Utilization Review

The process by which a payer evaluates the medical necessity, appropriateness, and efficiency of healthcare services before, during, or after they are provided.

Utilization review is the payer's process for deciding whether the care you are providing or planning to provide is appropriate and necessary. It happens at three stages: prospective (before the service through prior authorization), concurrent (during an ongoing treatment like a hospital stay), and retrospective (after the service through claims review). Prospective UR is what most providers experience as prior authorization. You submit clinical information, the UR nurse or physician reviews it against criteria, and they approve or deny the request. Concurrent UR happens most often during hospital admissions. The payer's UR team reviews the patient's progress and determines whether continued inpatient care is still medically necessary. If they determine the patient could be treated at a lower level of care, they issue a denial for continued stay. Retrospective UR happens after the claim is submitted. The payer reviews the claim and supporting documentation to determine whether the service was medically necessary. This is where post-payment audits and medical necessity denials come from. Utilization review decisions must be made by qualified clinical staff. NCQA and state regulations require that UR denials be made by a physician who is licensed and ideally has expertise in the relevant clinical area. A nurse can approve a UR request, but only a physician can deny one. If you receive a UR denial, you have the right to a peer-to-peer review with the physician who made the denial decision. The peer-to-peer review is one of the most effective tools you have. When you speak directly with the medical director and explain your clinical reasoning, a significant percentage of denials get overturned. Most payers allow you to request a peer-to-peer within 24 to 48 hours of the denial. Track your UR denial patterns by payer. If one payer is denying a disproportionate number of your requests, it might indicate a documentation issue on your end or an overly aggressive UR program on theirs.