Utilization management department: Questions to ask

Megan Beasley, Megan Galvan, Sarah Rea
| 5/4/2023
Utilization management department: Questions to ask

As with virtually all areas of healthcare today, optimizing an organization’s utilization and care management strategy has become critical to its ability to provide better patient care – and better manage costs. The risks of inefficiencies in this area to patient care and the revenue cycle are vast, including increased costs of care, higher readmission rates, and increased denials, among many others.

To address these challenges, leaders of healthcare provider organizations first need to know where their struggles lie. Following are questions to ask about the utilization management (UM) department to dig deeper and determine which improvements can most benefit the organization.

1. Do you have the right people, processes, and technology?

It might seem like a simple question, but if something is amiss in these three areas, problems can arise (if they haven’t already). Reviewing people, processes, and technology in the utilization management department, therefore, is a good place to start. Here are some questions to consider in these areas:


  • Do existing procedures outline expected productivity measures, task priorities, and role expectations?
  • Does the level of staffing meet business needs and not just fulfill business hours?
  • Are formal systems in place to enable UM staff to solve problems and make UM-related decisions?
  • Is a formal system in place to enable UM staff to work with physician advisers?
  • Are departmental and staff competencies continually evaluated, and is continuing education and training subsequently offered to staff?


  • Does the UM department have active and standardized policies and procedures in place, and are they being followed? Are these measures continually reviewed and revised based on departmental needs and guidelines?
    Examples include:
    • Observation protocols
    • Level-of-care policies
    • Inpatient-only procedure lists
    • Care coordination and discharge strategies
    • Policies for initial and ongoing staff quality assurance and education
  • Do standardized documentation tools and templates exist?


  • Does the department use standard workflows, including exception-based work lists?
  • Are structured reporting and reconciliation tools available for daily management?
  • Does the department use dashboards to give leadership better insights into areas needing improvement?

2. How is the utilization management department’s relationship with physician advisers?

Physician advisers are vital assets to a UM department. These advisers should be included within department processes such as secondary reviews, clinical documentation, care guidelines, and staff education. The following should be considered when evaluating the use of physician advisers within the UM department:

  • Are standardized guidelines regarding secondary reviews of patient status in place?
    • Do the guidelines thoroughly explain what is expected from the physician adviser and nurse?
  • Do effective interdisciplinary relationships exist among physician advisers, the medical staff, and the managed care, care management, utilization management, clinical documentation improvement, and revenue cycle teams?
  • Are physician advisers actively involved in the process for overturning denials during a patient’s stay, such as by conducting peer-to-peer conversations with payors or owning or contributing to the claim denial and appeal letter authorship?
  • Do physician advisers conduct continuing education for hospitalists and physicians in areas such as clinical documentation, regulation changes, and appropriate levels of care?

3. Is effective documentation a priority?

Having quality clinical documentation practices in place is another way to mitigate risk. These are some thoughts to consider when reviewing the clinical documentation quality across the organization:

  • How do the hospital’s documentation strategies support the patient care provided?
  • Do the clinical summaries contain the appropriate documentation requirements to support the need for the determined patient status classification?
  • For Medicare patients, does documentation support the Centers for Medicare & Medicaid Services’ two-midnight rule and potential exceptions for unexpected shorter patient stays?
  • Is information regarding medical necessity included in all clinical documentation?
    For example:
    • Patient signs and symptoms
    • Predictability of adverse outcomes
    • Facilities available for the patient’s next care transition
    • All clinical summaries
  • What is the clinical documentation integrity (CDI) team’s involvement in identifying areas of opportunity for documentation improvement, and how does the CDI team communicate with the UM team?

4. Are the right tools in place to enhance performance?

Data can be a powerful tool in an organization’s efforts to enhance performance of its utilization management department. Being able to make sense of large data sets allows UM staff and leadership to identify opportunities for improvement, initiate process changes, and determine staff education needs.

Leadership should consider if staff members have the proper tools in place to harness the wide swath of patient data available in the electronic health record (EHR). When attempting to understand the analytical capacity of the organization’s EHR and whether it is being used to its full potential, the following should be reviewed within the UM department:

  • Is the department able to review metrics and data about patients concurrently (while they’re in-house) and retrospectively (post-discharge) to give leaders greater insight into trends across the organization and the patient population at large?
  • Does the department have productivity monitoring in place to understand the team’s staffing coverage and potential gaps?
  • Do UM team managers have automated tools to assist them with monitoring the in-house patient population for cases that might need escalation or specific focus prior to discharge rather than afterward (which might prevent potential reimbursement loss)?

5. Do you know your numbers?

Paying attention to industry benchmarks regarding admission and related practices is critical to identifying areas for improvement or staff education in the utilization management department. Examples of essential metrics in this area include length of stay, reimbursement, denials, observation-to-inpatient ratio, admission trends by provider, and trends by cost center. Organizations should evaluate performance across multiple dimensions, including at the facility level and financial class or payor levels. Following are some questions to ask UM leaders about admission practice metrics:

  • What percentage of bedded patients are being admitted? An average hospital admits approximately 84% of bedded patients, with most hospitals falling between a 75% and 90% admission rate.1 If a hospital’s admission rate falls below that range, it might mean it is not admitting patients who typically would qualify for inpatient care, resulting in potential missed net revenue. If the hospital’s rate falls above that range, the denial risk increases.
  • What are the hospital’s initial and final denial rates (during the patient’s stay and post-discharge)? Knowing these numbers can help identify potential net revenue leakages and opportunities to understand payor behavior for managed care conversations.

Dig deeper for even more improvements

Digging deeper into the root of utilization management department challenges can help healthcare provider organizations begin to address them. Getting answers to some of the questions organizations can consider related to UM department performance can help them identify areas for improvement that can have cascading, positive effects on patients, staff, and the bottom line.

The patient care and financial risks of UM underperformance are great. For more ideas about optimizing this area, healthcare leaders should consider working with third-party specialists.

1 According to user data from the Crowe Revenue Cycle Analytics solution, October 2021 to September 2022.

Contact us

Megan Beasley
Megan Beasley
Principal, Healthcare Consulting
Megan Galvan
Megan Galvan
Sarah Rea
Sarah Rea