Utilization Review

The Worth of Utilization Review

By: | January 14, 2014

Roberto Ceniceros is a retired senior editor of Risk & Insurance® and the former chair of the National Workers' Compensation and Disability Conference® & Expo. Read more of his columns and features.

Every $2 Washington state spent on mandated utilization review during the 1990s eliminated only $1 worth of inappropriate MRI requests for spine evaluations.

So the state’s monopoly workers’ compensation insurer, the Department of Labor & Industries, notified doctors that it was eliminating the UR process and would approve any MRI request. That seemed like a smart, cost-effective move because L&I had also found that most of the MRIs it funded were appropriate.

But in 2003, three years after halting the UR process, L&I experienced a 54 percent increase in spinal MRI scans and a 72 percent increase in lower-extremity MRI scans.

“The reviewers were unable to identify any variable other than the removal of the UR requirement that accounted for the increase in MRI utilization,” according to a California Workers’ Compensation Institute report released Jan. 8.

The recent CWCI report titled “Medical Dispute Resolution: Utilization Review and Independent Medical Review in the California Workers’ Compensation System” cited Washington’s experience as an example of why eliminating UR can backfire.

Overall, the study evaluated California’s dispute resolution system for workers’ comp claims treatment requests and shows that utilization review is not a system for outright denial of claims.

And even though the report focuses on UR and independent medical review in California, the Washington example shows that the study holds lessons for other states.

The researchers found that 94.1 percent of UR decisions result in the approval of medical treatment requests. But among the 5.9 percent of treatment requests denied or modified, three of four are approved through an independent medical review process.

So the authors conclude that because only a small proportion of medical treatment requests are modified or denied, California’s UR/IMR system is working as intended.

But that won’t eliminate a public policy debate over the proper level of UR and IMR.

The California Applicants’ Attorneys Assn. considers the state’s UR system “out-of-control” and argues that insurers routinely apply it to deny doctors’ legitimate requests to provide appropriate treatment for injured workers.

More from Risk & Insurance

More from Risk & Insurance