Medical Necessity Monopoly: How to Avoid “Chance” and Advanced to “Go”

Medical Necessity Monopoly: How to Avoid “Chance” and Advanced to “Go”
AAOSNow – November 2018
by Karen Zupko and Michael Marks, MD, MBA

A three-step medical necessity action plan can help ensure payment

Consider the following: A patient presents to your office complaining of symptoms that indicate a possible herniated disk. A history notes symptoms following the S1 nerve root, and your examination finds right radicular signs. You order an MRI to confirm your findings and proceed to discuss herniated disk surgery with the patient.

Is it time to escort the patient to the surgery scheduler? Not yet. The unanswered question in this scenario is whether the herniated disk surgery is medically necessary for this patient. Scheduling the case at this time would be akin to picking a card from the game of Monopoly’s Chance pile. And you better hope it’s not the card that says you cannot pass GO.

Although the MRI confirmed the patient’s condition, what’s needed, from the payer’s perspective, is supporting documentation that corroborates that now is the right time for this patient to proceed with this surgery. Without that documentation, it’s unlikely the surgery will be preauthorized. Even if you perform the surgery, send a claim, and receive reimbursement, a random or retrospective audit by a payer could result in you having to pay that money back if the payer’s definition of medical necessity was not met. For fiscal year 2017, the Medicare fee-for-service program had $6.3 billion in improper payments due to inappropriate medical necessity, representing 17 percent of all Medicare payments. That is money that Medicare may attempt to reclaim. Additionally, this figure excludes monies private insurers may seek to reclaim due to improper payments for medical necessity.

Here’s how to do things right—and in the correct order—to satisfy a payer’s medical necessity requirements.

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