Healthcare providers will need to change more than the actual codes they use; in order to successfully transition to ICD-10. The way of coding utilizing ICD-10 will also change. Providers must ensure that the code they choose most accurately reflects the specific condition they?re treating so that it supports the medical necessity of their services, in addition to choosing the right code from a list of 68,000 possibilities. It must be reasonable and necessary to diagnose or treat a patient?s medical condition, for a service to be considered medically necessary. When submitting claims for payment, the diagnosis codes reported with the service helps in making the payer understand the reason for the service performed. The medical necessity is supported by the diagnosis provided for the procedure. The diagnosis for all procedures that are performed must be documented by the provider. Any diagnostic test ordered, the provider must provide an appropriate diagnosis for the same . A common error which is seen when reviewing medical documentation is that the provider will document a diagnosis and indicate tests ordered. But there won’t be any documentation regarding whether all the tests ordered were for the diagnosis documented in the assessment.
Procedures and tests performed on an outpatient basis do not always meet the standards of medical necessity in case of hospitals.ICD-10 and the increased level of diagnosis codes, changes to NCDs and LCDs could make it difficult in selecting the appropriate diagnosis code to support the medical necessity.
In ICD-10, Medical necessity can be a big problem in the physical therapy department, because the condition that the physician treats is different from the one the referring physician treats. The ICD-10 code which the physician uses may not be helpful in justifying the referring physician’s treatment. Therefore application of code that most accurately describes the diagnosis is important. One more important note regarding medical necessity is that avoiding the ?Generalized or Unspecified? codes. This will help in ensuring the payers to reimburse for the services provided.
The following example will illustrate the importance of medical necessity for a service.
The patient presents with left knee effusion and the physician performs an Arthrocentesis. He also orders a chest X-ray. The only diagnosis documented is knee effusion. The knee effusion supports the medical necessity for performing the Arthrocentesis, but it does not support the medical necessity for the chest X-ray. In this case, the provider should be queried why the chest X-ray was ordered so the proper diagnosis can be reported. The provider may have wanted a knee X-ray and made a mistake when writing his orders. By asking the provider for clarification, you have prevented the performance of an unnecessary test because the provider really intended to order a knee X-ray. In this case, the knee effusion would support the order of the knee X-ray. Asking for clarification can help in reporting the service with a more appropriate code and eliminate a claim denial.
Reviewing and communicating feedback on medical necessity adjustments at a detail level to physician offices, ED physicians, internal clinic physicians will help in reducing the number of denials occurring due to medical necessity.