What is the purpose of a utilization review?

The purpose of a utilization review is to assess the medical necessity for services provided to patients. This process involves reviewing the appropriateness, necessity, and efficiency of healthcare services, procedures, and facilities in relation to established guidelines and the latest clinical standards. By determining whether the services offered are warranted based on patients' diagnoses, severity of illness, and other clinical indicators, healthcare organizations can ensure that patients receive necessary care while helping to control costs.

Utilization reviews are critical in managing healthcare resources and ensuring that services rendered are justified, which directly impacts the quality of care and reimbursement processes. Effective utilization review processes can lead to improved patient outcomes by preventing unnecessary treatments and supporting appropriate resource allocation.

This focus on evaluating medical necessity distinguishes utilization reviews from other aspects of healthcare management, such as monitoring claims denials or analyzing billing errors, which are more focused on coding, payment processes, and financial management rather than the clinical appropriateness of care.