Utilization Review Compliance

Improve the health of your organization: Add compliance to your plan

In the medical field it is often said that an ounce of prevention is worth a pound of cure. This sentiment also holds true with compliance. Entities that fail to maintain the proper licenses risk penalty fees and other sanctions from the state, while compliant entities can practice with confidence.

Like much of the healthcare industry, organizations that provide utilization review services are often subject to significant regulation. Depending on the location of an organization and types of review offered, a variety of certifications and licenses may be required.

The good news? An experienced, dedicated compliance partner can help you take a proactive approach to maintaining utilization review licensure and certification. Contact Harbor Compliance today to help you simplify the licensing process.

Overview of Requirements

Organizations offering utilization review services are typically required to register with either the department of insurance or the department of labor depending on the type of review they conduct. 40 states currently require entities to obtain a certification or license before conducting utilization review, and almost every state has regulations pertaining to the practice of utilization review.

Utilization review licenses can be split into two main groups: medical review and workers’ compensation review.

Medical Utilization Review Licensure

Medical utilization review licenses are usually administered by the department of insurance. Many states issue separate licenses for independent or external review organizations, and separate license classifications for long-term care review, mental health review, and chiropractic review are available in many states.

Application requirements vary by state and license type, but common requirements include:

  • Utilization review plan
  • Disclosure of clinical review criteria
  • Description of procedures in place for expedited review requests
  • Copies of the organization’s grievance procedures
  • Description of the organization and the services it provides
  • Responsibilities and qualifications of individuals involved in the review process
  • Bylaws and other organizational documents
  • List of states where the organization has been approved to perform reviews
  • Application fee

Medical review entities operating in states that do not require a license may still need to follow rules established by the department of insurance. In most cases these rules require submission of the organization’s utilization review plan or an affidavit certifying compliance with the relevant laws.

Hospitals and clinics with internal review programs are generally exempt from licensure as a medical utilization review organization.

Workers’ Compensation Utilization Review Licensure

Workers’ compensation utilization review licenses are usually issued by the department of labor, although the department of insurance handles this responsibility in some cases.

Application requirements vary by state and license type, but common requirements include:

  • Utilization review plan
  • Samples of letters sent to a claimant
  • Description of the organization’s QA program
  • Description of the organization and the services it provides
  • Responsibilities and qualifications of individuals involved in the review process
  • List of states where the organization has been approved to perform reviews
  • Application fee

A number of states require workers’ compensation review organizations to submit a review plan that follows state regulations instead of obtaining a license. Although there is no license requirement in these states, following the state’s rules can be just as time consuming.

Ohio, North Dakota, Washington, and Wyoming are monopolistic states, meaning they partner with a single organization to conduct workers’ compensation reviews. Other review organizations are not permitted to perform workers’ compensation utilization review in these states.

Maintaining a License

In order to continue providing utilization review services, review organizations must renew their license with the state. Medical and workers’ compensation utilization review licenses are usually issued for one or two year periods. In addition to renewing a license, some states require organizations to submit annual reports detailing the number and type of review requests processed.

Utilization review licenses that are not renewed by the due date will expire. Organizations with an expired license are precluded from performing reviews and may face penalty fees when they reinstate their license.

Adverse Determination - When a health care plan or utilization review program decides that a medical treatment or service is not necessary.

Concurrent Review - Utilization review that is conducted during a patient’s course of treatment.

External Review - When an independent review organization is consulted to appeal an insurance company’s adverse determination.

Independent Review Organization (IRO) - Unbiased third-parties that conduct utilization review.

Prospective Review - Utilization review that occurs prior to treatment.

Retrospective Review - Utilization review that occurs after treatment and often after payment.

Utilization Review - A system for evaluating the medical necessity, efficiency, and appropriateness of medical services.

Utilization Review Agent (URA) - An entity that conducts utilization review.

Utilization Review Plan - A document of the procedures used during utilization review.

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