What Is Utilization Review

Utilization review is the process that insurance companies use to approve care for payment before patients receive it. Although it helps reduce costs, this process can be inefficient and slow down physicians work as utilization reviewer have to find information from the clinical notes to approve the care.

When you go to the doctor or hospital, the care you receive has to be approved for payment by insurance companies (unless you pay out of pocket). To control costs, insurance companies will implement approval processes known as utilization review for more expensive procedures, services and medications; it is widely panned by physicians as impeding care since the process is generally inefficient and often manual. Both insurance companies and providers hire staff in this role; for instance, hospitals hire nurses to work with insurance companies for utilization review. Utilization review can be divided into three areas based on the life-cycle of patient care: prior authorization, concurrent review, and retrospective review.

Prior Authorizations

Even though a doctor prescribes you a medication or treatment, insurance companies may require you first to get approval for your care through the workflow of prior authorizations. While the goal of prior authorizations is to improve patient outcomes and reduce costs by instituting best practices nationally, many physicians view them as just a means for insurance companies to make more money. And outpatient physicians spend large amounts of their time performing administrative tasks already, so prior authorizations only add to this burden. Confusingly, insurance companies have 20 to 30 different authorization forms in the US and providers are expected to complete each different type. There is no standardization to these forms; a number of startups are trying to create a more streamlined workflow because of this inefficiency. While prior authorizations are burdensome to doctors, insurance companies have not been traditionally concerned about making the process expedited as the inefficiency itself can be profitable (with a slower payment system, insurance companies make more money from the interest on the premiums in the investment pool).

Concurrent Review

Hospitals need to get approval from insurance companies for inpatient admissions to make sure they will pay for the costly treatment; hospital stays in the US average about $3k per day. And during a patient’s stay, the hospital will continually evaluate the patient’s care to help make sure the person gets the right level of care for a reasonable cost. So this approval process, known as concurrent review, is an ongoing conversation with the payor in the hospital since the patient care plan is more in flux during an inpatient admission.

Retrospective Review

Lastly, after the care has already been provided, both providers and payors will analyze the appropriateness of the treatments and the costs through retrospective review. Providers and hospitals have entire teams to prepare claims to prevent them from denial. Likewise, insurance companies have automated software and staff that will review submitted claims for denials if they were not properly completed or the care provided was not medically necessary.

The Role of Natural Language Processing (NLP)

All in all, both providers and insurance companies are interested in a streamlined approach in finding nuggets of information from the clinical notes that is needed to determine authorization through the utilization review processes. Neither party really wants to dig through the electronic medical record (EMR) to find what information is clinically relevant or not. To this purpose, natural language processing (NLP) is currently being used in healthcare startups to extract the information from the EMR to automate the process of utilization review. Likewise our company, Abstractive Health, will soon be offering a patient summary during the concurrent review workflow to expedite the process so utilization review nurses don’t have to spend as much time in the EMR. While some of the traditional insurance companies have been slower to adopt, vertically integrated ones such as Kaiser are more likely to care as they directly benefit from the efficiencies: they are currently paying for the inefficiency cost as they directly employ the providers on their plans.

Abstractive Health provides an automated narrative summary of the medical record as a software solution for healthcare. We use a natural language processing algorithm to summarize the most important and salient information in the patient chart. We currently have a partnership with Weill Cornell where we are demonstrating the clinical quality of our automated hospital summaries compared to the hospital course section of the Discharge Summary.