SERVICE UTILIZATION

   Managed care was established in order to decrease the rising costs of health care as well as controlling service utilization.  The issue of managed care has become controversial in terms of whether or not it truly provides individuals with quality of care that is cost effective as well.  In determing the necessity of services, managed care companies perform utilization reviews, in which they evaluate an individual's condition and assess the appropriateness of services.

    There are various kinds of utilization reviews performed by managed care companies, which include the following: prospective utilization, concurrent utilization, and retrospective utilization reviews.  Prospective utilization reviews involve a pre-authorization of services.  Services can be pre-authorized by a second opinion mandate.  The purpose is to detemine if services are medically necessary. Managed care companies will more likely authorize short-term therapy as opposed to long-term insight oriented therapy.

    In concurrent utilization reviews, the current use of services is evaluated to determine its appropriateness.  If the treatment is found to be medically necessary and cost effective, reimbursement is made to the provider.  Sufficient progress of the client must be evident in order to demonstrate that the chosen treatment continues to be effective. This form of utilization review is usually done along with prospective reviews, especially for clients with severe and persistent mental illness, who are considered "high-cost" clients.    

    Lastly, there are retrospective utilization reviews.  This involves an evaluation after services have already been provided.  The managed care company is looking to see if treatment was medically necessary and that the most effective treatment was utilized in a cost efficient manner.  Because this form of review is done after the completion of services, the evaluation will usually include review of the provider's records.

    There are controversies regarding the use of utilization reviews.  The focus is on determining "medical necessity".  The problem created is the lack of clarity in the definition of "medical necessity".  In evaluating medical necessity a diagnosis must be determined, which is done through the use of the DSM-IV.  The DSM-IV is controversial in itself because of the lack of agreement among clinicians in determining a diagnosis.  Little research has been done to demonstrate the impact of utilization reviews on decreasing costs AND maintaining the quality of care.  More research needs to be done in this area to determine how these reviews impact the services that clients receive.  

References

     Allen, M.G. (1996). When is psychiatric hospitalization required? In A. Lazarus (Ed.), Controversies in managed mental health care. (pp 129-142). Washington, DC: American Psychiatric Press, Inc.

    Corcoran, K. (1997). Managed care: Implications for social work practice. In R.L. Edwards (Ed.-in-Chief). Encyclopedia of social work (19th ed., pp 191-200) Washington, DC: National Association of Social Workers Press.    
   
    Corcoran, K. & Vandiver, V. (1996). Maneuvering the maze of managed care: Skills for mental health professionals. New York: Free Press.

    Glazer, W.M. & Gray, G.V. (1996). How effective is utilization review? In A. Lazurus (Ed.) Controversies in managed mental health care. (pp. 179-194). Washington, DC: American Psychiatric Press, Inc.
   
    Kuder, A.U., & Kuntz, M.B. (1996). Who decides what is medically necessary? In A. Lazurus (Ed.) Controversies in managed mental health care. (pp. 159-177).  Washington, DC: American Psychiatric Press, Inc.