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Proper Coding Can Help Prove Medical Necessity


Report diagnoses to tell the payer why a service was performed, support medical necessity, and avoid having your claims denied.

For a service to be considered medically necessary, it must be reasonable and necessary to diagnosis or treat a patient’s medical condition. When submitting claims for payment, the diagnosis codes reported with the service tells the payer "why" a service was performed. The diagnosis reported helps support the medical necessity of the procedure.

For example, a patient presents to the office with chest pain and the physician orders an electrocardiogram (ECG). A 12-lead ECG performed in the office and interpreted by a physician is reported with CPT® code 93000. The reason the physician orders the ECG is because the patient is complaining of chest pain. The diagnosis code for unspecified chest pain is 786.59.

The provider must document the diagnosis for all procedures that are performed. The provider also must include the diagnosis for each diagnostic test ordered. A common error seen when reviewing medical documentation is that the provider will document a diagnosis and indicate tests ordered, but it is unclear that all the tests ordered are for the diagnosis documented in the assessment. For example, the patient presents with right knee pain and the physician performs an arthrocentesis. He also orders a chest X-ray. The only diagnosis documented is knee pain. The knee pain supports the medical necessity for performing the arthrocentesis, but it does not support the medical necessity for the chest X-ray.

In this case, the provider should be queried why the chest X-ray was ordered so the proper diagnosis can be reported. The provider may have wanted a knee X-ray and made a mistake when writing his orders. By asking the provider for clarification, you have prevented the performance of an unnecessary test because the provider really intended to order a knee X-ray. In this case, the knee pain would support the order of the knee X-ray. If the provider intended to order a chest X-ray, by asking for clarification you can report the service with a more appropriate ICD-9-CM code and eliminate a claim denial. In this example, the arthrocentesis is reported with procedure code 20610 Arthrocentesis, aspiration and/or injection; major joint or bursa (eg, shoulder, hip, knee joint, subacromial bursa) and diagnosis code 719.46 Pain in joint; lower leg. The code for the X-ray is selected based on the anatomic site and number of views obtained.

Not all diagnoses for all procedures are considered medically necessary. Medicare and commercial payers have coverage policies that specify the diagnosis codes that support medical necessity for certain procedures. Also included in the coverage policies are documentation requirements. The documentation requirements can include diagnostic test values that must be met, that less invasive treatments be attempted before the service is determined to be medically necessary, or - for a repeat procedure - a statement of the outcome of the previous procedure of the same type. Knowing the coverage polices for the services provided in your office can help eliminate denied claims later.

The coverage policies are available for providers to review and adhere to when submitting claims. The coverage policies for Medicare are found at the Medicare Coverage Database. This database includes NCDs (National Coverage Determination), which are nationwide determinations for Medicare covered services; and LCDs (Local Coverage Determination), which are determinations if a service is covered carrier-wide by a MAC (Medicare Administrative Contractor). Using this database, you can search for coverage determination by CPT® or HCPCS Level II codes, and by your geographic region.

Private payers (e.g. Cigna, United Healthcare, etc.) have coverage policies as well. Most private payers have their coverage polices available on their website. Provider contracts with payers also include coverage policies. Review the coverage polices for the private payers you contract with, as well as Medicare if your provider participates in the Medicare program.

Word of caution: Do not alter the diagnosis code for a patient to match one of the diagnosis codes listed in the coverage policy as supporting medical necessity. The diagnosis code submitted must be supported by the medical record. It is inappropriate to report a diagnosis solely because it is on the approved list of diagnosis codes that meet medical necessity. Reporting a diagnosis that the patient does not have to receive payment for the service is fraud, which may result in fines and, in some cases, criminal prosecution.

When submitting claims, you must report the diagnosis that is indicated in the medical record for the procedures performed and ordered. Knowledge of coverage policies will help you to be proactive in avoiding claim denials and to educate your providers on the documentation required to support the services rendered. This is not to say that the provider should not perform the service if the circumstances may deem the service not medically necessary. If the physician determines the procedure is medically necessary even though the coverage policy does not approve it, this gives you the opportunity to educate your patients that the service may be denied by their insurance carrier. The patient then has the choice whether to have the procedure.

Raemarie Jimenez, CPC, CPMA, CPC-I, CANPC, CRHC has over 15 years experience in the medical field. She manages the clinical development of the AAPC exams program. She oversees the development of exam content for all certification exams and exam preparation material such as study guides and practice tests. She assisted with the development of the Medical Coding Training CPC curriculum that is used by PMCC-licensed instructors and the AAPC distance learning course. E-mail her here.

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