Utilization management

Utilization management (UM) or utilization review is the use of managed care techniques such as prior authorization that allow payers, particularly health insurance companies, to manage the cost of health care benefits by assessing its medical appropriateness before it is provided, by using evidence-based criteria or guidelines. Critics have argued that if cost-cutting by insurers is the focus of their use of UM criteria, it could lead to healthcare rationing by overzealous denial of care as well as retrospective denial of payment, delays in care, or unexpected financial risks to patients.

Utilization management (UM) or utilization review is the use of managed care techniques such as prior authorization that allow payers, particularly health insurance companies, to manage the cost of health care benefits by assessing its medical appropriateness before it is provided, by using evidence-based criteria or guidelines. Critics have argued that if cost-cutting by insurers is the focus of their use of UM criteria, it could lead to healthcare rationing by overzealous denial of care as well as retrospective denial of payment, delays in care, or unexpected financial risks to patients.

Aspects

Utilization management is "a set of techniques used by or on behalf of purchasers of health care benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care prior to its provision," as defined by the Institute of Medicine Committee on Utilization Management by Third Parties (1989; IOM is now the National Academy of Medicine). UM is the evaluation of the appropriateness and medical necessity of health care services, procedures, and facilities according to evidence-based criteria or guidelines, and under the provisions of an applicable health insurance plan. Typically, UM addresses new clinical activities or inpatient admissions based on the analysis of a case. But this may relate to ongoing provision of care, especially in an inpatient setting. Discharge planning, concurrent planning, pre-certification and clinical case appeals are proactive UM procedures. It also covers proactive processes, such as concurrent clinical reviews and peer reviews as well as appeals introduced by the provider, payer or patient. A UM program comprises roles, policies, processes, and criteria.

Regulation

In the United States, in addition to voluntary self-policing by industry, various organizations are involved in regulation at the state and federal government regulation.

Criticism

UM has been criticized for treating cost of care as an outcome metric, and that this confuses the objectives of healthcare and potentially reduces healthcare value by mixing up process of care with results of care. Some authors have pointed out that when cost-cutting by insurers is the focus of UM criteria, it may lead to overzealous prospective denial of care as well as retrospective denial of payment. As a result, there may be delays in care or unexpected financial risks to patients.

Text derived from https://en.wikipedia.org/w/index.php?oldid=1352886419 under CC BY-SA 4.0; modifications have been made.