Medical Necessity Documentation
It’s not news that Medicare and even private insurance payers are requesting additional documentation and requiring complex medical review of DME claims at an alarming rate. Audits have exploded over the past several years and show no signs of slowing in the near future.
Providers who’ve been in the business more than 10 years surely look back longingly at the days when claims were simply paid without needing to provide extensive proof that medical justification criteria had been met. It’s a good bet that physicians also miss the days when their medical judgment was unquestioned.
As someone who reviews 50 or more audit responses for clients each week I can understand the frustration providers are feeling. While CMS states that the goal of audits is to reduce fraud, abuse and so-called improper payments, it often feels like the process is more focused on finding a reason not to pay the claim. And unfortunately, private insurance payers seem to be following CMS’s lead, but without the same volume of requests providers are experiencing from Medicare.
The bottom line is that the industry is in the midst of a fundamental change associated with obtaining payment from insurance payers. The good news is providers can adjust to this change by sharpening their documentation processes.
Let’s start by reviewing some general steps providers can take to implement a proactive medical necessity documentation process. The first thing DME business owners and managers must understand when making decisions about the documentation process is how to differentiate documentation required to bill the claim from additional documentation that will be needed if the claim is audited.
CMS documentation checklists can be useful in this regard, or providers can create their own simplified checklists based on the information provided by Medicare. Generally, the documentation required to bill the claim will be a dispensing order (which need not be signed by the physician); a detailed written order, CMN or other required certifying statement from the treating physician; valid proof of delivery; and test results for items such as oxygen or PAP devices. The specific details vary based on the product, but in most cases it includes all documentation required by the medical policy with the exception of physician or other relevant health-care provider’s progress notes.