Providers may come across varying degrees of medical necessity denials on their reimbursement claims based on the payers and the plans they work with. For example, while only about 2% of all in-network claim denials by HealthCare.gov plans were attributed to medical necessity, several plans report up to 37% of claims denied on this basis. The level of subjectivity is because denials are based on the decision to be made by a payer, whose medical directors or utilization management staff review the request and assess if the service is reasonable and essential for diagnosing or treating the patient’s condition.
The “medical necessity” criteria may vary between insurance providers, including guidelines, evidence-based medicine, and the patient’s medical history and conditions. The most common cause of denials is inadequate documentation to support the length of stay, the services provided, the level of care, and the reason for admission.
Preventing Medical Necessity Denials
Providers can solve this problem by implementing a clinical documentation improvement (CDI) program either in-house or outsourced to a qualified vendor – to prevent medically necessary denials and improve appeals’ success rate. The focus of a successful CDI program should be to enable the accurate documentation of a patient’s clinical status.
The scenario is undoubtedly complicated but manageable by implementing straightforward protocols and quality control methodologies. Enhancing clinical knowledge of coding staff, periodic clinical reviews, managing the known aspects of decision support criteria, and the effective use of benchmarks in the preparation of claims can go a long way towards improving the success rates of claims and eliminating the risk of medical denials.
This white paper advises healthcare providers on the steps they can take to reduce the revenue leakage they face through persistent medical necessity denials, along with clear case-based examples and solutions.