Healthcare and Utilization Management

Healthcare reform is bringing about change to all aspects of healthcare in the United States. Utilization review is taking a prominent role in the oversight of the healthcare industry. According to the National Library of Medicine, the purpose of utilization review is to evaluate the necessity, appropriateness and efficient use of health care services, facilities and procedures. Today the term has broadened to include "utilization management," which is sometimes confused with "utilization review." Although the health care industry uses these terms interchangeably, it is helpful to understand the differences between the terms. Utilization review is a look back at cases, while utilization management takes a proactive look at discharge planning, concurrent planning, precertification and clinical case appeals.

Utilization management is defined by URAC as "the evaluation of the medical necessity, appropriateness and efficiency of the use of healthcare services, procedures and facilities under the provisions of the applicable health benefits plan."  As the need for utilization review expanded to include all aspects of patient care such as precertification and preadmission "independent review boards" known as IRO's became a part of the utilization review process.  Discharge planning begins before a patient is admitted to the hospital at the same time the patient is precertified for insurance coverage. Doctor's must evaluate a patient's condition during the admission process when the level of care is established. Medical necessity is a cornerstone of utilization review or management.

As hospital costs continue to rise, health care providers must be able to provide high quality cost effective care. Utilization review helps make this possible. Reviewers are health care professionals employed by independent organizations to review patient charts to find ways to recover patients in the shortest possible time. This is accomplished by making a daily assessment of the patient needs. Does the patient really need an acute level of care? Is there a continuing need for this level of care? Could this patient be better treated in a different setting? Utilization review also takes a look back at a patient's visit after discharge and the same questions are asked but in retrospect. Although the review process may seem like a hassle to caregivers, it is necessary because the caregivers and providers discover new options that may be better choices for the patient.

URAC is the regulating body that accredits independent review organizations as well as other healthcare organizations. Federal government and state insurance commissions rely heavily on URAC  to establish consumer health care protection. The government declares that there will be utilization review, then sets the standards for utilization review controls to protect the consumer. Some of these protections keep healthcare practitioners from arbitrarily offering misleading and capricious information about healthcare services, treatments offered, facility practices, and procedures. These standards are required for accreditation.