Vendors, hospitals scramble to meet 'medical necessity'
Vendors, hospitals scramble to meet 'medical necessity'
Preventive stance necessary with increased government scrutiny
As the federal government continues to expand the scope and funding of its Medicare fraud and abuse initiatives, health care providers are being compelled to take a preventive stance on the issue of medical necessity. When diagnoses and procedures don't match up properly, Medicare not only won't pay, it may threaten criminal prosecution. Although the Baltimore-based Health Care Financing Administration's (HCFA) requirements haven't changed, its auditing and enforcement capabilities have.
The Health Insurance Portability & Accounting Act, which went into effect last January, allocated more than $100 million in additional funding to combat fraud. Instead of costly and time-consuming manual audits, HCFA now has an automated "artificial intelligence" information system that screens claims line by line (with 23,000 line items in the program) and kicks out noncompliant claims.
With that in mind, software vendors are scrambling to offer tools that allow providers to screen for medical necessity and correct coding initiative errors prior to the filing of claims.
Merle West Medical Center in Klamath Falls, OR, which uses Meditech for its main health information system (HIS), has combined the elements of two software programs to enable it do upfront medical necessity screening, says Jani Greene, RNC, clinical coordinator for information systems.
Because Canton, MA-based Meditech's system is a proprietary system, it is not able to interface easily with other computer software, Greene explains. For that reason, software dictionaries created by Omega Systems Inc. in Naperville, IL, are combined with a front-end piece designed by Boston-based Iatric Systems, a vendor that writes software in Magic, the Medi tech computer language, she adds. These dictionaries take current procedural technology (CPT) codes and identify all the ICD-9-CM (diagnosis) codes that will show medical necessity, she adds.
"Iatric provides the tools to capture the data that can then be evaluated before the bill is sent to Medicare," she says. "Omega scrutinizes the charges to know what goes in the covered and noncovered [slots] so a clean bill can be sent. It's a joint venture between the two companies."
Hospitals with other HIS systems, such as HBOC or SMS, would be able to use Omega's Medical Necessity Pre-Service Module product by itself, Greene notes. At Merle West, the complete process works like this, she says:
A paper charge sheet goes to the physician's office, with the idea that when the physician sends the patient to the hospital to have blood work done, the sheet is filled out and includes the diagnosis and the accompanying ICD-9-CM code. "We encourage them to give us the code, which happens about 50% of the time, but sometimes it's just the diagnosis," Greene says.
The patient presents at the hospital, and the registrar doing the admission can enter up to four different ICD-9-CM codes in four fields on the computer screen. There also is a place where the wording of the actual diagnosis can be typed in for each of the codes.
Search with a string
"What happens with the Omega product is that there will be a string search," Greene explains. "In other words, if someone comes in with a headache, you will type in 'head,' and it will do a search and show you choices, such as 'migraine,' etc. It narrows the field, and it's not based entirely on how the coding is written. The string search allows you to search as doctors speak rather than how the regulations spell it out."
Meanwhile, when lab staff order a test, they are alerted by the computer if the test fails medical necessity criteria, which requires a waiver to be signed, she says. "What they want you to do before you draw [the blood for] the test is see if it's going to pass based on the coding. If not, you ask them to sign a waiver."
If the patient is supposed to have a complete blood count, for example, and the physician has specified three ICD-9-CM codes - perhaps codes indicating diabetes, trouble breathing, and a heart problem - the test would "fail" medical necessity. If the code for fever had been added, it would have passed, Greene explains.
The software checks to see if the patient is on Medicare. If so, it does a comparison between the ICD-9-CM code and the CPT code that was put in at admission. The CPT code is attached to tests in the billing module. If these don't match, it will come up as a "fail."
The lab staff must then answer "yes" or no" as to whether the waiver or advance beneficiary notice (ABN) for persons on Medicare has been signed. "The way I run it," Greene says, "they can take a look at the ABN dollar amount for the test, which comes from the billing dictionary. There might be four tests; two of those don't pass, and the next field shows the costs of the failed tests." The lab person, then, is able to tell the patient how much he or she would have to pay for the tests that didn't meet medical necessity and thus won't be covered by Medicare, she adds.
The decision was made for the hospital to not have the patient sign the printed waiver, she notes. "We've decided not to do that for the time being. We've chosen to keep the ABN and the tests check-marked on the original piece of paper the physician sent."There also is a record in the computer to let the billing person know whether the waiver has been signed so the patient can be billed.
The problem with the process to this point, Greene points out, is that while the hospital has added the tools to accurately determine medical necessity, in doing so it has created a lot more work. "This part didn't streamline the process enough," she adds. "It gave people more lists to double-check - whether or not the pass-fail had happened, whether or not we needed to call the doctor to double-check the ICD-9 codes and see if they want to give us another code. Plus, [staff] still had to do their regular jobs."
For that reason, Greene says, Merle West is now in the process of automating that crucial back-end work - again in conjunction with Iatric - with Omega's back-end medical necessity product, the Correct Coding Initiative Module.
Without the back-end piece, she adds, "non-covered tests are not put in the noncovered slot for Medicare. Once the test comes back as being denied by Medicare, no one is taking the next step to bill the patient, because they're never sure whether the patient has signed the release. There's now a way of capturing that release information, so we can actually bill the patient. It's not OK with Medicare not to try to recoup those dollars."
As for the status of that back-end automation, "we're now at the stage where we have sent the codes to Iatric to populate the dictionaries, and we have worked on holding the files so we can retrieve the 'yes' or 'no' waivers," she notes. "Once that's implemented, it will all flow. Billers will get a tool that's workable, as opposed to trying to work off lists and being overwhelmed with paper."
The hospital now has about 500 releases signed per week from the lab, Greene adds, "lists that I can run to show who passed and who didn't, but that's still tedious. When Omega drops in, that process gets automated. [Staff] only deal with the ones that don't pass."
It takes a collaborative effort
Merle West has been using its front-end medical necessity program since early May, she says. All staff have received training, including physicians' staff, who were offered coding classes. "A lot of process changes have to take place," Greene notes. "For example, the physicians' offices were using [ICD-9-CM] books that were more than two years old - and [ICD-9-CM] codes were changed two years ago, changing from three digits to five."
There also is a trust issue involved, she points out, with staff long accustomed to doing things manually wondering, "Does the computer really know?" Once they realize it does, Greene says, it speeds up the process.
Collaboration is important, she adds. "Unless everybody plays together, it doesn't work. Each department could think they're doing their portion well, and that's not enough."
Greene points out that in the coming year, hospitals across the country likely will not get paid for things that they have gotten paid for in the past. "These are not new [medical necessity] requirements," she says. "Medicare was never intended to be an insurance company for the elderly, but rather to offset [the costs of] catastrophic illness. It's not supposed to be for screening."
Although it's too early for any statistics on the results of the hospital's medical necessity program, Greene says she anticipates it eventually lowering accounts receivable days. "We now have the tools to figure out what's going on, and before we didn't have that."
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