Utilization review of psychiatric care: building a program that works

Since the early 1970s the federal government, private insurers, and employers have searched for ways to control health care costs. In 1972, Congress, dissatisfied with hospitals' utilization review efforts under the Medicare program created Professional Standards Review Organizations (PSROs). Ten years later when the Medicare reimbursement system underwent radical changes, the utilization review system remained more or less intact but had its name changed to Professional Review Organizations (PROs). The insurance industry has developed and employed, with varying levels of success, several cost-saving tactics, including deductibles and copayments for specialized care, limitation of benefits by diagnosis or facility type, exclusion of specific disorders, inclusion of dollar limits, pre-payment claims review for specific types of service, and post-payment review with retroactive denial of claims. Case management is the latest development in the ever-widening search to put a lid on health care costs. These attempts to measure the effectiveness of care vis a vis the dollar spent for it have been especially difficult for psychiatry, a less measurable science than other fields of medicine. Because psychiatry straddles the disciplines of sociology, psychology, and medicine, it is not easily understood. Inadequate documentation of care, a paucity of outcome studies, and confidentiality issues all combine to make utilization review particularly difficult in psychiatry. This paper will describe a collaboration between Blue Cross and Blue Shield of Maryland and four private psychiatric hospitals in the state that resulted in a workable, effective utilization review program acceptable to providers, payers, and patients.