Increasing use of imaging services and rising costs for Medicare have not been kind to radiology providers. Congress has issued several mandates to the Centers for Medicare and Medicaid Services to control these costs and to ensure quality data. Unfortunately, there is nothing radiology providers can do about these requirements except deal with the end result, which often means less income.
Radiology providers can do something, however, about the claims that Medicare and other third-party payers deny because the services billed are not considered to be medically necessary. There are steps you can take and management processes you can implement to reduce those denials. To do this, of course, requires a little elbow grease and cooperation on the part of referring providers as well as your testing facility's radiologists and staff.
Be sure you understand the definitions of medical necessity with which you must comply, including those used by Medicare and non-Medicare payers.
Although they will differ, most definitions incorporate the terms reasonable and necessary or appropriate in light of clinical practice standards.
The Medicare program defines medical necessity as services or items reasonable and necessary for the diagnosis or treatment of illness or injury (and within the scope of a Medicare benefit category). Note, however, that even if CMS considers a service to be reasonable and necessary, coverage may be limited.
Even more important than the CMS definitions are the definitions that your payers give to medical necessity. You may find those definitions on your payers' websites, but if you don't, request them in addition to their clinical review criteria.
In 2005, the American Medical Association issued the fourth edition of its Model Managed Care Contract, which is designed to help physicians negotiate with health plans (www.ama-assn.org/ama/pub/category/9559.html). Supplement 1 of the contract defines medical necessity as follows:
"Healthcare services or procedures that a prudent physician would provide to a patient for the purpose of preventing, diagnosing, or treating an illness, injury, disease or its symptoms in a manner that is (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site, and duration; and (c) not primarily for the economic benefit of the health plans and purchasers or for the convenience of the patient, treating physician, or other healthcare provider."
COVERED OR NOT?
Become knowledgeable about Medicare's national coverage determinations (NCDs) and local coverage determinations (LCDs) for radiology services. Both sets of guidelines, as well as the guidelines you probably won't get from non-Medicare payers (see below), are very important to submitting medically necessary claims.
CMS develops its NCDs through an evidence-based process; currently, there are 29 NCDs for radiology services (See Information Sources). All Medicare contractors must apply these national guidelines as well as the frequency limitations that CMS establishes. If the services supplied to the Medicare beneficiary exceed a published limitation, claims may be denied.
Medical directors employed by Medicare contractors develop LCDs on a variety of topics, as needed, in addition to those covered by NCDs. Although the LCDs can be more detailed or specific than NCDs, they must be consistent with CMS's national guidance. LCDs and NCDs include the CPT codes covered for a procedure, indications and limitations of coverage and/ or medical necessity, and ICD-9-CM codes that support medical necessity. In other words, they contain key points you need to know to ascertain whether a referral will be paid.
Unfortunately, the coverage determinations of non- Medicare payers are not so straightforward or accessible. Some of these payers make their guidelines public, but most consider them proprietary and do not share them with physicians.
"In the case of non- Medicare payers, we're often left with the question of whether a procedure is covered or not," one radiologist said. "Sometimes the only way to know whether something is covered is when the claim gets denied or paid. You're behind the eight ball from the start, so you end up having to appeal the denial."
COVERAGE GAPS
Generally, the coverage provided by these commercial payers must be as inclusive as Medicare's coverage. But radiologists or, more likely, their practice managers must be prepared to read the individual contracts and determine coverage provided. Even hiring an outside expert to analyze the contract before it's signed can, in the long run, help save you money.
Prior authorization also comes into play for non-Medicare payers, and it's up to you to find out which payers require this if they don't tell you up front. Better yet, assume that you need prior authorization and just call the payer. But be sure to make the call before the patient arrives for the appointment. While on the phone, write down the date of the call and get the name of the person who gave (or did not give) you the authorization. Getting the decision in writing is, of course, the best course, and you could ask to have the decision faxed to you so you can prove authorization.
