Creating a Win-Win in Utilization Management

As healthcare organizations continue to transition to value-based care, provider relationships with patients and payers alike will be affected. Value-based care, at its very core, redefines old methodologies and relies on evidence-based outcomes, which is good news for all parties involved. Historically contentious relationships between providers and payers have an opportunity to improve as both groups’ ultimate goals merge.

Some providers – and patients – remain skeptical about a health plan having its members’ best interests at heart. However, it stands to reason that in the long run healthier patients cost payers less.

In Managed Care Magazine, Tammie Phillips, Vice President of Business Consulting for McKesson Health Solutions, shares her opinion about how traditional utilization management (UM) can benefit from a new health economy in a value-based world:

 “We have a utilization management process. We have guidelines. We have evidence. But we’re not using them effectively. Who wants to be admitted to a hospital if they don’t have to? Who wants spine surgery if it’s not warranted? Certainly providers and payers are conceptually aligned on what matters: Providers want to deliver the right care and payers want to pay for the right care. When researchers run the numbers, however, it becomes clear that traditional utilization management isn’t living up to its full potential.

That’s the bad news. The good news: By employing a new process designed for a value-based world, payers can influence decisions as they’re being made, streamline the administrative burden, and better engage providers in a collaborative relationship that supports value-based care.”[1]

The Value of UM

UM programs are becoming more dynamic and objective due to the rise of evidence-based medicine.

Early on, UM interventions were geared towards a focus on cost containment. This focus has shifted to support quality-based outcomes. For example, national accreditation agencies such as NCQA and URAC have expanded their UM standards to require quality improvement initiatives that are developed, implemented, monitored and tracked.

Coverage and denial management is a pivotal area for application of evidence-based guidelines and presents an opportunity to clearly demonstrate that a plan’s rulings are evidence-based.

As a result of its extensive subject matter, RegQuest is a must-have resource for health care professionals, compliance staff, benefit administrators, consumers, government officials and others who require a better understanding of the UM process. This easy-to-use service assists medical insurance management in the areas of business, legal and regulatory forces and stays on top of all new federal and state requirements. As a subscriber, you gain instant access to up-to-date information on UM, external review (ER) as well as grievance and administrative appeals. With a mouse click you can review state surveys, trend reports, blogs and more.

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[1] Phillips, Tammie RN, “Fixing Utilization Management To Fit With a Value-Based World,” Managed Care Magazine, March 2016, Retrieved from: