Utilization Review
A process used by insurance companies to evaluate the necessity, appropriateness, and efficiency of healthcare services before, during, or after treatment. This review helps control costs by ensuring that medical procedures and treatments are medically necessary and cost-effective.
Example
“The insurance company's utilization review determined that the recommended surgery was medically necessary, so they approved coverage for the procedure.”
Memory Tip
Think 'Useful Treatment Investigation Level' - insurance companies investigate if treatments are truly useful before paying.
Why It Matters
Utilization review directly affects what medical treatments your insurance will cover and can prevent unnecessary procedures while controlling healthcare costs. Understanding this process helps you work with your healthcare provider to ensure treatments meet your insurer's criteria for coverage.
Common Misconception
Many people believe utilization review is just insurance companies trying to deny claims to save money. While cost control is a factor, the primary purpose is ensuring medical appropriateness and preventing potentially harmful unnecessary procedures.
In Practice
Sarah's doctor recommends an MRI for her back pain, estimated at $2,400. Her insurance company's utilization review requires she try physical therapy for 6 weeks first, costing $720. If physical therapy doesn't help, then the MRI gets approved. This process potentially saves $2,400 while ensuring the less invasive treatment is tried first.
Etymology
The term combines 'utilization' from Latin 'uti' meaning 'to use' and 'review' from Old French 'reveoir' meaning 'to see again,' emerging in healthcare insurance in the 1970s as cost-control measures became necessary.
Common Misspellings
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Related Terms
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See Also
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