medical necessity

This question has come up before, and I've tried to do some research regarding medical necessity. Does anyone out there know how medical necessity is defined by Medicare? I've read the info regarding "overarching criteria", etc. What I'm really looking for is what an auditor would use or if such guidance exists for an auditor? For example, if I have one of my billing people audit my charts, how would they (non-clinicians) determine medical necessity. Additionally, could medical decision making substitute for medical necessity? If MDM meets level 4 criteria, then could I assume that medical necessity meets level 4 criteria? I've had new office visits with history, exam, and MDM which meet level 4, but I've downcoded to a level 3 because it just "didn't seem right." I want something more scientific than just "didn't seem right". Thanks.

Medical necessity response

I've been billing and coding for physicians since 1978. This has been the biggest point I've struggled with when educating clients. It requires a full understanding of the coding and billing process, of which providers certainly could not be expected to know. And, there is a difference between 'medical necessity' and 'medical decision making.'

However, if you provide certain services, especially E/M's - you must become a good student of the process. Here's how I explain it (I train physicians only):

-When a service is performed, there should be 1 - 2 diagnoses that most accurately describe the reason for the performance. This must be documented by the provider to communicate to the coder and the health plan the reason you chose to perform (do not use "rule-outs.")

-When completing your charge request, link the diagnosis to the CPT®.

-Coders should only code what is written in the documentation. Coders take written words and assign them numbers for reporting. If the words aren't there, they can't code it. And, if the words are weak and not specific, that's what gets coded and transmitted to the plan.

-Providers must be acutely aware of the National Coverage Decisions, Local Coverage Decisions, and any health plan specific rules for the services they provide. If you want to be paid, this is a must.

-Medical necessity is determined only by the provider of care, not the coder. The coder's job is to provide feedback when problems in claim consideration arise or when a service cannot be reported due to the lack of information to 'code.' The pairing of CPT® to ICD-9 justifies 'medical necessity' (and sometimes frequency of service). This pairing is done by the provider in their documentation, not by the coder.

-Medical decision making (per the coder's job) is bean-counting information you have written in your documentation that states what you did for the patient that day to either resolve or plan further for the patient's problem.

When what you have written and what was coded is sent to the health plan *in the manner you requested* (the very weak link between provider/coder/biller) and it is denied for "medical necessity" - the first step for the coder/biller is to view written medical policies for the plan and communicate this to you. If what you reported does not meet their guidelines, it is most likely the lack of more specific diagnosis coding, but not always. It may need to be reviewed by a clinician to approve for consideration (usually by the plan). In larger organizations, RN's and LPN's can review and assist with "words" that can be coded accordingly.

Karen Hurley, CMM, CPC-I
President, HPMSI
Waldorf, MD

Medicare has told us...

that the visit level should reflect the complexity of the presenting problem.

So if a new patient presented with toenail fungus but the doc took a thorough history, the patient filled out a form with PMH, Soc hx, fam hx, surg hx and the exam was comprehensive so all areas justify a level 4 by documentation, you can rightfully say that "it doesn't feel right" because toenail fungus in a healhty patient is not that complex a problem.

On the other hand, a diabetic, hypertensive, hyperlipidemic on meds for all of those comes in for a 3 month visit with no new complaints is a level 4 visit no matter how simple it may sound because 3 chronic problems is actually a complex situation with medication interactions, interpretation of labs, etc.

Coding podiatry fee tickets (bills)

I code and enter clinical and surgical charges for our podiatrists. My dilemma is I find the LCD Indications and Limitations of Coverage and/or Medical Necessity to be so vague that I am uncertain whether I should add the KX modifier on the HCPCS L-codes for Ankle-Foot Orthoses. "For any item to be covered by medicare, it must: 1) be eligible for a defined Medicare benefit category, 2) be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and 3) it meets all other applicable Medicare statutory and regulatory requirements"

Specifically, how does anyone determine items 1 and 3?

Pamela Schaaff, Orthopedic and Podiatry Coding Liaison, Exeter Hospital, Exeter NH