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Managing care: utilization review in action at two capitated medical groups
Kanika Kapur1, Carole Roan Gresenz, David M Studdert
1RAND, Santa Monica, California, USA.
Health Affairs (Project Hope)
|October 7, 2003
Summary
Managed care organizations deny coverage more often than reported, especially for emergency services and equipment. Retrospective requests face higher denial rates than prospective ones.
Area of Science:
- Health Services Research
- Managed Care
- Healthcare Policy
Background:
- Managed care organizations (MCOs) are increasingly prevalent in healthcare delivery.
- Concerns exist regarding MCOs' utilization review (UR) processes and coverage denials.
- Empirical data on the specifics of UR decisions and their outcomes remain limited.
Purpose of the Study:
- To investigate the profile and outcomes of utilization review decisions in large medical groups.
- To quantify denial rates for various service types and request timings.
- To identify reasons for coverage denials in managed care settings.
Main Methods:
- Analysis of nearly 500,000 coverage requests from two large medical groups.
- Examination of utilization review decisions made by health plans contracting with these medical groups.
- Comparison of denial rates for prospective versus retrospective requests.
Main Results:
- Observed higher denial rates than previously reported in the literature.
- Denial rates were notably higher for emergency care and durable medical equipment.
- Retrospective requests were nearly four times more likely to be denied than prospective requests.
- For prospective denials, services falling outside covered benefits were a more common reason than lack of medical necessity.
Conclusions:
- Utilization review in managed care settings results in significant coverage denial rates.
- Specific service categories like emergency care and durable medical equipment are disproportionately affected.
- The timing of requests (retrospective vs. prospective) and the reason for denial (scope of benefits vs. medical necessity) offer crucial insights into MCO decision-making.
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