Controlling workers' compensation medical care use and costs through utilization management

Little is known about the performance of utilization management (UM) progra ms, which are now widely used within the workers' compensation system to co ntain medical! costs and improve quality. UM programs focus largely on hosp ital care and rely on preadmission and concurrent reviews to authorize hosp ital admissions and continued stays. We obtained data from a large UM progr am representing a national sample of 9319 workers' compensation patients wh ose medical care was reviewed between 1991 and 1993. We analyzed these data to determine the denial rate for hospital admission and outpatient surgery and the frequency of length-of-stay restrictions among hospitalized patien ts. The denial rate was approximately 2% to 3% overall, but many of the den ials were later reversed. On average, the UM program reduced the length of stay by 1.9 days relative to the number of days of care requested. The esti mated gross cost savings resulting from reduced hospitalization time and de creased outpatient care was approximately $5 million. UM programs may offer a viable approach to cost containment within the workers' compensation sys tem. Their value as a tool to improve the quality of care for workers' comp ensation patients remains to be demonstrated.