Denied claims are a major headache for any surgical facility and the patients they serve. Taking a proactive approach to medical necessity denial prevention is always worthwhile and can save time, money and frustration. Understanding the top reasons for medical necessity claim denials is an important first step, followed by strategizing on how to avoid costly pitfalls.
Common Reasons for Claim Denials
Before chasing your tail trying to determine if all criteria were met to verify medical necessity, the reason for your claim denial could be as simple as:
- A data entry error such as a misspelled name or wrong gender
- The patient is ineligible for service because health insurance coverage ended
- The service or procedure you are billing for may not be included in the patient’s plan’s benefits.
After double checking these elements of the claim, consider next that it may be missing prior authorization. Additionally, verify that there are no coding errors such as missing or misused modifiers, wrong procedure codes or failure to link diagnosis codes to CPT codes.
Verifying Medical Necessity
If you are seeing an upward trend in the amount of medical necessity denials you are receiving, you should quickly investigate. Keep in mind that in order to determine medical necessity, the need for an item or service must be clearly documented in the patient’s medical record. Medically necessary services or items are defined as:
- Appropriate for the symptoms and diagnosis or treatment of the patient’s condition, illness, disease or injury;
- Provided for the diagnosis or the direct care of the patient’s condition, illness, disease or injury;
- In accordance with current standards of good medical practice; and not primarily for the convenience of the patient or provider;
- The most appropriate supply or level of service that can be safely provided to the patient.
Preventing Medical Necessity Denials
Inadequate documentation is the top reason for medical necessity denials. Providers should be documenting the patient’s history, physical findings, all diagnoses, services performed, supplies used, prescriptions or tests ordered and patient instructions while the patient is still in the exam room. Additionally, there should be documentation containing all specific and detailed information that indicates why the physician prescribed the procedure. To avoid unnecessary medical necessity denials, utilizing medical necessity software can help you select the appropriate procedure codes for a particular diagnosis. Physicians should also be properly and consistently educated on the critical roles they play in preventing medical necessity denials.
Best Practices for Decreasing Medical Necessity Denials
At NexGen, we implement programs and policies at all of our client facilities to help decrease medical necessity denials. We inspect the documentation process and look for areas of improvement. Our skilled coding team thoroughly reviews claims to ensure accuracy and compliance and also performs regular coding audits. We also implement an electronic batch eligibility verification system to improve upfront procedures and optimize the patient eligibility process. This software offers a single solution to a time-consuming task for staff. It can eliminate the inconvenience and awkwardness of telling patients that charges not covered by insurance are due. For some facilities, partnering with a denial management service can be worthwhile to keep in-house staff on task.
Solving problems is our specialty at NexGen. If your surgical facility is struggling with medical necessity denials, we can uncover the root cause of this serious issue and implement our proven processes for reversing it. Contact us today to learn more about how we can take the headaches out of your surgical facility.
