Utilization management

CCMC Key Definitions Related to Utilization Management

Utilization Management- Review of services to ensure that they are medically necessary, provided in the most appropriate care setting, and at or above quality standards. 

Utilization Review- A mechanism used by some insurers and employers to evaluate healthcare on the basis of appropriateness, necessity, and quality.

Continued Stay Review- A type of review used to determine that each day of the hospital stay is necessary and that care is being rendered at the appropriate level. It takes place during a patient’s hospitalization for care.

Preadmission Certification- An element of utilization review that examines the need for proposed services before admission to an institution to determine the appropriateness of the setting, procedures, treatments and length of stay. 

Admission Certification- A form of utilization review in which an assessment is made of the medical necessity of a patient’s admission to a hospital or other inpatient facility. Admission certification ensures that patients requiring a hospital-based level of care and length of stay appropriate for the admission diagnosis are usually assigned and certified and payment for the services are approved. 

Concurrent Review- A method of reviewing patient care and services during a hospital stay to validate the necessity of care and to explore alternatives to inpatient care. It is also a form of utilization review that tracks the consumption of resources and the progress of patients while being treated.
Retrospective Review- A form of medical records review that is conducted after the patient’s discharge to track appropriateness of care and consumption of resources.

Second Opinion- An opinion obtained from another physician regarding the necessity for a treatment that has been recommended by another physician. May be required by some health plans for certain high-costs cases, such as cardiac surgery.

Discharge Planning- The process of assessing the patient’s needs of care after discharge from a healthcare facility and ensuring that the necessary services are in place before discharge. This process ensures a patient’s timely, appropriate, and safe discharge to the next level of care or setting including appropriate use of resources necessary for ongoing care. 

Utilization Management vs. Utilization Review

The terms utilization review and utilization management are often used interchangeably. It is true that the evaluation process for utilization review and utilization management is similar or the same and both assess medical care for appropriateness. It is also true that the goal for both is to control the cost of healthcare services. The difference is that utilization management is a prospective process that occurs before and during the admission, procedure or treatment, while utilization review is retrospective. 

The Utilization Management Process

  1. Verify eligibility- Check that the patient is covered under the health plan, and that this coverage is primary. Example:  The patient may have Medicare and insurance through his employer. The primary insurance is the one the preauthorization request would go through.
  2. Verify that the requested service is a covered benefit under the insurance contract. If it is a covered benefit, determine if it requires preauthorization. Example:  Bariatric surgery may be a contract exclusion. If it is a covered benefit, it may require preauthourzation. 
  3. Gather clinical information needed to determine if criteria is met for this service.
  4. Review of clinical information to determine if it meets criteria for medical necessity, and level of care.
  5. If guidelines are met, the requesting provider is notified of the approval.
  6. If guidelines are not met, it is sent to physician review. The physician will approve or deny based on his or her medical judgement and the requesting provider will be notified of the approval, or the denial and appeal process.
  7. The patient or treating physician may appeal.
  8. The medical director collects more information and reviews the case again. He may also speak with the treating physician or send the information to an independent third party physician with expertise in the specialty area of the request. 

Types of Utilization Management

  • Preadmission Certification
  • Admission Certification
  • Continued Stay/Concurrent Review
  • Retrospective Review
  • Second Surgical Options
  • Discharge Planning Review
  • Pharmacy Therapy Management
  • Review for Referral to Case Management