By Mary Rose Ready RN, MSN, CCM, ACM
This manuscript, Case Management and Utilization Review in a Different Era, explores historical perspectives on case management and utilization review practices. The content reflects methodologies, regulatory influences, and challenges from past decades, particularly those prior to 2013. While many principles of case management remain relevant today, the healthcare landscape continues to evolve with advancements in technology, regulatory changes, and shifting payer expectations. It serves as a comparative reference to highlight how case management and UR have developed over time, offering insights into past approaches that have shaped contemporary practices.
Case Management and Utilization Review
Care coordination involves a team of health care professionals, including case managers and social workers. Case managers are responsible for coordinating care for patients in a myriad of health care settings. The case manager wears many hats in the patient care hospital setting. Not only are they on the frontline, communicating directly with physicians and nurses, but they are also on the backend, performing utilization reviews and may be involved with admission, coding, and the finance team.
Utilization review and utilization management are used synonymously. Utilization management is comprehensive and includes utilization review. UM is an evaluation of services to determine medical necessity and ensure standards are met, whereas UR is a mechanism used by insurance companies and employers to assess healthcare for appropriateness and necessity (Powell & Tahan, 2008).
Purpose of Utilization Review
Case Management has evolved due to its involvement in the continuum of care. The implementation of case management in various care settings has increased for several reasons. One of the reasons is the rising number of the elderly with chronic and complex medical health issues. Other reasons include shifts in financial risk, changes in healthcare reimbursement methods, increased demand for quality care, and the increasing involvement of government bodies (Powell & Tahan, 2008).
The use of Case Management varies from one practice setting to another, but regardless of where they practice, the commonality is positive patient outcomes (Powell & Tahan, 2008). In the hospital setting, case management responsibilities are typically a combination of discharge planning and utilization review. As previously indicated, UR is a method used by insurers and employers to evaluate health care for medical necessity, quality, and appropriateness of decision-making (Powell & Tahan, 2008). UR involves revenue and affects the revenue cycle management at all facilities that provide patient care.
With the concept of managed care, utilization review performed in hospitals may differ. Managed care organizations perform utilization review, but they also have to consider the patients’ benefits. Managed care organizations seek efficiency in healthcare delivery (Spector, 2004). Hospitals seek a positive outcome, but often overlook the importance of considering insurance benefits. For example, if a patient comes into the emergency room without insurance, they cannot be denied services. The patient will be treated and will likely receive a consultation from Case Management to determine a safe discharge and the best outcome for the patient. Outcome and quality of care are essential elements in utilization review. There is a growing emphasis on results and outcomes (Powell, 2000).
Organizational standards, as described by the Utilization Review and Accreditation Commission (URAC), provide reviews and accreditation for utilization review services and programs delivered by self-supporting agencies. They are also known as the American Accreditation Health Care Commission (Powell & Tahan, 2008). Being accredited through URAC demonstrates that quality and safe care will be delivered.
Hospital Case Management and Utilization Review
Care Management is an essential part of an organization. Typically, Case Managers perform utilization review and discharge planning. It is difficult to gauge the complexity of a patient until an assessment is completed. A typical case load for a case manager is about thirty. The busyness of a given day for a case manager can be immeasurable at times. If the case manager performs all the responsibilities for the team and cannot adequately and safely perform all functions, the outcome will more than likely be negative. Having a case management team focus on a specialty will produce positive outcomes.
The case managers are the frontline for physicians and act as a liaison for the patient. The discharge coordinator will assist the case manager for a safe and most appropriate discharge plan. Utilization review can focus on reviewing for quality, medical necessity, and appropriateness for the patients’ hospitalization. Also, utilization review will ensure reviews are completed and submitted to payors promptly. Social work plays an integral part in the care coordination team, especially with end-of-life and hospice matters. Having a strong utilization review program and a clear communication line with physicians will help with transitions of care (Orland, 2011).
Why a Triad Model
The Care Coordination Department comprises Case Managers and Social Workers. Case Managers work closely with Social Workers to ensure patients have a safe discharge. The Case Managers had the responsibility to perform utilization review on all patients with a myriad of payor sources. They reviewed patients with Medicare, Medi-Cal, Commercial, and unfunded patients. With a caseload of 30 or more patients, utilization reviews were not performed consistently. Their priority was discharge planning. This situation became problematic because of a decline in revenue, an increase in denials, and an increase in readmissions. Not only was it financially hurting the organization, but Leadership also recognized the importance of preparing for the upcoming Health Care Reform. The focus is on quality, service, cost, and growth.
In this case, Care Coordination adopted the Triad Model, where Utilization Review was separated from the Case Manager role. The title of the nurses did not change, but their responsibilities did. The UR department was now responsible for completing reviews to ensure that patients are meeting medical necessity to be in the hospital. There were changes in responsibilities, but the focus remained the same, and that is to use evidence-based practice to mold the department and produce positive outcomes.
Evidence-Based Practice in Case Management and Utilization Review
Effective case management relies on clinical excellence and evidence-based practice. A strong clinical background is essential for both case managers and utilization review nurses. Evidence-based guidelines support quality care, safety, and positive outcomes by ensuring standardized, accredited practices (Throckmorton & Windle, 2009). Staying informed on current trends allows professionals to make well-founded decisions, improving patient care while demonstrating compliance with accreditation standards. Utilizing evidence-based approaches ensures individualized care, mitigates rising healthcare costs, and enhances overall patient satisfaction (Throckmorton & Windle, 2009).
Utilization Review and Patient Outcomes
As a case manager, patients are a priority in supporting them over the continuum of care in order to produce a positive clinical outcome. Case managers are aware that involving patients in their care is essential and support Patient Rights. Utilization review is a way for case managers to make sure that patients are getting their medical care appropriately and are provided in a timely manner (Striker, 2012). Utilization review and interventions benefit the patient and the organization. In turn, this function helps the organization by lowering costs and improving clinical outcomes.
Regulatory Guidelines Integrated in Utilization Review
Regulatory guidelines and government bodies have significantly influenced care coordination through mandated reporting to ensure beneficiaries receive the best care and protection (Muller, 2011). The Affordable Care Act (ACA), a result of healthcare reform, required organizations to adapt by enhancing education, modifying processes, and increasing data collection efforts. These changes affect transitions of care, which involve multiple departments, from pharmacy to nursing, to ensure seamless patient care (Muller, 2011).
Transitions of care begin in the community and extend through the emergency room into post-acute settings. Case management and utilization review teams collaborate with financial counselors to identify potential funding barriers while working closely with financial services to mitigate discharge obstacles. By proactively addressing these barriers, both patients and organizations benefit—patients avoid unnecessary extended hospital stays, reducing the risk of hospital-acquired conditions, while hospitals manage costs more effectively and improve patient outcomes.
CMS and Utilization Review
The Centers for Medicare & Medicaid Services (CMS) plays a critical role in ensuring quality care and preventing fraud. Through programs like Recovery Audit Contractors (RAC), CMS identifies over- and underpayments to healthcare providers, influencing hospital practices (Centers for Medicare & Medicaid Services, 2013). RAC, established permanently under the Tax Relief and Health Care Act of 2006, has led to changes in utilization review practices. Hospitals rely on utilization review to determine appropriate levels of care for admitted patients, classifying them as inpatient, observation, or outpatient, all requiring physician orders.
Levels of Care
In the hospital setting, levels of care include inpatient, outpatient, and observation services. Observation falls under outpatient care and requires periodic monitoring to determine if inpatient admission is necessary (CMS). Levels of care—acute, intermediate, and critical—are assigned based on severity and resource needs. Guidelines such as InterQual and MCG help determine appropriate care levels and support clinical decision-making.
Types of Reviews in a Hospital Setting
Initial reviews are completed to determine medical necessity. At this time, the utilization review nurse will determine that the patient is at the appropriate level of care and meets criteria, depending on which guideline the organization uses. Concurrent reviews are completed by utilization review staff. In the review, they include the reasons for admission and the patient’s progress. It would be beneficial to include a discharge plan in the reviews to avoid discharge delays. Discharge reviews are necessary to complete and close out the case, but not all organizations require them. Discharge reviews provide an opportunity for the reviewer to ensure that the discharge was appropriate and that a safe plan was in place. Reviews should be completed in a timely manner. This should not be common practice to avoid denials or delays in payment.
Discharge Planning
Discharge planning begins on the first day of hospitalization to ensure a smooth transition of care. The Centers for Medicare and Medicaid Services (CMS) mandates that all patients have a discharge plan as part of its Conditions of Participation (CoP) (Daniels, 2011). Effective discharge planning requires a standardized approach, involving case managers who coordinate with patients and families to meet their needs. Utilization review teams also work with payors to secure necessary authorizations, ensuring timely and safe discharges while minimizing delays (Daniels, 2011).
Avoidable Days
Utilization review identifies delays in patient discharges or procedures, known as avoidable days. These occur when necessary services, such as imaging or specialist consultations, are unavailable on weekends or due to scheduling inefficiencies (McKesson, 2013). Additionally, delays caused by patient or family decisions, such as waiting to choose a post-discharge facility, contribute to avoidable days. Proactively addressing these barriers minimizes hospital-acquired conditions, reduces revenue loss, and improves patient outcomes by ensuring timely transitions of care.
Readmission Rates
The utilization review portion of care coordination cannot be placed on the wayside. It is an instrumental department that has opportunities to capture much-needed data that affects patients and the organization’s revenue. The Affordable Care Act has established the Medicare Hospital Readmissions Reduction Program. The purpose is for cost reduction and quality improvement. Three principal diagnoses have been targeted: acute myocardial infarction, pneumonia, and congestive heart failure. Medicare indicates that these readmissions could be determined as an adverse event (Meyerson, 2013).
Medicare defines a readmission as a repeat admission within 30 days of discharge (Meyerson, 2013). Exclusions are if a patient leaves against medical advice, dies, is transferred to another hospital, or is disenrolled from Medicare. If a patient is readmitted, the DRG will be reduced. A list of hospitals will be made public, but hospitals have an opportunity to make corrections before results are posted (Meyerson, 2013).
Hospital Length of Stay
Utilization review plays a key role in monitoring hospital length of stay (LOS) to ensure efficient use of healthcare resources. Managed care organizations (MCOs) require pre-certification for planned admissions, granting an approved number of hospital days based on clinical guidelines such as InterQual or MCG (Powell & Tahan, 2008). If a patient exceeds the authorized stay, case managers must justify additional days to the payer.
LOS directly impacts hospital revenue, as reimbursements are often fixed per diagnosis-related group (DRG). For example, if a total hip replacement typically requires a three-day stay, but the patient remains hospitalized longer without medical necessity, the hospital absorbs the extra cost. Effective utilization review ensures appropriate LOS, reducing financial strain while maintaining quality patient care.
Utilization Review and Technology
Technology is essential in meeting regulatory requirements and improving workflow efficiency in utilization review. A robust system facilitates data collection, streamlines processes, and supports decision-making. Organizations must invest in software that integrates with existing hospital systems, ensures ease of use, and allows tracking of key metrics such as avoidable days, denials, and appeals (Athena Forum, 2013).
Selecting the right software requires input from key stakeholders to ensure it meets the needs of case managers, utilization review nurses, and other departments. Effective systems enhance data analysis capabilities, reducing redundant data entry and improving reporting accuracy. By leveraging technology, hospitals can optimize utilization review processes, improve compliance, and enhance patient care outcomes.
Associations and Certifications
Case management practice is structured around evidence-based practice, ensuring that case managers and utilization review nurses provide high-quality, patient-centered care. To enhance their credibility and career advancement, obtaining professional certifications can significantly increase their competency in case management and utilization review. These certifications prepare professionals to effectively manage the increasing complexity of patient cases.
Several certification programs are available to support case managers and utilization review nurses in their professional development:
- Accredited Case Manager (ACM) Certification – Established by the American Case Management Association (ACMA) in 2005, this certification is specifically designed for professionals in health delivery systems and transitions of care (TOC) case management. The ACM program offers two distinct credentials: RN and SW.
- Commission for Case Manager Certification (CCMC) – This certification exam is tailored for case managers working outside hospital settings, ensuring that professionals are equipped to manage care in diverse healthcare environments.
- Case Management Society of America (CMSA) – This organization focuses on hospital-based case management, providing resources and advocacy to advance the practice in acute care settings.
The primary goal of case managers and utilization review nurses is to enhance patients’ wellness, independence, and the appropriate use of healthcare services and financial resources. Earning certifications adds credibility to their practice, demonstrating a commitment to safe, effective, and high-quality patient care.
Conclusion
With federal requirements and regulatory agencies’ demands, case management and utilization review can be a challenging role. Government-based payors such as Medicare and Medicaid programs have greatly influenced practice and processes. Utilization review is a requirement for nearly all payor types, and capturing pertinent information, such as avoidable days, is crucial in identifying weaknesses in an organization’s process. Data drives changes, and the use of systems is essential for effective workflow and concise reporting. Tracking length of stay, denials, avoidable days, and readmission rates within the organization will help guide practice. Working collaboratively with Leadership and other departments will have a significant effect on the organization and produce positive outcomes.
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Bio: Mary Rose Ready RN, MSN, CCM, ACM is an experienced Utilization Management Nurse with over 15 years in case management, utilization review, denial management in the hospital and insurance setting. I obtained a Master of Science in Nursing focus on Nursing Informatics, and CCM and ACM certifications, I worked in various healthcare settings, including academic hospitals and insurance organizations. My expertise includes regulatory compliance, denial management, and process improvement. I am dedicated to optimizing patient outcomes through evidence-based practice, interdisciplinary collaboration, and effective healthcare resource utilization. Through this manuscript, my goal is to highlight the evolving role of case management and utilization review in modern healthcare.