We were asked this question today, by a CFO:
“Isn’t Medical Necessity decided by the physician?”
The answer is: Yes and No.
If we are talking about whether care is clinically necessary for the well-being of the patient, physicians get to decide that question, and they are loathe to be questioned on their judgement — and perhaps rightly so, since they are indeed the doctor. However…
If we are talking about where the care should be provided, which will have a very direct bearing on the cost of the care and who will or will not be paying for that care, THEN the physician does not get to decide. In fact, the physician must justify the provider setting for the care in the medical record or the payer may decide not to reimburse the providers for that claim. Please notice, we said “providers” — plural.
Case in point: Transfer DRGs.
Let’s just consider a simple example — okay, this is perhaps a grossly simplified example, but you’ll get the point. Suppose a physician wants to admit an aged patient who is chronically ill to a SNF. (We said this was simplified, not uncommon…) The patient needs the care, in the doctor’s medical opinion. The patient is admitted to an acute care hospital as an inpatient, and after 2 days is transferred to a local SNF.
Question: Can the hospital bill with a transfer DRG, and will the SNF get paid for their portion of it? (Not many details here, just play along…)
Answer: Both the hospital and the SNF would probably be denied for Medical Necessity. Why? Because, although the patient needs care, the patient was not presenting with acute illness, only chronic, and therefore probably did not meet Medical Necessity for admission as an inpatient, in the first place. Therefore, the payer denies the hospital stay, and that means the SNF stay is also denied. Neither gets paid.
Oh, but you say, how can that happen if the patient was admitted using proper criteria?
Let us point out two things…
First, using “proper criteria” is a safeguard, but no guarantee. Unfortunately, the criteria are not objective, but are typically fairly subjective. A RAC, in fact, could decide to disagree with your criteria. And CMS might agree with the RAC.
Second, just because the patient met criteria, and even if CMS/RAC/whoever agrees with your criteria, that won’t matter if the medical record does not reflect it.
The documentation must be there or it won’t matter what actually happened.
We are talking about contractual language, not clinical language. The Payer will only care about the contractual langauge.
RACs are essentially Bounty Hunters. And like all Bounty Hunters, they won’t care about your guilt or innocence. They have a hunting license, and they are authorized to take captives.
Not even proper coding will save you. The proper contractual language must be in the medical record to justify medical necessity, not in only in the clinical sense, but also in the location that the care is provided.
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