DEFINITION:

Utilization management identifies “the appropriate level of care for patients using evidence-based practices and medical necessity criteria”,

It is crucial aspect of healthcare that impacts the quality and efficiency of healthcare services, involving optimizing resources, ensuring appropriate care and achieving the best outcome for patients.

What Does Utilization Management Do?

Utilization management covers a wide array of responsibilities with one of its core functions being the conduct of utilization review. These reviews serve various essentials purposes, aiming to address key questions and concerns as follows:

-Were resources used effectively based on clinical practice guidelines?

-Was care provided necessary and appropriate?

-Are the place of service and length of stay appropriate?

-Are there examples of inefficiency, over, or underutilization?

-Was quality care provided at the right time?

-Are there opportunities for coordination of care?

-What is the most appropriate level of care for discharge?

-Are there opportunities for education about improved utilization management?

-would an individual be appropriate for monitoring under technical care management or other program?

-Are providers routinely following clinical practice guidelines?

-Are there any psychosocial needs would benefit from a referral or continued care?

Medical Necessity is a crucial concept in healthcare that describes services as

1. Essential for Diagnosis or Treatment:  Medical services must be required to diagnose or treat a medical condition. They should be directly related to addressing a patient’s health issues.
2. The Optimal choice for the Medical Condition: Th services provided are not just necessary but also the most suitable and effective option for addressing a specific condition.
3. In Line with local medical standards: Medical necessity also involves aligning with established standards of good medical practice in a given geographical area.
4. Patient-centered: Crucially, the medical necessity is determined by the clinical needs of the patients rather than any consideration of convenience for either the patients or healthier provider.

In essence, for a service to be considered medically necessary, it must be both essential for diagnosing or treating a medical condition and the most suitable option. It must confirm to local medical practice standards and be driven by genuine clinical needs of the patient, rather than convenience.

This definition ensures that healthcare resources are utilized effectively and that patient receives care that is not only required but also appropriate for their specific medical condition.

Current Practices of Utilization Review

In today’s healthcare landscape, utilization review has become a standard procedure adopted by insurance plans and healthcare providers across various settings. Although the term “Utilization Management” and Utilization Review” are often used interchangeably, it is crucial to distinguish them. The difference is that UM is a program with plans, policies and procedures. Utilization review is a process of the utilization management program.

Interestingly, many companies conducting utilization review have transitioned towards a more targeted approach, as proposed to reviewing every service offered by all providers. The sheer magnitude of reviewing all services from every healthcare professional is dauting to imagine.

These focused reviews are guided by established criteria, including standards for length of stay, and other measures. This shift towards focused reviews serves to reduce costs and enhance overall organizational management of healthcare services.

Utilization Review Teams

The utilization review teams are multifaceted group of professionals that can vary depending on the healthcare settings. These teams are generally led by registered nurses, often functioning as case managers or utilization review clinicians. However, you may also find other clinicians such as licensed practice nurses, physical therapists, and social workers, involved in review process.

To oversee the entire team, there is typically a medical or clinical director/manager who plays a crucial leadership role. Additionally, a physician on the team may step in to handle complex cases or consult with fellow medical professionals. Administrative staff and sometimes, utilization management assistances complete this diverse team, working together to ensure efficient and effective utilization of healthcare resources.  

Utilization Review Tools

Clinicians engaged in utilization review address a myriad of crucial questions about healthcare services by evaluating the medical necessity of delivered services, gauging the appropriateness of level of care, and advocating for top-notch care. This process encompasses the continuous monitoring of ongoing care and post-care requirements, and collaboration with third party payors where applicable. To steer their assessment in the right direction, the utilization review teams relies on criteria rooted in clinical practice standards. These criteria act as evidence-based screening tools, offering guidance to providers, clinicians, involved in utilization review for appropriateness of care. However, not all utilization review tools are created equal. They need to meet some critical criteria themselves. They should be current, objective, clinically sound, reviewed annually, and grounded in evidence-based medicine or group consensus established through standard process. Tool kit for decision support includes national/international criteria sets, guidelines, protocols, algorithms and pathways are the resources that empower healthcare professionals to make informed and effective care-related decisions.

IMPACT OF UTILIZATION REVIEW

Recognizing that healthcare expenses are often beyond the means of many individuals; it is imperative to proactively address the need for cost reduction and enhanced quality of care. A significant portion of mis-spent funds, amounting $45 billion annually, is attributed to inadequate care coordination and transition (ACMA 2019). Preventable hospital acquired infection incur substantial cost of at least $28.4 billion in medical expenses annually, accompanied by an additional $12.4 billion in lost productivity due to premature deaths (CDC,2021). Efforts to provide high quality care at appropriate time and in appropriate settings can significantly reduce waste of healthcare resources. Utilization review can help solve the escalating challenges in healthcare-increasing costs, variations in care quality, and inadequacies in service management. Through diligent reviews, the utilization management team is well-positioned to pinpoint and enhance opportunities for optimizing the use of healthcare services and resources. Their contributions directly impact the quality of care experienced by healthcare consumers.