Medical Records and the Law

20 CHAPTER 2: MEDICAL RECORDS AND MANAGED CARESeveral forces contributed to this transition, including increasedemphasis on the importance of documentation in medical training;medical records standards incorporated in accreditation and certificationrequirements, and the development of formal utilization controlsfor healthcare services, culminating in the managed care revolution ofthe late 1900s.Utilization ReviewOne factor in the increase in the scope and quality of medical recordswas a requirement that was beginning to be imposed by payers aroundmid-century—namely, that providers document the need for, and provisionof, services in exchange for payment. The beginning of theMedicare and Medicaid program operations in 1966 was a watershedyear for formal utilization review because the program operations requiredmost hospitals and nursing facilities that wished to participateto maintain utilization review programs in order to obtain and maintaincertification. 1 In 1972, Congress added an additional layer of review,by professional standards review organizations (later known aspeer review organizations and quality improvement organizations), 2and imposed a specific obligation upon providers to support their provisionof services by evidence of medical necessity and quality “in suchform and fashion and at such time as may reasonably be required by areviewing peer review organization in the exercise of its duties and responsibilities.”3 The federal peer review program extended not only toinstitutions, but also to physicians and other practitioners. 4Managed CareThe impetus for the development of utilization review was burgeoninghealthcare costs. A related effort by Congress to address quality and1See, e.g., 42 C.F.R. § 482.30, requiring most hospitals seeking to participate in theMedicare program to have in effect a utilization review plan that provides for review ofservices furnished by the institution and by members of the medical staff to patients entitledto benefits under the Medicare and Medicaid programs.242 U.S.C. § 1320c-3.342 U.S.C. § 1320c-5.442 U.S.C. § 1320c-5.