Health system tackles medical necessity ogre, brings 10 hospitals into the fold
Getting medical records staff on board is crucial
How a hospital copes with "medical necessity" — two of the most ominous words to become part of the industry buzz in recent years — has everything to do with the health of its bottom line. With that in mind, the 10-hospital Baptist Health System (BHS), based in Birmingham, AL, is entering the third phase of a program focused on ensuring that the procedures and tests ordered by its physicians meet the Baltimore-based Health Care Financing Administration’s (HCFA) medical necessity guidelines.
In February 1999, BHS began checking for medical necessity at the point of scheduling at one of its facilities and attempting to reconcile nonmatching diagnoses and procedures, says Becky Miller, director for compliance, patient business services. By August, that process was in place at all 10 hospitals.
To make it easier for physicians to cooperate in the effort, BHS distributed about 1,500 copies of the guidebook Code First: Medicare Medical Necessity Reference. Developed at one of its own hospitals, the book identifies the procedure/diagnosis matches required for reimbursement. (See related story, p. 123.)
Before that, in phase one of the program, the health system identified procedures that failed medical necessity — using software from Omega Systems Inc. in Tampa, FL — and wrote them off, Miller notes. "We knew we shouldn’t bill for them."
In phase three, BHS is expanding its program by checking medical necessity at the point of registration for unscheduled patients, she says, a process that originally was expected to be under way by late September. Additionally, it requires waivers signed in advance for lab tests that do not meet medical necessity, Miller says.
Anecdotal evidence indicates the focus on medical necessity is paying off, she adds. "We are seeing physicians change their mind and not do a test, or come back with a diagnosis that supports a procedure, and [the schedulers] will jump up and down. They’ll say, So-and-so just saved us $600,’ or That saved us $1,000. We don’t have to write it off.’"
Measuring any overall positive result is difficult, however, with a target that is constantly moving, Miller points out. "Every month, Medicare adds something new [to the list of procedures that must meet medical necessity]. Things don’t stabilize enough to know the progress you’ve made."
At present, she estimates, there are about 400 procedures for which HCFA requires providers to show medical necessity, "ranging from little labs to surgeries and MRIs."
How BHS does it
When a physician’s office calls to schedule a procedure at BHS, schedulers identify the patient and the test being performed, then check a list to determine the assigned CPT-4 code, explains Miller. They ask callers for a diagnosis, encouraging them to specify an ICD-9-CM code, she says. "They’re mandated [by HCFA] to give us a diagnosis, but not mandated to give us the code."
If the scheduler gets only a description, not the actual ICD-9-CM code, Miller notes, she can enter the description and a group of diagnoses will appear with the ICD-9-CM codes. If the proper diagnosis can be identified easily, the scheduler selects it. Otherwise, the patient will be asked to sign an advance beneficiary notice (ABN) form (See copy of form, p. 125), assuming responsibility for the cost if Medicare will not cover it, she adds.
If the physician’s office does supply an ICD-9-CM code, the scheduler types it in, along with the CPT-4 code, and either a smiling face or a frowning one appears on the screen, depending on whether the two match, Miller says. If the response is positive, the information goes through the computer system and is recorded on the patient registration.
Ultimately, the information is picked up by the medical records staff, which codes the account using the initial ICD-9-CM code and perhaps a code for the test results, she points out. "As long as we have the initial [code] that supports [the procedure], we know we’ll get paid."
Over the past year, Miller adds, she’s had many arguments with medical records personnel about whether that initial code is required, she says. "Our local Medicare intermediary published something that made it clear to use both [codes], and I keep it next to me all day long. It has made my argument so much easier."
Any access department that implements this kind of procedure "will have trouble with the medical records department," she predicts. "You’ve just got to keep working with them and make sure they’re coding from the results and from the initial admitting diagnosis or symptom."
The response she often receives from medical records employees, Miller says, is, "I can only code what I see," which means the results of the test as reported in the medical record. But this attitude, she points out, can result in the hospital not being reimbursed for what are, in fact, allowable procedures.
A physician might order, as in one actual BHS case, a computerized axial tomography (CT) scan of the head, and in the notes mention that the patient had surgery a couple of months before. "There is a diagnosis — V15.2, personal history of surgery to a major organ — that makes the CT allowable under Medicare," Miller explains. "If [medical records personnel] had known that, they could have coded it." In that case, the code wasn’t included, and the hospital didn’t get reimbursed for the procedure, she adds. "Even after I showed them, they still wanted to argue with me."
She suggests encouraging medical records personnel to become familiar with local medical review policy bulletins, generally issued monthly by Medicare intermediaries to inform providers of updates or additions to medical necessity rules.
"Be a step ahead," Miller advises. "Know what Medicare wants, what it considers allowable, and if it’s there, use it. If you catch it after the fact, your only opportunity is to rebill, and with 10 hospitals, we’re just not able to handle the volume."
If the scheduler gets a negative response when the diagnosis and procedure codes are entered, "we have to be careful how we invite a further diagnosis from the physician," she says. "We don’t want to sound like, We won’t be paid for this diagnosis; you have to give us something else.’"
Instead, Miller adds, the scheduler will say, "This diagnosis doesn’t support medical necessity. Perhaps there’s another diagnosis you failed to get." The physician’s office employee then may review the record or talk to the physician, she says. "Maybe they had a whole slew of diagnoses and just didn’t give them to us."
If this effort still doesn’t result in a successful match, the hospital scheduler faxes the physician’s office the ABN form, with the patient’s name, the test, and why the patient is being asked to sign, Miller says.
At this point, the physician may decide to take another route or may say, "I think you really need this test, but Medicare may not pay," Miller says. "The ultimate outcome is the physician and the patient talking together, making that decision. It gets the physician involved in the whole medical necessity kick. Many of them feel, It’s not my problem, it’s the hospital’s,’ but if you read [the directives] from HCFA, the intention is that it is the doctor’s problem."
Determining medical necessity in advance is also a customer service issue, explains Sandra Holmes, RN, BSN, clinical revenue specialist for the BHS consolidated business office. "It’s very aggravating for the patient or the family to take off work, park, come in, and find out that the diagnosis may not support this procedure.
"People would rather know upfront," she says, "so they can call the physician and ask, Why is this test necessary?’ It’s getting the patients more involved with the physicians and with their own health care."
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content