Utilization Review An Adjusters BEST Cost Control Weapon

A utilization review allows the adjuster to know if the medical care being provided to the employee is medically necessary and appropriate for the treatment of the injury or occupational disease and is one of the best weapons an adjuster can use to control workers’ comp costs.

The unintentional consequence of workers’ comp paying 100% of all medical expenses is, unfortunately, the employee is unconcerned about the cost of medical care he received. To be fair, the employee normally does not know the medical ramifications of the treatment provided. Both the employee (and often the adjuster) do not know if prescribed medical treatment is repetitive of care already provided, is not appropriate, or inadequate for the injury.

Utilization reviews vary in usage by different work comp insurers. Some insurance companies require a review of all planned treatments. Others require a utilization review only for specific types of medical care such as hospital admissions, inpatient surgery, ambulatory procedures, skilled nursing and rehabilitation services, planned prescriptions, and durable medical equipment.

In most companies, the utilization review is conducted by a registered nurse (RN), who determines if the treatment is medically necessary. If the RN believes the medical treatment should be denied, or is unsure if the medical treatment is necessary, a physician conducts a second review of the information before approving or denying care.

Either the utilization review is in-house by the insurer or third party administrator, or done by an outside organization specializing in utilization review services. Ideally utilization reviews should always be completed within 7 days and preferably within 3 days. In some situations an expedited review may be needed; for instance when the physician wants to immediately admit an employee to a hospital for further care.

Utilization review includes pre-certification reviews (also referred to as utilization management or prospective review), concurrent review, retrospective review, and re-review (also referred to as an appeal). The purpose of each type of review is to control the cost of the medical treatment without interfering in the employee's medical recovery. After each type of utilization review, all parties are notified of the review decisions.

Pre-certification Review

When first hearing the term “utilization review” most people think of what is actually the “pre-certification review.” In a pre-certification review, before medical care is provided, the RN collects all the necessary information including symptoms, diagnosis, test results, and the reasons the physician is requesting the medical service. The RN compares the information provided against the normal criteria for treating a specific type of injury or occupational disease.

If the medical service is necessary, it is approved. If the medical service is not necessary, then a physician at the utilization service reviews the medical information again to verify the denial of the service is correct.

Concurrent Review

Concurrent reviews occur during the time the medical treatment or service is being provided. The employee either can be an inpatient in a hospital or have on-going outpatient care. The RN approaches the concurrent review in the same way as the pre-certification review.

This type of utilization review is often overlooked by the workers’ comp adjuster, especially for outpatient care. The concurrent review verifies the medical necessity of the treatments and/or services provided to the employee and verifies the employee is receiving the right, most cost effective care. The workers’ comp adjuster who consistently utilizes the concurrent review of outpatient treatment shortens the time the work comp claims are open.

When the concurrent review is for inpatient care, it can shorten the hospital stay be limiting it to the amount of time the employee needs to be hospitalized. It can also be very helpful in identifying the medical care needed when the employee is discharged from the hospital.

Retrospective Review

The retrospective review is used for either inpatient or outpatient services. A retrospective review, as the name implies, occurs after the medical services are provided. The procedure for the retrospective review by the RN as the other reviews.

While physicians and hospitals recognize the need for pre-certification reviews and concurrent reviews and accept them, they are less accepting of the retrospective review, especially if the medical care or medical service is denied. When a retrospective review denies a service the physician or hospital provided, they do not get paid, as they cannot bill the employee. [They often will request a re-review].

Re-reviews

When a medical service is denied by a pre-certification review, a concurrent review, or a retrospective review, the employee or the medical provider can appeal the denial. When a re-review is requested, the physician at the utilization review service goes over all available medical information to determine if the denial should be reversed. Often the physician will bring in a second physician specializing in the type of medical care needed. The specialist will confirm the denial or reverse it. (workersxzcompxzkit)

Summary

Utilization review is a win-win process for all involved. The self-insured employer or the workers’ comp insurance company can eliminate the cost of unnecessary medical services through the utilization review process. The physician and employee benefit by not wasting time on medical care that does not expedite the employee's recovery.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.