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aceventura3 · 08-17-2009, 11:45 AM

Here is a link to a report discussing "medical necessity" in Medicare. In the fourth paragraph of the Executive Summary they indicate that most of the rules are not found in the statute or even the regulations.

http://www.partnershipforsolutions.o...MedNec1202.pdf

I don't know what the answer is, but are we at least at a point where a discussion can be had on the issue on this topic?

{added} Here is another perspective on the issue:

Quote:

A physician who bills Medicare for services which he should know are not medically necessary can be prosecuted for fraud by the OIG. Violators face penalties of up to $10,000 for each service, an assessment of up to three times the amount claimed, and exclusion from federal and state health care programs. The problem is that determining medical necessity is not always easy.

The dilemma is due to several factors, the first of which is definitional. There are almost as many definitions of medical necessity as there are payors, laws and courts to interpret them. Generally speaking, though, most definitions incorporate the principle of providing services which are "reasonable and necessary" or "appropriate" in light of clinical standards of practice. The lack of objectivity inherent in these terms often leads to widely varying interpretations by physicians and payors, which, in turn, can result in the care provided not meeting the definition. And last, but not least, the decision as to whether the services were medically necessary is typically made by a payor reviewer who didn’t even see the patient.

For example, Medicare defines "medical necessity" as services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. While that sounds like a hard and fast rule, consider that CMS (formerly HCFA) has the power under the Social Security Act to determine if the method of treating a patient in the particular case is reasonable and necessary on a case-by-case basis. Even if a service is reasonable and necessary, coverage may be limited if the service is provided more frequently than allowed under a national coverage policy, a local medical policy or a clinically accepted standard of practice.

Claims for services which are not medically necessary will be denied, but not getting paid isn’t the only risk. If Medicare or other payors determine that services were medically unnecessary after payment has already been made, they treat it as an overpayment and demand that the money be refunded, with interest. Moreover, if a pattern of such claims can be shown and the physician knows or should know that the services are not medically necessary, the physician may face large monetary penalties, exclusion from Medicare program, and criminal prosecution.

Protections Against Denial

Considering the potential financial and legal liabilities tied to mistakenly filing a claim the physician believes to be medically necessary, the question becomes what can be done to protect against claims which are denied because they are for unnecessary services. Obviously, the best way to protect yourself is to avoid the denial in the first place. Here are some solutions to the problem.

You should have known. One of the most common reasons for denial of Medicare claims is that the physician didn’t know the services provided were not medically necessary. Ignorance, however, is not a defense because a general notice to the medical community from CMS or a carrier (including a Medicare Report or Special Bulletin) that a service is not covered is considered sufficient notice. If a physician was on Medicare’s mailing list as of a specific publication date, that may be sufficient to establish that the physician received the notice. Courts have concluded that it is reasonable to expect physicians to comply with the published policies or regulations they receive. Thus, no other evidence of knowledge may be necessary.

Another trap for the unwary is that, if a physician doesn’t read Medicare’s publications but delegates that responsibility to others, the physician or the professional corporation may still be held liable for what the physician should have known.

http://www.physiciansnews.com/law/802.miller.html