Evaluate your facility's medical necessity compliance
HIM Connection, July 16, 2003
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TOPIC: Evaluate your facility's medical necessity compliance
Without understanding where your facility is today with respect to medical necessity compliance, there can be no movement toward improved compliance or reimbursement. The first step is to evaluate your situation.
Answer the following questions:
1. How much and where are our medical necessity losses?
2. Do we have a current medical necessity checking process in place, including an advance beneficiary notice (ABN)?
3. Does our current software give us the ability to perform medical necessity checks?
4. What are our weaknesses in checking medical necessity?
Discovering medical necessity losses in raw numbers is not difficult. Medicare remittance advice uses the following two claim adjustment reason codes that designate denials for lack of medical necessity:
Scrutinize these Medicare remittance advices to see what services are being denied. Then categorize the services according to the department in which they occurred. Rank the services according to the amount of loss to the institution that each one represents.
After completing the evaluation, your facility will have a clearer picture of where losses are occurring and whether some services contribute more than others to the overall losses. The evaluation will help prioritize the objectives, and even show whether a comprehensive medical necessity checking process is needed.
It's possible that simple solutions in a few departments for a few services may effect sizeable improvements in receivables. By focusing on these services, the move to an enterprise-wide solution will be easier; if people see measurable success early on, they will be eager to move forward.
This week's HIM Connection was excerpted from the book, "Medicare Medical Necessity: A Guide to Accurate Reimbursement and Full Compliance." Go to for more information or to order your copy.
Sincerely,
Lauren McLeod
Executive Editor
lmcleod@hcpro.com
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