Medical Necessity: More Than a CPT and ICD Code Pair

By: Barbara Aubry

In real estate, value is determined by three things — location, location and location. In my opinion, a similar adage should be created for determining the value of medical services. Medical necessity is based on three things – documentation, documentation and documentation. It’s more than pairing a CPT and ICD code that will pass your claim scrubber. It’s even more than making a patient feel better.

On July 28, 2011, Daniel R. Levinson, Inspector General, U.S. Department of Health and Human Services testified that “medically unnecessary services are particularly concerning as beneficiaries may be subjected to tests and treatments that serve no purpose and may even cause harm.”

He went on to state “…because beneficiaries are generally responsible for a 20-percent copayment for items and services provided under Medicare Part B, beneficiaries may pay unnecessary or inflated copayments when they receive items or services that they do not need, or more expensive versions than they need.” He also referenced Executive Order 13520 which demands the government make every effort to improve payment accuracy. (Find more information here)

My Take

The OIG has known for years that we have a documentation problem. In 1989, they audited 7,000 records and found that 48.2 percent of DRG 87 (MS-DRG 189) assignment errors were based on physicians incorrectly specifying the diagnosis or procedures on the attestation form. 56 percent of all discharges assigned to DRG 87 were wrong. (For more see here) 

Executive Order 13520 provides the teeth that auditors need to go after providers who engage in substandard documentation practices. It is important that healthcare providers understand the RAC, OIG and DOJ are looking for the accurate BMI or injection fraction values in the clinical notes – not just the CPT or ICD codes. If documentation is a problem for you it’s time for some behavior modification; the government has already changed theirs. As Einstein said “insanity is doing the same thing over and over again and expecting different results.”

You have an opportunity to empower physicians, case managers, clinical documentation specialists, and coders with tools that can help them access information to improve documentation. Is everyone aware of all the nuances in an NCD or LCD that need to be documented in support of medical necessity? Most likely not. However, when tools are used to identify ‘red flag’ areas and provide important documentation requirements everyone stands a far better chance of being compliant. This can help your physicians’ document the history and findings required to adequately tell the clinical story. When this happens, the OIG and the DOJ have a better understanding of the medical necessity of your patient’s treatment. And isn’t it more cost effective to promote compliance rather than appeal denials? Or even worse – face false claims allegations?