Jan 25th 2021

Four Things You Must Know About Utilization Management Right Now

Utilization management is designed to make sure that your members get the care that they require, without excessive testing and unnecessary costs associated with care they don’t need. In a healthcare environment that is rapidly changing, with new medical knowledge emerging at an ever-accelerating rate, utilization management continues to be a vital component of a quality healthcare management program.

Here's what you should know about utilization management right now:

 

1. Utilization management can prevent unnecessary costs.

 

Utilization management can help reduce the rising rates of healthcare costs—and in the current situation, that's more important than ever.

Healthcare costs typically rise each year. But 2020 has been unusual, to say the least, with many people deferring care because of the pandemic. Payers are currently seeing cost savings because patients are foregoing doctor visits, but when more people feel it is safe again to seek medical care, medical costs will boomerang. While there's still lots of uncertainty about how the end of the pandemic will play out, actuarial consulting firm Milliman expects that pent-up demand will lead to significant costs to payers at some point in the future when the situation normalizes.

With a strong utilization management program in place, your organization can reduce costs by reviewing claims and identifying services that aren’t medically necessary, weren't correctly coded, are duplicates, or simply aren't covered benefits.

 

2. Utilization management can ensure better adherence to compliance regulations.

 

Every hospital and healthcare organization that participates in Medicare or Medicaid has to keep a close eye on its compliance with regulations. A utilization review plan is one of the elements required by the Centers for Medicare and Medicaid Services (CMS) for hospitals and healthcare organizations that participate in Medicare and Medicaid. Factors such as length of stay and resource utilization must be monitored for compliance, so that reimbursements aren't negatively impacted. A robust utilization management program can track and help improve your compliance with these regulations.

 

3. You can reduce denials with a strong utilization management team.

 

As long as there is waste in the healthcare system, denials for medical services are going to occur. But a well-trained utilization management staff can reduce the number of denials in a couple of significant ways. For example, during utilization review they can carefully examine a medical case and possibly determine opportunities for the providers to modify their orders.

Staff members that are highly knowledgeable in utilization management can also ensure that the process is conducted and documented thoroughly for every patient. This is especially valuable when submitting appeals of denials, because they understand the requirements necessary to establish medical necessity.  Even better, that knowledge can be applied during the initial submission to prevent unnecessary denials that occur solely due to missing or incomplete clinical information.

A well-trained, detail-oriented staff will help to ensure optimum performance of your utilization management program.

 

4. Artificial intelligence is improving the process.

 

A data-driven approach to utilization management could be just what the doctor ordered. If you use a program that makes use of predictive analytics to forecast the needs of your patients, you can get a clearer picture of the services they're likely to require.

You can incorporate the patient's own medical history, as well as information about their lifestyle and compliance with other treatments, to begin to understand the most effective clinical path forward.

Clearly, utilization management can make a big difference to your organization or practice. It can help make operations more efficient, deliver better care, reduce costs, and improve compliance—core tasks for any healthcare organization seeking to survive in uncertain times.