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They don't call themselves utilization review companies anymore.

Many companies that got their start by providing employers with retroactive review of medical bills now are taking a much broader role in managing claims costs. The companies today offer such services as demand management, disease management and provider profiling, as well as time-proven specialties such as case management and operating preferred provider networks.

Some companies also are focusing less on contracting directly with employers. As players in the health care delivery system have taken on more risk, utilization management companies are finding that doctors, hospitals and health maintenance organizations want their services. They also are selling their managed care services in the workers compensation arena.

"(Utilization management) is still a robust business for us, and opportunities are still coming our way," said John Weymer, senior vp of group health managed care in Dallas for Intracorp. "The only erosion away from utilization management that we are seeing are those customers who are going to straight HMOs from indemnity. On our book of business, that has been less than 5% a year, and that has held for a number of years."

Employers with traditional indemnity or PPOs still seek Intracorp's utilization management services, Mr. Weymer said.

But there is less demand for stand-alone utilization management services among employers-or in regions, such as California, where managed care enrollment is high. That is because utilization management already is bundled in most managed care plans.

Stand-alone utilization management companies "are probably feeling the pinch because all of the large carriers now are providing comparable or better services," said Tim Beck, principal and health and welfare consultant for Buck Consultants Inc. in Los Angeles. "They certainly haven't gone away, but they are consolidating or selling themselves to large carriers."

Ken Dude, director of group benefits planning and administration for The May Department Stores Co. in St. Louis, said it has been several years since his company has had significant numbers of employees in traditional indemnity health plans requiring a separate utilization review vendor.

"With HMO enrollment and managed care enrollment, we have very, very little direct utilization review," Mr. Dude said. "If we have 50,000 people enrolled in managed care plans, I think at this point we have less than a couple hundred enrolled in any plan that would have direct utilization review services."

While many employers leave utilization and case management to their managed care plans, plenty of self-insured companies still rely on outside vendors to provide additional oversight, according to consultants.

That can sometimes create a double layer of utilization management review, with occasional disagreements between the employer's case manager and the managed care plan's, Mr. Beck said.

"I don't want to suggest this is a large problem," he added. "But it does present itself every once in a while. You will get some conflicts in what appropriate treatment is."

But while many employers leave utilization management to their health insurers, they may not always be getting as good a product as when they contracted for the service directly, one consultant said.

"I think it's easier today for an organization to be weak in one area and get by with it, whereas when everything was unbundled the employer was likely to go with whoever was strongest in each specific area," said John C. Garner of Garner Consulting Services in Pasadena, Calif. "But now somebody can come along and offer you a great rate and a great network and you might not pay much attention to how well they do the utilization management."

The quality of utilization management would become an issue only if employees complained about it, said Mr. Dude of May Department Stores. May contracts with 89 HMOs and has had no complaints, he said.

For their part, utilization and case management companies continue to sharpen their focus.

In the past, they generally concentrated on high-cost catastrophic illnesses requiring hospitalization or home health care. But the trend now is to also focus on helping people stay healthy before catastrophic hospitalization is needed, said Dr. Mark Bloomberg, chief medical officer for Private Healthcare Systems Inc., a Waltham, Mass.-based PPO and utilization management company.

For example, practices such as medication compliance-which ensure patients are taking maintenance medicine, such as for high blood pressure, as prescribed-reduce the need for more acute care attention, Dr. Bloomberg said. But illnesses that can be costly and lead to hospitalization, such as diabetes and heart disease, still receive the most attention from case managers, he added.

Generally, there is a lower threshold for case management involvement, said Chris Galanos, vp of group health managed care for Intracorp in Itasca, Ill. Several years ago, an average case might require 18 or 20 hours of Intracorp's interaction with the claimant. "Now, there are a lot of cases we work on which are very short-term, which may require two to four hours," he said.

Home infusion therapy and chemotherapy for oncology cases are among areas where case management is playing a bigger role, in part because the medical profession has found good outcomes are possible with case managers' intervention.

Providers also have found case management essential for their bottom line.

The medical community had a distaste for utilization review, said Marlene Travis, president and chief operating officer for Health Risk Management Inc. in Minneapolis. But as health care providers have taken on more financial risk, such as through capitated managed care arrangements, they have grown more interested in practices that save money by improving people's health.

"They tend to be more interested in figuring out how can we (treat people) from a best practices standpoint, which is somewhat different from the way insurance companies would have looked at it," she said. "Insurance companies think of things more from a financial standpoint."

As a result, the medical community has pushed the refinement of utilization management toward a focus on quality outcomes, believing that will save money, Ms. Travis said.

Utilization management companies also are looking to educate the consumer and offer demand management services in the form of 24-hour toll-free hot lines staffed by nurses.

"We are now moving in a very direct way toward the patient side of the equation, or the demand side of the equation," said Intracorp's Mr. Weymer. "That is a very significant trend in the industry."

Demand management programs generally aim to reduce health care expenses through increased education and by helping individuals to practice healthy habits and to participate more in health care decisions.

In that sense, many utilization management companies are striving to become traffic cops, helping employees navigate integrated health services. Using toll-free numbers, utilization management companies can direct employees to counseling, the appropriate hospital or doctors and other services.

In some cases, that can mean reduced costs by sending employees to the right care in the early stages of an illness or answering questions over the phone rather than scheduling a doctor visit. Consumers also can be directed to "centers of excellence" that exclusively specialize in such areas as asthma or cardiovascular care.

"A lot of that can be done by using guidelines and other modalities at the fingertips of a nurse, Ms. Travis said. "There is more and more of a trend for managing the entire benefit plan from one central location."

That includes the integration of claims and network management for one-stop shopping driven by treatment guidelines, Ms. Travis said.

But the jury is still out on who makes the most appropriate supplier of demand management services, some observers said.

Several utilization management companies say they are more likely to offer demand management services provided by specialty companies rather than operate that part of the business themselves.

"We are looking toward demand management and nurse triage," said Dr. Bloomberg. "But I think there we would be better to joint-venture with someone who does that already."

"Many of us are hooking up with demand management companies," said Vicki Merrill, senior vp of operations for Irvine, Calif.-based Beech Street Corp., which provides utilization management through its PPO network.

"Beech Street actually invested in National Health Enhancement Services, and we are building programs to integrate our delivery model and medical management and case management with their capabilities," Ms. Merrill said. Phoenix-based NHES specializes in health information and technology, including demand management services.

Provider profiling is another area where utilization management companies foresee a use for their expertise. "Eventually, companies like ours that handle cases (before, during and after treatment is rendered) have the best shot at provider profiling or offering report cards so consumers can make better choices," Ms. Merrill said. "I think that is the next step."

Part of that next step is already here. The companies are providing information to help claimants determine what type of doctor to see, how long a doctor has been in business, what languages they speak and what hospitals they are associated with.

But more detailed information, such as on their success rate with specific surgeries or how many they have performed, is not yet available, though Ms. Merrill said she expects it eventually will be.