Utilization Review vs. Utilization Management

Utilization Review versus Utilization Management?

Although the two terms are often used in the same way and to mean more or less the same thing in healthcare, the two concepts of Utilization Review and Utilization Management are subtly different. Understanding how they differ can help to improve communication around the subject. 

Utilization Review

When we talk about Utilization Review, we are talking specifically about the process of reviewing patient records to assess their completion and accuracy after the treatment has occurred. The response to the findings of the review can be encompassed through a discussion of Utilization Management, which are the actions a healthcare system takes to address findings that may not be optimal.

Utilization Management

Through Utilization Management, plans and procedures can be developed to help improve the outcome of reviews. In ideal circumstances, Utilization Management procedures are really proactive rather than reactive. But the impetus for changing or developing them may be, at first, in response to the outcome of a review.

When are Utilization Management and Utilization Review one in the same?

Utilization Review colloquially does encompass Utilization Management. When we talk about review, often we are discussing it in broader terms than just the physical act of reviewing charts. But that is not always immediately clear, and therefore, understanding the difference between the two, especially in conversation, is imperative.

Federal vs. Local Mandates

The conversation is further complicated by the fact that while the federal government has some set standards about procedures, each state varies on their individual standards. So, while there are some elements that will ring true for all hospitals, there are other nuances which will differ based on where the hospital is located.

Where does URAC fit into the equation?

URAC, then, is able to provide some semblance of structure and set expectations that are true for all healthcare systems by providing review and subsequently, URAC accreditation. This accreditation is recognized as a seal of approval. In providing a set of standards that all can work toward, accreditation through URAC improves communication not just between organizations, but within them.

Enter: IROs

Independent Review Organizations, or IROs, are the organizations that typically provide the review services because they can provide much needed objectivity. The IROs are an integral player and liaison between the providers and the payers, who have very different needs and expectations. IROs have the tough job of abiding by and staying aware of both federal and local standards. 

IROs assist in the process of reviewing services for medical necessity and appropriateness. The goal is always to analyze if the documentation provided by the physician supports the treatment the patient received. Concerns about payments being made when they should not have been are on the forefront of the insurers minds, but then to there are also occasions where it’s possible a hospital may, in fact, have been underpaid, and so the tug-of-war could fall to either side. It is because of these conflicting pay-offs that an external or independent review is needed. There can’t be a conflict of interest when it comes to review of the patient charts to assess if the treatment- and thus, the payment- was truly justified.

Be proactive, not reactive.

Utilization management in a hospital setting is now moving more toward a proactive rather than reactive approach. Through care coordination, discharge planning and medication reconciliation, hospital administrators are taking the necessary steps to review themselves before they ever need to seek an external review in the first place. While proactive planning is better than retroactive justifications, not everyone is quite there yet.

For those who are still in the planning stages – and seeking resources in developing their plan – IROs will certainly come in handy.