Health Information Management

News: Rebilling possible option for medical necessity denials

CDI Strategies, June 20, 2013

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Three out of four Recovery Auditors (RAs) list medical necessity of cardiovascular procedures as their top issue, according to CMS data published in May 2012. Medical necessity of minor surgery or other treatment billed as an inpatient stay is the top issue for the fourth RA.

This data doesn't surprise Jonathan G. Wiik, MSHA, MBA, chief revenue officer at Boulder (Colo.) Community Hospital. Forty-three percent of the hospital's RA audits pertain to cardiovascular cases. Gastrointestinal and musculoskeletal cases rank second and third at 24% and 21% respectively. The remaining 12% fall under the "other" category.
Boulder Community Hospital, a 265-bed acute care facility, began experiencing RA audits in 2010. The audits focused largely on DRG code validations. However, throughout 2011 and 2012, Wiik says the audits have shifted in focus exclusively to medical necessity.
Once a denial pertaining to the medical necessity of an inpatient admission is made, hospitals essentially have two choices in light of CMS' recent Administrative Ruling and anticipated final rule on Part B rebilling:
1.       Defend the admission criterion and utilization review (UR) process in an appeal and wait for the ­reimbursement to which you're entitled
2.       Ignore the UR criterion and process and accept reimbursement at a lower rate now by rebilling the denied Part A claim to Part B
Editor’s Note:This article originally appear in the June edition of Briefings on Coding Compliance Strategies.

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