Utilization Management (UM), initially referred to as Utilization Review (UR), remains a well-recognized component of a cost management approach in the health care service delivery and payment arenas. UM processes include interventions that take place before, during, and after the clinical encounter. The type of UM that occurs before the clinical event is called prior authorization or "pre-auth." If UM occurs during clinical care for a patient admitted to a facility, then this type of UM is called a concurrent review. Finally, UM that is done after the clinical encounter has occurred is called the retrospective review or "retro-review."
Types of UM:
The prior authorization, or pre-auth, is done before a clinical intervention is delivered. The purpose of the pre-auth is to put a control in place designed to ensure that the requested clinical service or procedure is appropriate and that it will be delivered in an appropriate setting. Typically, a set of criteria helps to determine the appropriateness of the request and when available national standards of care are used. In addition to cost control, the prior authorization process can facilitate communication within the healthcare organization about patients who are being evaluated for or who are diagnosed with specific conditions, which may improve access to different services and which may encourage more effective coordination of care for the patient by the organization.
The concurrent review takes place while the patient is receiving care while admitted to a facility. The purpose of the concurrent review is to put an oversight process in place that permits the scrutiny of the type of care being delivered, the necessity for that care, and the level and setting of that care. The goal is to ensure the delivery of efficient and effective health care, to reduce the misuse of inpatient services, and to promote high quality and safe patient care during the inpatient component of the care. Similar to prior authorization, the concurrent review can also facilitate communication about the patient to other components of the health care organization which permits quality monitoring, provides access to additional services and supports and may assist with the coordinate of care especially around transitions to the next appropriate level of care, which may be discharged to home or to a setting that delivers a lower level of care. The concurrent review can identify patients who could benefit from case management, disease management, or form a variety of population health strategies for their specific diagnosis or clinical situation. The concurrent review also uses sets of criteria, often based on national standard-setting efforts.
Retrospective review is the type of UM that occurs after the care was delivered and after the bill for that care was submitted. The retrospective review seeks to confirm that the care was appropriate and was provided at the most efficient and effective level. Additionally, the retro review also determines if the codes used to describe the care listed on the submitted bill are coded correctly according to such standards as Current Procedural Terminology (CPT) and the International Classification of Diseases-10 (ICD-10). Ideally, the retrospective review should uncover only minimal discrepancies with information that might be available from the pre-auth and concurrent review processes when available. The retrospective review also provides an opportunity to collect data related to the quality of care, compliance with national standards, and additional outcomes data that can be shared with providers and throughout the organization.
The determinations of any of the three types of UM can result in a denial of either the request or for the payment for the service or procedure. If the provider disagrees with the UM determination, they typically have the ability to file an appeal of that denial, which would then be processed according to the organization's policies and procedures. Typically, there are two broad types of denials, benefit, and medical necessity. Benefit denials focus on the coverage benefits to which the patient is entitled (e.g., fertility services may not be covered benefit so such a service may be denied because of a lack of coverage) and medical necessity denials focus on the need for a specific service or procedure (e.g., an MRI for minor head trauma with no signs on physical exam may be denied as not medically necessary). There are typically formal time-frames set out for appeals based on the urgency of the situation and potential risk for an adverse outcome to the patient if an appeal for denial is not considered in a timely manner.