The Utilization Review Process during a Pandemic

Everything is different, but nothing has changed.

I am sure we have all heard the statement “everything is different, but nothing has changed.” There are so many versions, variations, and applications of this on the Internet, but how does it generally get interpreted? The way I see it is that every day, we see situations in which everything is different than it used to be, but when looked at closely, we still get the feeling that nothing has changed. In today’s pandemic, everything we know is so different, but in so many situations, nothing has changed. The utilization review process is such an example.

Everything is Different
There is a longstanding recommended process for Medicare providers involving utilization review, and reviewing for level of care and medical necessity. It starts with the Conditions of Participation (CoP) and many other regulations. In view of the pandemic, on March 20, 2020, the Centers for Medicare & Medicaid Services (CMS) waived the entire utilization review Condition of Participation, Utilization Review (UR), at §482.30. This regulation requires that a hospital have a UR plan with a UR committee that provides for a review of services furnished to Medicare and Medicaid beneficiaries to evaluate the medical necessity of each admission, duration of stay, and services provided. This waiver extends for the duration of the COVID-19 crisis, and is intended to allow hospitals to utilize UR staff for patient care. Former CMS Administrator Dr. Seema Verma explained at the time that “in a time of crisis, regulations shouldn’t stand in the way of patient care.”

This waiver represents potential relief for hospitals, since it temporarily alleviates some of the regulatory requirements they face, but taking advantage of it isn’t mandatory. Dr. Verma went on to explain that “many healthcare systems won’t need these waivers, and they shouldn’t use them if they don’t need them, but the flexibilities are there.” It also does not apply to commercial insurers and their patients.

Removing these administrative requirements, again, allowed hospitals to focus more resources on providing direct patient care. Hospitals must be careful, though, as the waiver is not a free pass to just forget about the process and bill all as inpatients, as audits will occur after the pandemic is over, as the False Claims Act has not been waived.

Nothing has Changed
Here is a typical scenario in the UR process: when a patient enters the hospital, once the attending physician has written an order for level of care (inpatient versus observation versus outpatient)), there is a point where an initial utilization review should be done. The earlier this is done, the better. This is typically performed by a UR nurse or case manager applying commercial criteria, Milliman and InterQual being the most common. Physician documentation is critical to justify the level of care that is ordered and subsequently certified. Unfortunately, though, that documentation is not always complete, or present in a timely manner. If the patient meets inpatient criteria, it is generally considered de facto evidence for inpatient care, as most screening tools are rather stringent. If the patient does not meet inpatient criteria, one of several next steps occur:

  • The case manager or UR nurse will speak with the attending physician to try and acquire more information; and/or
  • The case is referred to a physician advisor for a second-level review (SLR).

When trying to contact the attending the case manager or UR nurse, one may run into one of several scenarios:

  • Successful discussion – probably happens more often than thought.
  • The Curmudgeon: defines a curmudgeon as a “bad-tempered, difficult, cantankerous person.” When it came to this situation, that was me, and it was not uncommon for me and others to say “oh, and what medical school did you go to?” Usually this did not result in a very productive conversation.
  • The Runner – this is the doctor who starts walking down the hall and spots a case manager or UR nurse ahead. They are then thinking “they want to talk with me, but I don’t want to have this conversation” and so they run off in another direction. I’ve even seen them run into the OR, and they weren’t even a surgeon.
  • The Invisible Man/Woman – this is the doctor who makes rounds at 6 a.m. or after 9 p.m. just so they didn’t have to see a case manager or UR nurse or even discuss the case with anyone.
  • The Evader – this person is not seen as much, in today’s world of technology and various devices, texting, cell phones, and more ways to communicate. Yet they do have ways of ignoring calls and texts, or saying, “I never got it.”
  • The Sneak – there are some facilities that do not require the attending to do a discharge summary for patients in observation. I am guilty of being a sneak. When ready to discharge an inpatient, I would change the status to observation and then immediately write the discharge order. That way the case manager or UR nurse could not have time to talk with me about the change. Back then, I didn’t realize the consequences to the beneficiary, financially, and maybe wouldn’t have cared (yes, I was a nightmare.)
  • The Pleaser – essentially this is the doctor who says that he/she will do what is asked, and then goes ahead and does whatever they want, usually nothing.
  • The Collegiate – this is the doctor with whom there is actually a great conversation, after which they give the information needed for an appropriate level of care or referral to a physician advisor.

In today’s world, with there being more physician advisors (PAs) around, they may run into similar situations, but not as many. Physicians can’t play as many tricks when it is a peer with whom they are talking. Doctors behave better then, but not always.

What are some of the reasons patients don’t end up in the correct status or level of care? More specifically, when do they stay in observation or fail to certify for inpatient care?

  • No SLR is done when indicated
    • PA not available, or facility does not have one
    • A PA is not requested
  • Use observation screening with observation order, or as a default when patient doesn’t meet inpatient criteria
  • No UR done on weekends, holidays, and/or evenings
  • “I know that payer is going to deny it regardless”
    • That way there is no denial to worry about
  • Case management “judgment”
  • “Shouldn’t all of the symptom DRGs always be observation?”

Over the years I have been repeatedly asked if there is any regulation mandating that all Medicare patients must undergo a utilization review. Surprisingly, there is not, but there is a regulation indicating that all claims submitted must be compliant. That regulation is the False Claims Act (FCA). The FCA is a federal law that imposes civil liability on “any person who … knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” or  “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim” paid by the government.

This regulation was enacted in 1863 by a Congress concerned that suppliers of goods to the Union Army during the Civil War were defrauding the Army. The FCA provided that any person who knowingly submitted false claims to the government was liable for double the government’s damages, plus a penalty of $2,000 for each false claim. Since then, the FCA has been amended several times. In 1986, there were significant changes to the FCA, including increasing damages from double to treble damages and raising the penalties from $2,000 to a range of $5,000 to $10,000. The FCA has been amended three times since 1986. Over the life of the statute, it has been interpreted on hundreds of occasions by federal courts (which sometimes issue conflicting interpretations of the statute).

There are solutions, also, to “recycle” the UR dilemma, and it really is quite simple – follow the correct process. One would think that it should be easily implemented. To put it in simple terms, one should take their eyes off of short-term gains and focus on long-term vision.

Ensuring a compliant and effective UR process involves all these elements:

  • Education
    • UR staff
    • Physicians
    • Executives
  • Seven days/week UR coverage
    • Not focused on discharge planning but on medical necessity documentation and accuracy
  • Timely initial reviews
    • This can vary from institution to institution, depending on the culture. Finding the appropriate window for review, whether between 12 and 24 hours or between 8 and 16 hours, depends on the documentation habits of the physicians and the availability of supporting evidence, like lab results and imaging.
  • Timely re-reviews as needed
  • Physician Advisors
    • Internal
    • Outsourced
  • Knowledge of :
    • Medicare regulations
    • Commercial payer contracts
  • Understand Condition Code 44
    • And how to bill compliantly if the Code 44 process is not completed
  • Understand consequences to the beneficiary:
    • Medicare
    • Commercial payer

Everything is Different, but Nothing Has Changed
Although the aforementioned waiver option now exists, ignoring the UR process during this pandemic will lead to a challenge that will need to be addressed eventually, and it will be addressed by you or someone else. It may even be some governmental agency, such as the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), U.S. Department of Justice (DOJ), or others. There may also be some significant fines associated with ignoring this process.

CMS remains committed to ensuring continuity of oversight activities during the national public health emergency, and will continue to work state survey agencies and accrediting organizations charged with inspecting Medicare and Medicaid providers to ensure compliance with federal requirements, verifying that these activities are prioritized to allow providers to focus on current health and safety threats and provide needed care to beneficiaries. We will continue to monitor program operations to support proper enrollment and accurate billing practices. CMS will coordinate our oversight activities with the OIG and Government Accountability Office (GAO).


John Zelem, MD, FACS

John Zelem, MD, is principal owner and chief executive officer of Streamline Solutions Consulting, Inc. providing technology-enabled, expert physician advisor services. A board-certified general surgeon with more than 26 years of clinical experience, Dr. Zelem managed quality assessment and improvement as a former executive medical director in the past. He developed expertise in compliance, contracts and regulations, utilization review, case management, client relations, physician advisor programs, and physician education. Dr. Zelem is a member of the RACmonitor editorial board.

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