September 20, 2010

Proactive Steps to Ensure Medical Necessity and Avoid Claim Denials

By

vandegriftBMany, if not most, claims are denied because they did not meet medical necessity.

 

If you haven't discovered this yet, chances are you will since Recovery Audit Contractors (RACs) are now reviewing hospital claims for medical necessity. It is the provider's responsibility to keep track of Local Coverage Determinations (LCDs) and National Coverage Determinations (NCDs) relating to all services and/or procedures delivered.

 

Like incorrect code assignments, medical denials should be considered as billing errors--in most cases, of course. The exception is when the patient's condition does not meet the LCD or NCD requirements outlined. In this case, you would be submitting a claim with the intention of getting a claim denial so that you may submit another claim to the patient's supplemental insurance plan.

 

Naturally, your goal should be to prevent denials in the first place so that you don't have to spend time and money trying to figure out why they occurred. But until you reach that goal, here are a few suggestions from Medicare payers to help you reduce unnecessary denials.


Make NCD and LCD Review Mandatory

 

As stated above, review in detail the NCDs and LCDs for services and procedures regularly performed in your facilities, and identify whether and when Medicare considers them to be medically necessary.

 

The guidelines and diagnosis codes listed in the LCDs are particularly important. Many of these change frequently so online review should be performed. Even though keeping a hard copy in a notebook may be more convenient, it is not an efficient way to proceed. The Centers for Medicare & Medicaid Services (CMS) discourage such desk references because, as it points out, LCDs are never final and are revised periodically.


Learn All About the ABN-and Use It

 

When you expect Medicare to deny a claim, get the patient to sign an advance beneficiary notice of noncoverage (ABN). It's a proactive step that you won't regret. For details and forms, go to the CMS website at https://www.cms.gov/BNI/02_ABN.asp.


Ensure "Sufficient" Documentation

 

To receive payment for a claim, there must be sufficient documentation in the provider's records for RACs to verify that the services were provided to eligible beneficiaries. The documentation also must prove that the service met Medicare coverage and billing requirements, including being reasonable and necessary; provided at an appropriate level of care; and correctly coded.

 

In other words, the patient's medical records must support the medical necessity of the services billed. Be sure the ICD-9-CM code(s) assigned identify the beneficiary's medical diagnosis and match the documentation. Verify that patient records and documentation are complete before you file a Medicare claim.

 

Respond Promptly to ADRs

 

When RACs cannot make a coverage or coding determination based upon the information on the claim and its attachments, they may send an additional documentation request (ADR). Putting a process in place ahead of time so that you can quickly and efficiently answer ADRs will save headaches. In addition to making sure that all records are complete, be sure those are legible and complete.

 

The ADRs specifically indicate suggested medical documentation that providers should submit in order to justify the services billed. This may require that a provider include the entire medical record including physician queries.


About the Author

 

Barbara Vandergrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn®), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.


Contact the Author

bvandegrift@medlearn.com

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