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A physician or clinical provider of care may have a completely different understanding, interpretation, and definition of medical necessity than the patient or a patient's family member. A third-party insurance payer may also have another completely different understanding and application of the term.
CMS provides a specific definition under the Social Security Act:
“… no Medicare payment shall be made for items or services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”
Decisions based on MNC should
- Be viewed as tools to help patients and payers make better informed decisions
- Assist in defining relative not absolute thresholds
- Incorporate individual patient risks, benefits, and preferences
Medical necessity can also be confusing when it comes to who is going to pay for the procedure or services. Many third-party payers have specific coverage rules regarding what they consider medically necessary or have riders and exclusions for specific procedures. Third-party payers may have a specific exclusion for procedures that they consider experimental, unproven for a specific diagnosis, or cosmetic. *
Lack of biological indicators
Medical necessity criteria are not intended to be construed or to serve as a standard of treatment. Standards of treatment are determined on the basis of all clinical data available for an individual case and are subject to change as scientific knowledge and technology advance and patterns evolve. These criteria should be considered guidelines only. Adherence to them will not ensure a successful outcome in every case.*
Even if a particular procedure or service is considered medically necessary, some payers impose limits on how many times a provider may render a specific service within a specified time frame. For Medicare and Medicaid, these limitations are known as National Coverage Determinations (NCD) and Local Coverage Determination (LCD). Private payers may simply refer to this type of limitation as a policy guideline or policy exclusion or rider. Within these guidelines, payers may define where or when they will cover a specific service, but may limit coverage to a specific diagnosis. For example, insurance policies may have a wellness or preventive care benefit, but may only cover one such visit per year. ^
Service limitations and care coverage
Medical necessity documentation from a physician or provider should include the following:
- Severity of the 'signs and symptoms' or direct diagnosis exhibited by the patient. This is our diagnosis driver, and multiple diagnoses may be involved.
- Probability of an adverse or a positive outcome for the patient, and how that risk equates to the diagnosis currently being evaluated. This is the medical risk vs. gain.
- Need and/or availability of diagnostic studies and/or therapeutic intervention(s) to evaluate and investigate the patient's presenting problem or current acute or chronic medical condition. In other words, does the facility, office, or hospital have what the provider or clinician needs to render care?
Reviewer networks are available through providers (physician advisors) and payers (peer-to-peer reviews). These reviewers, sometimes contracted as a third-party, provide important objectivity to the process. As the providers focus on patient care and payers focus on coverage details, an outside reviewer focused on MNC applications providers feedback and allows for accuracy and more efficient turn-around-times (TAT)s. An accurate and detailed reporting system must monitor reviewers and give on-going performance metrics.
The metrics measure the accuracy of MNC application. If out of sync, individualized training to the reviewer will target improvements and give significant savings.
Editor’s Note: Using Medical Necessity Criteria (MNC) successfully requires constant attention, understanding, and on-going education. BHM’s reviewer network MNC expertise allows you to focus on patient care. Click HERE and discuss how BHM’s MNC expertise can overcome medical necessity criteria challenges and improve your metrics. Medical Necessity Criteria Challenges