What is 'utilization review' in managed care?

Utilization review is the process insurers use to evaluate whether requested or provided medical services are medically necessary, appropriate, and consistent with care guidelines. Three types: (1) Prospective (prior authorization) — review before services are provided, with the provider seeking approval for non-emergency procedures, hospitalization, or expensive services; (2) Concurrent — review during ongoing treatment, especially hospitalization, to determine continued necessity; (3) Retrospective — review after services are provided, often during claim processing. Utilization review serves cost-containment purposes but can create delays or denials that frustrate patients and providers. Most plans have appeals processes for denied authorizations. State and federal laws (including the No Surprises Act) regulate utilization review practices.