Medical Necessity in order to avoid claim denials is one of the most important ways to protect your practice’s revenue. While medical billing claims can be denied for a variety of reasons, denials due to a lack of medical necessity — also known as a hard a hard denial — are fairly common. Understanding medical necessity in depth is essential for avoiding denials that cost your practice money.
In Order to avoid the denial claims there are some major repeated errors taken places.
Following Reasons:
- CLAIMS WITH MISSING INFORMATION
- CLAIMS NOT FILED ON TIME
- NON-SPECIFIC CLAIMS
- ILLEGIBLE CLAIMS
- CLAIMS BELOW PAYER STANDARDS
Payers use specific criteria to determine whether or not services provided to patients are medically necessary. Treatments, prescriptions, or procedures that do not meet the criteria for being medically necessary are typically not reimbursed by payers. Here’s a closer look at what your practice should be aware of.
Cigna provides a good definition of medical necessity. Their definition refers to services provided to patients by physicians using clinical judgment, and those services must be for diagnosing, treating, or evaluating a disease, injury, illness, or the symptoms of those problems. Cigna also states that services should be clinically appropriate in terms of location, extent, duration, and frequency.
Understanding Medical Treatment and Medical Necessity:
CMS allows Medicare Administrative Contractors (MACs) to determine whether services provided to Medicare beneficiaries are medically necessary. Original Medicare is assisted by 12 Medicare Part A and B MACs (Medicare Parts A and B). In addition to processing Medicare Part A and Part B claims, four of these MACs also process home health and hospice claims. There are four MACs specialized to durable medical equipment (DME).
MACs use the following criteria to determine whether services or items are medically necessary:
- It is not an investigational or experimental study.
- It is both effective and safe.
- When ordered and delivered by qualified personnel, it is appropriate.
- Provided in accordance with accepted medical practice standards.
- Provides for a patient’s medical needs in a setting appropriate to the condition and the patient’s medical needs.
Medical Necessity is driven by Diagnosis One of the key criteria driving medical necessity, from the payer’s perspective, is a patient’s diagnosis. The complexity of your medicaldecision-making may be a reliable substitute for the broadly defined idea of medical necessity, as it is based on the number and form of clinical difficulties as well as the risk to the patient.
Medical necessity is determined by providers using evidence-based medical data. The information could be used to request additional testing to diagnose a condition or to order additional procedures to treat that condition.
Clinical conditions and diagnosis codes are used by payers to determine medical necessity. When preapprovals are required, the procedure to be performed as well as the patient’s diagnosis must be submitted. Providers must also explain the severity of the patient’s diagnosis, any previous diagnostic studies or interventions, and the risk of not performing the ordered procedure.
Providers, billers, and coders must all be on the same page when it comes to medical necessity. WS specializes in medical billing and coding, assisting practices like yours in avoiding claim denials. If you’re worried about denials or want to increase your practice revenue, contact WWS today to find out how we can help.