1. Medical Necessity in the Outpatient Setting

2. OBJECTIVES WHAT IS MEDICAL NECESSITY?
WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
WHAT HAPPENS WHEN A DIAGNOSIS IS NOT MEETING MEDICAL NECESSITY?
HOW DO WE PREVENT MEDICAL NECESSITY DENIALS?

3. WHAT IS MEDICAL NECESSITY?
CMS’s DEFINITION: “….No Medicare payment shall be made for items or services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

4. WHAT IS MEDICAL NECESSITY?
For a service to be considered medically necessary:
Reasonable: Does it make sense?
Necessary: Will it make a difference in the quality of the patients life?
Improve: Is it clinically proven to be effective?
Claims for services deemed not to be medically necessary will be denied.
Every payer has a slightly different definition of medical necessity

5. WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
Medical Policies
CMS
National Coverage Determinations (NCD’s)
Local Coverage Determinations (LCD’s)
Medicare Administrative Contractor
Commercial and Private payers
Each payer has their own individual policies that can be found on their website.
Documentation requirements

6. WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS)
NCD’s and LCD’s
A national coverage determination (NCD) is a United States nationwide determination of whether Medicare will pay for an item or service.
A local coverage determination (LCD) is a local determination, by a MAC, of whether Medicare will pay for an item or service.
WPS (Indiana)
NGS(Illinois)
In the absence of a NCD, an item or service is covered at the discretion of the Medicare contractors based on a Local Coverage Determination (LCD).
An LCD policy can be no more restrictive than the NCD, although it can be less restrictive.

7. WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
National Coverage Determinations (NCD’s)
Medicare specific coverage on the national level.
All Medicare carriers are required to follow the NCDs.
The NCDs are developed by CMS to describe the circumstances for Medicare coverage nationwide for an item or service.
NCDs generally outline the conditions for which an item or service is considered to be covered (or not covered). NCDs are usually issued as a program instruction. Once published in a CMS program instruction, an NCD is binding on all Medicare carriers.

8. WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
Local Coverage Determinations: (LCD’s)
Medicare specific coverage on the local level
They only apply to the area served by the contractor who made the decision.
They provide a list of covered ICD 10 codes.
Coverage criteria is defined within each LCD
Diagnostic test values that must be met
Documentation that less invasive treatments have been attempted before the service is determined to be medically necessary
Medicare contractors develop LCDs when there is no National Coverage Determination (NCD) or when there is a need to further define an NCD.

9. WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
Services that are statutorily not covered:
Routine Labs-
Z00.00-if Z00.00 is the only diagnoses on a lab order-those labs are not going to get paid for, because Medicare specifically states that they do not pay for routine labs. If however, the patient has additional diagnoses AND the diagnoses meet medical necessity for the labs ordered, the labs will get paid.
Times where your hospital service surpasses the Medicare-approved stay length
Physical therapy treatment that surpasses Medicare’s usage limit
Hospital-administered treatment that could have been delivered in a lower-cost setting (example-ER vs Urgent Care)
Prescription of drugs to treat fertility, sexual or erectile dysfunction, weight loss or weight gain, and cosmetic purposes

10. SHOW MAP OF MAC’s

11. WHO DETERMINES WHAT IS MEDICALLY NECESSARY?
NCD’s:
LAB NCD’s:
LCD’s
STATUTORILY NOT COVERED SERVICES:

12. WHAT IS MEDICAL NECESSITY?
MY definition of medical necessity:

13. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
Procedures and protocols to ensure that a service is medically necessary:
Front end: (Registration and Scheduling)
Compliance checking software
ABN’s
Pre-authorization
Pre-determinations
Back end: (Coders)
Medical necessity editing software

14. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
Pre-Authorization:
Allows providers to determine coverage and secure an authorization/approval from a payor for a proposed treatment or service.
It does NOT guarantee reimbursement
However, if we do NOT get a pre-auth, it could mean we don’t get reimbursed at all
Could take up to 30 days to receive
Auth must go on the claim
Is a requirement

15. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
Pre Determination:
Similar to pre-authorization as it allows services or treatment to be reviewed for medical necessity
Can take up to days
It is a courtesy, not a requirement
Medical records are sent BEFORE the service is rendered.
Is still not a guarantee of payment
Having either of these will help later if the claim is denied and an appeal must be submitted.

17. M

18. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
An ABN (Advance Beneficiary Notice) is a Medicare waiver of liability that providers are required to give a Medicare patient for services provided that may not be covered or considered medically necessary
gives the patient the opportunity to accept or refuse the items or services
protects the patient from unexpected financial liability in cases where Medicare denies payment
offers them the right to appeal Medicare's decision
gives the patient a cost estimate to help them decide whether or not to get the service
In the absence of a signed ABN, a patient CANNOT be billed
ABN’s are not used in the ED
Emergency Medical Treatment and Active Labor Act

20. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
Back End
Medical necessity editing software
Some reasons it might be editing:
Lack of specificity
Coder missed documentation in the patient record, or from a multi-paged order

21. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
G MODIFIERS-(Medicare specific)
GA- Service or item is not considered reasonable and necessary; ABN is on file
GZ- Service or item is not considered reasonable and necessary; ABN is not on file
GY- Service or item is statutorily excluded or does not meet the definition of any Medicare benefit; ABN is not required.
GX- Service or item is statutorily excluded and the provider or supplier voluntarily notified the beneficiary with an ABN. -

22. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY? :
Most common Services that do not meet:
Radiology, lab and other ancillary testing
Dopplers – (ED)
PET Scans
Labs
Ambulatory surgery
Cardiac procedures
Infusions
Wound care

23. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY? :
Back end
PET scan
Physician order:
List of covered diagnoses from NCD:

24. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?

25. WHAT HAPPENS WHEN WE DO NOT MEET MEDICAL NECESSITY?
Amended order:
New diagnosis:
C82.01-Follicular lymphoma grade I, nodes of head, face, and neck

26. HOW DO WE PREVENT MEDICAL NECESSITY DENIALS?
GOOD DOCUMENTATION!!!! -
It supports proper payments and reduced denials
It helps ensure accurate measures of quality and efficiency.
It helps support clinical research and enhances communication with other medical professionals involved in the patients care
The most important reason=GOOD CUSTOMER CARE!!
Coding can only be as good as the documentation supporting it
Documentation begins and ends with the physician in every health care setting.
It is said, that 90% of all denials could be prevented.

27. HOW DO WE PREVENT MEDICAL NECESSITY DENIALS?
EDCUATION
LCD’s drive documentation
There needs to be more focus on documentation improvement in the outpatient setting.
Diagnoses MUST be documented to the highest level of specify.
We need to keep physicians and clinical staff updated concerning changes in payer policies.
Physicians and hospitals share the burden of making sure we are receiving proper reimbursement and that we are keeping ourselves eligible for possible incentives in the future, through reporting positive quality measures.
We need better communication between the facilities and the physicians in their practices.
Codes
71932 codes in icd10cm_order_2019.txt
72184 codes in icd10cm_order_2020.txt
273 additions
21 deletions
30 revisions

29. https://www. physicianspractice
REFERENCES

30. THANK YOU!!!!!!! Elizabeth Griffin, RHIT Franciscan Health