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Tip: Justify medical necessity on your claims

Ambulatory Surgery Reimbursement Update, September 9, 2008

Do you sometimes have claims denied for medical necessity reasons when you know that the procedure was reasonable and necessary but can’t figure out why the case was denied?

You must realize that 85% of denials for medical necessity reasons happen because of one simple thing—the payer doesn’t like the diagnosis code you used on the claim. This is the first place to check when there is a denial for this reason.

If it is a Medicare claim, check your state’s Medicare Web site to see if there is a Local Carrier Determination (LCD) policy in effect for the procedure you billed. LCD policies exist for many procedures, including colonoscopies, esophagogastroduodenoscopies, cataract extractions, YAG laser procedures, pain management procedures, and blepharoplasties.

If there is an LCD for the procedure, the policy will provide you with a list of what diagnosis codes Medicare allows for the billing of the procedure. Don’t fraudulently bill a code on the list if none of the codes apply. If you are able to find a code for a condition or symptom documented in a patient’s operative report, pathology report or the history and physical for the case, you can use that condition to reprocess the claim.

Do not list a diagnosis that is not on the LCD policy in the first position on the claim form (such as hemorrhoids on a colonoscopy claim).Try to find a symptom (such as rectal bleeding) that is on the LCD diagnosis list. It’s a good idea to go into the Medicare Web site and print out the current LCD policies for every procedure that your ASC performs that’s listed in the LCD policy index so you have the policies and diagnosis lists handy at the time of coding and billing.

This tip is brought to you by Ellis Medical Consulting, Inc.

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