Resolving Medical Necessity Denials - Role of Coding and Clinical Documentation

Depending on the payers and plans a provider works with, they may experience varied degrees of medical necessity denials on their reimbursement claims.
Several plans report up to 37% of claims refused on this basis, even though just around 2% of all in-network claim denials by HealthCare.gov plans were justified by medical necessity.
The level of subjectivity arises from the fact that payers must decide whether to deny a claim after reviewing it with the help of their medical directors or utilization management staff to determine whether the requested treatment is reasonable and necessary for correctly diagnosing or treating the patient’s condition.
Guidelines, evidence-based medicine, and the patient’s medical history and conditions are only a few examples of the “medical necessity” standards that can differ between insurance companies. Inadequate paperwork to substantiate the length of stay, the services offered, the level of care, and the reason for admission is the most frequent basis for denials.

Preventing Medical Necessity Denials

To reduce medically justified denials and increase the success rate of appeals, providers can address this issue by implementing a clinical documentation improvement (CDI) programme, either in-house or by outsourcing to a qualified vendor. An effective CDI programme should prioritise making it possible to accurately capture a patient’s clinical state.
The situation is complex, but it can be controlled by using simple protocols and quality control techniques. The success rates of claims can be significantly increased and the chance of medical denials can be eliminated by improving the clinical knowledge of the coding staff, conducting regular clinical reviews, managing the known aspects of decision support criteria, and effectively using benchmarks in the preparation of claims.
This white paper offers healthcare providers clear case-based examples and recommendations on how to limit the income loss they experience as a result of persistent medical necessity denials.