What Is Utilization Management In Health Insurance? 
Utilization management guidelines/requirements in health insurance/managed care companiesare designed to maximize the effective use of health care resources in a cost effective manner . Such guidelines/requirements can apply to the provider of health care services and/or to the insured person . Depending upon the insurance carrier and the health insurance program you are enrolled in these guidelines/requirements may be either active or passive . This means in some cases they are more like strong suggestions with little or no negative consequences for non-compliance and in other cases the guidelines/requirements must be complied with for the services to be covered at the in-network level of benefits or to not be declined for payment . Utilization management is a far reaching term that can touch virtually every aspect of health care from physician care to prescription utilization . The objective is to establish a set of recommended best practices and steps in treatment to be followed when dealing with a person 's health problems . For example , you might be required to try a long established prescription medication that is now a lower cost generic to treat a condition and have to show that the desired results were not being obtained before you might be approved for a newer , name brand medication that treats the same condition but is much more expensive . Having certain procedures performed on an outpatient basis rather than requiring a hospitalization is another example . The bottom line is that utilization management protocols attempt to get the appropriate level of care in the most appropriate and cost effective setting to maximize the value of our health care dollars . Sometimes utilization management can be a complicating factor in a patient 's and/or doctor 's experience as it may require everyone to go through steps A , B , C & D rather than jumping right from step A in treatment to step D. But , with insurance costs continuing their relentless rise , the consumer should anticipate that utilization management will be much more prominent in their health care than ever before . 