AUDIT DEFENSE - PART II: MEDICAL NECESSITY
Following my post titled “Audit Defense-Part I: Monitoring Your Practices Medical Records,” I received several questions and comments concerning a medical practice’s best use of its medical records to fight audits, investigations or reviews. My answer is that the best course of defense is a medical practice’s “offensive” maintenance of clear, well-established, medical records and documentation.
Medical necessity, in terms of medical records and documentation, evaluates whether the services, tests and/or treatment provided to a patient were reasonable and necessary under the circumstances presented. When government and private payors evaluate medical necessity they use Current Procedural Terminology codes (“CPT Codes”) and International Classification of Diseases Diagnosis and Procedure Codes (“ICD Codes”) to conduct their reviews and audits. The CPT Codes and ICD Codes guide payors in determining whether the services provided to the patient were (a) furnished for the diagnosis, direct care and treatment of the patient’s medical condition and (b) compliant with the standards for good medical practices.
There is no standard definition for medical necessity. For this reason, there is no single, foul-proof, approach to fighting a payor challenge based on “medical necessity.” However, most government and private payors use some variation of the definition used by Medicare and Medicaid (found in the Social Security Act), which reads:
Notwithstanding any other provision of this title, no payment may be made under Part A or Part B for any expenses incurred for the items or services - (1)(A) which… are not reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member…]
Moreover, all medical practices participating in and submitting medical bills to Medicare and Medicaid, among other federally funded programs, must comply with Medicare’s documentation requirements, as follows:
- There must exist sufficient documentation in the provider’s records to verify that the services were provided to eligible beneficiaries;
- Medicare’s coverage and billing requirements must be met (including that requirement that the services be reasonable and necessary); and
- Services must be provided at the appropriate level of care and must be coded correctly.
These requirements are especially critical when providers receive Additional Documentation Requests (“ADR’s”) from Medicare contractors or are subject to an audit. Upon request by a Medicare contractor (including a Recovery Audit Contractor), medical documentation must be submitted within forty-five days of the date of the request. If the provider (a) fails to submit documentation or (b) provides insufficient documentation for the services billed, Medicare takes the position that that there is no justification for the services or level of care billed and will either deny the claim or consider any prior payment an “overpayment” and request that the provider repay the amount previously paid on the claim.
For more information on medical records and documents, please click here and here to review prior posts on this subject.
