Author: Tiffany Ferguson, LMSW, CMAC, ACM | August 25, 2026
Ask a group of hospital leaders whether their organization has a Utilization Review (UR) or a Utilization Management (UM) department, and the answers will likely vary. In many organizations, the terms are used interchangeably. Job titles may include UR nurse, UM specialist, UM director; you get the point. This occurs even when the individuals are performing essentially the same work.
But are UR and UM actually the same? There is an important distinction between the two, and that distinction may be becoming more important as healthcare moves further away from managing individual encounters towards managing total utilization and episodes of care.
At its most basic level I have always considered utilization review as micro practice, while utilization management as macro practice. What I mean is, utilization review focuses primarily on the individual patient encounter. Does this patient require inpatient hospitalization? Does the documentation support the level of care? Does the case require escalation to a physician advisor? Has the payer authorized the services being provided?
The term ‘utilization review’ also has a specific regulatory foundation. Medicare’s Conditions of Participation at 42 CFR §482.30 require hospitals to maintain a utilization review plan addressing the medical necessity of admissions, duration of stays, and professional services furnished. Yet like all things from the time of 482.30 being written, we have naturally evolved beyond the term utilization review, into the management arena.
Traditional UR has largely been built around the hospital encounter. A patient arrives in the emergency department, a decision is made regarding hospitalization, and UR evaluates whether the patient meets the requirements for inpatient or outpatient care, often with observation services. Concurrent review then follows the patient through hospitalization. That model made sense when the hospital encounter was largely evaluated and reimbursed as an individual event. Increasingly, however, hospitals are operating in an environment where the financial and clinical consequences of utilization extend well beyond a single admission or even payer demands.
Consider an uninsured patient. There may be no payer authorization to obtain and no insurance company requesting concurrent clinical reviews. Under our old model, we may ignore this case, but from a utilization management perspective, this case is total financial risk to the organization.
The same evolution can be seen in CMS payment models. Models such as CJR-X will reinforce the importance of looking beyond the walls of the hospital and considering utilization across an episode of care. When organizations assume greater accountability for the cost and outcomes associated with an episode, utilization decisions cannot be isolated to whether the initial hospital admission met criteria. This is going to push the UR to UM model as we are evaluating length of stay, post-acute utilization, readmissions, avoidable emergency department use, and patient progression.
While UR can help to determine whether the individual service was appropriate. Maybe now it is the UM professional who asks whether the entire pattern of care was appropriate. Thus, an adaptive UM program requires data, physician engagement, case management, revenue cycle, CDI, finance, nursing, operational leadership, and utilization professionals working from a shared strategy.
This article was originally published on RACmonitor.
