In payer oversight, which statement best defines utilization management and utilization review?

• A. Utilization evaluations focus on actual services only; utilization management sets policy for coverage and denial.
• B. Utilization management is ongoing oversight of the necessity, level, and duration of services; utilization review is the evaluation of actual services provided to ensure appropriateness.
• C. Both terms mean the same thing and are interchangeable.
• D. Utilization management is a financial audit of provider charges.

Answer: (B)

Utilization management and utilization review are two related, but distinct, activities in payer oversight. Utilization management is the ongoing process of ensuring that health care services are necessary, provided at the appropriate level of care, and of appropriate duration. This includes activities before or during care, such as authorization, care coordination, and discharge planning. Utilization review, by contrast, evaluates the services that were actually delivered to confirm they were appropriate and aligned with medical necessity and established guidelines, often after care or during ongoing care to decide whether to continue or adjust services.

The statement that best captures this is that utilization management is ongoing oversight of the necessity, level, and duration of services, while utilization review is the evaluation of actual services provided to ensure appropriateness. The other options mix up scope or imply they’re interchangeable or purely financial, which isn’t accurate.