Medical Necessity Can Make or Break Your Claim

Along with documentation, medical necessity is one of the most important parts of medical billing. You tell exactly how the procedure was performed, be sure to meet the criteria for medical necessity of the procedure by telling why the procedure needed to be performed.

It used to be that Medicare was the only payer that cared what ICD-9 code was used. Now all payers, including insurance companies, are looking for any reason not to pay the bill or at least delay it. ICD-9 codes have become the target for close scrutiny.

ICD-9 codes range anywhere from a three-digit code to a five-digit code. Obviously, a five digit code is more descriptive then a four digit code. Similarly, a four digit code is more accurate then a three digit code. Very rarely will insurance companies pay a medical bill with a three-digit code anymore. Three digit codes don’t give all the medical billing information necessary to determine medical necessity. They are very generic codes. It is important when a medical biller decides to use an ICD-9 code, that is the most descriptive and accurate code available. Most of the time, this means a four or five digit code is in order.

Each and every year more ICD-9 codes are added to the list. Many medical practices are stretched to their limits and are unable to keep up with the changes. They end up resorting to generic three digit codes in their medical billing. When the payer gets the claim, they deny it for a lack of medical necessity and offer to review the case if a letter of medical necessity is sent. When this comes back to the practice, the office personnel must then put together a letter. This ends up stretching their time even thinner.

This is one of the big pluses for outsourcing your medical billing, no more paper chase and you can have the knowledge that your claims will be handled with full documentation on every claim.

View all Articles by: Kathryn E, CCS-P - Retired