Utilization Review

Much like precertification reviews, concurrent reviews are used for approval of medically necessary treatments or services. However, concurrent reviews happen during active management of a condition, be it inpatient or ongoing outpatient care. The focus of concurrent review is to ensure that the patient is getting the right care in a timely and cost-effective way.

This process is much like that of precertification. After you begin a medical treatment, any new treatments found on the insurance company's preapproval list are submitted to the insurance company for approval. Information on the care you've received, along with your current clinical status and any progress you've experienced, is collected. Once the insurance company or an independent review organization reviews the information, the physician and other providers are notified with the decision.

An important part of concurrent review is the assessment of the patient's needs after a hospitalization. Because concurrent review is used to decrease the amount of time you spend in the hospital, the first concurrent review often determines a discharge plan. This plan can include transfers to rehabilitation, hospice or nursing facilities. While discharge plans often change due to complications or abnormal test results, establishing an early time frame for hospitalization is key to keeping health insurance costs down.

So what happens if you didn't get preapproval but got the medical care anyway? That's where retrospective reviews come in.

The retrospective review involves the review of medical records after your medical treatment. The insurance company can use the results to approve or deny coverage you have already received, and the information can also be used in a review of the insurance company's coverage guidelines and criteria for a particular condition. The insurance company looks through your records for evidence of appropriate low-cost health care. It then compares your records to those of other patients with the same condition. It will then review, and possibly revise, its treatment guidelines and criteria to ensure that the provided care is adequate, and medically current, for the condition. This first type of retrospective review can be conducted by the health insurance company, an independent review organization or the hospital involved in the treatment.

The other function of retrospective review is the approval of treatments that normally require precertification but were done without approval. This can happen if a patient is unresponsive and has not been able to obtain precertification. Emergency services like surgery also may be eligible for this type of review. The review takes place before any payment is made to the provider or hospital. Therefore, most hospitals or providers are actively involved in the review process by providing clinical documentation that supports their treatment decisions.

What happens when a utilization review is denied? We'll explain the appeals process in the next section.

The appeals process begins after your insurance company gives you an "adverse determination" letter. This letter must come within three days of the initial utilization review and must include the reasons your request was denied, information on how this denial can be appealed and information on how to obtain the company's clinical review criteria. Once you've received this letter, you have the option to file an appeal.

The first step may be obvious -- call your insurance company to say you want to file an appeal. If you leave a message with this information, the insurance company is required to return your call within one business day. At this point you can choose an expedited or standard review of the appeal. Normally, you'd want an expedited review when the denied medical coverage is needed immediately. Pick the standard review if you don't need the coverage immediately or if an expedited review is denied.

Once the appeal begins, you or your provider may have to provide the insurance company with additional medical information. This information should be reviewed by the insurance company or outsourced to a utilization review organization. Licensed and registered utilization review agents (usually physicians or other health care providers) who know about your particular condition must make this decision.

After you've handed over all the requested information, the insurance company must respond to your appeal within a set time frame. For expedited appeals, you should receive a decision within two business days. With a standard appeal, the decision should be issued within 60 days. These time frames can prove extremely important -- if your plan does not respond within the set time line, the initial denial of coverage is automatically reversed and your insurance company must pay for the services. So be sure to keep track of what you sent and when you sent it.

If your appeal is denied, your insurance company is required to send you a "final adverse determination" letter. This document should include the specific reasons for the denial, along with any necessary medical explanations. It should also provide information on how you can receive a copy of the insurance company's clinical review criteria. Finally, depending on your state's laws, the letter may include information on how to make an external appeal that involves a third-party decision-maker, usually an independent review organization.

For more information about utilization reviews, take a look at the links on the next page.