We are into the second half of the year and financial reports are showing the cost of business. Management wants to keep expenses under control, particularly those that involve employee benefits. Medical insurance must be provided to employees, but it can get pricey. Claims and medical procedures are the major culprits. The claims can range from minor trips to the doctor to major surgeries. There needs to be some idea of how much is the cost and where are the primary expenses. Claims review is an example of analyzing costs and utilization review is the best way to discover where the money is going.
Utilization Review Definition
Claims utilization review looks at medical services provided to employees. It is the work of a third-party which specializes in this type of process. Ordinarily, an insurance company will request the activity as part of the insurance plan, and to keep costs manageable. There are several types of that are employed.
- The Prospective review investigates medical costs by procedure such as hospital admission.
- The Retrospective review looks at medical care after the employee has received the treatment. Determinations will center on whether location, procedure, or the scheduling were the right thing to do.
- The Concurrent review will examine the point of care decisions made by the health care providers.
All types will have criteria against which measures the activity and its validity. Failure to meet the standards can result in denial of the claim.
Reviewer vs. Provider
This inspection can all result in a dispute between the utilization review company and healthcare provider. Of course, management does not want any person denied medical service. However, some of the treatments performed or drugs prescribed can be more than required. It does happen that healthcare providers will be overly cautious. A physician may prescribe a certain treatment or medication just to be on the safe side. The difficulty is that it can result in inflated medical costs. Claims figures can start to spiral upward, and both management and the health insurance company need to rein in those costs. Medical necessity and cost-containment will still be priorities.
This effort to control costs may be annoying to some patients. It happens that observation only is going to be allowed and inpatient hospital admission will not. There may be some limitations imposed on various types of treatment. But the individual must understand that a clear medical necessity must be present. If there is no medical necessity, there can be some expensive consequences. While a person is entitled to select whatever medical treatment he or she prefers, this same employee may end up paying for almost all the procedure if a utilization review rejects the claim.
Communication is Important
Much of the dispute will arise from bad communication. Healthcare providers may not understand the group medical insurance rules governing medical costs by procedure, or the utilization review company does not completely understand medical care practices. Better communication between provider and reviewer will help resolve the issues.
The organization who has the group medical insurance policy should take utilization review seriously, and make a note of its findings. There is more to it than passing judgment on claims. The results of a review make a case for plan revisions. Unnecessary treatments can be removed from the policy, and payment limitations placed on others. It is critical to carefully explain to employees any policy change resulting from the analysis. There is no room for confusion or misunderstanding.
Regrettably, not every small or medium size business has the staff to develop the communication process. These groups need a third-party from the outside to assist in developing the communications. Would you like to take a look a how our communications deck are designed to promote better understanding?