Utilization management

Last updated

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 appropriateness before it is provided using evidence-based criteria or guidelines.

Contents

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. [1]

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 [1] Committee on Utilization Management by Third Parties (1989; IOM is now the National Academy of Medicine). [1]

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.

Reviewers

Roles included in UM may include: UM reviewers (often a registered nurse with UM training), a UM program manager, and a physician adviser. UM policies may include the frequency of reviews, priorities, and balance of internal and external responsibilities. UM processes may include escalation processes when a clinician and the UM reviewer are unable to resolve a case, dispute processes to allow patients, caregivers, or patient advocates to challenge a point of care decision, and processes for evaluating inter-rater reliability among UM reviewers.

Criteria and guidelines

UM criteria are medical guidelines which may be developed in-house, acquired from a vendor, or acquired and adapted to suit local conditions. Two commonly used UM criteria frameworks are the McKesson InterQual criteria [2] and MCG (previously known as the Milliman Care Guidelines). [3]

The guidelines should reflect evidence-based care, although there may be difference between "best practice" and cost-effective acceptable care quality, with payer guidelines emphasizing cost-effectiveness. [4] Conflicts between payers and providers can arise; for example, when studies found that vertebroplasty did not improve outcomes, Aetna attempted to classify it as experimental but retracted the decision after reaction by providers. [5] Findings from a 2019 systematic review identified how guidelines for UM are often more focused on reduction of utilization than on clinically meaningful measures such as patient-reported outcomes or measures of appropriateness. [6]

Medicare issues national coverage determinations on specific treatments.

Timing of review

Similar to the Donabedian healthcare quality assurance model, UM may be done prospectively, retrospectively, or concurrently. [7]

Prospective review is typically used as a method of reducing medically unnecessary admissions or procedures by denying cases that do not meet criteria, or allocating them to more appropriate care settings before the act.

Concurrent review is carried out during and as part of the clinical workflow, and supports point of care decisions. The focus of concurrent UM tends to be on reducing denials and placing the patient at a medically appropriate point of care. [8] Concurrent review may include a case-management function that includes coordinating and planning for a safe discharge or transition to the next level of care.

Retrospective review considers whether an appropriate level of care applied after it was administered. Retrospective review will typically look at whether the procedure, location, and timing were appropriate according to the criteria. This form of review typically relates to payment or reimbursement according to a medical plan or medical insurance provision. Denial of the claim could relate to payment to the provider or reimbursement to the plan member. Alternatively, retrospective review may reflect a decision as to ongoing point of care. This may entail justification according to the UM criteria and plan to leave a patient at the previous (current) point of care, or to shift the patient to a higher or lower point of care that would match the UM criteria. For example, an inpatient case situated in a telemetry bed (high cost) may be evaluated on a subsequent day of stay as no longer meeting the criteria for a telemetry bed. This may be due to changes in acuity, patient response, or diagnosis, or may be due to different UM criteria set for each continued day of stay. At this time the reviewer may indicate alternatives such as a test to determine alternate criteria for continued stay at that level, transfer to a lower (or higher) point of care, or discharge to outpatient care.

Integrated delivery system

In an integrated delivery system such as a health maintenance organization (HMO), the provider and the payer share the financial cost of care, allowing for more utilization management; the rise of utilization management in the 1980s was associated with a rise in integrated healthcare. [1] : 50 

As of 2019, about 3% of large employers, including Walmart and Boeing, contracted directly with providers to care for their employees, and these arrangements can remove prior authorization entirely with capitated payments. [9]

The Mayo Clinic and Blue Cross and Blue Shield of Minnesota agreed to let the Mayo Clinic have more say over emerging technologies, which are typically classified as experimental and investigational in insurer guidelines. [10]

History

In the United States, about 5 percent of insured employees were estimated to be affected,[ when? ] which rose rapidly to about three-quarters in 1989 [1] : 14  and became ubiquitous by 1995. [11]

In 2019, Anthem began a policy to deny emergency room visits which were deemed to be medically unnecessary, by retrospectively denying claims when the insureds visited ERs and received diagnoses which the insurer did not consider to be an emergency. [12] [13]

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.[ citation needed ]

Appeals

Denied claims can usually be appealed externally to an independent medical review by an independent review organizations (IROs).

In fully insured plans as opposed to employer-funded plans, the IRO is typically selected by state insurance commissioners, who have promulgated model laws through the National Association of Insurance Commissioners (NAIC). [14] As of 2017, Alabama, Mississippi, Nebraska and North Dakota used an alternative process. [14] For employer-funded group plans which are regulated by Employee Retirement Income Security Act (ERISA), as of 2011 guidance from the insurer must have at least three separate IROs, and not steer the patient to a specific IRO. [15]

In 2010 the Patient Protection and Affordable Care Act required states to have laws similar to the Uniform Health Carrier External Review Model Act by the NAIC or use an alternative federal appeal process. [14] Among other requirements, insurers must provide diagnosis and treatment codes upon request. [16]

As of 2018, in 42 states IROs must be accredited by the utilization review education and standards nonprofit URAC. [16] Notable IRO companies include the Medical Review Institute of America, Advanced Medical Reviews and AllMed Healthcare Management. [17] In 2019, it was found that a physician had impersonated another physician to conduct medical reviews. [18]

A study of health insurance market plans found less than 0.5 percent of denied claims appealed internally, and less than 1 in 10,000 appealed to external review. [19]

Lawsuits

Regardless of appeal, a lawsuit can be filed against the insurer; in 2019, class action lawsuits were filed against UnitedHealthcare regarding proton beam therapy, which was denied as experimental [20] although later language denied it on the basis of medical necessity, which is held to a different legal standard. [17] In 2019, a federal judge ruled against UnitedHealthcare's denial of mental health coverage. [21]

The results of lawsuits have been inconsistent historically; for example, HDC-ABMT was found unproven by Fifth and Seventh Circuits while the Eighth Circuit ruled against the insurer and found it non-experimental. [22]

In 2019, UnitedHealthcare settled a class action suit on lumbar artificial disc replacement surgery, reprocessing the claims. [23]

In 2018, a state jury in Oklahoma found against Aetna's denial of proton beam therapy with a $26.5m judgment in Ron Cunningham v. Aetna; [24] much of the damages arose from insurance bad faith [25] and the company stated that it was considering an appeal. [26]

Denials

Claim denials may be due to a number of things, including contract exclusions, unproven or investigational treatments, or medical necessity. A study of payers found wide variations in denial rates and days to pay. [27] Denials can also be caused by technical errors, such as incomplete information or misspelling a name, which accounted for about half of initial denials according to a 2015 analysis. [28] The migration to ICD-10 has also increased the risk of mistakes, as these are tied to automated treatment decisions. [29] In the case of Medicare, national coverage determinations show necessary treatments for diseases, with medical guidelines of insurers playing a similar role for private companies. [29]

It has been argued that "investigational" is not an appropriate criteria for denial, since treatments are continuously under investigation. [30] Off-label use of medications is relatively common in the United States, but can be denied as unproven. [30] Expanded access laws may affect coverage for experimental treatments.

De facto denials occur when claims are not denied outright, but in practical terms are not covered because of a non-response or non-payment from a carrier. [31] [32] [33]

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. [34]

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. [34]

See also

Related Research Articles

<span class="mw-page-title-main">Aetna</span> American insurance company

Aetna Inc. is an American managed health care company that sells traditional and consumer directed health care insurance and related services, such as medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans, primarily through employer-paid insurance and benefit programs, and through Medicare. Since November 28, 2018, the company has been a subsidiary of CVS Health.

<span class="mw-page-title-main">Health Insurance Portability and Accountability Act</span> United States federal law concerning health information

The Health Insurance Portability and Accountability Act of 1996 is a United States Act of Congress enacted by the 104th United States Congress and signed into law by President Bill Clinton on August 21, 1996. It aimed to alter the transfer of healthcare information, stipulated the guidelines by which personally identifiable information maintained by the healthcare and healthcare insurance industries should be protected from fraud and theft, and addressed some limitations on healthcare insurance coverage. It generally prohibits healthcare providers and businesses called covered entities from disclosing protected information to anyone other than a patient and the patient's authorized representatives without their consent. The bill does not restrict patients from receiving information about themselves. Furthermore, it does not prohibit patients from voluntarily sharing their health information however they choose, nor does it require confidentiality where a patient discloses medical information to family members, friends or other individuals not employees of a covered entity.

Health insurance or medical insurance is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among many individuals. By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity.

<span class="mw-page-title-main">Cigna</span> American health services organization

The Cigna Group is a for-profit American multinational managed healthcare and insurance company based in Bloomfield, Connecticut. Its insurance subsidiaries are major providers of medical, dental, disability, life and accident insurance and related products and services, the majority of which are offered through employers and other groups. Cigna is incorporated in Delaware.

Medical billing is a payment practice within the United States healthcare system. The process involves the systematic submission and processing of healthcare claims for reimbursement. Once the services are provided, the healthcare provider creates a detailed record of the patient's visit, including the diagnoses, procedures performed, and any medications prescribed. This information is translated into standardized codes using the appropriate coding system, such as ICD-10-CM or Current Procedural Terminology codes—this part of the process is known as medical coding. These coded records are submitted by medical billing to the health insurance company or the payer, along with the patient's demographic and insurance information. Most insurance companies use a similar process, whether they are private companies or government sponsored programs. The insurance company reviews the claim, verifying the medical necessity and coverage eligibility based on the patient's insurance plan. If the claim is approved, the insurance company processes the payment, either directly to the healthcare provider or as a reimbursement to the patient. The healthcare provider may need to following up on and appealing claims.

The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing health care and providing American health insurance while improving the quality of that care. It has become the predominant system of delivering and receiving American health care since its implementation in the early 1980s, and has been largely unaffected by the Affordable Care Act of 2010.

...intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases. The programs may be provided in a variety of settings, such as Health Maintenance Organizations and Preferred Provider Organizations.

In U.S. health insurance, a preferred provider organization (PPO), sometimes referred to as a participating provider organization or preferred provider option, is a managed care organization of medical doctors, hospitals, and other health care providers who have agreed with an insurer or a third-party administrator to provide health care at reduced rates to the insurer's or administrator's clients.

<span class="mw-page-title-main">Blue Cross Blue Shield Association</span> Federation of 36 separate United States health insurance organizations and companies

Blue Cross Blue Shield Association, also known as BCBS, BCBSA, or The Blues, is a United States-based federation with 34 independent and locally-operated BCBSA companies that provide health insurance in the United States to more than 115 million people as of 2022.

An independent medical review (IMR) is the process where physicians review medical cases in order to provide claims determinations for health insurance payers, workers compensation insurance payers or disability insurance payers. Peer review also is used in order to define the review of sentinel events in a hospital environment for quality management purposes such as to look at bad outcomes and determine whether there was any mis-diagnosis, mistreatment or any systemic problems involved which led to the sentinel event.

<span class="mw-page-title-main">Medicare for All Act</span> Proposed U.S. healthcare reform legislation

The Medicare for All Act, also known as the Expanded and Improved Medicare for All Act or United States National Health Care Act, is a bill first introduced in the United States House of Representatives by Representative John Conyers (D-MI) in 2003, with 38 co-sponsors. In 2019, the original 16-year-old proposal was renumbered, and Pramila Jayapal (D-WA) introduced a broadly similar, but more detailed, bill, HR 1384, in the 116th Congress. As of November 3, 2019, it had 116 co-sponsors still in the House at the time, or 49.8% of House Democrats.

Consumer-driven healthcare (CDHC), or consumer-driven health plans (CDHP) refers to a type of health insurance plan that allows employers and/or employees to utilize pretax money to help pay for medical expenses not covered by their health plan. These plans are linked to health savings accounts (HSAs), health reimbursement accounts (HRAs), or similar medical payment accounts. Users keep any unused balance or "rollover" at the end of the year to increase future balances or to invest for future expenses. They are a high-deductible health plan which has cheaper premiums but higher out of pocket expenses, and as such are seen as a cost effective means for companies to provide health care for their employees.

Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), was a United States Supreme Court case in which the Court limited the scope of the Texas Healthcare Liability Act (THCLA). The effective result of this decision was that the THCLA, which held Case Management and Utilization Review decisions by Managed Care entities like CIGNA and Aetna to a legal duty of care according to the laws of The State of Texas could not be enforced in the case of Health Benefit plans provided through private employers, because the Texas statute allowed compensatory or punitive damages to redress losses or deter future transgressions, which were not available under ERISA § 1132. The ruling still allows the State of Texas to enforce the THCLA in the case of Government-sponsored (Medicare, Medicaid, Federal, State, Municipal Employee, etc., Church-sponsored, or Individual Health Plan Policies, which are saved from preemption by ERISA. The history that allows these Private and Self-Pay Insurance to be saved dates to the "Interstate Commerce" power that was given the federal Government by the Supreme Court. ERISA, enacted in 1974, relied on the "Interstate Commerce" rule to allow federal jurisdiction over private employers, based on the need of private employers to follow a single set of paperwork and rules for pensions and other employee benefit plans where employers had employees in multiple states. Except for private employer plans, insurance can be regulated by the individual states, and Managed Care entities making medical decisions can be held accountable for those decisions if negligence is involved, as allowed by the Texas Healthcare Liability Act.

Healthcare reform in the United States has a long history. Reforms have often been proposed but have rarely been accomplished. In 2010, landmark reform was passed through two federal statutes: the Patient Protection and Affordable Care Act (PPACA), signed March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, which amended the PPACA and became law on March 30, 2010.

The public health insurance option, also known as the public insurance option or the public option, is a proposal to create a government-run health insurance agency that would compete with other private health insurance companies within the United States. The public option is not the same as publicly funded health care, but was proposed as an alternative health insurance plan offered by the government. The public option was initially proposed for the Patient Protection and Affordable Care Act, but was removed after independent Connecticut senator Joe Lieberman threatened a filibuster.

Healthcare in the United States is largely provided by private sector healthcare facilities, and paid for by a combination of public programs, private insurance, and out-of-pocket payments. The U.S. is the only developed country without a system of universal healthcare, and a significant proportion of its population lacks health insurance.

The Affordable Care Act (ACA) is divided into 10 titles and contains provisions that became effective immediately, 90 days after enactment, and six months after enactment, as well as provisions phased in through to 2020. Below are some of the key provisions of the ACA. For simplicity, the amendments in the Health Care and Education Reconciliation Act of 2010 are integrated into this timeline.

This article summarizes healthcare in California.

Prior authorization is a utilization management process used by some health insurance companies in the United States to determine if they will cover a prescribed procedure, service, or medication.

<span class="mw-page-title-main">Drug utilization review</span>

Drug utilization review refers to a review of prescribing, dispensing, administering and ingesting of medication. This authorized, structured and ongoing review is related to pharmacy benefit managers. Drug use/ utilization evaluation and medication utilization evaluations are the same as drug utilization review.

De facto denial or functional denial is a situation that can occur in health insurance and workers' compensation insurance when a claim is not denied outright, but in practical terms it is not covered. If cost reduction by an insurer is the reason for de facto denials as part of utilization management, it can lead to healthcare rationing through denials of care or coverage, delays in care, and unexpected financial risks to patients.

References

  1. 1 2 3 4 5 Institute of Medicine (1989), Controlling Costs and Changing Patient Care?: The Role of Utilization Management, Washington, DC, USA: National Academies Press, doi:10.17226/1359, ISBN   978-0-309-04045-7, PMID   25144100.
  2. ↑ Mitus, A. J. (2008). The birth of InterQual: evidence-based decision support criteria that helped change healthcare. Prof Case Manag, 13(4), 228-233
  3. ↑ Sebastian M (January 27, 2014). "Hearst's New Health Division is a Departure from Magazines and TV". AdAge . Retrieved April 14, 2018.
  4. ↑ Moses RE, Feld AD (January 2008). "Legal risks of clinical practice guidelines". The American Journal of Gastroenterology. 103 (1): 7–11. doi:10.1111/j.1572-0241.2007.01399.x. PMID   18184116. S2CID   11802118.
  5. ↑ Wulff KC, Miller FG, Pearson SD (December 2011). "Can coverage be rescinded when negative trial results threaten a popular procedure? The ongoing saga of vertebroplasty". Health Affairs. 30 (12): 2269–76. doi: 10.1377/hlthaff.2011.0159 . PMID   22147854.
  6. ↑ Maratt JK, Kerr EA, Klamerus ML, Lohman SE, Froehlich W, Bhatia RS, Saini SD (September 2019). "Measures Used to Assess the Impact of Interventions to Reduce Low-Value Care: a Systematic Review". Journal of General Internal Medicine. 34 (9): 1857–1864. doi:10.1007/s11606-019-05069-5. PMC   6712188 . PMID   31250366.
  7. ↑ Donabedian A (2003). An introduction to quality assurance in health care . Oxford University Press. pp.  92–93. ISBN   9780195158090.
  8. ↑ Olaniyan O, Brown IL, Williams K (2011). "Concurrent utilization review: getting it right". Physician Executive. 37 (3): 50–4. PMID   21675315.
  9. ↑ Livingston S (2018-01-25). "Left out of the game: Health systems offer direct-to-employer contracting to eliminate insurers". Modern Healthcare. Retrieved 2019-05-18.
  10. ↑ Haefner M. "BCBS lets Mayo in on decision-making with new 5-year contract". www.beckershospitalreview.com. Retrieved 2019-05-18.
  11. ↑ Shapiro MF, Wenger NS (November 1995). "Rethinking utilization review". The New England Journal of Medicine. 333 (20): 1353–4. doi:10.1056/NEJM199511163332012. PMID   7566031.
  12. ↑ Abraham T. "Anthem ER policy could deny 1 in 6 visits if universally adopted, JAMA study warns". Healthcare Dive. Retrieved 2020-03-12.
  13. ↑ Hart A. "Anthem's emergency room coverage denials draw scrutiny". The Atlanta Journal-Constitution. Retrieved 2020-03-12.
  14. 1 2 3 "Understanding Independent Medical Review and Utilization Review Services" (PDF). NAIRO.
  15. ↑ "Technical Release No. 2011-02". United States Department of Labor. 2016-07-27. Retrieved 2019-05-19.
  16. 1 2 Bikoff L (28 January 2016). "ACA specifies 'effective' internal claims appeals process". Utilization Review Accreditation Commission (URAC). Archived from the original on 29 September 2020. Retrieved 2019-05-19.
  17. 1 2 Rozelle TJ, Kantor LS. "Using ERISA to end proton therapy denials". dotmed.com. Retrieved 2019-05-18.
  18. ↑ Tozzi J (2018-10-02). "Doctor's Alleged Fraud Scheme Throws Medical Claims Review Process into Doubt". Insurance Journal. Retrieved 2019-05-19.
  19. ↑ Pollitz K (25 February 2019). "Claims Denials and Appeals in ACA Marketplace Plans". The Henry J. Kaiser Family Foundation. Rachel Fehr Published. Retrieved 2019-05-19.
  20. ↑ Livingston S (2019-04-29). "Judge recuses himself from UnitedHealthcare proton therapy lawsuits". Modern Healthcare. Retrieved 2019-05-19.
  21. ↑ Alder M. "Insurers' Internal Policies Latest Legal Front in Treatment Fight (1)". news.bloomberglaw.com. Retrieved 2019-05-19.
  22. ↑ Hoffman S (2000-03-30). "A Proposal for Federal Legislation to Address Health Insurance Coverage for Experimental and Investigational Treatments". Rochester, NY. SSRN   214131.{{cite journal}}: Cite journal requires |journal= (help)
  23. ↑ Wallace A. "Latest ERISA Lawsuit News – 401k Mismanagement Lawsuits Going Strong, New Settlement in Treatment Denial Case". www.lawyersandsettlements.com. Retrieved 2019-06-15.
  24. ↑ "Ron Cunningham v. Aetna, CJ-2015-2826". Oklahoma State Courts Network.
  25. ↑ Terry D (2018-11-09). "$25.6 Million Verdict Against Aetna in Bad Faith Case". Oklahoma Bad Faith Insider. Retrieved 2019-06-13.
  26. ↑ Clay N (2018-11-08). "Oklahoma County jury hits health insurer Aetna with $25.5 million verdict". Oklahoman.com. Retrieved 2019-06-13.
  27. ↑ Lewis T, Buell B (April 2019). "Denial Rates and Days to Pay for Cancer Drugs: Commercial Health Plan Report Card". OBR. 11 (4). Retrieved 2019-06-14.
  28. ↑ Gooch K. "4 ways healthcare organizations can reduce claim denials". www.beckershospitalreview.com. Retrieved 2019-06-24.
  29. 1 2 Eramo LA. "Mitigate Medical Necessity Denials". For the Record. 28 (3): 22. Retrieved 2019-06-24.
  30. 1 2 Steinberg EP, Tunis S, Shapiro D (1995). "Insurance coverage for experimental technologies". Health Affairs. 14 (4): 143–58. doi: 10.1377/hlthaff.14.4.143 . PMID   8690340.
  31. ↑ Weinstock J. "The Non-Response (De Facto) Denial". Virginia Hunt Law Office. Retrieved 2019-07-31.
  32. ↑ Kares J. "Medically Unlikely Edits and Medical Necessity". Medicare Insider. Retrieved 2019-07-31.
  33. ↑ Karlamangla S (15 December 2015). "Civil rights complaint filed against Medi-Cal". Los Angeles Times. Retrieved 2019-07-31.
  34. 1 2 Porter ME (December 2010). "What is value in health care?". The New England Journal of Medicine. 363 (26): 2477–81. doi:10.1056/NEJMp1011024. PMID   21142528.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.