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What Is Utilization Management in Healthcare?

Utilization management (UM)—i.e., the process of evaluating and regulating the use of healthcare services to ensure they are appropriate, necessary, and cost-effective—helps organizations optimize the allocation of healthcare resources while ensuring high-quality patient care.


Why is Utilization Management Important?

Utilization management plays a crucial role in promoting cost-effective, high-quality healthcare. Evaluating and managing the utilization of healthcare services helps strike a balance between controlling costs and ensuring that patients receive appropriate and effective care to improve outcomes. Utilization management also prevents overutilization of healthcare services such as unnecessary hospital admissions and emergency department visits.

Effective utilization management uses evidence-base care and clinical guidelines that assure the appropriateness of care so that patients receive treatments that are proven to be effective. Leveraging utilization data on trends, patterns, and areas of improvement for decision-making can further improve care quality.  

Components of Utilization Management

Utilization management consists of an orchestrated process of authorization, review, communication, and analysis to ensure the appropriate use of healthcare resources and services, contain costs, and improve quality. Key components include:

  • Prior authorization or prospective review is performed before treatment begins to determine which services a member needs and eliminate redundant, unnecessary, and inappropriate treatments.
  • Concurrent review is an ongoing assessment of a patient’s treatment plan while they are receiving care to evaluate the appropriateness and necessity of care and guide decisions about continued treatment.
  • Retrospective review looks back at healthcare services once treatment is completed and reviews the efficacy of the treatment and whether care was necessary and appropriate so that successful methods can be prescribed to similar patients in the future and ineffective care can be eliminated.
  • Appeals process enables patients and healthcare providers to appeal decisions made by utilization management programs if there is a disagreement about the necessity or appropriateness of a course of treatment.

What Are the Benefits of Utilization Management (UM)?

Utilization management promotes high-quality, cost-effective care and optimizes the use of resources for the benefit of payers, providers, and members alike. Utilization management:

  • Controls costs and ensures resources are used efficiently by identifying and eliminating unnecessary care, saving money for both payers and patients.
  • Mitigates risk by evaluating and managing the appropriateness of care and minimizing overutilization and duplicated care.
  • Improves quality and outcomes by right-sizing and standardizing care delivery and aligning with evidence-based guidelines.
  • Streamlines workflows and administrative processes around pre-authorization, concurrent review, and retrospective review, enabling providers to speed processing and focus more resources on patient care.
  • Optimizes resource allocation so that clinical resources are used appropriately and effectively.
  • Optimizes provider networks by identifying high-performing providers who deliver high-quality, cost-effective care.
  • Delivers a better patient experience by speeding turnaround times, reducing fragmentation of care, and improving coordination among healthcare providers.

How UM Software Improves Efficiency

Software such as InfoMC’s Incedo Utilization Management solution can help you automate error-prone, low-ROI tasks to reduce your administrative burden. Incedo is highly configurable, with decision support that can be personalized for your model of care to help you deliver the right care to the right people at the right time, location, and level to more efficiently manage quality, consistency, and compliance.

Utilization management software improves productivity & turnaround times

Fully configurable to meet your needs, the Incedo Utilization Management solution automates manual, error-prone tasks to reduce your administrative burden and streamline processes so that your members receive timely, right-sized treatment and your clinical resources are effectively utilized.

Incedo helps you speed care determinations across medical and behavioral health to improve outcomes with timely, appropriate, and cost-effective care and manage the authorization lifecycle from request and review to determinations and communication with stakeholders. Services that do not require clinical decisions can be auto-authorized according to your model of care, enabling timely response and improving the experience for both members and providers. Auto-generated tasks are routed to the right people to ensure actions are completed according to required due dates to manage compliance with decision and notification turnaround times.

Incedo is automatically aligned with the SNP model of care and fully configurable to changing requirements.

Fully integrated with care management and behavioral health management  

Incedo’s utilization management functionality supports both physical and behavioral health to improve cost and health outcomes. Collaboration and information-sharing across integrated teams ensure at-risk members get the care they need while preventing unnecessary treatment so that you reduce waste, save costs, and improve the health of the people you serve. 

Integration with evidence-based criteria improves and speeds decision-making

To support an efficient clinical review process, Incedo™ seamlessly integrates with with MCG Care Guidelines for Behavioral Health and InterQual clinical decision support for medical and behavioral health.  Guidelines can be seamlessly accessed within a decision support workflow, helping standardize the process for determining appropriate levels of care for individuals with complex needs.

Regulatory alignment promotes compliance and reduces penalty risk

Incedo processes and workflows align by program with regulatory guidelines—including CMS, NCQA, URAC, and state-required elements and processes—so that you can proactively monitor and manage requirements and ensure compliance.

Learn More About How Incedo™ Can Solve Your Utilization Management Challenges

InfoMC’s Incedo Utilization Management platform provides a person-centered medical management system that can help you improve member outcomes with timely, appropriate, and cost-effective care.

Contact us today to learn more about how InfoMC’s comprehensive utilization management solution can help you drive efficiency, cost savings, and compliance


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