The Scenario: A patient named Sam entered the Emergency Department (ED) with abdominal pain. He was triaged and escorted to a treatment room. After an assessment, examination, lab tests and imaging, it was determined Sam had appendicitis. He was scheduled for surgery the next morning for an appendectomy. Susan, the utilization review nurse, analyzed Sam’s electronic medical record the next morning. Susan asked herself, “Is the surgery medically necessary?” and “Can it be performed safely in an ambulatory setting or does it require an inpatient admission?”

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According to the Centers for Medicare & Medicaid Services Glossary (2016), medical necessity is defined as “services or supplies that: are proper and needed for the diagnosis or treatment of a medical condition, are provided for the diagnosis, direct care, and treatment of a medical condition, meet the standards of good medical practice in the local area, and aren’t mainly for the convenience of the patient or doctor.”

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An Introduction to Utilization Review

Healthcare has changed drastically in the last 100 years. Healthcare costs continue to rise, quality of care is questioned, and chronic diseases are evident now more than ever before. These challenges must be addressed by the industry, and effective solutions are a must.

Utilization review (UR) is one solution to the obstacles we face today in the healthcare industry. Utilization review is a method used to match the patient’s clinical picture and care interventions to evidence-based criteria such as MCG care guidelines. This criteria helps to guide the utilization review nurse in determining the appropriate care setting for all levels of services across the arc of patient care.

History of Utilization Review

Due to rising costs after the induction of health insurance in the 1960s, President Lyndon B. Johnson and the U.S. Congress responded with programs we now call Medicare and Medicaid. Medicare/Medicaid allowed for reimbursement to the physician for a reasonable and customary charge. Due to rising costs, and the offering of healthcare insurance from employers to employees, utilization review was presented.

Utilization review, as a process, was introduced in the 1960s to reduce overutilization of resources and identify waste. The utilization review function was initially performed by registered nurses (RNs) in the acute hospital setting. The skillset gained popularity within the health insurance industry, mainly due to growing research about medical necessity, misuse, and overutilization of services. Therefore, health plans began to review claims for medical necessity, and the hospital length of stay (LOS). To contain costs, some health plans required the physician to certify the admission and any subsequent days after the admission.

Utilization Review Process

There are three activities within the utilization review process: prospective, concurrent and retrospective.

• Prospective review includes the review of medical necessity for the performance of services or scheduled procedures before admission.
• Concurrent reviews include a review of medical necessity decisions made while the patient is currently in an acute or post-acute setting.
• Retrospective reviews involve a review of coverage after treatment is provided.

The complete utilization review process consists of precertification, continued stay review, and transition of care.

When a patient is admitted to the facility, a first level review is conducted for appropriateness; this includes medical necessity, continued stay, level of care, potential delays in care and progression of care.

Medical necessity determines whether the hospital admission is appropriate, justifiable and reimbursable. Continued stay determines if each day of the stay is necessary and if the level of care is appropriate for that day. Level of care determination identifies the most appropriate and needed level of care such as intensive or intermediate versus a medical-surgical floor level of care. System delays are assessed and monitored to identify any potentially avoidable delays in care.

Progression of care, utilizing the guideline’s Optimal Recovery Course, moves the patient through the continuum of care without delays and determines if services are appropriate, justifiable and reimbursable.

Applying the activities within the utilization review process, the nurse must accurately document the medical necessity and level of care based on evidenced-based criteria (such as MCG). The chart documentation must display the patient’s current condition, and why the condition cannot be safely treated outpatient, and the risk associated if care is not provided at that level of care.

In conclusion, although this is an overview of the utilization review technique, it is important to note the process includes other methods such as physician second level review, CMS regulatory requirements, and in some cases clinical documentation improvement. Today, utilization review is one method used to demonstrate the quality of care and protect revenue integrity. Because quality and costs are of paramount importance, utilization review nurses must possess clinical judgment and critical thinking skills to proactively mitigate overutilization and misuse of resources.

– India Watson, RN, MSN, BSN, CCM, CTT+ (June 21, 2018)

The information contained in this article concerns the MCG care guidelines in the specified edition and as of the date of publication, and may not reflect revisions made to the guidelines or any other developments in the subject matter after the publication date of the article.

Image courtesy Shutterstock/Monkey Business Images

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References:

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Daniels, S. & Hirsch, R. (2015). The Hospital Guide to Contemporary Utilization Review. HCPro.

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Cesta, T. G., & Tahan, H. M. (2017). The case managers survival guide: Winning strategies in the new healthcare environment (Third ed.). Lancaster, PA: Destech Publications.

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Centers for Medicare & Medicaid Services Glossary (2016, 0514) Retrieved from https://www.cms.gov/apps/glossary/default.asp?Letter=M&Language=English

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