Medical Necessity Tops Conversation Topics at SAWC Spring

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   While driving home recently and reflecting on the fabulous lectures that I attended, the Wound Clinic Business (WCB) seminar I hosted, an SAWC presentation in which I discussed expected and unexpected reimbursement changes for 2014, and the ICD-10-CM preparation and documentation post-conference, I came to the realization that wound care providers definitely underestimate the need to meet all “medical necessity” requirements in their documentation and before they see patients in HOPDs. Because “medical necessity” was such a big issue at SAWC, I thought I should discuss here some misperceptions the attendees shared with me.

Medical Necessity of Clinic Visits & Procedures During Same Encounter

  Let’s begin by discussing the subject of the Medicare recovery audit that was facing the aforementioned HOPD medical director. He explained that he and the HOPD bill for a clinic visit at each patient encounter, even when procedures are performed. Recovery auditors reportedly told him that most of the clinic visit charges were not “medically necessary.” The medical director said he assessed the wounds at each weekly encounter and believes the HOPD and he should be paid for that work. Unfortunately, I did not have great news for him: Each procedure has an inherent evaluation and management component for the decision to perform the procedure. If the encounter also includes a new problem, a new complaint, a new complication, etc. and if the qualified healthcare professional’s (QHP’s) documentation clearly describes a significant, separately identifiable evaluation and management service above and beyond the usual preoperative and postoperative work of a procedure, then the HOPD and the QHP may be able to bill for the visit and the procedure during the same encounter. In that case, the HOPD and QHP would attach “modifier 25” to the clinic visit/evaluation and management code. Unfortunately, most repeat wound care encounters in which a procedure is performed do not meet the “separate, significantly identifiable” medical necessity requirements. Therefore, everyone reading this article should: 1) audit past claims to verify they have not been routinely submitting claims with both a clinic visit/evaluation and management code and a procedure code; and 2) cease billing for these “medically unnecessary” clinic visits when performing procedures.

Specific Diagnosis & Comorbidities Determine Medical Necessity

  During the WCB seminar (www.woundclinicbusiness.com), many QHPs wanted me to tell them which diagnosis code they should put on their Medicare claims to prove “medical necessity” and gain Medicare coverage for specific wound care services/procedures/products. I explained that QHPs should clearly document each patient’s diagnosis and comorbidities in the medical record. The diagnosis and comorbidities should be reported on the Medicare claim for that specific encounter. If a local coverage determination (LCD) exists for any of the services, procedures, or products performed during that encounter, the QHP should verify whether or not the patient’s diagnosis and comorbidities are listed as covered in the LCD. If they are not covered, the QHP should not change the patient’s diagnosis and comorbidities just to gain coverage. Instead, the QHP should discuss the need for the service/procedure/product with the patient and give the patient an opportunity to sign an advance beneficiary notice (ABN) of noncoverage. Therefore, everyone reading this article should document the patients’ diagnoses and comorbidities to the highest level of specificity.

LCDs Provide Medical Necessity Guidelines

  Many QHPs said they did not realize the importance of their Medicare contractors’ LCDs. In fact, many QHPs said they have never read their LCDs because they thought LCDs were “just a guide for their coders and billers.” The QHPs also realized that they have often unnecessarily stopped performing some services/procedures and/or using some products because their claims were denied. After our discussions, the QHPs came to the conclusion that many of the claims were denied because the patient’s diagnosis was not covered per the LCD or because the QHP did not take the time to document the patient’s diagnosis to the highest level of specificity. Therefore, everyone reading this article should: 1) read pertinent LCDs to understand the covered diagnosis codes, the utilization guidelines, the documentation guidelines, etc.; and 2) present patients with ABNs when necessary.

Future Effective LCDs Provide Preview of ICD-10 Medical Necessity

  After speaking to many QHPs, I learned that seemingly nobody knew that the Centers for Medicare & Medicaid Services (CMS) mandated all Medicare administrative contractors (MACs) to convert all LCDs and articles that contained covered/noncovered ICD-9 diagnosis codes to LCDs and articles with ICD-10 diagnosis codes. The future effective LCDs and articles were required to have a new LCD/article identification number and to be published on the Medicare Coverage Database by April 10, 2014. All of the MACs complied with the CMS mandate, although a few posted their documents after the deadline. The Table at the conclusion of this article includes a sample listing of some wound care-specific future effective LCDs with ICD-10 codes that have been posted by each MAC.

  CMS has determined that although new LCD/article numbers were assigned to the ICD-10 LCDs, the policies were not considered “new.” CMS considers this type of update to be a coding revision that does not change the intent of coverage/noncoverage within an LCD. Therefore, if a MAC only translates ICD-9 codes to the appropriate ICD-10 codes, the policy does not need to be vetted through the Carrier Advisory Committee or to be sent through the public comment and notice process. However, if a MAC decides to revise more than just the ICD-10 code(s), they must follow the normal LCD development process.

  By reviewing the future effective LCDs, QHPs can obtain an excellent preview of the level of diagnosis specificity that they should begin to document. Therefore, everyone reading this article should review the future effective LCDs and articles that pertain to their work and should begin to document their patients’ diagnosis(es) and comorbidities with a greater degree of specificity. QHPs can view the entire list of their MAC’s future effective LCDs at www.cms.gov/medicare-coverage-database/overview-and-quick-search.asp.

Medical Necessity in the Absence of an LCD

  Many QHPs at SAWC were also under the mistaken idea that the absence of an LCD pertaining to a particular service/procedure/product meant that it was not covered. In the absence of an LCD, national coverage determination (NCD), or CMS manual instruction, “reasonable and necessary” guidelines apply. Section 1862 (a) (1) (A) of the Social Security Act states: “No payment may be made under Part A or Part B for any expenses incurred for items or services not reasonable and necessary for the diagnosis, or treatment of illness or injury, or to improve the functioning of a malformed body member.”

  To be considered “reasonable and necessary,” the patient’s medical record must include the following documentation to prove “medical necessity”:

    • The item or service is for the diagnosis or treatment, or to improve the functioning of a malformed body member.
    • The item or service is appropriate for the symptoms and diagnosis or treatment of the patient’s condition, illness, disease, or injury.
    • The item or service is furnished in accordance with current standards of good medical practice.
    • The item or service is not primarily for the convenience of the patient, or physician or healthcare provider.
    • The item or service is the most appropriate supply or level of service that can be safely provided to the patient.
    • The item or service is delivered in the most appropriate setting.
    • The item or service is ordered and/or furnished by qualified personnel.

  Therefore, everyone reading this article should remember: For any service reported to Medicare, it is expected that the medical record documentation clearly demonstrates that the service/procedure/product meets all the above “reasonable and necessary” criteria. In addition, remember that all documentation must be maintained in the patient’s medical record and be available to the MAC upon request.

Document Now for ICD-10

  Many attendees at SAWC revealed they had not begun to refine their documentation for ICD-10. Although Congress has delayed the implementation, CMS has announced its intentions to implement the new system Oct. 1, 2015. Although that may sound like a long way off, most QHPs have a lot of work to accomplish between now and then. In particular, they have to identify the level of documentation specificity required to properly diagnose patients via the ICD-10 system. Then they have to begin refining their documentation – one major diagnosis at a time. Therefore, everyone reading this article should learn the sections of the ICD-10 codebook that pertain to their work and should start documenting now with the specificity required by ICD-10. Remember that it takes practice to change documentation habits.

Medical Necessity = Direct Supervision of HOPD Therapeutic Services

  While much has been written and taught about the requirement for “direct supervision” in HOPDs, it was still a major topic of conversation and the subject of numerous questions at SAWC. CMS’ policy about direct supervision is actually quite clear if one knows CMS’ supervision levels definitions:
    • General Supervision: The procedure is furnished under the physician or non-physician practitioner’s overall direction and control, but his or her presence is not required during the performance of the procedure.
    • Direct Supervision: The physician or non-physician practitioner must be immediately available to furnish assistance and direction throughout the performance of the procedure. He or she does not have to be present in the room.
    • Personal Supervision: The physician or non-physician practitioner must be in attendance in the room during the performance of the procedure.

  The calendar year 2010 Outpatient Prospective Payment System final rule (74FR 60580) discusses “immediately available” and states which QHPs can provide direct supervision and who may personally perform specific therapeutic services under state law and hospital privileges.

  The QHP must be immediately available to furnish assistance and direction throughout the performance of the procedure (not “on call”) “without interval of time” and must be interruptible if concurrently engaged in other activities (eg, patient care). The rule also states hospitalists or emergency department physicians can provide direct supervision, if they are interruptible and are licensed, able, and have hospital privileges to furnish the specific therapeutic service(s).

  Nearly all services/procedures/products performed/supplied in an HOPD require direct supervision in order to be deemed “medically necessary.”

  Therefore, if an HOPD has been billing Medicare and receiving payment when direct supervision was not available, the hospital may be asked for a repayment upon an audit.

  NOTE: Effective Jan. 1, 2014, the direct supervision regulation also applies to critical access hospitals in order for HOPD services to be deemed “medically necessary.”

  NOTE: Only two wound care-related procedures may be performed under general supervision:

    29580: Strapping: Unna’s boot; and

    29581: Application of multilayer compression system; leg (below knee), including ankle and foot.

  Therefore, everyone reading this article should be sure that no HOPD services (except 29580 and 29581) are performed unless a QHP is scheduled and provides direct supervision. Kathleen D. Schaum is president and founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL. She may be reached at 561-964-2470 or kathleendschaum@bellsouth.net.