Definition - What does Utilization Management mean?
Utilization management is the process by which the efficiency and appropriateness of health care usage is evaluated. This process involves investigating healthcare use to make sure that only necessary, appropriate, and efficient services are being used. Utilization management helps health insurance companies prevent money from being wasted on unnecessary services, treatments, or medicine.
Insuranceopedia explains Utilization Management
Utilization management involves taking a look at both inpatient and outpatient services to make sure that all of the benefits provided by an insurer are being used properly and in an optimal fashion. One of the goals is to make sure that the benefits provided by a health insurance company are effectively taking care of the policyholders' needs, while at the same time being cost effective for the insurer. If the utilization management process discovers that they aren't, then the benefits may have to be redesigned.