With clinician reimbursement, a high quality of evaluation and management documentation is needed. E/M services are the most vulnerable to billing errors due to the complication of selecting the proper code for the level of service if the documentation is not there. Knowing the differences between Medical Decision Making (MDM) and Medical Necessity is key to improve the clinician’s claims payment rate.

MDM is one of the key components of an E/M service, as well as the history and physical exam components. MDM speaks on the complexity of establishing a diagnosis and/or selecting management option(s).

Medical necessity references the appropriateness of the service provided for a certain condition and determines whether the service will get reimbursed. The American Medical Association (AMA) defines medical necessity as,

Healthcare services that a prudent physician would provide to a patient for the purpose of preventing, diagnosing, treating or rehabilitating an illness, injury, disease or its associated symptoms, impairments, or functional limitations in a manner that is: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site and duration; and (c) not primarily for the convenience of the patient, physician, or other health care provider.

Problems can arise when medical necessity and MDM are used interchangeably or when payers and practices define medical necessity differently. Medical necessity assists choosing the final level of E/M code, not the MDM alone. For every encounter, documentation must show the level of history, exam, and MDM performed were all medically appropriate and necessary. This includes documenting the medical necessity for any therapeutic interventions and ancillary studies ordered or performed.

There are no published regulations that define the medical necessity criteria for performing a certain level of history and exam for a given chief complaint. Coders and auditors must use their clinical knowledge to determine the severity of a patient’s presenting problem, however only the clinician can determine the medical appropriateness and necessity of each case reviewed and account for the standard of care.

If you’d like to learn more about E/M Coding and the changes coming in 2021, join the 2021 E/M Changes Webinar with Monica Grimmett on Wednesday, March 11th at 1 pm EST. Join here: https://mmiclasses.com/2021-e-m-changes-webinar/