Why utilization management

Every hospital and healthcare organization that participates in Medicare or Medicaid has to keep a close eye on its compliance with regulations.

A utilization review plan is one of the elements required by the Centers for Medicare and Medicaid Services CMS for hospitals and healthcare organizations that participate in Medicare and Medicaid.

Factors such as length of stay and resource utilization must be monitored for compliance, so that reimbursements aren't negatively impacted. A robust utilization management program can track and help improve your compliance with these regulations.

You can reduce denials with a strong utilization management team. As long as there is waste in the healthcare system, denials for medical services are going to occur. But a well-trained utilization management staff can reduce the number of denials in a couple of significant ways.

For example, during utilization review they can carefully examine a medical case and possibly determine opportunities for the providers to modify their orders.

Staff members that are highly knowledgeable in utilization management can also ensure that the process is conducted and documented thoroughly for every patient.

This is especially valuable when submitting appeals of denials, because they understand the requirements necessary to establish medical necessity. Even with UM in place, the cost of care is still high, so it may be seen as ineffective. There is non-response or non-payment from an insurer sometimes called de facto denial.

Doctors may see these tests as important, but insurers might not have the same view. The number of insurance providers and the coverage available may cause costs to fluctuate.

There may be a difference between the best practice and most cost-effective treatment, which can create a conflict between doctors and insurance companies. The process can be burdensome on medical staff, taking them away from time that could be better spent with patients. Review criteria are often hidden from doctors and patients, so they may not know why coverage is denied.

UM may not have as big an effect as was once thought. Prescribed treatments that are unproven or investigational. However, treatments are constantly under evaluation, so something denied today may be covered in the future.

Lack of medical necessity of a treatment. Technical errors in the documentation, such as missing or incomplete information. Approve the treatment if criteria are met; deny it if not. If denied, the physician can appeal. Implementing a Utilization Management Program It takes a lot of time and effort for a healthcare provider to implement a UM program. The following questions will help guide the implementation of a UM program to ensure it meets goals and operates properly: How will the utilization management program limit unneeded utilization and contain costs?

What are the potential consequences both positive and negative of bringing outside parties into the patient care decision-making process? Will current processes hold utilization management organizations and purchasers accountable for their actions, or will you require new forms of oversight? What are the responsibilities of healthcare providers and patients?

What are the responsibilities and authority of case managers and care managers on the UM committee? How will you educate patients and staff about the value of UM? UM Components and Techniques Utilization management is a complex process that has many moving parts.

Keep the following in mind: Ensure the privacy and confidentiality of patient medical information. Treatment decisions will need to be reviewed and communicated in a timely manner, so delegate tasks and create a responsibility matrix that you can manage. Justify the medical necessity of admissions, extended stays, and professional services. Create a feedback process to evaluate the effectiveness of clinical criteria as well as satisfaction with the process.

When an insurer denies treatment, having a review board to process and collaborate with patients will expedite responses i. When decisions are appealed, a program should be in place that will allow data to be gathered to support the appeal.

ICD is a list of codes used to classify symptoms and diseases; because it is used internationally, using it as part of UM will help with communication. Proactively work to ensure that clinical documentation supports proposed courses of treatment. Processes need to be evidence-based, so they will require data gathering and verification tools. Be prepared for external audits. Ensure that payers and insurers share data in a timely manner. Incorporate tools to identify high-risk patients and their impact on the process.

Education is crucial for effective utilization management, so set up programs for patients and staff. Include administrative requests for clinical case reviews.

Team-based care works well with UM. Primary care physicians should lead teams that work to their highest level, communicate with patients before, during, and after in-person office visits, have systems in place to identify gaps in care, preventive needs, and clinical pathways, work to support process improvement, and look for system-level trends. High Cost Case Management High cost cases — those in which a small number of patients or beneficiaries generate a large portion of covered medical expenses — can cause headaches for insurers.

Pharmaceuticals in Utilization Management There are some aspects of utilization management that are specific to prescribing drugs and tracking their effects. Utilization Management versus Utilization Review The two terms are occasionally used as synonyms. URAC Standards for Utilization Management URAC which originally stood for Utilization Review Accreditation Commission, but now has no official meaning is a non-profit organization that runs accreditation programs for many areas of healthcare they also provide education programs.

Utilization Management Plan Template Because UM is such an involved and intertwined set of processes and procedures, a simple template would not be helpful. People and Entities Involved in Utilization Management In addition to the nurses, doctors, hospitals from small town clinics to well-known facilities like the Mayo Clinic , their staff including program managers, medical directors, and referral coordinators , private insurance companies e.

Medicare: A government-run insurance program for people 65 and older. Medicaid: A government-run insurance program for low income people. They are health insurance companies that contract with healthcare providers for reduced rates. Health Maintenance Organization HMOs : Another type of managed care that provides both insurance and healthcare, or works with closely-affiliated entities for healthcare. Kaiser Permanente is a well-known HMO. HMOs are sometimes called integrated delivery systems, and they drove the growth of UM in the s.

URAC: An organization that accredits utilization management programs and provides education as well. American Hospital Association AHA : A professional association that is one of the drivers behind UM, and acts as a clearinghouse for national healthcare data for their members.

The organization provides information and advice about health and health policy. It ran an advisory board called the Committee on Utilization Management by Third Parties, which helped improve the effectiveness of UM. Recovery Audit Contractors: These people review claims for Medicare and Medicaid to find and correct errors, improper reimbursement, incorrect coding of services, non-covered services, and duplicate services.

They are partly reimbursed based on the improper payments they identify. CMS provides data on healthcare quality and costs to the public. Peer Review Organizations PROs : Groups of local doctors mandated by the Tax Equity and Fiscal Responsibility Act that look at the quality and cost of services to ensure they meet Medicare requirements for quality and cost.

Managed Care Resources: A nurse-owned organization that works with managed care organizations. Envolve Healthcare: A private company that provides services to insurance companies and medical service providers to help them manage their UM programs UM Reviewers: People who help resolve conflicts that come up when case decisions are disputed or challenged.

Utilization Management Nurses: Nurses who work for insurers or hospitals, and are involved in deciding the type of treatment patients receive. Clinical Documentation Improvement CDI Specialists: People who examine documentation used to communicate with insurers to look for any red flags or enhancement opportunities.

Physician Advisors: People who review cases for which the proposed treatment may not be approved, and make recommendations to improve the chances of approval.

They are sometimes tasked with running the overall UM program. Independent Review Organizations IROs : Organizations that can be tasked with looking at denied claims and supporting or overturning the denials. Trends that may affect utilization management include the following: As costs continue to rise, UM may focus more on cost containment and assessing the value of treatments than other goals.

This act could have negative impacts on patients and doctors. Advancements in technology — not only in medical devices and pharmaceuticals, but also in electronic medical records — will require the UM process to continually adapt, not only in terms of how data is reviewed, but also in determining what is reviewed.

The way medical services are delivered as the population ages may drive change in UM. AI and big data may remove the need for human input on many cases. Improve Utilization Management Efforts with Smartsheet A key part of utilization management is collecting data and reviewing it to improve processes and care for patients going forward.

So, that being said, you have to make sure that you cover all those entities. The only way to do that is you have utilization management in place. So, a good example—and we call this a review. You have to make sure that you get everything which you can get and take credit for it because you did the care. Mike: Of course, collaboration leads to operational efficiency.

And you and I have also talked about the appropriate place for utilization management departments within an organization. But not everyone does it that way. So, talk to us about some of the collaboration that does occur between utilization management departments and other areas of the hospital and perhaps where you see the future of that department landing. Meliza Weiner: Okay! I always start everything from the beginning.

So, when we look at utilization management, you have the front-end. Do we have the necessary services to provide for that patient? Are the necessary payers aware? Did we get certification? Did we get all the papers in place? They have to work with admissions. A lot of people use the word siloed. This is what they got approved with insurance. Do we have all the paperwork in place? Do we have all the information we need?

With registration as well, they can help as far as coding. When the patient gets discharged, do we have the correct disposition? It should be coded that way. Another department that they work very well with is case management.

We just talked about discharge planning. Utilization managers can see that upfront. So, they can decrease the length of stay by working on discharge planning as soon as the patient comes in.

We want to make sure that the patient gets discharged safely and appropriately; and then, make sure that we do get our reimbursement for that care and services provided. Quality department, the quality department focuses on the quality of care provided. They have improvement activities. Sometimes they call it quality improvement ; sometimes, they call it quality assessment. They can work with utilization management as far as standards, protocols, policy, as far as processes involved.

Another department is revenue cycle.