EDITOR’S NOTE: This is the second of a three part series on Utilization Management Plan.

Did you know that the utilization review committee (URC) is the only committee required by the Medicare Conditions of Participation? Did you know the URC is a medical staff committee that must report through the medical executive committee to the board of directors? If not, then this article is for you!

The utilization management (UM) plan explicitly should detail the reporting structure and the roles and responsibilities of the board of directors, medical staff, hospital administration and line staff as they pertain to utilization review duties. Forming a strong UM plan with clear lines of authority and responsibility, coupled with a strong communication loop featuring peer review and quality improvement, is an important step to establishing commitment to a valid, consistent and compliant utilization review process.

Establishing Authority

Ultimately, the hospital board of directors has final authority over the utilization of hospital services. It is important that the UM plan detail how reports, annual evaluations, studies and minutes of the URC flow to the board. Below are two examples of how hospitals establish that flow of information:

Outlining Responsibilities

Governing Board – The governing board establishes and annually approves the utilization management plan. The board is also responsible for providing the human, informational and physical resources necessary to enable the case management team to perform its functions. Governing boards also delegate responsibility for implementation of the plan to the medical staff and chief executive officer, and require the hospital and medical staff to implement and report on utilization review activities throughout the organization.

Senior Leadership/Hospital Administration – The chief of staff, chief executive officer or “designee” delegates oversight of the URC, acting as a subcommittee of the medical executive committee or the performance improvement oversight committee. This person also ensures that admissions and continued stays are medically necessary and that medical and hospital resources are used appropriately. Such personnel should evaluate the effectiveness of utilization review activities and report the evaluation results to the governing board. Hospital administration is responsible for delegating a UR coordinator and a director to aid the UR Committee in carrying out its review functions by providing adequate personnel, time, data collection tools and systems. Administration also should provide meeting space and access to medical records, serving as a liaison and considering (and acting upon) recommendations made by the committee. These recommendations should be ratified by the medical executive committee to enhance to hospital policies and procedures, which ultimately promotes effective UR.

Medical Staff/Medical Executive Committee – The medical staff or medical executive committee is responsible for the following utilization review activities:

Criteria - Either developing or establishing the medical necessity criteria used by non-physician staff performing first-level review for all levels of care and services provided by the hospital.