The purpose of this study is to determine the impact of a managed care cost containment strategy, concurrent utilization review (UR), on l. the plan of care of hospitalized patients and 2. hospital fiscal outcomes. To date investigators have utilized claims data and examined the impact from the perspective of the managed care industry. The present research is unique in that it proposes to study the concurrent review process from the perspective of the hospital system and hospital clinicians, thus demonstrating the outcomes of utilization review on clinical care. The major questions to be answered by this study include: l. When authorization for reimbursement for care is denied under the concurrent utilization review process, what is the effect on the patient's plan of care? That is, do providers change the plan of care, do they modify the plan of care or the setting of care, or do they continue without regard to the denial? 2. What is the cost, in dollars, to the hospital, (a) of denials of reimbursement for care and (b) of conducting the UR process? 3. Do the data support a hypothesis that denial of reimbursement represents a form of cost shifting from managed care entities to the hospital provider? Clinical impact will be studied using audio recorded questionnaires of advanced practice nurse case managers each time a denial is received by the hospital. Fiscal data will be abstracted from the hospital computerized cost-accounting system. Fiscal impact will be evaluated by aggregating the costs of care incurred by patients but not covered by their third party payer after denial has been received. Costs will be further studied by stratifying denials by clinical service, by hospital departments where unreimbursed costs are accrued, and by using a production function model to determine costs of the process to the hospital. The process of conducting reviews has grown into a major industry in the United States and adds significantly to the cost of health care. The proposed study is the first to examine the impact on plans of care for hospitalized patients and has implications for hospital providers, payers, clinicians, and policy makers.

National Institute of Health (NIH)
Agency for Healthcare Research and Quality (AHRQ)
Small Research Grants (R03)
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Health Systems Research (HSR)
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Hagan, Michael
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University of Wisconsin Madison
Schools of Nursing
United States
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Murray, Mary Ellen; Brennan, Patricia Flatley; Moore, Shirley M (2003) A model for economic analysis. Nurs Econ 21:280-7, 259