Question of the Week

Question: We seem to be continuously sending out letters to physicians regarding “utilization issues,” but see little change in practice patterns.  What can we do to give our Utilization Management Committee “some teeth”?


Let’s begin with what the Medicare Conditions of Participation (CoPs) (42 C.F.R. §482.30) require.  The CoPs require hospitals to have a Utilization Review (UR) Committee that includes at least two physicians. For Medicare and Medicaid patients, that committee reviews the medical necessity of admissions, durations of stay that appear to be outliers, and professional services that appear to be outliers based on extraordinarily high costs.

Before making a determination that an admission or continued stay is not medically necessary, the UR committee is required to consult with the practitioner or practitioners responsible for the care of the patient and give the practitioner an opportunity to present his or her views.  Within two days of a determination by the committee that an admission or continued stay is not medically necessary, the hospital, the patient and the practitioner responsible for the care of the patient must be notified of the determination.

Many hospitals are beginning to go beyond the CoP requirements and are adopting a Utilization Management Policy that dovetails with their Professional Practice Evaluation (Peer Review) Policy.  Specifically, just as each Department identifies adverse outcomes, clinical occurrences, or complications that will trigger the review process, the UR committee identifies utilization situations that trigger the review process.  Examples of such triggers include continuing hospital stay in extended observation status, or a pattern of increased insurance denials when compared to other Medical Staff members in the same specialty.

The Utilization Management Policy also outlines progressive steps to address utilization concerns, including educational letters, meetings with physician advisors or case managers for specific types of cases, or CME regarding utilization management.

If those progressive steps are unsuccessful or the practitioner refuses to participate in the progressive steps recommended by the UR Committee, the matter is referred to the Professional Practice Evaluation Committee (PPEC, i.e., the Peer Review Committee) or Peer Review Committee for review.  Like any other clinical concern reviewed pursuant to the Professional Practice Evaluation (Peer Review) Policy, the PPEC can develop a detailed performance improvement plan for the practitioner.  If the practitioner refuses to participate in a performance improvement plan developed by the PPEC, the matter is then referred to the MEC for review pursuant to the Medical Staff Bylaws or Credentials Policy.

Reviewing concerns about medical necessity is just one of the many topics covered at The Peer Review Clinic.  Join Paul Verardi and Phil Zarone for this program.