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Utilization Review is a program designed to reduce unnecessary hospital admission and to control the length of stay for inpatients through the use of preliminary evaluations, concurrent inpatient evaluations, or discharge preplanning. Gillian I. Russell, Terminology, in FUNDAMENTALS OF HEALTH LAW 1, 44 (American Health Lawyers Association 5th ed., 2011).


Hospitals participating in the Medicare program were required to have utilization review plans that provide for the review on a sample basis of admissions, durations of stays, and professional services (with respect to outlier cases), to determine medical necessity and to promote efficient use of facilities. 42 U.S.C. § 1395x(e)(6)(A), (k); 42 C.F.R. § 482.30. Excerpt from Timothy P. Blanchard, Medical Necessity & Utilization Review in Compliance, AHLA Seminar Series (2003).

Where a hospital’s “utilization review committee” determines that a patient admitted by a physician as an inpatient does not meet the hospital’s inpatient criteria, the hospital may change the patient’s status from inpatient to outpatient and bill for covered services as outpatient services. Medicare Claims Processing Manual, Chapter 1 § 50.3.

Common Areas of Concern

The hospital Conditions of Participation require the utilization review committee to consist of two doctors of medicine or osteopathy, and may include other specified practitioners (i.e. dentist, podiatrist, optometrist, etc.). 42 C.F.R. § 482.30(b), MLN Matters Article SE0622, Q.3.

Non-physicians are not listed as members of the Utilization Review Committee. One member of the Utilization Review Committee may make the determination that an admission is not medically necessary, provided that the patient’s physician concurs with the determination or does not present their views when given an opportunity. 42 C.F.R. § 482.30(d)(i), MLN Matters Article SE0622, Background.

In all other cases, the determination that an admission is not medically necessary must be made by two members of the Utilization Review Committee. 42 C.F.R. § 482.30(d)(ii), MLN Matters Article SE0622, Background. Excerpt from Kimberly A. Hoy, Hospital Patient Status: Payment & Compliance Implications, Institute on Medicare & Medicaid Payment Issues (American Health Lawyers Association Mar. 2009).