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.
Obstetrics practices located in New Jersey and New York can increase revenue and efficiently allocate a substantial portion of their daily patient care by incorporating the services of certified midwives and/or certified nurse-midwives into their practices. Generally speaking, midwives are certified to attend to low risk pregnancies, attend during childbirth and to provide post partum care. Certified nurse-midwives may prescribe certain drugs, as authorized by the licensor-states and as outlined in their governing collaboration and/or affiliation agreements with a supervising physician.
A persistent concern for many health care entity-employers (“Entity-Employers”) is retaliation from a disgruntled former employee after the Entity-Employer responds to a “reference request” with negative, albeit truthful, information about the former employee. Often times, the Entity-Employer will choose not to respond to the reference request or will omit key information found in the former employees personnel file in the hopes of avoiding future conflict or retaliation (usually in the form of a lawsuit). However, the State of New Jersey found any failure to report on the part of Entity-Employer to be a danger to patient safety and welfare and, accordingly, enacted the Health Care Professional Responsibility and Reporting Act (“HCPRREA”) in response..jpg)
Over the past few years health care providers have reported an increasing surge in the outsourcing of medical billing and collections to third party medical billing companies. The outsourcing surge stems from a number of factors, most of which are focused on increasing revenue and surviving payor scrutiny.
Appearance enhancement and weight loss businesses that involve licensed professionals or that require a specialized business license will face complicated regulatory considerations when franchising their business. These regulatory considerations are heightened in states with strong corporate practice of medicine statutes in that the products, procedures and/or services offered by these franchise concepts may implicate what, in certain instances, may be considered the practice of “medicine.”
Health care providers participating in governmental health care programs, including Medicare or Medicaid, must confirm, when employing or contracting with a physician, employee, vendor or other affiliated party, that the individual or entity is not excluded from participation in any governmental health care program. .jpg)
