How UHS Strengthened Financial Performance Through Utilization Management

Utilization management is no longer a background function. For health systems navigating rising denial rates, shifting payer mix, and mounting administrative complexity, it has become one of the most consequential drivers of financial performance. Many hospitals are finding that the revenue cycle approaches that worked a decade ago are no longer enough.

Leaders from Universal Health Services (UHS) shared how more integrated approach to UM is changing outcomes. Their experience illustrates what’s possible when utilization management is aligned directly with revenue cycle performance and executed with discipline.

Pressure is coming from multiple directions

The financial strain facing hospitals reflects broad structural change. Medicare Advantage enrollment has steadily increased and now accounts for more than half of all Medicare beneficiaries. As Luisa Contreiras observed, that shift alone can lower reimbursement per case because Medicare Advantage plans apply more restrictive utilization and payment criteria than traditional Medicare, often in violation of federal rules.

At the same time, denial activity has risen sharply. Among Medicare Advantage payers specifically, 2+ Midnight denial rates have more than doubled since 2020, driven less by clinical variation and more by evolving payer behavior and stricter administrative requirements.

Taken together, these pressures leave little room for inefficiency. A utilization management strategy must now address both internal execution and the realities of an increasingly complex payer environment.

Why the traditional model breaks down

Many revenue cycle operations still follow a step-by-step model. Patient access, case management, coding, and billing operate independently, each focused on completing tasks. This structure limits accountability and obscures outcomes.

UHS moved away from this model. Mark Cannon described the shift as a move from transactions to outcomes, the question is no longer whether each step was completed, but whether the correct financial result was achieved.

This is a fundamental reorientation. Revenue cycle leadership expanded beyond back-end operations to engage directly with clinical teams, contracting, and executive leadership. The goal was to connect decisions made early in the patient journey with their financial impact downstream, and to hold the entire continuum accountable for the result.

Alignment across the care continuum

At UHS, utilization management is coordinated across patient access, case management, and the business office. Each group plays a defined role, but success depends on how well they work together.

The process begins with accurate registration and timely admission notification. These steps determine whether downstream actions can occur within required timeframes. Case management then works alongside physicians to support appropriate status decisions and secure authorizations during the patient stay.

This concurrent approach improves outcomes. Addressing issues in real time reduces the likelihood of denials and increases the chance of overturning them when they occur. UHS reports a peer-to-peer overturn rate above 50 percent, reflecting strong clinical alignment and consistent follow-through.

Transparency supports this coordination. Shared systems allow teams to track each case from admission through appeal, reducing delays and improving handoffs.

Measuring what actually matters

One of the more important changes at UHS involved redefining performance metrics. Traditional indicators such as denial rates or accounts receivable aging provide partial insight but can misrepresent overall performance.

Cannon noted that metrics viewed in isolation often lead to the wrong conclusions. A low denial rate does not guarantee appropriate reimbursement. Similarly, focusing on task completion can distract from financial outcomes.

UHS adopted a broader measure: Net Inpatient Realization®. Developed by CorroHealth in partnership with health system leaders including Mark and Caroline, NIR tracks the percentage of 2+ Midnight cases that ultimately result in inpatient payment, across every stage of the process, from initial status assignment to final reimbursement.

NIR is intentionally designed to break down silos. It connects operational performance directly to financial outcomes and surfaces what fragmented metrics miss; whether the organization is being paid for the care it delivers.

Reducing internal revenue loss

A significant share of lost revenue originates within hospital operations. Registration errors, gaps in documentation, and overly cautious billing practices can all lead to avoidable losses.

UHS addressed these issues directly. One critical shift was moving away from self-denial. When care met inpatient criteria, it was billed accordingly. This required physicians and case management to operate from a shared clinical foundation and the discipline to bill for medically necessary care rather than defaulting to a lower level of care to avoid conflict with payers.

Case management teams were central to this effort. Working closely with physicians, they helped ensure that status decisions reflected both medical necessity and regulatory expectations. Over time, this collaboration brought greater clarity and consistency across the process.

Operational improvements followed. Admission notifications became more reliable, registration errors declined, and authorization compliance improved. Each step helped close gaps and strengthened performance across the revenue cycle.

Holding payers accountable

Even the strongest internal performance cannot fully offset revenue loss. Payer behavior continues to shape outcomes in meaningful ways, and UHS addressed this through a more structured and deliberate approach to engagement and escalation.

It begins with consistent communication. Teams meet regularly with payer representatives to review trends, discuss denials, and walk through specific cases. Including clinical leadership in these conversations brings added clarity, particularly when there are differences in how care decisions are interpreted.

When issues persist, the approach becomes more deliberate. Denied claims are aggregated and analyzed to uncover patterns, then pursued through the mechanisms outlined in payer contracts. Cannon described this as a fourth level of appeal, a structured escalation strategy, grounded in data and backed by coordination across finance, legal, and operations. The approach is disciplined, not confrontational, but it is not passive.

By working within established contractual frameworks, UHS reinforces accountability while preserving productive payer relationships, on their terms, not the payer’s.

Data as the foundation

Data underpins every element of this utilization management strategy. At UHS, analytics drive performance monitoring, trend identification, and informed decision-making. Interactive dashboards offer clear visibility across the revenue cycle, enabling teams to act when issues arise.

In today’s environment, this level of insight is critical. Payer policies are continually evolving, sometimes impacting reimbursement without triggering higher denial rates. Organizations that rely on limited metrics may miss these shifts entirely until the damage is done.

For UHS, data bridges operational decisions and financial outcomes. It also strengthens escalation efforts by providing the evidence necessary to challenge inappropriate denials and underpayments with specificity and force.

A more disciplined approach to performance

The experience at UHS illustrates what integrated utilization management actually looks like in practice. It is not a single intervention or a technology deployment. It is alignment across teams, metrics, clinical documentation, and payer strategy; executed consistently and measured against outcomes that matter.

For health systems facing the same pressures, the lesson from UHS is clear: the organizations that are winning are not fighting harder, they are operating differently. When utilization management is built into the organizational strategy rather than bolted onto, the revenue follows.