Medical necessity can sometimes be difficult to define. Medical necessity is a decision made by the payers. Payers never directly see the patient and their illness. Medicare defines medical necessity as services and/or items reasonable and necessary for the diagnosis and/or treatment of illness, injury, and/or improvement of the function of a malformed body member.

For any payer, even if a service is deemed medically necessary by being reasonable and necessary, coverage may be limited. The coverage may be limited if the service is provided more frequently than allowed under a local medical policy, national coverage policy, or clinically accepted practice.

If you’d like to be sure you’re supporting medical necessity for services reported, you should apply one of the following guidelines:

  • List the principal diagnosis, condition, problem, or other reason for the medical procedure or service.
  • Assign the code to the highest level of specificity.
  • For office and/or outpatient services, never use a rule-out statement. A rule-out statement is a suspected, but not confirmed diagnosis. This simple clerical error could permanently give a patient a condition that they do not have. Simply code symptoms if there is no official diagnosis.
  • Be specific when describing the patient’s illness, condition, or disease.
  • When appropriate and needed, be sure to distinguish between acute and chronic conditions.
  • Identify the acute condition of an emergency like coma, hemorrhage, consciousness, etc.
  • Identify chronic condition, or secondary diagnoses, only when treatment is provided or when the condition or secondary diagnoses impacts the overall management of the patient’s care.
  • Be specific to identify how the injury occurs.

As long as one of the guidelines is met, you should not have to worry about proving medical necessity to the payer.

If need assistance with clinical documentation to support medical necessity, check out MMI’s Clinical Documentation Improvement Course here: