Definition/Introduction

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.[1][2] The type of UM that occurs before the clinical event is called prior authorization or "pre-auth."[3] If UM occurs during clinical care for a patient admitted to a facility, then this type of UM is called a concurrent review.[4] Finally, UM that is done after the clinical encounter has occurred is called the retrospective review or "retro-review."[4]

Types of UM:

Prior Authorization

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.

Concurrent Review

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

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.

Issues of Concern

Because of the initial connection to cost management, UM programs often address overutilization, defined as excessive use of services and procedures that leads to waste within the health care system that does not result in any measurable improvement in quality, e.g., routine lab tests on admission to the hospital.[5][6][7]

With the emerging focus of UM programs on also addressing quality improvement and compliance with national standards and recommendations for care, underutilization is increasingly a goal of UM programs as well, e.g., low immunization rates.[5][6][7]

Because of the information collected in UM, connections to other patient support programs such as disease management, care management, and population health program offerings are also possible and now are increasingly related to modern UM programs.[2][6] In short, UM programs are part of the delicate ecology in health care delivery, wherein the program offers to seek to deliver the right care to the right patient at the right time. Payers and health care organizations, along with providers and patients themselves collaborate via UM programs along with disease management, care coordination, and population health offerings to control costs, increase collaboration in healthcare delivery, improve the quality of care, and to optimize the patients’ experience with the healthcare system.

The concept of medical necessity is foundational to UM programs. Medically necessary services are those that can be reason­ably expected to produce the intended results for the patient and are expected to have benefits that outweigh any potential harmful effects.[8][9]

Essentially, medically necessary services are the standard of care that patients expect to receive. For a UM program to establish the standard of care and medical necessity, it is imperative to have clinical input from health care professionals.[10][11][12] Typically, a UM program is advised by a committee that includes several practicing physicians from different specialties and primary care who participate in the evaluation of the validity and the appropriateness of the UM program and who provide accountability around appropriate medical necessity determinations.

Clinical Significance

The UM process has several readily identifiable stakeholder groups that each have an interest in understanding the UM process. First, patients and their families are likely to have minimal contact with the UM process, all the while the decisions made may have a significant impact on the types and locations of care and service provided. It would be important for patients and families to stay informed of what UM processes are in play as they access their health care benefits. Second, health care professionals and institutions in which they work are engaged with the UM process, likely daily. Health care professionals and institutions need to understand the process and to co-operate effectively. With an eye towards quality improvement and enhanced patient experience, it would be ideal for those professionals and institutions to make full use of the data that emerges from the UM process to improve care and safety were ever possible.[13] 

Participating in the UM process around the identification and implementation of national standards of care is one obvious possibility, and with UM's focus on both overutilization and underutilization of health care services, quality improvement projects are likely to emerge. Third, those professionals and organizations that conduct UM have a responsibility to oversee the UM process in an ethical manner that respects the legitimate rights and obligations for all of the stakeholders involved. Finally, those who pay for health care benefits and health care services, namely employers and purchasers also have a responsibility to make sure that any UM processes done on their behalf are useful and contributing to the delivery of efficient and effective health care services to those for home health care is purchased.[14][15]

One ongoing concern relates to how UM programs might create unintended consequences emanating from the financial incentives and disincentives on health care professionals' decisions around care and service delivery. The literature evaluating the impact that UM determinations might have on professionals and institutions' behaviors and care process is mixed in terms of measuring a positive, negative, or neutral effect.[16][17][18] What is clear that additional research is necessary to provide a more robust answer to the question of what the impact is on utilization and quality of care based on UM and payment policies.[18]

Nursing, Allied Health, and Interprofessional Team Interventions

Nurses and clinical pharmacists are often the health professionals who conduct the three types of UM activities, namely, prior authorization, concurrent review, and retrospective review. Nurses by way of training and experience are ideally suited to both 1) collect the clinical information required for UM activities, and 2) interpret the clinical relevance and appropriateness of the information collected as well.[19] Pharmacists have unique skills and experience with collecting and interpreting clinical information related to medication use.[20][21] 

The central role that nurses play in UM has long been addressed in the literature, and maintaining the connection of UM nurses to the principles of the nursing profession remains a concern.[22] Also, ethical dilemmas may arise in the performance of UM owing to the tension that may arise between UM’s focus cost containment and the judgment necessary in determining appropriate clinical interventions and at what level of care and setting of care is appropriate for that intervention.[23][24] [Level 5] Review decisions and denials/prior authorization by utilization management organizations necessitate physicians to work closely with nurses and pharmacists. Interdisciplinary collaboration and good communication are important after utilization management reviews and improves patient outcomes.