UTILIZATION REVIEW – Class 5

The focus of Utilization Review is on appropriateness, effectiveness and quality of services provided

UTILIZATION REVIEW (UR) or Utilization Management (UM)

  • Systematic means for reviewing and controlling patients’ use of health services and providers’ use of health care resources
  • Usually involves data collection, review and/or authorization, especially for services such as a specialist referrals and emergency room use, and particularly costly services such as hospitalization
  • Utilization Review (“UR”) also known as Utilization Management is the process by which the health plan, payor or UR firm determine which services are medically appropriate and cost effective
  • Many insurance plans and all HMOs require that UR procedures are followed prior to all inpatient and some outpatient and emergency care or they will not pay for services rendered

Typically, Utilization Review (UR) involves UR coordinators who go through patient’s chart after hospital admission to expedite care, avoid delays of service, and to ensure the patient is being treated at the appropriate level of care.

Utilization Review aims to provide for effective pre-admission screening to avoid unnecessary admissions and provide early discharge planning to promote prompt placement once patient has reached a lower level of care

Utilization Review aims to provide for effective pre-admission screening to avoid unnecessary admissions and provide early discharge planning to promote prompt placement once patient has reached a lower level of care. An example of this is discharge planning in which the UR coordinator advises to move a patient from a hospital to home health care when medically appropriate. The focus of Utilization Review is on appropriateness, effectiveness and quality of services provided.

Types of Utilization Review: 

  • Prospective
  • Concurrent
  • Retrospective

There are three types of utilization review:  prospective, concurrent and retrospective.  Prospective review is review or authorization for elective procedures or services prior to such services being rendered.  Concurrent review is review or authorization for procedures or services during the time such services are being rendered.  An example of concurrent review is when a physician calls a Managed Care Organziation (MCO) and requests an initial length of stay (LOS) for a patient and then after the patient has been admitted into the hospital, the physician calls the MCO and explains that due to extenuating circumstances the patient needs to stay in the hospital for a longer time and the physician requests an extended length of stay (ELOS).  Retrospective review is review of services after they have been rendered, typically using medical charts.  Most physicians, have learned through the years, to not have retrospective review used as a source for payment by MCOs because hindsight is always 100%.

Drive thru delivery laws establishing minimum hospital stays in mid 1990s. This study evaluated the effects of an early discharge protocol (a hospital stay of one postpartum night plus a home visit) in a HMO (Harvard Vanguard Medical Associates) and a subsequent state law guaranteeing a 48 hour hospital stay.  The early discharge program increased the rate of stays of less than 2 nights from 29% to 65.6% and the rate declined to 3.7% after the state mandate.  The rate of newborn examinations on the third or fourth day of life increased from 24.5% to 63% with the program and dropped to 535 after the mandate. Average HMO expenditures on hospital and home-based services decreased by $90 per delivery with the early discharge program and increased by $100 after the mandate.  Conclusion: “neither policy appears to have affected the outcomes of newborns.  After the mandate, newborns were less likely to be examined as recommended on day 3 or 4. Because of changes in hospital prices, the two policies had minimal effects on HMO expenditures for hospital and home-based service.”  American Academy of Pediatrics guidelines recommend at least 48 hours of postpartum hospitalization but add that earlier discharge is reasonable if newborns are examined again within 48 hours after discharge.  Consider:  was the overall effects of the legislation protective, as intended.  

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