Non-Medicare payors do not have to follow federal guidelines unless the member participates in a Medicare managed-care plan.
In the absence of a national coverage policy, an item or service may be covered at the discretion of the Medicare contractors based on a local coverage determination (LCD).5 LCDs vary by state, creating an inconsistent approach to medical coverage. The vascular study guidelines listed above do not apply to all contractors. For example, Trailblazer Health Enterprises’ policy does not reference preoperative exams being limited to unilateral studies.7 (A listing of Medicare Contractor LCDs can be found at www.cms.hhs.gov/DeterminationProcess/04_LCDs.asp.)
Investigate “medical necessity” denials. Do not take them at face value. Billing personnel often assume that the physician reported an incorrect diagnosis code. Consider the service when trying to formulate a response to the denial. Procedures (surgical or diagnostic services) may be denied for an invalid diagnosis. After reviewing the documentation to ensure that it supports the diagnosis, the claim may be resubmitted with a corrected diagnosis code, when applicable. Denials for frequency limitations can only be appealed with documentation that explicitly identifies the need for the service beyond the contractor-stated parameters.
If the “medical necessity” denial involves a covered evaluation and management (E/M) visit, it is less likely to be diagnosis-related. More likely, when dealing with Medicare contractors, the denial is the result of a failed response to a prepayment request for documentation. Medicare typically issues a request to review documentation prior to payment for the following inpatient E/M services: 99223, 99233, 99239, and 99292.
If the documentation is not provided to the Medicare prepayment review department within the designated time frame, the claim is automatically denied with a citation of “not deemed a medical necessity.” Acknowledge this remittance remark and do not assume that the physician assigned an incorrect diagnosis code. Although this is a possibility, it is more likely due to the failed request response. Appealing these claims requires submission of documentation to the Medicare appeals department. Reimbursement is provided once supportive documentation is received.
Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She is faculty for SHM’s inpatient coding course.
- Social Security Administration. Exclusions from coverage and Medicare as a secondary payer. Social Security Administration website. Available at: http://www.ssa.gov/OP_Home/ssact/title18/1862.htm. Accessed March 1, 2012.
- Highmark Medicare Services. A/B Reference Manual: Chapter 6, Medical Coverage, Medical Necessity, and Medical Policy. Highmark Medicare Services website. Available at: http://www.highmarkmedicareservices.com/refman/chapter-6.html. Accessed March 1, 2012.
- Pohlig C. Daily care conundrums. The Hospitalist. 2008;12(12):18.
- Highmark Medicare Services. LCD L27506: Non-Invasive Peripheral Venous Studies. Highmark Medicare Services website. Available at: http://www.highmarkmedicareservices.com/policy/mac-ab/l27506-r10.html. Accessed March 1, 2012.
- Centers for Medicare & Medicaid Services. Medicare Coverage Determination Process: Overview. Centers for Medicare & Medicaid Services website. Available at: http://www.cms.hhs.gov/DeterminationProcess/01_Overview.asp#TopOfPage. Accessed March 1, 2012.
- Centers for Medicare & Medicaid Services. Medicare National Coverage Determination Manual: Chapter 1, Part 1, Section 70.1. Centers for Medicare & Medicaid Services website. Available at: http://www.cms.gov/manuals/downloads/ncd103c1_Part1.pdf. Accessed March 1, 2012.
- Trailblazer Health Enterprises. LCD 2866: Non-Invasive Venous Studies. Trailblazer Health Enterprises website. Available at: http://www.trailblazerhealth.com/Tools/LCDs.aspx?ID=2866. Accessed March 1, 2012.