Utilization management (UM) or utilization review is the use of managed care techniques such as prior authorization that allow payers, particularly health insurance companies, to manage the cost of health care benefits by assessing its medical appropriateness before it is provided, by using evidence-based criteria or guidelines. Critics have argued that if cost-cutting by insurers is the focus of their use of UM criteria, it could lead to healthcare rationing by overzealous denial of care as well as retrospective denial of payment, delays in care, or unexpected financial risks to patients.
Aspects Utilization management is "a set of techniques used by or on behalf of purchasers of health care benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care prior to its provision," as defined by the Institute of Medicine Committee on Utilization Management by Third Parties (1989; IOM is now the National Academy of Medicine). UM is the evaluation of the appropriateness and medical necessity of health care services, procedures, and facilities according to evidence-based criteria or guidelines, and under the provisions of an applicable health insurance plan. Typically, UM addresses new clinical activities or inpatient admissions based on the analysis of a case. But this may relate to ongoing provision of care, especially in an inpatient setting. Discharge planning, concurrent planning, pre-certification and clinical case appeals are proactive UM procedures. It also covers proactive processes, such as concurrent clinical reviews and peer reviews as well as appeals introduced by the provider, payer or patient. A UM program comprises roles, policies, processes, and criteria.
Reviewers Roles included in UM may include: UM reviewers (often registered nurse with UM training), a UM program manager, and a physician adviser. UM policies may include the frequency of reviews, priorities, and balance of internal and external responsibilities. UM processes may include escalation processes when a clinician and the UM reviewer are unable to resolve a case, dispute processes to allow patients, caregivers, or patient advocates to challenge a point of care decision, and processes for evaluating inter-rater reliability among UM reviewers.
Criteria and guidelines UM criteria are medical guidelines which may be developed in-house, acquired from a vendor, or acquired and adapted to suit local conditions. Two commonly used UM criteria frameworks are the McKesson InterQual criteria and MCG (previously known as the Milliman Care Guidelines). The guidelines should reflect evidence-based care, although there may be difference between "best practice" and cost-effective acceptable care quality, with payer guidelines emphasizing cost-effectiveness. Conflicts between payers and providers can arise; for example, when studies found that vertebroplasty did not improve outcomes, Aetna attempted to classify it as experimental but retracted the decision after reaction by providers. Findings from a 2019 systematic review identified how guidelines for UM are often more focused on reduction of utilization than on clinically meaningful measures such as patient-reported outcomes or measures of appropriateness. Medicare issues national coverage determinations on specific treatments.
Timing of review Similar to the Donabedian healthcare quality assurance model, UM may be done prospectively, retrospectively, or concurrently. Prospective review is typically used as a method of reducing medically unnecessary admissions or procedures by denying cases that do not meet criteria, or allocating them to more appropriate care settings before the act. Concurrent review is carried out during and as part of the clinical workflow, and supports point of care decisions. The focus of concurrent UM tends to be on reducing denials and placing the patient at a medically appropriate point of care. Concurrent review may include a case-management function that includes coordinating and planning for a safe discharge or transition to the next level of care. Retrospective review considers whether an appropriate level of care was applied after it was administered. Retrospective review will typically look at whether the procedure, location, and timing were appropriate according to the criteria. This form of review typically relates to payment or reimbursement according to a medical plan or medical insurance provision. Denial of the claim could relate to payment to the provider or reimbursement to the plan member. Alternatively, the retrospective review may reflect a decision as to ongoing point of care. This may entail justification according to the UM criteria and a plan to leave a patient at the previous (current) point of care or to shift the patient to a higher or lower point of care that would match the UM criteria. For example, an inpatient case situated in a telemetry bed (high cost) may be evaluated on a subsequent day of stay as no longer meeting the criteria for a telemetry bed. This may be due to changes in acuity, patient response, or diagnosis, or may be due to different UM criteria set for each continued day of stay. At this time the reviewer may indicate alternatives such as a test to determine alternate criteria for continued stay at that level, transfer to a lower (or higher) point of care, or discharge to outpatient care.
Integrated delivery system In an integrated delivery system such as a health maintenance organization (HMO), the provider and the payer share the financial cost of care, allowing for more utilization management; the rise of utilization management in the 1980s was associated with a rise in integrated healthcare. As of 2019, about 3% of large employers, including Walmart and Boeing, contracted directly with providers to care for their employees, and these arrangements can remove prior authorization entirely with capitated payments. The Mayo Clinic and Blue Cross and Blue Shield of Minnesota agreed to let the Mayo Clinic have more say over emerging technologies, which are typically classified as experimental and investigational in insurer guidelines.
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