Medical necessity. Hospital executives and financial officers are well-aware of the importance determining medical necessity in order to get paid for certain instances of care provided to patients. Typically, the topic of medical necessity is one dealt with on the access management side of care. However, meeting this requirement is also important from a patient perspective.

The establishment of medical necessity is mandatory in order to prevent revenue leakage.

Meeting medical necessity requirement is a critical step in a successful registration process.

What Medical Necessity Means for One Single Mom

Wabe Radio posted an article that described the difficult plight one single mother endures to provide care to her medically fragile son. To Sarah Allen, those two words, “medical necessity” have the power to impact her life in ways most of us could never imagine. In fact, failure to meet medical necessity for her son’s home care, can literally put her out on the streets, again. Why? Allen’s son Aiden was born prematurely and his brain was malformed which led to a host of health conditions, including: 

  • Cerebral palsy
  • Epilepsy
  • Obstructive sleep apnea
  • Cortical visual impairment
  • Mild form of microcephaly
  • Brain scarring
  • Enlarged ventricles

Because of his complex medical condition, he is unable to sit up by himself, or speak. He is wheelchair bound and is fed via a tube 22 hours per day. Due to the fact that he requires constant care, Allen is unable to maintain employment without the help of visiting nurses.

However, because all of his care is covered by Medicaid, this single mother must meet “medical necessity” requirements to get all the nursing hours (currently 28 hours in the home each week) she needs to function as a provider. Recently, the state tried to reduce this number of hours to only eight per week, which could send her into another financial downward spiral. A physician recently prescribed additional hours to the current plan and there is a hearing coming up to review this.

Nursing care for Aiden falls under Medicaid Act’s Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program. This Medicaid service guarantees him the right to medically necessary and long-term services that allow him to stay in a permanent home and avoid being placed in an institution. 

What happens when physicians disagree on what is medically necessary? What’s the difference between outright fraud and failure to accurately meet medical necessity for services that were rendered? Let’s explore these issues in greater detail.

Medicaid Fraud or Physician Disagreement?

Like other aspects of Medicaid billing practices, sometimes the establishment or lack thereof medical necessity falls into a grey area. Medicare and Medicaid fraud occurs on a regular basis and oftentimes it involves providers billing for services that were not medically necessary. 

The False Claims Act (FCA) was established to oversee and prosecute government contractors that submit  false claims to the government. Under this act, the Department of Justice has recovered $19.3 billion in fraudulent health claims over the last eight years according to the Washington Examiner, which accounts for 57 percent of the total money recovered in 30 years, which leads many to believe the FCA has overreached its authority.

While some cases are obviously fraudulent in nature, such as the recent New Jersey case that involved two drug salesmen that were prescribing drugs that were highly expensive and medically unnecessary, (read the full story in the Courier Post Online) – other incidents that involve medically unnecessary treatments may be due to a disagreement among doctors.

Lack of medical necessity is often cited in claims that are deemed fraudulent, but who decides what is and is not necessary? Shouldn’t that be a doctor’s decision? Certainly doctors have filed egregious fraudulent claims, but do we want our health care professionals second-guessing their decisions because they are worried about being prosecuted for fraud? One doctor may choose one course of action or set of tests while another may disagree and choose another. Should either of these decisions be considered fraudulent? – The Social Work Helper

How Hospitals and Providers can Maximize Revenue and Strengthen Compliance

At The SSI Group, our mission is to see hospitals and providers collect more revenue by streamlining processes and improving accuracy. Our suite of Access Management software is designed to help providers tackle their most critical issues and improve the front-end of their revenue cycle management.

Medical necessity accuracy is critical to successful registration. With SSI Medical Necessity, providers can determine the correct codes to validate medical necessity and issue Advanced Beneficiary Notices (ABNs) prior to service. Acting as a checks and balances system, the solution enables organizations to reduce the risk of lost revenue and non-compliance.

Establishing medical necessity for patient services is a critical step in the complete registration process. Failure to establish this requirement may result in revenue leakage, payment delays, and potentially suspicion of fraud. Our robust Medical Necessity module verifies this information against the CMS Verifying medical necessity against CMS National Coverage Determinations (NCD) and Medicare Administrative Contractors’ Local Coverage Determinations (LCD). Learn more our Medical Necessity software solution when you request the data sheet today.