Medical necessity is an essential concept in terms of billing for accurate (and reimbursable) medical services. It seems “medical necessity” should be a consensus concept, but if we examine the sources, it turns out the issue is more complex.
From the standpoint of a physician or other medical professional, medical necessity refers to any health service or product they prescribe/perform that will prevent, diagnose or treat a condition, following medical standards.
From the health plan’s perspective, a service must be deemed medically necessary in order to be covered (and reimbursed). This definition of medical necessity utilizes various guidelines, including state and federal benefit mandates, scientific research, and case management procedures to determine which services are considered medically necessary.
Centers for Medicare and Medicaid Services (CMS)
CMS developed a range of National Coverage Determinations (NCDs) to describe the circumstances under which Medicare will cover a specific medical service or device. NCDs generally outline the conditions, for which a service is covered (or not) as well as any frequency or other limitations. NCDs are usually issued as program instructions. In rare instances of contradictory information between the NCD and an administrative contractor’s LCD, the NCD prevails.
Medicare Administrative Contractors (MACs)
MACs process claims for their assigned states and can establish Local Coverage Determinations (LCDs) that define coverage criteria for a particular service on a MAC-wide basis. The criteria include lists of CPT/HCPCS codes and ICD-10 codes for covered services as well as those considered “not reasonable and necessary”, along with any frequency or other limitations. Again, if the LCD conflicts with a National Coverage Determination (NCD), the NCD prevails.
Medical Policies
A medical policy refers to the rules and regulations set forth by individual payers. It is based on the highest level of evidence available and defines the technologies, procedures and treatments considered medically necessary, not medically necessary and/or investigational, as well as any frequency or other limitations, such as site of service.
What does this mean to a coder?
Coders are the “Picasso” of medical billing and the physician’s dictated report provides the palette coders use to assign the most appropriate and specific CPT® and ICD-10 codes as they paint a picture of medical necessity for the payer.
CPT® and ICD-10 code combinations are the primary factors used by payers to validate medical necessity and ICD-10 specificity is critical for accurate coding, as the ICD-10 code used is the determining factor in supporting, or not supporting, the medical necessity of the procedure. Coders will not “assume” these codes (based for example on practice or facility protocols) and are held to the compliance viewpoint stating, “If it isn’t documented, it didn’t happen.”
The “palette” needs to dictate specificity and the most specific CPT and ICD-10 code need to be assigned. Payers scrutinize “unspecified” diagnoses and we are starting to see payers, like Cigna, deny when the ICD-10 code assigned does not identify laterality when there are ICD-10 codes to specify laterality.
An Example
Example: An ICD-10 code of I82.409- Acute embolism and thrombosis of unspecified deep veins of unspecified lower extremity, would be assigned for a dictated indication of DVT, and would be denied by Cigna, since there are available ICD-10 codes to specify laterality.
I82.401 – Acute embolism and thrombosis of unspecified deep veins of right lower extremity.
I82.402 – Acute embolism and thrombosis of unspecified deep veins of left lower extremity.
I82.403 – Acute embolism and thrombosis of unspecified deep veins of lower extremity, bilateral.
However, another payer may deny any of the ICD-10 codes above, requiring additional specificity. i.e., femoral, iliac, popliteal, etc.
I82.411 – Acute embolism and thrombosis of right femoral vein.
I82.412 – Acute embolism and thrombosis of left femoral vein.
I82.413 – Acute embolism and thrombosis of femoral vein.
I82.421 – Acute embolism and thrombosis of right iliac vein.
I82.422 – Acute embolism and thrombosis of left iliac vein.
I82.433 – Acute embolism and thrombosis of iliac vein, bilateral.
The dictated report should be as specific as possible to avoid these medical necessity denials.
In addition, laterality modifiers are used to identify the side of the body where a procedure is performed. The laterality modifiers include RT: right side, LT: left side, or 50: bilateral procedure.
Guidance for laterality modifiers:
- Evaluate whether a modifier is needed. If the CPT descriptor includes the word “bilateral” the coder would not use RT, LT or 50. Examples include:
- 75716 Angiography extremity bilateral
- 71110 X-ray ribs, bilateral
- 77067 Screening mammography, bilateral
- Verify proper application of modifier 50. A procedure not designated as bilateral but which can be performed on an anatomical structure that is symmetrical or paired, (i.e. nose, cheeks, ears, eyes, extremities) will need modifier 50 if it is performed on both sides of the body. Examples include:
- 76641-50 Bilateral Breast Ultrasound
- 20610-50 Bilateral Knee Injection
- 36247-50 Bilateral 3rd order catheter placement of peroneal artery
- Assess whether it is appropriate to append RT/LT. Modifiers RT and LT should be used whenever a procedure is performed on only one side, e.g. ears, eyes, extremities, kidneys, lungs, ovaries. Examples include:
- 73221-RT MRI joint of right shoulder, without contrast
- 73502-LT X-ray of left hip
- 50200-RT Biopsy of right kidney
Medical Necessity Denials
The ideal situation prevents a denial from occurring by ensuring complete and accurate documentation in the dictated report. This takes teamwork and communication. MSN maintains an extensive library of medical policies, including NCDs and LCDs and works to communicate denial trends and recommended solutions to our client practices. The denial team also provides updates and education to coders and client service teams.
Standardized procedures and resources are provided to determine whether a particular denial can be appealed, as well as providing detailed information regarding correct coding and proper handling of each medical necessity denial.
Medical necessity denials generally occur as the result of insufficient documentation and in that case, can be difficult to appeal. However, there are instances of a denial being improperly determined and the denials team has a good chance of successfully appealing them when supporting documentation can be provided. For example, a payer denies 62323-Injection of diagnostic or therapeutic substance, epidural, lumbar or sacral, with an ICD-10 of G91.9- hydrocephalus, because the payer processed the claim under the policy for “Epidural Steroid Injections for Pain Management.” The injection was appropriately performed for a cisternogram, and not for pain management; therefore, this decision could successfully be appealed, overturned and reimbursed.
Another example would be Blue Cross Blue Shield of Mississippi has a medical policy for a CTA of the chest. Within the guidelines of the policy, evaluation of suspected pulmonary embolism is considered medically necessary IF there is a Wells score of >4. In this scenario there is not an ICD-10 that would indicate whether the Wells score criteria is met; therefore these denials are appealed with the medical report if it documents the Wells score meets the criteria, and the denial would be overturned for reimbursement.
In a recent instance the MSN coding team was successful petitioning several Medicare MACs to broaden the range of acceptable diagnosis codes for CT Perfusion studies, which had been denied when findings were negative. It was a laborious process that involved MSN client physicians and members of the coding department, who provided authoritative medical documentation regarding the appropriateness of the studies, since negative findings also guide treatment plans for specialists following up on patients presenting with stroke symptoms. This action resulted in a wide expansion of medical necessity determinations in several MAC jurisdictions.
MSN Medical Necessity Team
MSN Healthcare Solutions has a team dedicated to medical necessity, with a wealth of knowledge and experience in both accounts receivable and coding. MSN brought the two worlds together to be more effective, proactively attacking medical necessity issues with the goal of reducing their occurrence. The team works to identify problems to not only correct the denials that occur, but to prevent them in the future. We work hands-on with coders, coding education, A/R, operations, and most importantly our clients, to diligently reduce medical necessity related denials, and in turn, increase revenue.
Jennifer Wright-Davis
CPC, RCC, RCCIR, MSN-ARC
MSN Senior Coding Manager
Jennifer is an MSN Senior Coding Manager with a focus on denials management. She brings 25 years of industry experience to her current position and has been with MSN for nearly 6 years. Jennifer’s background includes work in both accounts receivable and coding so she has focused on bringing the two worlds together to address the challenge of reducing denied claims. Her work also involves communicating with MSN’s education, coding and client services teams, as well as providing resources to client practices to improve documentation.
