Define Healthcare in Utilization Management Organizations

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

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.

Inpatient Utilization Review

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 and Government Roles in Utilization Review

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.

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Comments 8 comments

kimh039 profile image

kimh039 5 years ago

Thanks for a clearly written and informative hub, Smireles. In Behavioral Health, psychiatric and substance abuse treatments are reviewed in the same manner.

Joni Douglas profile image

Joni Douglas 6 years ago

Good information, thanks for this hub. Keeping health care decisions in the hands of the patients and their doctors is of utmost importance. The bottom line sometimes just has to take a second seat.

Pamela99 profile image

Pamela99 6 years ago from United States

Smireless, This is an excellent hub. As I was a nurse I was still working when the reviews started and it sounds like they are much better now.

Smireles profile image

Smireles 6 years ago from Texas Author

eovery, there will always be room for improvement in any operation whether it is healthcare or business. Healthcare professionals are good at their jobs and their educational process never ends.

Mickey Dee, thanks for your support.

Micky Dee profile image

Micky Dee 6 years ago

Great hub Smireles! And thank you for being a positive force!

eovery profile image

eovery 6 years ago from MIddle of the Boondocks of Iowa

This is good, because I have heard from some friends in the healthcare industry that there are a lot inefficiencies, and errors made out there. But as Tom says, I hope the professionals are doing this, and not politicians.

Keep on hubbing!

Smireles profile image

Smireles 6 years ago from Texas Author

Tom, I worked on a nursing unit for thirteen years. We were very skeptical when utilization review and managed care was first introduced back in the nineties. But in spite of the fact that most of the staff did not accept UR the truth is that their suggestions many times worked. I still believe that the doctor is the person to make decisions about treatment and care plans. All utilization review professionals are licensed medical people such as nurses, nurse practitioners, and at some level physicians. I am not in favor of the government making healthcare decisions, either. However, it appears they are going to get their hands in the mix in spite of our best efforts to keep them out. Thanks for commenting.

Tom Whitworth profile image

Tom Whitworth 6 years ago from Moundsville, WV


As long as this rewiew is conducted by competant medical professionals it OK. I don't want government beaurucrats making these decisions!!!!!!!!!

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