A New Team: Utilization Review and Coding for Medical Necessity?

On March 21, I told you about the new regulation from CMS – 1455R, which is an exciting opportunity for hospitals to recoup some dollars otherwise lost on denied inpatient stays.  Specifically, CMS says,

The hospital may submit a Part B inpatient claim for payment for the Part B services to the extent the services furnished were reasonable and necessary,  that would have been payable to the hospital had the beneficiary originally been treated as an outpatient rather than admitted as an inpatient, except when those services specifically require an outpatient status.

The hospital could re-code the reasonable and necessary services that were furnished as Part B services, and bill them on a Part B inpatient claim. This proposed policy would only apply to denials of claims for inpatient admissions that are not reasonable and necessary, and would not apply to any other circumstances in which there is no payment under Part A, such as when a beneficiary exhausts Part A benefits for hospital services or is not entitled to Part A.

Medical Necessity is Not the Enemy

I’ve been reading various “Top Stories of 2012 in Healthcare” articles; this past year has really been a wild ride. The more I reread all the changes, the more I think of the great, reliable constant—medical necessity. It’s the cornerstone of the third-party reimbursement system, yet it remains a challenge that both providers and payers continue to struggle with. Believe it or not, CMS is greatly concerned with writing clear, accurately coded policies, and I’m sure other payers are as well.  I know: some of you are thinking, ‘’Ugh, I hate medical necessity.” So let’s take a closer look. According to CMS, “A service may be covered by a Medicare Contractor if it meets all of the following conditions:

• It is one of the benefit categories described in Title XVIII of the Social Security Act
• It is not excluded by Title XVIII of the Social Security Act other than 1862 (a) (1); and
• It is reasonable and necessary under section 1862 (a) (1) of the Social Security Act.

CMS: Moving Forward on Medically Questionable Admissions

It appears CMS is mounting a two pronged crusade against medically inappropriate admissions. On August 3, 2012 the agency announced the beginning of the prepayment reviews for hospitals in troubled states. Those with higher rates of improper claims payments include California, Florida, Illinois, Louisiana, Michigan, New York, and Texas. They are also targeting four states with historically high claim volumes of short stays including Missouri, North Carolina, Ohio, and Pennsylvania.  The go-live date for this initiative is August 27, 2012.

The second prong was discussed on the July 18 open-door forum call-in regarding the latest in OPPS rulings. CMS is not so much questioning the medical necessity of care provided as they are the appropriateness of the site- of- service. They are aware that determining inpatient versus observation status is challenging, especially for those hospitals that do not have 24/7 case managers or utilization review access. And Condition Code 44 with its accompanying compliance requirements has never been user friendly. CMS is looking to the industry for suggestions on how to simplify compliance, reduce extended ‘observation’ stays, and protect beneficiaries from the financial burden of unexpected Part B charges for care not covered under Part A.

ICD Patient Reason for Visit Codes and Medical Necessity

Recently, a customer service rep asked me to help with a question from a client regarding medical necessity and “patient reason for visit code(s)” also known as “reason for visit” code(s)—PRV or RFV. Whatever you prefer to call it, in the outpatient world the code represents the reason the patient sought urgent treatment. There is debate and confusion regarding these diagnosis codes: must the provider check them for medical necessity? Do claim adjudication systems consider them when running their medical necessity checks? Must they be reported on the claim? Why is my payer denying my claim when my reason for visit code is included on the NCD (National Coverage Determination) or LCD (Local Coverage Determination)? Why does my medical necessity software pass the claim with the PRV code and my back end scrubber fails the same claim? Who’s right?

Medical Necessity and Cloning

By: Barbara Aubry

I recently read a great article from Report on Medicare Compliance by Nina Youngstrom titled “Medicare Watchdogs, Compliance Officers Investigate ‘Carry Forward’” that brought back memories of my days as a Utilization Review nurse. As the article reminds us, CMS has no hard and fast national position on the use of electronic (or manual for that matter) medical record short cuts such as templates or the ubiquitous cut-and-paste transfer of patient data from one encounter to the next. Click here to learn more. While a definite time-saver, this habit does present compliance issues that payers are beginning to notice.  And some are going so far as to wonder — if your documentation does not change from one date of service to the next — are those visits really medically necessary?

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.”