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Utilization
Review
The importance of utilization review
Health care costs now consume a significant portion
of the United States gross national product, with that
figure forecast to increase by the year 2000. Some of
the reasons for the continuing rise in health care costs
include:
· A greater demand for health care services.
· A rapidly aging population who are living longer
and using more services and more expensive services
and drugs.
· Costly technological advancements in medicine.
· Cost-shifting resulting from Medicare reimbursements.
· Price inflation.
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Utilization review is one important
way in which HMOs help curb these costs. By evaluating
health care on the basis of appropriateness, necessity
and quality, HMOs can coordinate a patient's total medical
treatment and eliminate excessive and unnecessary health
care services. Utilization review procedures vary from
one organization to another but often include the following:
· Hospital preauthorization for non-emergent
services.
· Second opinion review, which is
sometimes needed to determine if a surgical procedure
is necessary.
· Prospective procedure review to determine if
a patient's condition meets the criteria necessary to prescribe certain surgeries or diagnostic tests.
· Concurrent review, in which a nurse
continually reviews the chart of a hospitalized patient.
· Case management, in which a UR manager coordinates
care and rehabilitation, often at a patient's home.
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The Future of
HMOs
Health care reform is at the top of everyone's agenda
- from the President of the United States to employees
at all levels, from the entire medical community to employers
ranging from multinational conglomerates to local small
businesses.
Many changes are on the way. The big challenge is the
containment of the United States' yearly health care
bill, which continues to grow. The future certainly
points the way to even more reliance on some form of
managed care.
Health maintenance organizations, since their inception,
have emphasized the dual advantages of full health care
benefits and cost containment. And they have continued
to grow, proving that they can successfully meet both
the medical needs of their members and the financial
limitations of employers. HMOs, undoubtedly, will play
a key role in the future of health care in the United
States.
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Glossary
A glossary of health care terms, abbreviations and acronyms
Accrual
the amount of a plan's estimate to cover expenses incurred
but not yet paid. Accruals for claims and risk settlements
can be based on a combination of data from the authorization
system, claims system, lag studies, and the plan's prior
history. There are many types of accruals; this is only
one example.
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Actuarial assumptions
the estimates that an actuary uses to calculate the expected
costs and revenues of a plan. These are based upon the
risks associated with providing certain coverages and
can include utilization rates, the age and sex mix of
enrollees, and medical services costs.
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Adjusted average per capita
cost (AAPCC)
the best estimate of the Health Care Financing Administration
(HCFA) of the cost to care for Medicare recipients under
fee-for-service. The AAPCC is made up of many rate cells,
most of which are adjusted for age, sex, Medicaid eligibility,
institutional status and the obtainment of both Medicare
Part A and Part B. The remaining two cells are for individuals
with end-stage renal disease.
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Adjusted community rate (ACR)
a calculation used by HMOs with Medicare risk contracts
to determine what premium the plan would charge for providing
Medicare-covered benefits on a group basis, adjusted to
allow for the greater intensity and frequency of utilization
by Medicare recipients. The ACR may be equal to or lower
than the average payment rate (APR), but it can never
exceed it.
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Ambulatory care
health services delivered on an outpatient basis. A patient's
treatment at a doctor's office or a surgical center without
an overnight stay is considered ambulatory care; home
treatment is not.
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Authorization
the approval of care, such as hospitalization. Preauthorization
may be required before a patient is admitted or given
care by a non-HMO provider.
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Average payment rate (APR)
the amount of money that HCFA can pay an HMO for services
to Medicare recipients under a risk contract. The figure
is derived from the adjusted average per capita cost (AAPCC)
for the service area. The payment to the plan, the adjusted
community rate (ACR), can never be higher than the APR,
but it may be equal or less.
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Health plan products and services are offered
by PacifiCare of California and PacifiCare Behavioral Health
of California, Inc. |
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Indemnity insurance products (including PPO
products) offered in California are underwritten by PacifiCare
Life and Health Insurance Company. |
| Other products and services are offered by PacifiCare
Health Plan Administrators, Inc., RxSolutions, Inc., and PacifiCare
Behavioral Health, Inc. |
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PacifiCare® is a federally registered
trademark of PacifiCare Life and Health Insurance Company. |
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