A. Utilization management (UM), as a program or process, has existed for more than 40 years.

B. In the commercial sector, UM was conducted by insurance companies, managed care organizations, or third-party utilization review (UR) vendors. The industry is now seeing integrated delivery systems (IDSs), accountable care organizations (ACOs), and other forms of provider organizations performing UM due to risk-bearing contracts and/or pay-for-performance arrangements.

C. UM programs may be telephonic, onsite, and/or web-based. Each format has plus and minus arguments. As organizations move to web-based communication, special attention must be paid to security and privacy measures.

D. The validated clinical and outcome impact of UM is challenging to discern in a broad sense. The reasons for this include the absence of a specific methodology for measurement and the condition-specific nature of program reporting. In addition, outcomes are not consistently shared. This variation of methodology and lack of transparency make generalizations difficult.

E. Workers’ compensation programs have dedicated UM standards and practices that are different from those required by Medicare, Medicaid, or commercial health insurance plans/third-party payers. Refer to Chapter 24 for more information about workers’ compensation.

F. Social workers are rarely involved in UM. Sometimes, social workers may collaborate with nurse case managers in obtaining authorizations from the payer for postdischarge services and resources for a patient or in identifying which postdischarge service providers are part of the health insurance plan panel of providers.

A. Admission certification—A form of utilization review in which an assessment is made of the medical necessity of a patient’s admission to a hospital or other inpatient facility. Admission certification ensures
that patients requiring a hospital-based level of care and length of stay appropriate for the admission diagnosis are usually assigned and certified as medically necessary according to care guidelines, but this is not necessarily a guarantee of payment for such services (payment is a benefit and/or claims determination).

B. Adverse determination—A decision by a health carrier, UM organization, or designee that a request for benefit coverage does not meet the requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness. It may also mean that the requested service or product is considered experimental or investigational and not a covered benefit. An adverse determination may be denial, reduction, termination, or failure to provide or make payment (National Association of Insurance Commissioners, 2012).

C. Alternative level of care—A level of care that can safely be used in place of the current level and is determined based on the acuity and complexity of the patient’s condition and the type of needed services and resources.

D. Appeal—The formal process or request to reconsider a decision made not to approve an admission or health care services, reimbursement for services rendered, or a patient’s request for postponing the discharge date and extending the length of stay.

E. Authorization—In the context of managed care, authorization is the need to obtain permission prior to coverage for specified services. This is common practice for gatekeeper-type health maintenance organizations. For instance, a primary care provider must authorize a member for a specialist provider visit in order for payment of said services (Kongstvedt, 2013).

F. Case rate—Rate of reimbursement that packages pricing for a certain category of services. Typically combines facility and professional practitioner fees for care and services.

G. Clinical practice guidelines—The Institute of Medicine (IOM) defined clinical practice guidelines as statements that include recommendations intended to optimize patient care that are informed by a systematic review of evidence and an assessment of the benefits and harms of alternative care options (Graham, Mancher, Wolman, Greenfield, & Steinberg, 2011). These guidelines should include the following characteristics: founded in systematic evidence review, developed by multidisciplinary expert panel, provide a clear explanation of the relationship between care options and health outcomes, and provide ratings of both the quality of evidence and the strength of the recommendations (National Heart, Blood, and Lung Institute, 2015).

H. Clinical review criteria—The written screens, decision rules, medical protocols, or guidelines used by the UM organization as an element in the evaluation of medical necessity and appropriateness of requested admissions, procedures, and services under the auspices of the applicable health benefit plan (URAC, 2010). Examples of clinical review criteria include InterQual, Managed Care Appropriateness Protocol (MCAP), and Milliman Care Guidelines (now known simply as MCG).

I. Continued stay review (also known as concurrent review)—A type of review used to determine whether each day of the hospital stay is necessary and that care is being rendered at the appropriate level. This
UM process takes place during a patient’s hospitalization for care to evaluate the medical necessity of continued acute care.

J. Continuum of care—The continuum of care matches ongoing needs of individuals being served by the case management process with the appropriate level and type of health, medical, financial, legal, and psychosocial care for services within a setting or across multiple settings.

K. Denials (also called noncertifications)—A determination that the requested health care services do not meet medical necessity criteria, resulting in the issuance of a notice of noncertification decision.

L. Diagnostic-related groups (DRGs)—A patient classification scheme that provides a means of relating the type of patient a hospital treats to the costs incurred by the hospital. DRGs include groups of patients using similar resource consumption and length of stay.

M. Discharge criteria—Clinical criteria to be met before or at the time of the patient’s discharge. They are the expected or projected outcomes of care that indicate a safe discharge.

N. Discharge planning—The process of assessing and evaluating the patient’s needs of care after discharge from a health care facility and ensuring that the necessary services are in place before discharge.

O. Evidence-based medicine (EBM)—A systematic approach to clinical problem solving, which allows the integration of the best available research evidence with clinical expertise and patient values. Evidencebased implies that the recommendation has been created using an unbiased and transparent process of systematically reviewing, appraising, and using the best clinical research findings of the highest value to aid in the delivery of optimum clinical care to patients.

P. Length of stay (LOS)—The number of days that a health plan member/patient stays in an inpatient facility, home health, or hospice.

Q. Level of care (LOC)—The intensity of effort required to diagnose, treat, preserve, or maintain an individual’s physical or emotional status.

R. Overutilization review—Using established criteria as a guide, determination that the patient is receiving services that are redundant, unnecessary, or in excess of what is determined to be medically necessary.

S. Preadmission certification (also known as prospective review)—An element of utilization review that examines the need for proposed services before admission to a health care facility to determine the appropriateness of the setting, procedures, treatments, and length of stay.

T. Precertification/prospective review—The process of obtaining and documenting advanced approval from the health plan by the provider before delivering the medical services needed. This is required when health care services are of a nonemergent nature.

U. Prospective payment system (PPS)—A health care payment system used by the federal government since 1983 for reimbursing health care providers/agencies for medical care provided to Medicare and Medicaid participants. The payment is fixed and based on the operating costs of the patient’s diagnosis.

V. Quality Improvement Organization (QIO)—A federal program established by the Tax Equity and Fiscal Responsibility Act of 1982 that monitors the medical necessity and quality of services provided to Medicare and Medicaid beneficiaries under the prospective payment system. QIOs also are involved in the discharge appeals process, especially for Medicare beneficiaries when they disagree with their discharge plans (and/or date) from various health care facilities including acute/hospital, rehabilitation, skilled nursing, and long-term acute care.

W. Resource management (RM)—A quality improvement activity that analyzes resources used in patient care processes to improve quality, efficiency, and value (Brown, 2015).

X. Retrospective review—A form of medical records review that is conducted after the patient’s discharge to track appropriateness of level of care, quality of care, and consumption of health care resources.

Y. Utilization management (UM)—UM is the evaluation of the medical necessity, appropriateness, and efficiency of the use of health care services, procedures, and facilities under the provisions of the applicable health benefits plan, sometimes referred to as utilization review (URAC, 2015).

Z. Utilization review (UR)—UR is a safety mechanism that guards against unnecessary and/or inappropriate medical care. It is also used to establish circumstances where underutilization is problematic. It allows for the review of patient care through the use of evidence-based guidelines, expert consensus statements, to determine a variety of care elements (e.g., medical necessity, quality of care, decision making, place of service, length of hospital stay) (Spector, 2004).

A. The Case Management Society of America (CMSA) describes in its standards of practice for case management (CMSA, 2010) that case management practice extends across all health care settings, including payer, provider, government, employer, community, and home environment.

B. The CMSA (2010) in its standards of practice for case management explains that case management practice varies in degrees of complexity and comprehensiveness based on four factors described in Box 14-1.

C. This chapter describes utilization and resource management across the continuum of care with special focus on the role of the case manager and the case management services provided.

D. This chapter addresses case management practice, which requires knowledge of and proficiency in the following practice standards: client assessment, monitoring, facilitation/coordination/collaboration, legal, advocacy, resource management and stewardship.

A. A UM program is a comprehensive, systematic, and ongoing effort. UM review activities are conducted through telephonic, fax, mail, on-site, and Web methods of communication with providers. Increasingly, health plans are interacting with providers through Web-based platforms that results in a more efficient and timely UM process. The UM process includes the evaluation of the appropriateness, quality, and level of care for health care services, equipment, and supplies across the delivery system.

B. UM programs focus on a variety of goals such as those summarized in Box 14-2.

C. UM review process: Web based