Utilization review (UR) is the process of making sure healthcare services are being used appropriately and efficiently, which is a key component of avalue-based approach to paying for healthcare.
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Who Does Utilization Review?
The government requires hospitals to have an effective utilization review program in order to participate in Medicare and Medicaid.There are also drug utilization review protocols in place for both Medicare and Medicaid, in an effort to reduce abuse and misuse of certain medications, particularly opioids.
Utilization review can be done while the care is being given, known as concurrent UR, or after the care has been completed, known as retrospective UR. Utilization reviews can also be done prospectively, as part of theprior authorization process, when a patient needs approval from their health insurer before a test or treatment can be performed.
UR nurses at hospitals and home health companies work closely with their UR nurse counterparts at health insurance companies, as well as with the quality improvement team, the social work team, the discharge planning team, and the clinical staff caring for the patient.
Sometimes, the hospital UR nurse is also the discharge planner. When UR and discharge planning are combined into one job, it’s known ascase management.
An Example of Utilization Review
Sam is admitted to theICUthrough the emergency room in the middle of the night after a car accident. The next morning, the hospital’s UR nurse looks at Sam’s medical record and notes all of his medical problems and treatments.
The UR nurse consults the protocols to make sure that the ICU is the best place for Sam to be treated. For example, it’s possible that Sam would benefit from being transferred to a specialty trauma ICU at the regional trauma center.
Alternatively, it could be that Sam’s injuries aren’t so severe and his treatments not so complex as to warrant being in the ICU; he might be more efficiently and economically cared for in the ICU step-down unit or on a surgical floor.
Most of the time, the UR nurse will find that patients are being cared for at the correct level of service, and that Sam should be in the ICU. However, if their protocols suggest a different level of care would be more appropriate, they would discuss this with the doctors and nurses who are providing Sam’s medical care.
Those doctors and nurses may provide additional information that makes it clear that Sam is where he needs to be. But it might also become clear that Sam would be cared for more appropriately in a different setting, like the ICU step-down unit or the regional trauma center’s trauma ICU. If this is the case, the UR nurse works with the physician and the nursing staff to move Sam where he can receive the best and most efficient care to meet his medical needs.
The hospital UR nurse communicates with the UR nurse at Sam’s health insurance company. The health plan UR nurse compares Sam’s clinical findings and treatments with the health plan’s protocols and evidence-based treatment decision-making tools.
The health insurance UR nurse then communicates back to the hospital UR nurse something to the effect that the health plan approves Sam’s admission and treatment and is authorizing four days of hospitalization. She might add instructions to contact her if it becomes apparent Sam will need more than four days of hospitalization.
The hospital UR nurse might notify the health plan’s UR nurse that Sam won’t be ready to go home when anticipated. In that case, the health plan’s UR nurse will consult her protocols and either approve more days of hospitalization or suggest a more appropriate alternative care setting.
For example, if Sam needs intensivephysical therapybut not the other medical services that acute-care hospitals provide, the health plan’s UR nurse might suggest transferring Sam to an inpatient rehabilitation facility where he can get the physical therapy and nursing care he needs more economically.
Utilization Review in Your Health Plan
Part of the reason hospitals tend to have such robust internal utilization review protocols—and a line of communication with the UR teams at the health plans that contract with the hospital—is to avoid claim denials in the first place. Hospital protocols are designed to ensure that the care they’re providing is appropriate, efficient, and linked to improved patient outcomes.
That said, there are appeals processes in place that you and your healthcare provider or hospital can use if your health plan denies a claim.
States can and do regulate how health insurance companies conduct utilization reviews, for health plans that are regulated at the state level (i.e., health plans that aren’tself-insured). The National Association of Insurance Commissioners hasa utilization review model actthat states can use as-is or modify as necessary to meet state laws and regulations.
State insurance commissioners are responsible for overseeing the insurance companies that offer coverage within the state; you canreach out to your state’s insurance commissionerif you have a question or comment about your health plan’s utilization review process.
Summary
Utilization review is a process designed to ensure that medical care is effective, efficient, and in line with evidence-based standards of care. Utilization review specialists are often nurses. They work for health insurance companies, hospitals, and various other medical providers. Utilization review teams at hospitals tend to work in tandem with their counterparts at health insurance companies to coordinate care. This helps to expedite prior authorization from health plans and ensure that patients' claims are covered.
If you’re worried that utilization review might be compromising your access to certain types of care, contact the team that’s reviewing your case to discuss it with them. In most cases, you can appeal a decision that your health plan makes regarding the care they’ll authorize.
12 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Centers for Medicare and Medicaid Services.CMS manual system pub.100-07 state operations provider certification.Centers for Medicare and Medicaid Services.Improving Drug Utilization Review Controls in Part D.Medicaid.gov.Drug Utilization Review Guidance.MCG Health.The utilization review process and the origins of medical necessity.American Medical Association.Inpatient versus observation care.Indeed.What Is a Utilization Review and Who Performs Them?Aug. 15, 2024.RegisteredNursing.org.What is discharge planning and utilization review?Healthcare IT News.Reinventing utilization management.LaPointe, Jacqueline. RevCycle Intelligence.Hospital Utilization Management Can Reduce Denials, Improve Care.HealthCare.gov.How to appeal an insurance company decision.National Association of Insurance Commissioners.Utilization Review and Benefit Determination Model Act.KFF.2024 Employer Health Benefits Survey.Additional ReadingMCG.com.The Utilization Review Process and the Origins of Medical Necessity.
12 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Centers for Medicare and Medicaid Services.CMS manual system pub.100-07 state operations provider certification.Centers for Medicare and Medicaid Services.Improving Drug Utilization Review Controls in Part D.Medicaid.gov.Drug Utilization Review Guidance.MCG Health.The utilization review process and the origins of medical necessity.American Medical Association.Inpatient versus observation care.Indeed.What Is a Utilization Review and Who Performs Them?Aug. 15, 2024.RegisteredNursing.org.What is discharge planning and utilization review?Healthcare IT News.Reinventing utilization management.LaPointe, Jacqueline. RevCycle Intelligence.Hospital Utilization Management Can Reduce Denials, Improve Care.HealthCare.gov.How to appeal an insurance company decision.National Association of Insurance Commissioners.Utilization Review and Benefit Determination Model Act.KFF.2024 Employer Health Benefits Survey.Additional ReadingMCG.com.The Utilization Review Process and the Origins of Medical Necessity.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Centers for Medicare and Medicaid Services.CMS manual system pub.100-07 state operations provider certification.Centers for Medicare and Medicaid Services.Improving Drug Utilization Review Controls in Part D.Medicaid.gov.Drug Utilization Review Guidance.MCG Health.The utilization review process and the origins of medical necessity.American Medical Association.Inpatient versus observation care.Indeed.What Is a Utilization Review and Who Performs Them?Aug. 15, 2024.RegisteredNursing.org.What is discharge planning and utilization review?Healthcare IT News.Reinventing utilization management.LaPointe, Jacqueline. RevCycle Intelligence.Hospital Utilization Management Can Reduce Denials, Improve Care.HealthCare.gov.How to appeal an insurance company decision.National Association of Insurance Commissioners.Utilization Review and Benefit Determination Model Act.KFF.2024 Employer Health Benefits Survey.
Centers for Medicare and Medicaid Services.CMS manual system pub.100-07 state operations provider certification.
Centers for Medicare and Medicaid Services.Improving Drug Utilization Review Controls in Part D.
Medicaid.gov.Drug Utilization Review Guidance.
MCG Health.The utilization review process and the origins of medical necessity.
American Medical Association.Inpatient versus observation care.
Indeed.What Is a Utilization Review and Who Performs Them?Aug. 15, 2024.
RegisteredNursing.org.What is discharge planning and utilization review?
Healthcare IT News.Reinventing utilization management.
LaPointe, Jacqueline. RevCycle Intelligence.Hospital Utilization Management Can Reduce Denials, Improve Care.
HealthCare.gov.How to appeal an insurance company decision.
National Association of Insurance Commissioners.Utilization Review and Benefit Determination Model Act.
KFF.2024 Employer Health Benefits Survey.
MCG.com.The Utilization Review Process and the Origins of Medical Necessity.
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