Utilization Review - What It Is & How It Works

A hospital utilization review nurse works closely with the physician, the nursing staff, social workers, and the health plan's utilization review nurse.. Image © LWA/Getty Images

Utilization review is the process of making sure health care services are being used appropriately. The goal of utilization review is to make sure patients get the care they need, that it’s administered via proven methods, provided by an appropriate health care provider, and delivered in an appropriate setting. This should result in high quality care administered as economically as possible.

Who Does Utilization Review?

UR is done by health insurance companies, but also by hospitals, home health companies, and myriad other types of health care providers.

It can be done while the care is being given, known as concurrent UR, or after the care has been completed, known as retrospective UR.

UR is frequently, but not always, done by nurses. Usually the nurses have protocols that define what high quality care is and by whom and in what setting it should be administered. UR nurses at hospitals and home health companies work closely with their UR nurse counterparts at health insurance companies, as well as with the quality improvement team, the social work team, the discharge planning team, and the clinical staff caring for the patient.

Sometimes, the hospital UR nurse is also the discharge planner. When UR and discharge planning are combined into one job, it's known as case management.

An Example of Utilization Review

Sam is admitted to the ICU through the emergency room in the middle of the night after a car accident. The next morning, the hospital’s UR nurse looks at Sam’s medical record and notes all of his medical problems and treatments.

She consults her protocols to make sure that the ICU is the best place for Sam to be treated. For example, it could be that Sam would benefit from being transferred to a specialty trauma ICU at the regional trauma center. Alternatively, it could be that Sam’s injuries aren’t so severe and his treatments not so complex as to warrant being in the ICU; he might be more efficiently and economically cared for in the ICU step-down unit or on a surgical floor.

Most of the time, she’ll find that patients are being cared for at the correct level of service, that Sam should be in the ICU right where he is. However, if her protocols suggest a different level of care would be more appropriate, she would discuss this with Sam’s doctor.

Sometimes the doctor can provide additional information which makes it clear that Sam is right where he needs to be. Other times it becomes clear that Sam would be cared for more appropriately in a different setting, for example the ICU step-down unit or the regional trauma center’s trauma ICU. If this is the case, the UR nurse works with the physician and the nursing staff to get Sam where he can best and most efficiently be cared for.

The hospital UR nurse communicates with the UR nurse at Sam’s health insurance company. The health plan UR nurse compares Sam’s clinical findings and treatments with the health plan’s protocols. She then communicates back to the hospital UR nurse something to the effect that the health plan approves Sam’s admission and treatment and is authorizing four days of hospitalization.

She might add instructions to contact her if it becomes apparent Sam will need more than four days of hospitalization.

The hospital UR nurse follows along with Sam’s progress every day or two. If it becomes clear to her that Sam won’t be healthy enough to be discharged before the four days approved by the health plan’s UR nurse are up, she’ll contact the health plan’s UR nurse with an update on Sam’s condition and treatments.

If the hospital notifies the health plan’s UR nurse that Sam won’t be ready to go home when anticipated, the health plan’s UR nurse will consult her protocols and either approve more days of hospitalization or suggest a more appropriate alternative care setting. For example, if Sam needs intensive physical therapy but not the other medical services that acute-care hospitals provide, the health plan’s UR nurse might suggest transferring Sam to an inpatient rehabilitation facility where he can get the physical therapy and nursing care he needs more economically.

Utilization Review in Your Health Plan

UR done by your health plan is similar to UR done in a hospital but with a few differences. For example, if a hospital admission doesn't pass UR at the health plan, the health plan will likely deny the claim when the hospital sends the bill. Your health plan won't pay for care it doesn't believe is medically necessary or care not delivered in an appropriate setting.

That said, there are appeals processes in place that you and your doctor can use if your health plan denies a claim.


Legal Information Institute, Cornell Law School, 42 CFR 482.30 Condition of Participation - Utilization Review. Accessed 6/16/16.

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