Utilization Review and Guidelines

What Is Utilization Review (UR)?

UR is the process by which medical necessity is established using a systematic approach based on a set of criteria, standards of care, guidelines, or other methodologies in which a patient’s care is approved for reimbursement. Merriam-Webster defines as “the critical examination (as by a physician or nurse) of health-care services provided to patients especially for the purpose of controlling costs (as by identifying unnecessary medical procedures) and monitoring the quality of care” (https://www.merriam-webster.com/dictionary/utilization%20review – accessed April 2023)

The basis for UR is to assure that care delivered to patients is appropriate for time and setting and to control cost that will, in the end, provide sufficient monies to allow for care to be provided to all constituents.

UR can be conducted by various entities including, but not limited to, governmental agencies, contracted agencies, quality improvement organizations (QIO), private payers, and hospital committees. Most states also have a review process for Medicaid beneficiaries who can be reviewed by QIOs, contracted parties, and insurance departments of the state under public health or insurance laws.

Regulations that Support Hospital-Based UR

The federal government under the Social Security Act and the Centers for Medicare & Medicaid Services (CMS) Conditions of Participation (CoP) has provisions establishing hospital-based UR.

Section 1861(k) of the Social Security Act provides the regulation for hospital-based utilization review and are as follows:

Utilization Review

(k) A utilization review plan of a hospital or skilled nursing facility shall be considered sufficient if it is applicable to services furnished by the institution to individuals entitled to insurance benefits under this title and if it provides—

(1) for the review, on a sample or other basis, of admissions to the institution, the duration of stays therein, and the professional services (including drugs and biologicals) furnished, (A) with respect to the medical necessity of the services, and (B) for the purpose of promoting the most efficient use of available health facilities and services;

(2) for such review to be made by either (A) a staff committee of the institution composed of two or more physicians (of which at least two must be physicians described in subsection (r)(1) of this section), with or without participation of other professional personnel, or (B) a group outside the institution which is similarly composed and (i) which is established by the local medical society and some or all of the hospitals and skilled nursing facilities in the locality, or (ii) if (and for as long as) there has not been established such a group which serves such institution, which is established in such other manner as may be approved by the Secretary;

(3) for such review, in each case of inpatient hospital services or extended care services furnished to such an individual during a continuous period of extended duration, as of such days of such period (which may differ for different classes of cases) as may be specified in regulations, with such review to be made as promptly as possible, after each day so specified, and in no event later than one week following such day; and

(4) for prompt notification to the institution, the individual, and his attending physician of any finding (made after opportunity for consultation to such attending physician) by the physician members of such committee or group that any further stay in the institution is not medically necessary.

The review committee must be composed as provided in clause (B) of paragraph (2) rather than as provided in clause (A) of such paragraph in the case of any hospital or skilled nursing facility where, because of the small size of the institution, or (in the case of a skilled nursing facility) because of lack of an organized medical staff, or for such other reason or reasons as may be included in regulations, it is impracticable for the institution to have a properly functioning staff committee for the purposes of this subsection. If the Secretary determines that the utilization review procedures established pursuant to title XIX are superior in their effectiveness to the procedures required under this section, he may, to the extent that he deems it appropriate, require for purposes of this title that the procedures established pursuant to title XIX be utilized instead of the procedures required by this section. (Source: www.socialsecurity.gov/OP_Home/ssact/title18/1861.htm#act-1861-k, accessed April 3, 2023.)

The CoPs by CMS under title 42 of the Code of Federal Regulations are as follows:

TITLE 42—PUBLIC HEALTH

CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES

PART 482—CONDITIONS OF PARTICIPATION FOR HOSPITALS—Table of Contents

Subpart C Basic Hospital Functions

Sec. 482.30 Condition of participation: Utilization review.

The hospital must have in effect a utilization review (UR) plan that provides for review of services furnished by the institution and by members of the medical staff to patients entitled to benefits under the Medicare and Medicaid programs.

(a) Applicability. The provisions of this section apply except in either of the following circumstances:

(1) A Utilization and Quality Control Quality Improvement (QIO) has assumed binding review for the hospital.

(2) CMS has determined that the UR procedures established by the State under title XIX of the Act are superior to the procedures required in this section, and has required hospitals in that State to meet the UR plan requirements under Sec. 456.50 through 456.245 of this chapter.

(b) Standard: Composition of utilization review committee. A UR committee consisting of two or more practitioners must carry out the UR function. At least two of the members of the committee must be doctors of medicine or osteopathy. The other members may be any of the other types of practitioners specified in Sec. 482.12(c)(1).

(1) Except as specified in paragraphs (b)(2) and (3) of this section, the UR committee must be one of the following:

(i) A staff committee of the institution;

(ii) A group outside the institution—

(A) Established by the local medical society and some or all of the hospitals in the locality; or

(B) Established in a manner approved by CMS.

(2) If, because of the small size of the institution, it is impracticable to have a properly functioning staff committee, the UR committee must be established as specified in paragraph (b)(1)(ii) of this section.

Under the interpretive guidelines, exceptions to the UR committee are explained and are as follows:

The regulation permits two exceptions to the requirement for a hospital UR plan: (1) where the hospital has an agreement with a QIO under contract with the Secretary to assume binding review for the hospital or; (2) where CMS has determined that UR procedures established by the State under Medicaid are superior to the UR requirements for the Medicare program and has required hospitals in that State to meet the UR requirements for the Medicaid program at 42 CFR 456.50 through 456.245.

With regard to the second exception, CMS would have to determine that UR procedures established by a State under Medicaid are superior to the UR requirements for Medicare. Currently no UR plans established by a State under Medicaid have been approved as exceeding the requirements under Medicare and required for hospital compliance with the Medicare UR CoP within that State. In the event that CMS approves a State’s Medicaid UR process for compliance with the Medicare UR CoP, CMS will advise the affected State Survey Agency.

(42 CFR 456.50 through 456.245.)

Because of the regulations, the establishment of a UR committee and a process ensuring the ability to review cases to make medical necessity determinations provides the impetus for any facility to acquire the necessary personnel to meet the regulations. Other regulatory bodies such as The Joint Commission, while not mandating a UR committee, does have in place a section on discharge planning and will review the entire process that includes the need for a patient to be hospitalized and when the patient should be discharged. Without understanding how to review an admission and subsequent stay, the case manager or UR personnel could have a difficult time in demonstrating a proper discharge plan. The purpose behind the UR process is that it should include using the review of medical information to drive clinical milestones necessary to communicate with the attending physician. This includes when the milestones have been reached and at what level of care the patient should be at any given time.

For example, a patient with pneumonia may be admitted as an inpatient per the review guidelines provided there is involvement of two lobes, concomitant diseases in need of treatment, the patient’s age, and other factors. Patients with an admitting diagnosis of pneumonia will be placed on IV antibiotics, oxygen, and perhaps IV fluids. Some of these patients will easily transition to oral antibiotics within three days and no longer require oxygen, but some will need prolonged treatment and perhaps a discharge to a lower level of care including, but not limited to, home healthcare or some form of skilled nursing with a short-term rehabilitation plan. Most case managers have the experience and knowledge to understand this simple case, but when the patient’s clinical complexity is higher and the dual plan that the case manager established is not followed, where then does the case manager turn to provide the necessary information to the attending physician for him or her to make an informed decision regarding the discharge plan?

Most UR criteria include ‘discharge screens’ for use in determining a patient’s medical stability or readiness for discharge and some include references that will provide a suggested next level of care based on the patient’s clinical trajectory. Many of the new AI tools also provide progression of patient care analysis that “steps” down the patient per the intensity of service they are receiving along with the improvement in their illness as the algorithm inherent in the code tracks the information in the electronic health records and provides that feedback to the utilization review personnel. Whether the processes in place provide for the UR personnel to loop in the discharge team as to the progression of the patient from the AI tools or evidenced based criteria an argument can be made that it might be beneficial to have some loopback mechanism for some of the more uncommon diagnosis and some of the more difficult to discharge/complex patients that take longer to heal based on intensity of service and complexity of disease management.

The regulations that require UR in the hospital setting are joined with the care of the patient and the discharge plan. The regulations also indicate that if there is a discrepancy among the attending physician and the UR reviewer, the UR committee has the right to determine medical necessity, issue denials to patients, and advise them of their rights to appeal. One of the goals of the regulations and that of case management practice is to foster an open a communication line between the UR physicians and the attending physicians. Physician advisors can assist case manager/utilization review teams by bridging the gap of information between nurses and physicians and play a vital role with their colleagues by interpreting information that at times is not in harmony in how nurses view outcomes compared to physicians. Conversations between physician advisors for case management departments can yield information that lead to authorizations, overturn denials and at times improve length of stay. Frequently, case managers have had to rely on the rules, laws, and findings published by the different governing bodies to assert their accountability to establish and follow protocols that can and will lead to reversals of denied cases by the different payer sources. With the assistance of physician advisors also known as medical directors of case managers the landscape has changed and denials have been overcome with peer-to-peer appeals many times completed by medical directors of case management (MDCM)or with the encouragement of the MDCM to an attending physician to discuss the case with the medical director of the insurance company.

Hospitals are also required to have in place a Utilization Review Plan to show how it will manage situations in which there are conflicting circumstances. For example, a patient may be medically ready for discharge, qualify for the Extended Care Benefit for post-hospital skilled rehabilitation, but there is no Skilled Nursing Facility Bed available for the patient. Since this has significant impact on delay in discharge, the UR committee/team must be involved in the process to continue to search for a bed for the patient. CMS used to publish the following document that was used by many as a basis for a basic UR Plan but has since been achieved but still is useful from a historical and practical standpoint.

Some excerpts from that document will help the reader identify why ‘medical necessity’ for services is blended with clinical judgement and availability of medically necessary post acute services. Spacing of the document has been changed from the original to allow for ease in reading.

290.3 Availability and Appropriateness of Other Facilities and Services.

--In determining whether further inpatient hospital stay is medically necessary, utilization review committees are required to take into account the availability and appropriateness of other facilities and services. The following guidelines should be used by UR committees in general hospitals.

A. Determining Required Level of Care.

· --If the committee believes that the patient no longer requires hospital care but could receive prope treatment in a SNF,

o it should determine whether there is a SNF level bed available to the patient in a participating SNF or swing bed hospital in the area.(see C and E below.)

o If there is, the committee should find that further stay in the hospital is not medically necessary.

· If the committee determines that no SNF level bed is available to the patient in a participating skilled nursing or swing bed facility, it should find that continued stay in the hospital is medically necessary.

o The basis for the decision should be documented in the committee records.

o The committee will advise the attending physician that its decision is based on the lack of availability of a SNF level bed; and

o that it is his responsibility to attempt on a continuing basis (with the assistance of the hospital's social worker, etc.) to place his patient in a participating SNF level bed as soon as such a bed becomes available.

· If the UR committee determines that the patient requires services other than inpatient hospital or extended care services (such as custodial, outpatient, or home health care), it should find, without regard to the availability of such kinds of care, that further inpatient hospital stay is not medically necessary.

o Covered inpatient hospital or extended care services should not be considered as an alternative to noncovered or noninstitutional services.

B. Home Health Care as an Alternative to Institutionalization.

· --A patient who needs either hospital or extended care services continually requires a level of care and a scope of services that can only be provided in an institutional setting.

o Only those institutions which meet the conditions of participation for hospitals and SNFs are qualified to provide them.

· A patient who needs home health services requires a minimal level of services which does not call for the patient to be institutionalized.

o For example, an individual may only require a single service, such as physical therapy.

o A UR committee which finds that an individual only requires home health services should not recommend continued inpatient stay, even though the required services are not available to the individual because there is no agency in the community which can provide the services, or there is an agency but the individual has no home to which he can be discharged.

C. Location of Alternative Facilities.

· --A UR committee will consider what facilities are available in the community or local geographic area in deciding whether the patient can be cared for effectively elsewhere.

o It is not possible to define community or local geographic area with any precision.

o However, as a general rule, a community or local geographic area should not be defined in such a way as to require a patient to be taken away from his family and transported over great distances.

D. Patient's Financial Status and Personal Preference.

· --A UR committee should not take into account a patient's ability to pay for services or his coverage or lack of coverage under the health insurance program in deciding whether continued hospital stay is medically necessary.

· A patient's preference for one SNF over another (such as a preference for a sectarian facility over a nonsectarian facility) should not be taken into account by the committee. If SNFs are available but the patient's preferred facility is filled, the committee should find that further inpatient stay is not medically necessary.

Differences between Hospital UR and Insurance-Driven (Payer Based) UR

Hospital UR can seem similar to the insurance-driven UR. In essence, they share many of the same reasons for review, primarily to ensure that the patient is receiving appropriate care and that there is a correct status assignment, that the care will be appropriately reimbursed. Other areas of similarity are in ensuring length of stay is appropriate and that the level of care is correctly adhered to.

The differences between hospital based and payer-based UR mainly stem form the perspective of resource allocation. The insurance company is trying to assure that the benefits purchased by members are appropriately used, and to preserve and distribute funds to secure payment for all its beneficiaries. On the other hand, the hospital’s UR process is focused on the care of the individual patient that is present in the facility. The focus of both the payer and the hospital UR process is to also to properly move patients along the continuum of care from one level to the next. The hospital works to maximize reimbursement, especially in the face of a diagnosis-related group payer source and with some contracts that still exist on a per diem basis. With the advent of risk bearing contracts payers are very diligent to minimize cost allocation and will invest time to work with the hospital case management and UR time to determine the best course of action for their patients in terms of discharge time frames, level of care, and potential transfers to in-network facilities if the patient is at an out of network hospital.

Using UR methods, case managers can more diligently examine the need for an admission and a continued stay, as well as the proper placement for the level of care required. UR can also assist in resource allocation and timely use of the resources, such as tests that need to be performed to ensure proper length of stay. The UR committee in the hospital can function in a similar role as the insurance company by reviewing suspect, or marginally appropriate cases and issuing denials to patients, particularly for Medicare and Medicaid beneficiaries.

With the institution of the recovery audit contractor (RAC) program, the hospital-focused review takes on a more important role, which will be discussed further later in this book. In the case of a RAC review process, more focus is put on preventing a denial than on a length of stay or continued stay review.

Sources of Evidence-Based Medicine

Evidenced-based medicine (EBM) in the formation of clinical guidelines or clinical order sets at most facilities across the world. Many are incorporated into algorithms in EHRs that drive clinical care. EMB is also used by the most prolific makers of utilization review criteria companies for their guidelines; InterQual and Milliman Care Guidelines (MCG), The question is, where does it come from and how can it be used to prevent and or overturn a denial?

According to the Centre for Evidence-Based Medicine, “Evidence-based medicine is the conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients” (Sackett et al, 1996). Physicians and physician extenders often rely on such research to advance their practice. New methods, treatments, and surgeries are proved useful, safe, and efficacious by studying the method, drug, or intervention, and thus become everyday practice.

In the United States, many insurance companies rely on EBM to create their “clinical guidelines” that are used in making UR determinations, and often will use only research that has been conducted in the United States, thus shutting out important research that has gone on in the rest of the world.

InterQual and Milliman provide a rich source of evidence-based articles in their bibliographies. Other sources include Medline, PubMed, CINHAL, and online search engines such as Google, CUIL, and Yahoo can provide a list of research articles that can be used in the practice of UR. In later chapters you will see evidence of this method being used to compile an appeal. Most of today’s hospitals have access to electronic libraries, where a search can be conducted to extract research that supports your position.

How Criteria Guidelines Are Derived

InterQual and Milliman use a variety of methods to create their guidelines. InterQual owned by Change Healthcare has a 5 step process to develop their guidelines in which they (1) identify the content for development or updating, (2) use their clinical team to critically appraise the clinical evidence, (3) have Physician led groups develop new and updated content, (4) have an Independent Clinical Review Panel of More Than 1,000 Experts Provide Authoritative Peer Review, and (5) have a Clinical Team Conduct Final Quality Assurance Check and

Release Content

Many of Change Healthcare clinical staff hold advanced degrees and case management certification. The clinical content is reviewed and validated by a national panel of clinicians and medical experts, including those in the community and academic practice settings, as well as within the managed care industry throughout the United Sates. The clinical content is a synthesis of evidenced-based standards of care, current practices, and consensus from licensed specialist and/or primary care physicians.

The acknowledgment by Change Healthcare that evidence-based standards of care are used provides an avenue to use newer research that can open a door to reverse a denial. Since Change Healthcare publishes its guidelines annually, many of the articles used to create the guidelines are updated, but consideration of the articles’ review and publication and the fact that not all research is used provides you the opportunity to enlighten reviewers to a new or more recently updated finding that can sway their opinion in your favor.

Milliman states the following about their guidelines:

The full-time clinical staff that produces the Milliman Care Guidelines® adheres to the industry’s most rigorous evidence-based methodology. Over 100,000 articles were reviewed during the guideline development process, while a Milliman Care Guidelines epidemiologist examines databases that cover a significant portion of the United States population in order to validate that these published research results are achievable in real-life situations; 14,000 of these references are currently being cited by MCG.

As with InterQual, Milliman acknowledges the fact that research-based, EBM is the primary driver behind its criteria. But again, it only reviews its guidelines annually, leaving room for new EBM to be introduced.

During the pandemic of 2020 MCG and Change Healthcare released criteria in mid-cycle to help address COVID issues and offer guidelines to assist with the direction of clear up to date accurate guidance on the difference between COVID and pneumonia. This demonstrated a commitment to the community of the expertise in using what was available in the peer reviewed arena to create evidenced based guidelines.

How to Find the Article You Need

Most research begins with a methodology that incorporates what is known and then a hypothesis is formed. To prove the hypothesis, the researcher postulates a question or series of questions that must be proved or disproved. Referencing a specific example, here are the recommended steps to take to ascertain the validity of a hypothesis:

1. State what you are trying to prove (e.g., admission for Heart Failure)

2. Check the bibliography in the criteria set being applied (in this case, Heart Failure – MCG 26st Edition – ORG: M-190 (ISC)©) – The bibliography has 112 articles

3. Search for articles on the subject (Heart Failure and hospital admission) using those words as search terms.

4. Conduct an online search to find various articles that can assist in the support of the need to admit a patient for treatment (in this example, Google Scholar produces some interesting results discussed below).

After the articles are researched results include many in the bibliography but many point to reasons why patients should be treated to prevent an exacerbation of heart failure and considerations for observation stays. As the bibliography points out in the article listed in number 12 - Is hospital admission for heart failure really necessary?: the role of the emergency department and observation unit in preventing hospitalization and rehospitalization. Journal of the American College of Cardiology 2013;61(2):121-126. DOI:10.1016/j.jacc.2012.08.1022.

By admitting the patient and providing the proper care, the patient benefits from a reduction of hospital admissions as well as stabilization of the heart failure but at what status inpatient or inpatient, that is what is needed to be determined by the UR staff in association with the physicians to prevent a denial or if trying to overturn an existing denial using the articles to show the depth of the heart failure that needed more than just a quick tune up. When postulating the need for admission on an appeal as well as to the cardiologist in the emergency room, the case manager can reference EBM to back up her or his claims (see appendix for list of articles).

This is just one example of how to search for material that can make the difference between an accurate admission and or a reversal on a denial. Further examples will be presented in later chapters. Being proficient in obtaining information by using online databases can lead to a better formalized approach in preventing and recuperating denials.

Wrap Up

In conclusion, utilization guidelines, regulations, and laws govern facilities in their approach to handling reviews and how to establish committees that can assist with the process. The ability to research evidence-based medicine will assist in the writing of an appeal. Writing an effective appeal letter will be covered in Chapter 5.

References

Milliman Care Guidelines: www.careguidelines.com/whycg/ebm.shtml, accessed April, 3, 2023.

InterQual Level of Care Criteria. Change Healthcare, 2023.

Sackett, D. L., W. M. Rosenberg, J. A. Gray, R. B. Haynes, and W. S. Richardson. “Evidence-based Medicine: What It Is and What It Isn’t,” BMJ 312 (1996) 7023: 71–72. PMID 8555924, www.bmj.com/cgi/content/full/312/7023/71.

Collins SP, Pang PS, Fonarow GC, Yancy CW, Bonow RO, Gheorghiade M. Is hospital admission for heart failure really necessary?: the role of the emergency department and observation unit in preventing hospitalization and rehospitalization. Journal of the American College of Cardiology 2013;61(2):121-126. DOI:10.1016/j.jacc.2012.08.1022.