Insurance companies provide coverage for care, items, and services that they deem to be “medically necessary”. Medical necessity is one of the most common reasons that insurers deny behavioral health claims. It is possible to get this type of denial overturned, but to do so; there are a few essential steps to follow.
What is Medical Necessity?
The first thing you should familiarize yourself with is what criteria payors use to determine medical necessity. Medicare defines medical necessity as “Health care services or supplies needed to diagnose or treat an illness or injury, condition, disease, or its symptoms and that meet accepted standards of medicine.”
To make this determination, claim adjusters should consider the following:
- Are the services based on credible, scientific evidence recognized by the medical community?
- Are the services clinically appropriate regarding type, frequency, and duration?
- Is the service effective for the illness it is treating and not more costly than an alternative service?
This criterion is subjective, and even if the treatment is pre-authorized, the insurance claim can still deny. This is why it is critical to keep thorough clinical notes and record of the patient’s experience throughout his or her time at the facility.
How to Appeal?
Before, you write an appeal letter, gather all of the information you have on the client. Review, the diagnosis, the treatment plan and authorization number that you agreed upon with the case manager, and any clinical notes you have during treatment.
Utilization Review
Utilization reviews bridge the gap between providers, payors and patients. They help ensure that the patient receives the appropriate level of care and that the insurance company will reimburse the provider for their care. Proper case management is critical to insurance reimbursement. This means comprehensive intake assessments, knowledge of the patient’s past and current mental state, and timely follow-up calls to extend treatment, if necessary.
Here are the 4 things you should know before calling for a Prior Authorization:
- Call in the case within 24 hours of admission.
- Gather all of the relevant medical necessity documentation during the intake assessment.
- Monitor the client’s progress and if they need more treatment, call in the request days in advance.
- Stay organized. Keep a record of details and any critical information from the case manager.
Familiarize yourself with the appeal process for the insurance company that you are submitting the appeal too. Similarly, you will also benefit from reviewing the patient’s specific policy, verifying there are not any written provisions that you may have missed during the VOB.
Writing the Appeal
Once you are familiar with the appeal process gather all of the information to support your case, so that you are almost ready to write an appeal. Your letter should be clear and concise, citing specific, evidence-based reasoning as to why the insurer should reconsider the claim.
At the top of the letter, include the client’s name, policy identification number, and the claim number that you are appealing. List the name of your facility and the NPI or Tax ID number. Attach any clinical notes and send the appeal using certified mail, fax or per the insurer’s guidelines.
Understanding medical necessity is an important part of medical billing because it is why an insurance company actually pays for a claim.
Stay connected with us to learn more about Medical Necessity to reverse a denied claims or Email me at support@wonderws.com
