Revenue Cycle

Tips to help master medical necessity

Recovery Auditor Report, January 7, 2010

Having the right process—and people—in place can help ensure your hospital consistently meets medical necessity criteria.

For one thing, implementing a team approach is critical. Integrating your team successfully really begins with installing an admitting case manager, according to Tanja Twist, MBA, HCM, director of patient financial services at Methodist Hospital of Southern California in Arcadia, CA. “Your case manager reviews all admissions, specifically Medicare admissions, to make sure they are all meeting criteria,” says Twist.

In addition, Twist suggests you review physician orders for medical necessity. Ensure physicians are clearly indicating their outpatient vs. inpatient decisions.

She also suggests taking the following steps:

  • Run your DRG list. “If you do concurrent coding this will help you to get a jump start,” Twist suggests.
  • Assign a nurse auditor to help you when reviewing these claims. A nurse specializing in this field will better help you to understand the charts.
  • Develop a physician documentation improvement plan. “That has helped us immensely,” Twist says.
  • Redesign any admitting forms or physician order forms that might be unclear, and discover your risk areas in your billing system. “Use your billing system to help you find places where you might have issues: what they’re catching, what they’re stopping, and what your billers are fixing,” Twist explains.
  • Report findings of audits to appropriate departments for review and correction, if necessary, and discuss them with your legal department

Editor’s note: Taylor and Twist spoke during the October 26–27, 2009 Medicare Compliance Forum: A Team Approach to Manage Medical Necessity in Atlanta, GA.

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