How Much Does Utilization Review Really Save?

Medical costs are climbing. In fact, for many carriers and self-insured employers, the medical spend in workers’ compensation and liability lines is outpacing wage growth, outpacing inflation, and dragging claim severity upward.

Many Workers’ Comp programs’ medical costs represent over 60 % of total claim expenses.

Utilization Review is too often viewed as a compliance checkbox or a post-treatment task. But when done well, UR is a powerful cost-containment mechanism. It operates not just to verify care, but to steer it, align it, and optimize it, benefiting both the insurer and the insured.

What Utilization Review Actually Does

So what is Utilization Review? At a high level, UR is the process of assessing the medical necessity, appropriateness, and efficiency of proposed care. Click here to read a granular explanation in our “3 Steps to Mastering Utilization Review” blog. In the Workers’ Comp or liability space, it means evaluating whether a requested treatment aligns with evidence-based guidelines, whether it is likely to lead to functional improvement, and whether it is the most efficient path forward.

UR operates across three main stages:

Prospective review: Reviewing a treatment plan before care is delivered (pre-certification, prior authorization)

Concurrent review: Reviewing treatment while it’s in progress (continuing stay, ongoing services)

Retrospective review: Reviewing after the care has been delivered (to validate appropriateness or spot potential over-utilization)

Click here to read more in-depth about the UR process.

The ROI of Utilization Review

All claims or risk leader wants to know: What’s the return on investment for UR?

It’s straightforward: In many implementations, you’ll see ROI ratios ranging from 4:1 to 10:1, depending on mix of claim types, complexity, and volume. Some specialty reviews (like high-cost surgeries) yield even higher ratios (one program found $60 saved for every $1 spent).

But it’s not only about the direct dollars avoided. The indirect returns are significant: faster recovery, shorter disability durations, lower litigation exposure, and stronger provider networks. These results might seem intangible but they make a huge difference and save thousands on complications and extended unnecessary treatment plans.

Quantifying the Savings

Let’s talk about the numbers. It’s one thing to say UR works, and another to show where the ROI and savings actually occur.

One case study by Enlyte showed that by automating UR decisions, one large carrier captured $2 million in savings in one year.

In a 2021 economic evaluation of UR in lumbar fusion claims (for back injuries), a program in Washington state found that claims with UR-denied fusion requests cost on average $40,000, versus $94,000 for fully approved fusion requests. Meaning UR yielded an average of $53,395 per-claim savings for that high-cost procedure.

UR yielded an average of $53,395 per-claim savings for that high-cost procedure.

While data vary by complexity, many programs estimate that UR can reduce total claim costs by 15-25% depending on how aggressive and early the program is deployed.

Beyond direct treatment costs, UR drives a number of indirect savings:

• Fewer prolonged disability cases (by keeping treatment efficient and recovery aligned to benchmarks)
• Reduced litigation or dispute costs (because unnecessary services often breed complexity)
• Lower duplication of diagnostics or imaging (avoiding needless repeats)
• Early detection of treatment patterns that may signal abuse or over-utilization

 The Overlooked Cost Saver

This is one major saving often hidden in plain sight: UR is a frontline defender against provider fraud, unnecessary treatment schemes, and inflated billing. By virtue of reviewing proposed treatment before or as it’s delivered, UR catches patterns that are high-risk: repetitive procedures, excessive durable medical equipment (DME) requests, up-coding, and more.

Here’s how UR supports fraud prevention:

• It flags repetitive procedures or treatment sequences that fall outside guideline norms (indicating possible abuse).
• It questions excessive DME or supplies requests when standard care would not warrant them.
• It creates documented decision trees and peer reviews that are valuable when a subrogation or SIU (Special Investigative Unit) team needs to build defensible cases.

Example:

During a retrospective UR audit, reviewers identified a pain management clinic submitting nearly identical treatment plans across multiple patients. The giveaway was that all were prescribing the same frequency of injections, regardless of diagnosis. The UR findings triggered an SIU referral, revealing the provider was part of a regional billing fraud ring.

This investigation prevented more than $120,000 in fraudulent payments and led to the provider’s removal from the network, protecting future claims exposure.

The Long-Term Impact

The power of UR doesn’t stop at individual claim savings. When you make UR a strategic part of your process, you unlock long-term advantages:

Strong UR programs support case management alignment because case managers can work toward evidence-based treatment benchmarks rather than ad-hoc care plans.

Over time, you start to build feedback loops: UR findings help claims teams identify cost‐drivers, update protocols, adjust guidelines, and tighten their overall claims ecosystem. Some carriers with integrated UR + case management report up to 20% shorter claim duration.

It positions your organization as a strategic player—not simply a cost-cutting operation. By emphasizing quality care, functional recovery, and cost-effectiveness, you strengthen your value proposition to employers, adjusters, and clients alike.

Utilization review isn’t just a compliance function. It’s a cost-saving engine embedded in the lifecycle of every claim. Every medically unnecessary test, every non-evidence-based referral, every extended stay that doesn’t move recovery, these are leak points. UR intercepts them. It aligns care with guideline-driven standards, supports fraud prevention, and builds defensible savings.

UR isn’t a cost center. If you treat it as a strategic lever, you’ll see dollar savings, improved outcomes, and stronger claim performance. In a world of rising medical inflation and intense scrutiny, UR is one of the few levers you can pull that impacts both quality and cost.

Want to see how utilization review can strengthen your cost containment strategy? Talk to our dedicated UR experts.

Visit our Learning Center to explore case studies, benchmark data, and integration approaches.