Medical professionals must prove that that a particular service or treatment was necessary before a patient’s healthcare insurance provider will pay for it.
Medical necessity trumps other criteria in the adjudication process and Nitin Chhoda provides new insights into why proving medical necessity is necessary, particularly in the current healthcare climate.
Medical Necessity
Medical necessity refers to steps taken to evaluate, diagnose and treat disease, illness and injury.
Procedures, and the reason for performing them, form the heart of the medical necessity clause.
Insurance companies won’t reimburse for anything that doesn’t fit the definition of medical necessity.
Preventative measures may be medically necessary, but that doesn’t mean they will be deemed necessary by an insurance provider. In an era of abbreviated healthcare insurance policies, some forms of preventative care may not be covered at all.
It’s All About the Money
Receiving a reimbursement denial interrupts revenue and requires valuable time to rectify or appeal. It’s an especially frustrating experience for practitioners, who often feel that they’re being second guessed by individuals with no practical knowledge of the patient in question.
For insurance companies, it’s all about the money. If medical professionals want to be paid, they must provide documentation to support their actions.
Insurance companies base their payment decisions on a set of parameters that utilize a generally accepted set of procedures. To ensure services remain within the medically necessary rule, practitioners should focus on performing an exam that’s relative to the client’s complaint and document elements of their history as it applies to the visit. If documentation falls short of the intended billing code, bill at a lower code.
ICD and CPT codes
Documentation of medical necessity is supported by ICD-9 and CPT codes. During the adjudication process, insurance companies refer to the ICD and CPT codes clinicians provide. They’re the nuts and bolts of a reimbursement claim. Inclusion of coding that supports findings and actions at the time of the patient’s visit are essential for facilitating the payment process.
Practitioners should be aware that certain codes in medical billing convey a wealth of information in clusters. Many of these are used frequently and in conjunction with specific problems that occur together.
It’s important to learn which of those codes are used together most often and ensure multiple patient issues are reflected in the coding choices.
Clinicians often see the medical necessity clause as a tool to withhold or ration services to patients and payments to providers.
Insurance companies view it as a way to save money, ensure they’re not paying for superfluous services, and not padding the pocketbook of practitioners.
The medical necessity clause serves as a check and balance system. To get paid, it’s up to clinicians to provide proper ICD and CPT codes that offer documented proof that the services they provided meet the definition of medical necessity.
