Will using evidence-based approaches to a standards development process improve Medicaid policy making? Report on a...

In theory, evidence-based medical necessity policy in health care utilization review may make resource allocation more equitable. Costs can be managed through the consistent application of standards for approval of only those services deemed medically necessary and by controlling denials and appeals litigation. Additional cost savings may be realized with more efficient utilization review processes and concentration on review standards for the specific items or services that have the greatest financial impact on overall utilization dollars. This article describes a five-step process for evidence-based medical necessity standards development and includes illustrative examples from a state Medicaid agency project. While early results are promising, data are scarce. The authors, nevertheless, believe the approach may prove to be useful on promoting the application of evidence-based decision making.