November 2018

November 2018

Medical Necessity Denials

What Defines Justified Care?

Denied due to lack of medical necessity…

This is probably one of the most common and frustrating reasons a claim is denied. Since when does the payer know more about the needs of your patients than you, right? 

Why is it that so many doctors who are seemingly “following the rules” receiving denials due to medical necessity? Unfortunately, there are multiple answers to that question, and they may differ with each payer.

How is medical necessity defined?

A general definition for Medical Necessity is: Related to activities which may be justified as reasonable, necessary, and/or appropriate, based on evidence-based clinical standards of care. Medicare’s definition is “The patient must have a significant health problem in the form of a neuromusculoskeletal condition that necessitates treatment. The manipulative services rendered must have a direct therapeutic relationship to the patient’s condition and provide a reasonable expectation of recovery or improvement of FUNCTION.”

There must be a valid expectation, at the time treatment is rendered, that improvement will occur. Then, after the fact, it is necessary to demonstrate that improvement has occurred - and when function improves, well, even better.

Simply stated, medical necessity is the force which drives claim payment by third party payers. Your documentation is the element which proves that your treatment was justified and produced measurable improvement. Without proper documentation, it would be fair to assume that your claims will be rejected.

Living in the grey

The truth is…medical necessity is often a grey area that many providers do not fully comprehend. This is not always due to lack of trying on the part of the provider. As stated previously, medical necessity is very often defined differently, sometimes significantly, per payer.

While we cannot list every payer’s definition of what constitutes medical necessity, or even guarantee that another medical necessity denial won’t show up after reading this, we can provide a simple checklist of what elements must be included within your documentation to support and prove medical necessity.

  • Patient consultation and history data

  • Physical examination findings, tests, and measurements

  • Subjective complaints mentioned by the patient

  • Diagnosis/diagnoses

  • Treatment plan(s)

  • Achievable functional goals as the result of your care

Additionally, proper utilization of the integrated paperwork system from The Paperwork Project will simplify the task of satisfying medical necessity requirements for most any payer.