Typically, UM addresses new clinical activities or inpatient admissions based on the analysis of a case.
UM policies may include the frequency of reviews, priorities, and balance of internal and external responsibilities.
Similar to the Donabedian healthcare quality assurance model, UM may be done prospectively, retrospectively, or concurrently.
[7] Prospective review is typically used as a method of reducing medically unnecessary admissions or procedures by denying cases that do not meet criteria, or allocating them to more appropriate care settings before the act.
Concurrent review is carried out during and as part of the clinical workflow, and supports point of care decisions.
The focus of concurrent UM tends to be on reducing denials and placing the patient at a medically appropriate point of care.
In an integrated delivery system such as a health maintenance organization (HMO), the provider and the payer share the financial cost of care, allowing for more utilization management; the rise of utilization management in the 1980s was associated with a rise in integrated healthcare.
[1]: 50 As of 2019, about 3% of large employers, including Walmart and Boeing, contracted directly with providers to care for their employees, and these arrangements can remove prior authorization entirely with capitated payments.
[19] Regardless of appeal, a lawsuit can be filed against the insurer; in 2019, class action lawsuits were filed against UnitedHealthcare regarding proton beam therapy, which was denied as experimental[20] although later language denied it on the basis of medical necessity, which is held to a different legal standard.
[22] In 2019, UnitedHealthcare settled a class action suit on lumbar artificial disc replacement surgery, reprocessing the claims.
[26] Claim denials may be due to a number of things, including contract exclusions, unproven or investigational treatments, or medical necessity.
[29] In the case of Medicare, national coverage determinations show necessary treatments for diseases, with medical guidelines of insurers playing a similar role for private companies.
De facto denials occur when claims are not denied outright, but in practical terms are not covered because of a non-response or non-payment from a carrier.