What Is Workers' Compensation Utilization Review?

What you will find below:

• What Is Workers’ Compensation Utilization Review?
• How Does the Workers’ Compensation UR Process Work?
• What Treatments May Require Utilization Review?
• Why Is Utilization Review Important in Workers’ Compensation?
• What Should Claims Professionals Look for in a UR Partner?

Workers’ compensation utilization review (UR) evaluates whether treatment requested or provided for an injured worker meets applicable medical necessity criteria. It helps claims professionals assess treatment using medical evidence, clinical guidelines, and state requirements.

What Is Workers’ Compensation Utilization Review?

Utilization review assesses proposed, ongoing, or, where permitted, previously provided medical treatment. Reviews may take place before treatment (prospective), during care (concurrent), or afterward (retrospective).

A 2026 RAND study found that more than 90% of medical treatment requests submitted for utilization review within 30 days of injury were approved across nearly all treatment categories in its California sample. This means that most of the requested treatments were determined to be medically necessary through the UR process.

How Does the Workers’ Compensation UR Process Work?

The workers’ compensation utilization review process begins when a treating provider requests medical treatment for an injured worker. The request typically includes medical records and supporting documentation explaining why the treatment is needed.

Next, the request is evaluated to determine whether the proposed treatment is medically necessary. Depending on the state, the type of request, and the information provided, this review may be handled by a claims professional or a qualified clinical reviewer.

During the review, the reviewer considers factors such as the injured worker’s diagnosis, medical history, examination findings, and response to previous treatment. Applicable medical treatment guidelines also help determine whether the requested care is appropriate. If additional information is needed, the reviewer may request more medical records or contact the treating provider.

UR may involve different levels of review. An initial review is typically conducted by a nurse, while a physician may conduct a further clinical review when needed. However, requirements vary by state. For example, California requires a physician reviewer to make medical-necessity decisions when modifying or denying a treatment request. This does not mean every request requires physician review.

Once the review is complete, a decision is issued. The requested treatment may be approved, modified, or denied based on the findings and applicable state requirements. The decision is communicated to the appropriate parties, who may have options to challenge it depending on the jurisdiction.

What Treatments May Require Utilization Review?

Depending on the jurisdiction, review requirements may apply to physical therapy, diagnostic imaging, prescription medications, injections, surgery, or additional treatment visits. Not every service requires authorization.

Example

Consider a worker recovering from a shoulder injury whose provider requests more physical therapy. The reviewer may examine improvements in range of motion, remaining functional limitations, progress notes, and treatment goals. Those details can help establish whether additional sessions meet the applicable medical necessity criteria.

State rules can change whether authorization is needed at all. For example, in New York, physical therapy consistent with its Medical Treatment Guidelines generally does not require prior authorization.

Why Is Utilization Review Important in Workers’ Compensation?

Medical treatment is a significant part of workers’ compensation losses. Medical costs accounted for 53% of combined medical and indemnity losses for 2025, according to preliminary NCCI data.

With medical costs representing a significant share of workers’ compensation losses, making informed treatment decisions is important. UR helps evaluate whether requested care is appropriate and medically necessary.

A clearly documented review can explain the reasoning behind a treatment decision, identify gaps in the records, and help claims teams communicate with providers. Timely decision-making matters because treatment planning must also account for authorization requirements. Supporting medically appropriate care remains central to the injured worker’s recovery and potential return to work.

What Should Claims Professionals Look for in a UR Partner?

Claims professionals should look for qualified reviewers, familiarity with state-specific requirements, clear written determinations, reliable turnaround processes, and responsive communication. It is also useful to ask how a partner obtains missing records and handles cases requiring physician review.

Looking for reliable, clinically sound UR decisions? Connect with our experts today.

Sources:

• California Department of Industrial Relations, Division of Workers’ Compensation. “Utilization Review.” California Department of Industrial Relations, https://www.dir.ca.gov/dwc/UR_Main.htm.
• California Department of Industrial Relations. “§ 9792.9.5. Utilization Review—Decisions to Modify or Deny a Request for Authorization.” California Code of Regulations, Title 8, https://www.dir.ca.gov/t8/9792_9_5.html.
• National Council on Compensation Insurance. “Asked & Answered: WC Medical Share of Losses.” NCCI, 2 Sept. 2026, https://www.ncci.com/Articles/Pages/Insights-Asked-and-Answered.aspx.
• New York State Workers’ Compensation Board. “Medical Treatment Guidelines Frequently Asked Questions.” New York State Workers’ Compensation Board, https://apps.wcb.ny.gov/content/main/hcpp/MedicalTreatmentGuidelines/FAQs.jsp.
• Rennane, Stephanie, et al. Examining the Impact of Senate Bill 1160 on Utilization Review and Medical Treatment in California Workers’ Compensation. RAND, 20 July 2026, https://www.rand.org/pubs/research_reports/RRA4256-1.html.