate, align, and automate these critical functions. At Iodine, we’re committed to building the tools that make this collaboration not only possible – but impactful.

Ready to learn how IodineCDI and IodineUM can drive outcomes and efficiency for your organization? Schedule a demo today.