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Medical Necessity and Levels of Care (LOC) criteria are interdependent sets of objective and evidence-based health guidelines used to standardize coverage determinations, promote evidence-based practices, and support a patient’s recovery and well-being. Being such, LOC application, documentation, and accuracy plays a pivotal role in care and reimbursement.
What are Levels of Care
Level of Care (LOC) criteria might be developed by comparing national, scientific, and evidence-based criteria sets, including but not limited to those publicly disseminated by the American Medical Association (AMA), American Psychiatric Association (APA), Substance Abuse and Mental Health Services Administration (SAMHSA), and the American Society of Addiction Medicine (ASAM). These standards include guidelines and consensus statements produced by professional specialty societies, as well as guidance from governmental sources such as CMS’ National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs).
The schedule for reviewing and updating the LOC criteria needs an annual process. Sometimes on an as needed basis as new treatment applications and technologies are adopted as generally accepted medical practice.
Levels of care*
Levels of care classify health care into categories of chronology, priority, or intensity, as follows:
- Emergency care handles medical emergencies and is a first point of contact or intake for less serious problems, which can be referred to other levels of care as appropriate.
- Intensive care, also called critical care, is care for extremely ill or injured patients. It thus requires high resource intensity, knowledge, and skill, as well as quick decision making.
- Ambulatory care is care provided on an outpatient basis. Typically patients can walk into and out of the clinic under their own power (hence “ambulatory”), usually on the same day.
- Home care is care at home, including care from providers (such as physicians, nurses, and home health aides) making house calls, care from caregivers such as family members, and patient self-care.
- Primary care is meant to be the main kind of care in general, and ideally a medical home that unifies care across referred providers.
- Secondary care is care provided by medical specialists and other health professionals who generally do not have first contact with patients, for example, cardiologists, urologists and dermatologists. A patient reaches secondary care as a next step from primary care, typically by provider referral although sometimes by patient self-initiative.
- Tertiary care is specialized consultative care, usually for inpatients and on referral from a primary or secondary health professional, in a facility that has personnel and facilities for advanced medical investigation and treatment, such as a tertiary referral hospital.
- Follow-up care is additional care during or after convalescence. Aftercare is generally synonymous with follow-up care.
- End-of-life care is care near the end of one’s life. It often includes the following:
- Palliative care is supportive care, most especially (but not necessarily) near the end of life.
- Hospice care is palliative care very near the end of life when cure is very unlikely. Its main goal is comfort, both physical and mental.
Who Uses LOC?
Care Advocates use the Level of Care Guidelines when making medical necessity determinations and as guidance when providing referral assistance. Determinations of medical necessity are decisions whether the benefit plan will pay for any portion of the cost of a health care service. The patient and the patient’s care provider make decisions about the actual treatment the patient will receive. MNC guides treatment decisions, they do not dictate treatment.
When making determinations about medical necessity use the information provided to ascertain whether services are in accordance with standards of practice, are clinically appropriate, not mainly for convenience, and whether services are cost-effective and provided in the least restrictive environment.
Using Utilization Management and the Level of Care Guidelines reduces undesirable variation from evidence-based practice. This is key to improving quality and affordability.
Peer Reviewers use the Level of Care criteria when staffing a case, conducting a peer review, and as a basis for adverse medical necessity determinations. Personnel use the information and decisions derived from using the Level of Care criteria to identify opportunities to improve the adequacy of the service system.
Sometimes, diagnosis codes become misapplied across many levels of care. This might give the appearance that one of the largest drivers of diagnosis code selection begins with which problem matches the CPT codes being billed. This reverse engineering can occur to demonstrate medical necessity. Coding guidelines state providers should document all diagnoses that are a part of the medical decision-making process for each visit.^
The innocent goal of supporting MNC might end in confusions and payment delays, especially with the new, more complex value-based payment systems.
Utilizing third-party reviewer services, whether payer or provider, applies MNC objectively, combine those benefits with BHM’s advanced reporting tools that allows on-demand data-mining based on Levels of Care, and many other variables, you maximize your payment processes so the focus can stay on patient care. Your patients and members will appreciate not having any paperwork processing headaches.
Editor’s Note: BHM’s reviewer network expertise with levels of care allows you to focus on patient care. Click HERE and discuss how BHM’s LOC expertise can overcome care challenges and improve your operational metrics.dical Necessity Criteria Challenges