Utilization Review
The managed care process of evaluating the medical necessity and efficiency of proposed or delivered care, including prospective (preauthorization), concurrent, and retrospective review.
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Practice This Concept
An HMO pays a primary care physician a fixed amount each month for every member assigned to that physician, regardless of how many services the member actually uses. This method of paying providers is called:
Capitation — Capitation is a managed care payment method in which the HMO pays each primary care physician a fixed per-member, per-month amount, and the physician bears the cost of providing the covered services within that budget. Because the payment does not increase with each office visit or procedure, capitation gives the physician a financial incentive to deliver efficient, preventive, and cost-effective care. It is the hallmark of HMO financing and is why HMOs emphasize gatekeeping, network panels, and utilization review. By contrast, fee-for-service pays per procedure, which encourages more services rather than fewer.
National insurance concept
The managed care process that requires a physician to obtain the plan's approval before admitting a patient to the hospital is called:
Precertification, also called pre-admission certification — Precertification, also known as pre-admission certification or prior authorization, is a utilization review step in which the insurer or managed care organization approves a proposed hospital admission, procedure, or treatment before it occurs. If the member does not obtain precertification, benefits may be reduced or denied. Utilization review tools are used by managed care plans to control costs and ensure that care is medically necessary, appropriate, and provided in the most cost-effective setting.
National insurance concept
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