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Documenting Medical Necessity

Documenting Medical Necessity. By: Joseph Newsome, CPC, CPC-I, CEMC, HCS, HAS. Medical Nessesity. Medicare defines "medical necessity" as services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.

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Documenting Medical Necessity

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  1. Documenting Medical Necessity By: Joseph Newsome, CPC, CPC-I, CEMC, HCS, HAS

  2. Medical Nessesity • Medicare defines "medical necessity" as services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.

  3. Cigna: Medical Necessity • Medically Necessary” or “Medical Necessity” shall mean health care services that a Physician, exercising prudent clinical judgment, would provide to a patient for the purpose of evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are: • a)   in accordance with the generally accepted standards of medical practice; • b)   clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient’s illness, injury or disease; and • c)   not primarily for the convenience of the patient or Physician, or other Physician, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient’s illness, injury or disease

  4. Medical Necessity • Health insurance companies provide coverage only for health-related services that they define or determine to be medically necessary.

  5. Medical Necessity: The Ugly • Over utilization of services / procedures • Increased risk • Reimbursed for services never performed and/or un-necessary • Poor inventory controls • Increased mal-practice risk • Domino affect……

  6. Medicare & Medical Necessity • Section 1862(a)(1)(A) of the Social Security Act • Must be • Reasonable • Necessary • For • Diagnosis • Treatment

  7. Medicare Claims Processing Manual • It would not be necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted • Volume of documentation should not be the primary influence upon which a specific level of service is billed. • Documentation should support the level of service reported

  8. Medicare Claims Processing Manual • When it comes to selecting the appropriate level of care for any encounter, does medical necessity trump everything else including: • History • Examination • Medical Decision Making

  9. The Battle • This could mean that adequate documentation of the three key components used to determine the level of service is not protection enough if an auditor finds that medical necessity is lacking

  10. Medical Decision Making vs. Medical Necessity • Medical Decision Making is an important component in documenting medical necessity • 3 areas to document • Number of Diagnosis and Management Options • Complexity of Data to be reviewed • Risk of mortality and/or morbidity • Documenting the History and Exam based on the necessity via Medical Decision Making

  11. Applying Medical Necessity • The best way to stay within the bounds of medical necessity is to think of each element of the history and physical exam as a separate procedure that should be performed only if there is a clear medical reason to do so. • For example, if you see an established patient who complains of intermittent chest pain, it would be medically necessary to perform a comprehensive history to address this issue. Each component of the history would yield clinically relevant information

  12. Continued: • On the other hand, when the same patient returns to your office for a follow-up visit six months after coronary artery bypass surgery with no specific somatic complaints, you would have a hard time justifying doing either a comprehensive history or exam.

  13. Improving the Documentation • Render: The physician should record a comprehensive patient history and physical exam • Review: The physician should rationalize and analyze data, including the results of the diagnostic workup, and capture this process in the record • Report: The physician should document working clinical diagnoses and his or her impression through use of clinical medical decision-making and clinical judgment

  14. Documentation • Complete and legible. • Reason for encounter/relevant history/physical exam findings/prior diagnostic tests/ongoing assessment/diagnosis/progress and treatment outcomes/plan of care/test results/counseling. • Date and legibility of identity of observer/provider.

  15. Documentation • Rationale for ordering diagnostic and other ancillary tests. • Past and present diagnoses. • Applicable health risk factors/pertinent negative findings.

  16. Documentation • Patient progress, response to and changes in treatment. • Revisions and diagnoses. • CPT and ICD-9-CM codes. • HCFA 1500 form must link diagnosis code to examination and history findings.

  17. Medical Necessity • Reminder: • An auditor or reviewer will only use the documentation to validate necessity and/or services rendered. • The physician has the patient in sight when making decisions. The physician must communicate through dictation the rationale for ordering and/or performing a service or procedure.

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