Managing Care

Utilization Review in Action at Two Capitated Medical Groups; Prospective Denials of Coverage on Grounds of Medical Necessity Are Only a Small Part of the Overall Picture

Published in: Health Affairs - Web Exclusive, June 2003, p. W3-275-W3-282

Posted on RAND.org on December 31, 2002

by Kanika Kapur, Carole Roan Gresenz, David M. Studdert, Jose J. Escarce

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Despite widespread concern about denials of coverage by managed care organizations, little empirical information exists on the profile and outcomes of utilization review decisions. This study examines the outcomes of nearly a half-million coverage requests in two large medical groups that contract with health plans to deliver care and conduct utilization review. The authors found much higher denial rates than those previously reported. Denials were particularly common for emergency care and durable medical equipment. Retrospective requests were nearly four times more likely than prospective requests were to be denied, and when prospective requests were denied, it was more likely because the service fell outside the scope of covered benefits than because it was not medically necessary.

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