• 

• Understanding Medical Necessity

Medicare’s underlying logic is medical necessity.

This logic was implemented in 1965 to prevent abuse of Medicare through overuse and improper use. One of the most difficult things about Medicare is understanding why some services are denied and some aren’t. 

This need for medical necessity for payment does complicate Medicare coverage. Medical necessity is a broad concept with many nuances. Each service billed to Medicare requires medical necessity unless the service is a screening.

Included in the Social Security Act (SSA), Section 1862 (42 U.S.C. 1395) is the following excerpt, “no payment may be made under Part A or Part B for any expenses incurred for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” Also included in the SSA is specific coverage for certain screenings.

Medical necessity is determined by sign, symptom or diagnosis that is the reason for the service.

The purpose is to heal the illness or injury or improve the function of malformed body member. In the case of medical testing, medical necessity requires that the results are used for medical treatment.

The service is diagnostic if there is medical necessity.  The service is a screening if performed as a preventative measure and on Medicare’s coverage list.  Let’s look at EKGs and medical necessity to better understand the nuances.  

1. I may want an EKG because I am anxious. The physician does a work-up and determines anxiety is my problem. No EKG is performed as I don’t have medical necessity.
2. I may want an EKG because I am having occasional chest pain. The physician agrees. It appears I have bad indigestion. Chest pain is my reason for the test. No cardiac condition is identified. I still have medical necessity. 
3. I have stable cardiac disease that is being treated effectively.  The physician performs another EKG and confirms the current treatment is working well. No changes in treatment is required. The EKG was used for medical decision making and is well documented. I have medical necessity.
4. I am having minor surgery. The surgeon requests an EKG as part of the preoperative screening by my family physician. I have no cardiac disease. The surgeon insists on the EKG. I have the EKG. I have no medical necessity. I will have to pay out-of-pocket for this test. As an aside, most preop screening tests without medical necessity have been eliminated. Make sure you ask about this if pertinent to you or your loved one. Typically after review, there is a better diagnosis that does meet medical necessity.
5. I am being seen for my ‘Welcome to Medicare’ exam. I have an EKG although I don’t have signs, symptoms or a chronic cardiac condition. The EKG is covered as a screening. I don’t need medical necessity.
6. I don’t want to undergo the treatment proposed if my EKG is positive. If I know this is the case before the test. I may not have medical necessity.
7. This is frequently the case for end-stage disease. The subsequent treatment would not restore my health or add to my comfort. It may not be medically necessary. If I am on hospice, it would not be treated so the diagnostic test may only be medically necessary if my current care can be improved with alternate care.
8. As an example, if the new condition indicates a course of physical therapy is going to help me stay flexible during my end-of-life care and hospice care. The physical therapy most likely would meet medical necessity.

As you can see, medical necessity is not straight forward. 

It is a bit overwhelming when we have to apply medical necessity coverage rules for every service and test. Medicare is complicated due to all the thought needed for every medical decision.

Medical necessity is noted on the medical bill via one of the 70,000 diagnosis codes available.

There is another code-set for ninety-nine place of service codes and 10,000 procedure codes. All of these codes have to align in a certain order to meet medical necessity guidelines. It can be a bit overwhelming but the logic works.

Physicians, nurses, coders and insurance agents may have a different understanding or definition of medical necessity. Regardless, we need to think like Medicare. We may be seniors but we are not too old to understand medical necessity the Medicare way.

                                                                Wanda Cantrell, RHIA, CCS, CCS-P, LPN

                         The column is based on Medicare guidance and reflects the views of the writer.