Overcoming Medical Necessity Denials with Clinical Documentation Improvement: A Comprehensive Approach
Medical necessity is a crucial element in ensuring accurate medical coding and billing, as well as processing claims. However, despite its importance, many healthcare providers continuously run into medical necessity denials. These denials can’t be ignored, as they can lead to significant revenue loss and compliance issues. Within this article, we’ll provide clinical documentation improvement strategies and other tips to overcome medical necessity denials.
Understanding the Importance of Medical Necessity
HealthCare.gov defines “medical necessity” as the “health care services or supplies needed to diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine” (2023). The National Association of Insurance Commissioners (NAIC) further explains that health insurance companies define medical necessity in their plans’ policies, meaning they decide which services they will pay for (2023).
If the service, procedure, or materials used in the patient encounter don’t fall under the insurer’s definition of medical necessity, then the insurer can reject the bill, leading to a denied claim.
While uncovered services contribute to the number of medical necessity denials, there are many other reasons why they occur. Incorrect coding, inadequate documentation, prior authorization issues, and unsupported clinical decision-making by the physician can all lead to medically necessary-related denied claims.
Best Practices for Addressing Medical Necessity Denials
Some of the top strategies for addressing medical necessity denials include:
- Issue facility-wide standardization policies for clinical documentation improvement and coding: Establish standardized parameters for all documentation to include details such as the reason for the patient visit, rationale for services and tests performed, summary of patient health and medications, physician’s recommended treatment plan, changes in treatment, and other details your staff deems necessary to provide a complete picture of the patient encounter. For medical coders, create a review process that allows them to contact the physician for more information if they need more supporting documentation to meet the payer’s guidelines for medical necessity.
- Maintain ongoing education and training for physicians and coding staff: Continuous training on providing complete, accurate documentation will help physicians comply with those policies. Ongoing education on coding changes and payer updates keeps coders compliant with the latest codes and guidelines. The more educated the staff is on their daily operations, the less likely errors and denied claims will occur.
- Resolve medical necessity claims denials by seeking external coding support: Internal coding teams might already struggle to keep up with their daily backlog of patient records. Adding the task of researching and resolving denied claims to that list might push them over the edge. That’s where a trusted external coding partner can alleviate some of the burdens from medical necessity denials.
Check Medical Necessity Denials Off Your List
Assisting health systems, physician clinics, and other clients with their denied claims is one of YES HIM Consulting’s specialties. Our carefully trained coding consultants and auditors review the denied claim against the provided documentation, providing solutions to resolve the denial. Taking it a step further, our consultants can provide expertly curated training and education recommendations to prevent medical necessity denials from occurring in the future.