The key to effective utilization management: Better patient care, reduced cost

Utilization management (UM) is commonly assumed to be a strategy payers implement to reduce health care cost. Although successful programs do result in reduced cost of claims, the focus of an effective UM program is improved quality of care.

When UM programs focus on denials–prioritizing cost savings over patient care–they often inadvertently add to the cost of a claim. Denying claims for the sole purposed of reducing cost can interfere with early intervention and result in more costly procedures down the road due to a delay in care.

Effective UM programs are based on providing the right patient care at the right time. These programs can be broken down into four key components–risk management, quality assurance, education, and utilization review.

Risk management

Risk management aims to improve quality of care for patients and prevent avoidable costs through early intervention, preventive health, and education.

Early Intervention: Early intervention is used to stop the disease process, preventing a decline in the quality of life and high spending to fight the disease. The hope is that the existing disease process is completely reversed.

Preventive health: Preventive health attempts to stop the disease from ever occurring by implementing healthy lifestyle choices. It also works to identify the potential disease process very early on to improve overall population health and in turn, lower costs.

Education: Educating patients with proper knowledge around the signs/symptoms of the disease allows for early identification and intervention. Education also provides patients with knowledge on best practices regarding annual check-ups, preventive care, and the benefits available to them through their insurance plan.

Utilization review: Utilization review determines the appropriateness of the prescribed treatment plan to ensure a high quality of care and prevent unnecessary procedures. It is broken down into three phases of review: prospective, concurrent, and retrospective.

• Prospective review–A review to evaluate the prescribed treatment plan before the treatment is performed to assesses the need for the health care services.
• Concurrent review–A review performed at pre-determined intervals throughout the treatment process which primarily focus on the appropriateness of length of stay and initial discharge plans.
• Retrospective review–A review performed post-discharge assessing the appropriateness of procedures, length of stay, and discharge to gain insights for quality management and risk assessment. It is the process of assessing appropriateness of procedures, settings, and timings after the services have been rendered to ensure claim submissions contain correct billing codes for services provided.

Best practices for a successful UM program

1. Clearly define processes, responsibilities, and policies–A well-defined utilization review process—that clearly maps out each step in the process and the roles and responsibilities of each team member—ensures quality, repeatability, and sustainability. Having robust policies and procedures in place that include topics such as the guidelines utilized for admissions/requested services, complete list of professional services offered, and care setting reviews, is critical to the success of a UM program.
2. Have a dedicated physician advisor oversee utilization review–Experienced clinicians with a robust knowledge of health care policies, UM standards, and revenue cycle processes should provide arching oversight of all UM staff conducting utilization reviews and the UM program itself. These advisors are imperative to any successful UM initiative as they demonstrate critical thinking, problem solving, and good decision-making skill that enable them to see the bigger picture when it comes to patient care–clinical and legal aspects, not solely financial–while providing guidance to nursing staff by sharing their knowledge of best practices and standards of care in their designated field(s) of medicine. 
3. Ensure it’s a strong quality improvement program–All processes and clinical decision- making must be audited to ensure regulatory compliance and appropriate utilization of medical necessity guidelines. Having a strong quality improvement program allows for the audit results to become actionable data. Staff coaching, providing refresher education, revamping training materials, and updating workflows are just some of the actions that can be done based on the quality audits, leading to more competent and consistent staff, more efficient handling of cases, increased quality results, and better patient outcomes.  

Consider a UM provider

As outlined above, a successful UM program revolves around highly skilled, experienced clinicians who are able to see the bigger picture, prioritize quality, and improve patient care. With the labor shortages and nursing crisis currently crippling the U.S health care system, this may seem daunting, costly, or even impossible.

Outsourcing your UM can provide you with a dedicated team of experienced clinicians, allowing you to focus on patient care. With the right UM provider, you can scale your clinical teams, improve your quality scores, and reduce cost.

Tips to select a UM partner

1. Proven adherence to federal/state regulations–These regulations aim to prevent the misuse of medical resources and combat fraud, waste, and abuse in an expensive health care system.
2. A robust understanding of guidelines/criteria–A robust knowledge of health care policies, UM standards, and revenue cycle processes equips clinicians to be able to determine the most appropriate patient care.
3. Nurses that work at the top of their licensure–Nurses who demonstrate critical thinking, problem solving, and good decision-making skills have a better understanding of disease processes and provide better patient care.
4. Ensure they have strong training and QA teams–UM partners must have the skills to prioritize quality results in more qualified clinicians, increase efficiency, and improve quality scores–all resulting in better patient outcomes and reduced cost.

About Shearwater Health

Shearwater Health is a full-service UM provider.

With 3,000+ experienced clinicians and over 20 years of experience in health care, Shearwater Health provides dedicated clinical teams delivering improved quality of care, reduced cost, and improved clinical processes to eight of the top 10 payers in the industry.

With 98.9 percent standard quality audits, 97 percent clinical decision accuracy, and URAC accreditation, coupled with an average 30-65 percent savings on direct labor costs, Shearwater health can help you scale and manage a successful utilization program.