Research Needs to Examine and Enhance the Role of Utilization Management Programs in Promoting Patient Safety

Additional Statement, Submitted by the URAC (also known as the American Accreditation HealthCare Commission)

URAC, also known as the American Accreditation HealthCare Commission, is pleased to submit this testimony regarding the need for additional research on the role of utilization management in promoting patient safety. URAC is the nation's largest accreditor of health care organizations. Founded in 1990, URAC is a 501(c)(3) non-profit, charitable organization. Since then, URAC has issued over 1,200 accreditation certificates to more than 300 managed care organizations that do business in all 50 states and the District of Columbia. URAC's accreditation standards establish benchmarks for the operations of diverse health care organizations, including utilization and case management organizations, HMOs and preferred provider organizations. We are an independent accountability organization, not a trade organization.

Following release of the Institute of Medicine Report on patient safety, URAC began the process of revising its national standards to incorporate standards on patient safety. As you may already be aware, URAC is also collaborating with other national accreditation organizations, the Joint Commission on Accreditation of HealthCare Organizations and the National Committee for Quality Assurance, to promote development of meaningful accreditation standards relating to patient safety. The collaboration is designed to ensure that patient safety standards are seamless across different types of delivery systems.

URAC has accredited utilization management organizations (UMOs) and utilization management (UM) programs in managed care organizations for over ten years. As such, URAC has had the opportunity to review and examine the operations of hundreds of UM programs. Our testimony highlights our observations about the key role UM plays in the health care delivery system, and URAC's recommendations for research that could identify a more effective role for UM programs in promoting patient safety.

In spring of 2000 URAC carried out a case study research project on quality management strategies used by preferred provider organizations (PPOs), funded by the California HealthCare Foundation. During the course of interviewing and site visiting numerous PPOs, URAC specifically queried these health care organizations on their strategies to identify potential problems in patient safety and to address patient safety concerns. URAC observed very diverse care management strategies in PPOs, and wide variations in how they perceive their responsibilities for monitoring and addressing patient safety. The common element in every PPO, however, was the use of utilization management to "flag" cases that fall outside the norms for use of services or course of treatment. It became abundantly evident during the course of URAC's study that UM can be used as a sentinel for possible quality problems. Additional research and development is needed to full realize the potential of UM as an adjunct to monitoring, investigating and addressing threats to patient safety.

Introduction

Utilization management (UM) is the single activity found in virtually every form of managed care organization, including HMOs, PPOs, managed indemnity programs, third-party administrators (TPAs), workers' compensation programs, and stand-alone utilization management organizations (UMOs). The vast majority of Americans who have health insurance are affected by utilization management services. Utilization management activities typically focus on assessing medical necessity and appropriateness of inpatient stays and services. Mental health services and some outpatient procedures may also be subject to utilization review. In related activity, many health care organizations also conduct pharmacy utilization review to assess the necessity of specific (usually high cost) medications. The impact of UM, and its effects on patterns of care have not been well researched.

Recent UM Trends

There are hundreds of UM programs in operation today. They represent a vast spectrum of care management approaches and sophistication. Over the past decades, utilization management has continually changed and evolved in response to changing demands and circumstances. Recent trends have resulted in increased integration between UM, disease management (DM) programs, and case management (CM) programs. This evolution has shifted UM from a purely reactive process of approving or denying inpatient treatment, to one in which practitioners assess clinical information and have the capability to interact with a patient's attending providers.

UM has also evolved towards increased professionalism and a more evidence-based approach. In the past, utilization management "reviewers" would collect diagnosis and treatment information from patients or providers via telephone, and then compare the data to recommendations in established in UM "criteria." Criteria were established through trends identified in claims data, and through "expert opinion." URAC's UM accreditation standards, first released in 1990, spurred implementation of the current standard of practice, which require UM reviews to be conducted by licensed clinical personnel. All accredited UM programs have physician oversight, physician involvement in development of criteria, and a structured process of review and decision-making.

The UM process also has been enhanced in recent years through the development of information systems (IS) and information technology (IT) support services. In the 1980's and early 1990's, most UM programs relied on paper-based manuals. By the mid-1990's, UM clinical criteria were automated through various computer-based applications. The migration of UM to an electronic platform has allowed UM review to be linked to claims information, demographic information and clinical data, for a more comprehensive analysis of case progress. IT platforms allow for instant application of clinical algorithms, analysis of patterns and comparisons of specific cases against norms. This capability has increased the role of medical management programs in preventing, detecting, and addressing errors of omission and commission in health care delivery systems. IS/ IT systems have made the UM process faster, more consistent, and increased the level of integration within the medical management process.

Other benefits of the new IS/IT platforms include:

• Electronic monitoring of the UM process, including screening devices and reminder alarms for sentinel events. Sentinel events may include an unexpected admission, a return to the operating room, an upgrade in level of severity of a case, an adverse drug event or an unexpectedly long length of stay. Many of these indicators are also flags of potential quality of care problems or medical errors.
• Windows-based software programs now allow for multiple screen applications. This allows UM staff to input and review data on enrollment, benefits, treatment and care patterns and other information. This creates efficiencies for patients and also could potentially permit a seamless review of the patient's course of treatment.
• Electronic transfer of information enhances communication links. This permits a higher level of online exchange between attending providers and the UMO on clinical issues and criteria, as well as real time updates for providers, and faster turnaround of UM decisions. Ultimately enhanced communication leads to better coordination of services for the patient.
• IS/IT systems are creating new and improved data warehousing tools. UM data, which is rich in clinical information now can be integrated with large amounts of claims, pharmacy, and laboratory data for the purposes of tracking and analyzing care patterns.
• Computerized support systems have built new administrative efficiencies into the UM process. For example, some UM programs through their IS/IT systems allow selected providers to skip the pre-authorization requirements based upon the providers' historic medical practice patterns that promote quality outcomes.

Some UM programs have incorporated some of the ideas underpinning the patient protection legislation pending in Congress and many state houses. For example, UM programs are becoming more sensitive to patient privacy concerns and potential conflicts of interest. As a result, UM policies and procedures often incorporate upgraded confidentiality requirements and require clinical peers to sign conflict of interest statements. Implementation of external review mechanisms are another example.

Patient Safety

UM activities also have a potential role in protecting patients from medical errors and adverse outcomes. This role has yet to be fully recognized or explored by health care delivery organizations. An aggressive research program can help to bring this under-utilized resource to bear in identifying, monitoring, and intervening in potential quality of care problems.

For example, as briefly mentioned above, most automated UM systems have the capability of flagging unexpected events that may be indicators of a quality problem. Currently, the flag may prompt a review of the patient file by either a nurse or physician advisor in the UMO. How companies use this information varies considerably. Most companies evaluate the event retrospectively. Options for using information retrospectively including using UMO physician advisors to provide educational counseling to the attending provider, alerting the facility in which the problem occurred, or using a pattern of such problems recredentialing decisions about a provider. A few UM companies are able to identify a problem concurrently and have the clinical resources to intervene. These companies may use physician peers to contact the attending provider to assess the concern and provide guidance as needed.

One avenue of research would be to catalogue models of using UM to pro-actively intervene in cases of possible medical error, and to assess the response of the provider community to such UM initiatives.

Research Needs

Based on URAC's recent studies and experience with the UM process, we recommend that AHRQ sponsor additional qualitative and quantitative research on the effect of UM in identifying and preventing medical errors. One type of research project would focus on quantifying the penetration and potential impact of UM on patient safety and reduction of medical errors. Other studies would assess the impact of UM on practice patterns, by diagnosis, and examine outcome differences in programs using UM versus those that do not. Qualitative research would identify applied approaches to using UM to address patient safety problems. This research would inventory tools and approaches used in UM programs to extend the reach and impact of UM to influence provider practice and improve patient outcomes.

Specific recommendations for study topics include:

• Quantify the volume UM encounters in the health care system. UM can be carried out at the facility level, by hospitals or medical groups, as well as by employers managing self-insured health benefits plans, by insurers, or stand alone delivery organizations. A baseline study is needed to quantify when and where UM is taking place. This will provide a tool for predicting the potential impact of UM for surveillance on patient safety or medical errors.
• Conduct a review and audit of typical UM information systems, including software programs, to assess the relationship between what these systems now call "flags" for potential quality concerns, and indicators of medical errors. Some companies purchase "off the shelf" UM software, which has pre-programmed flags for adverse quality events. Other companies develop their own protocols or software, or customize protocols with their own indicators. An initial study is needed to inventory what types of indicators are used and to identify a set of core indicators of patient safety problems that can be universally integrated with UM systems.
• Catalogue best practices in UM programs that identify sentinel indicators of patient safety problems or medical errors. Qualitative studies are needed to identify tools such as software programs or staff training program that result in more effective identification and intervention of patient safety concerns.
• Identify best practices in UM programs that intervene in cases of possible medical error. As noted, there is significant variation in how companies respond to potential patient safety problems. Again, more qualitative studies are needed to identify best practice interventions. Such interventions might include reporting of events to facilities or oversight bodies, or peer counseling with the attending provider.
• Develop a standardized format for UM programs to report on their activities and outcomes relating to patient safety and monitoring for medical errors. Many UM programs do not now think of their activities as "patient safety" interventions. AHRQ could promote more recognition of the UM role by disseminating reporting formats and tools to UM companies to be used in routine reporting to customers.

Other research questions to be addressed after a baseline understanding of UM's penetration and influence has been developed:

• What is the effect of UM "denials" of authorization? A decision not to certify treatment may result in improved care, due to reductions of inappropriate or unnecessary care, or it could, as more commonly reported in the popular media, result in delay or denial of needed care. Both under and over utilization are considered threats to patient safety and good outcomes. Little is known about the appropriate level of use of care. Similarly, little is known about the effect of denied or deferred care on outcomes. Many health industry observers believe that much of the care "denied" is actually deferred until additional testing or a subsequent request. Understanding the effect of UM on over or under-utilization is a critical area in need of research.
• How should clinical guidelines be used? Most UM protocols are based on algorithms for care modeled from large claims data bases. UM criteria are loosely supported by the medical literature, but are not considered, "evidence based guidelines." Further study is needed on how guidelines derived from experience compare to guidelines derived from evidence. In addition, more research is needed on the effect of "customizing" both clinical guidelines and UM criteria based on local practice patterns.
• How could reporting on the UM process be standardized to allow comparisons of UM programs? Many payers, regulators, and consumers would like to have information on the effectiveness of the UM program in influencing health care utilization and outcomes. Standard measures ideally would include approval and denial rates, and information on process and clinical outcome indicators. Such reporting is complicated by the diverse procedures that may be reviewed (e.g., some companies only review inpatient care, while others may review outpatient services or high cost procedures) and variations in employer demands from the UM process (e.g., some employers direct the UM company to apply criteria very strictly, while others prefer to approve most procedures as a strategy to promote patient/employee satisfaction).
• What is the effect of UM on practice patterns overall? Many observers of the UM field speculate that the presence of UM programs has changed provider behavior through indirect means. This suggests that UM has an influence well beyond that which can be calculated through rates of approvals and denials.

URAC would be pleased to respond to questions about UM programs or to provide AHRQ with complimentary copies of our publications on utilization management or other health care delivery systems. For more information on URAC, please visit our web site at www.urac.org, or call Liza Greenberg, RN, MPH, Vice President, Research and Quality Initiatives, (202) 216-9010 x 8805.

Appendix 1. How UM works

UM is a process by which clinical personnel review certain medical procedures to determine if they are medically necessary. The UM process generally works as follows:

1. A payer (insurer, TPA or employer) determines that UM may reduce unnecessary services. That entity can contract with a stand-alone UM company, purchase UM as part of its PPO network, or develop an in-house program.
2. The payer determines what services should be reviewed. Requests for elective inpatient care or cosmetic procedures are most frequently part of UM decisions. Other companies may elect to review and pre-authorize mental health care, certain high cost outpatient procedures (such as MRIs), or other services. The customer also determines how "tightly" UM should be carried out. Customers can request that the UM company handle ambiguous cases by routinely authorizing services, or they can request that the UM program adhere very strictly to criteria.
3. Providers are notified of UM requirements in the provider manual and through information provided on patient identification cards. Providers or their staff usually initiate UM encounters, although occasionally patients call the UM program directly.
4. When a call from a provider or patient comes in to the UM center, a staff member, usually a nurse, takes demographic and subscriber information and may also request clinical information such as diagnosis, previous findings or medical history.
5. The nurse compares information obtained from the provider to criteria used by the company. Commercial UM criteria are available from companies such as Milliman and Robertson or InterQual. Some companies develop their own criteria based on claims experience. Criteria establish care protocols and utilization norms for most diagnoses and procedures based on a large volume of claims data. Based on information input by the reviewer, the criteria will direct the reviewer to authorize a recommended length of stay for "loosely managed," "moderately managed" or "tightly managed care." Alternatively, the criteria may indicate that the service is not medically necessary because it does not meet criteria.
6. In an accredited UM program, a nurse reviewer is authorized to approve procedures using nationally recognized criteria. If a case does not meet criteria, a physician must review it and make a decision to approve or deny the procedure.
7. In accredited UM programs, the patient's attending physician must be notified if the case is not approved, and must be given several levels of appeal. Ultimately, the case is decided by a physician in the same specialty of the attending physician. Some states regulate timelines for notification and the qualifications of UM decision-makers.
8. A service denied through the UM process may still be carried out by the physician or facility. When the claim is received by the PPO it may be treated as an out of network benefit, and covered at a lower rate, or denied for payment.
9. In some states, patients have the right to an independent review of a UM denial through an external review organization.

UM programs that are not accredited or that do not come under state regulation (for example, programs carried out in-house by self-insured employers) do not necessarily follow this process or provide similar appeals rights to patients.

This information is reprinted from URAC's report to the California HealthCare Foundation, "The State of PPO Quality Measurement." Draft, August, 2000.

Current as of September 2000

Internet Citation:

Research Needs to Examine and Enhance the Role of Utilization Management Programs in Promoting Patient Safety. Additional Statement by URAC. National Summit on Medical Errors and Patient Safety Research. September 2000. http://www.quic.gov/summit/aurac.htm

Return to Additional Statement Directory
National Summit on Medical Errors and Patient Safety Research
QuIC Home Page
Department of Health and Human Services