Short-Term Analysis to Support Mental Health and Substance Use Disorder Parity Implementation. Utilization Management (UM) Practices


UM refers to the policies and protocols that define when and for what types of services preauthorization, concurrent review,and retrospective review are utilized. The review provides the opportunity for medical necessity criteria to be applied. Thus, the review may result in denial of coverage for all or some portion of care, or authorize coverage for an alternative to the requested care. In addition, preauthorization and concurrent review may delay care -- if participants and providers wait on the outcome of the review -- or discourage care due to the “hassle” factor.4

The industry leaders we interviewed reported that their organizations review and update UM practices in the same manner as updating of medical necessity criteria, and use the same or similar committee process. UM practices are also updated in response to federal and state regulatory requirements. Industry representatives said that the factors they use to drive the nature of review processes were intended to prevent “overuse” and “misuse” of services. For example, one organization cited Wennberg’s5 four factors: (1) regional variation; (2) underuse of effective care; (3) misuse of preference-sensitive care; and (4) overuse of supply-sensitive care. Another mentioned practice variation, above benchmark use, and evidence of inconsistent adherence to evidence-based guidelines. Cost containment is also relevant, as reflected in comments that they attend to: unexplainable rise in costs of a service, and patterns of use of high cost services relative to commonly available alternatives.

Comparison of behavioral health UM practices to those in general medical care required these organizations to develop a cross-walk between classes of services, and make a comparison. Some organizations were still in the process of collecting information and making changes on a plan-by-plan basis. One organization mentioned that they have sometimes changed from UM to a limit in benefit design, to be consistent with the medical plan.

The industry representatives told us that a few issues stood out as being particularly ambiguous with respect to comparison across behavioral health and general medical UM practice:

  1. According to the industry, outpatient behavioral health care has some unique features and does not cross-walk well with outpatient medical care. The potential for misuse and overuse is perceived to be high relative to, for example, visits with a primary medical care provider or a cardiologist. One industry leader suggested that psychotherapy was probably more like occupational, physical, and speech therapy, in its potential for misuse and overuse.

  2. They also said that intermediate levels of care (e.g., intensive outpatient and partial hospitalization) are also challenging to cross-walk, and plans have made different decisions about whether to place these alongside outpatient or inpatient medical care. Industry leaders reported that as a result behavioral health UM practices have become more varied across plans than prior to the IFR. Some industry leaders noted that guidance from the government that would allow a more uniform approach to behavioral health UM practice would be welcome.

  3. For inpatient care, some medical plans rely on DRG-based standards, for example, applying retrospective review or capping the benefit when DRG amounts are exceeded. Behavioral health inpatient care is not subject to Medicare DRG payments (too variable within diagnostic groups), so no equivalent method exists.

The IFR has already led to UM practice changes for these organizations. For outpatient behavioral health care, several industry leaders told us that the pass-through number (that is, the number of visits that are allowed prior to review) has changed from a somewhat arbitrary number (e.g., 2, 8, 10, or 20), to a number based on the statistical distribution of visits (e.g., 1 or 2 standard deviations above mean visits, sometimes calculated within diagnosis). This has had the effect of making the pass-through number larger, and also preserving a more unified approach across medical plans served by a particular MBHO.

Some organization representatives told us that pre-certification of outpatient care, and preauthorization of inpatient care has been, or is in the process of being, phased out. One organization is replacing inpatient preauthorization with “pre-notification.” Another is replacing inpatient prior authorization with intensive concurrent review.

4. Koike A, KlapR, Unutzer J (2000). “Utilization management in a large managed behavioral health organization.” Psychiatric Services, 51: 621-626.

5. Wennberg JE, Fisher ES, Skinner JS (2002).“Geography and the debate over Medicare reform.” Health Affairs, published ahead of print February 13, 2002, doi:10.1377/hlthaff.w2.96. [Available at]

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