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Understanding the New Medical Necessity Documentation Requirements

March 1, 2016

Medical necessity documentationFlorida was at the forefront of enhanced medical necessity documentation for major joint replacement surgeries when the state’s Medicare Administrative Contractors (MACs) issued detailed coverage requirements in 2011. Following Florida’s lead, several other states ratcheted up their documentation requirements, and in 2014, HHS Secretary Kathleen Sebelius promulgated similar medical necessity requirements for CMS providers on a national level. 

The driving force behind the enhanced documentation requirements was preventing improper payments and reducing reimbursement errors and overpayments; major joint replacement surgery is one area under intense scrutiny for auditing projects to identify and recover incorrect reimbursements. Many orthopedic practices have felt the sting of these auditing measures when their documentation practices fell short of adequately proving medical necessity. 

Know Your State’s Requirements

While CMS sets coverage requirements through national coverage determinations (NCDs), regional MACs are also authorized to issue local coverage determinations (LCDs) for medical procedures, and in fact, most coverage determinations are authorized at the local level. 

You can find your state’s requirements from the Medicare Coverage Database. Using the “quick search” box on the right of the screen, you can select NCDs, LCDs, or both, and choose your state or region from a drop-down menu. You can also search by CPT code or keyword such as “joint replacement.” Joint replacement LCDs are generally requiring more information to substantiate medical necessity. 

Four Key Requirements of Medical Necessity

CMS audits revealed that documentation failed to clearly present the patient’s story, including history, treatments, and other factors that led to the decision to perform major joint replacement surgery. The four areas of weakness included:

  1. Proving end-stage joint disease. Diagnostic imaging should demonstrate subchondral cysts or sclerosis, periosteal osteophytes, joint space narrowing, bone-on-bone articulation, or similar condition. In addition, the patient’s history of functional disability (onset, duration, aggravating factors, etc.) should be clearly documented, as well as a summary of attempted conservative treatments, such as anti-inflammatories, weight loss if indicated, physical therapy, braces and supports, and corticosteroid injections. 
  2. Demonstrating distinct structural abnormalities. Structural abnormalities generally fall into three categories: Fractures, avascular necrosis, or malignancy. In the case of total knee replacement, for example, conditions such as distal femur or proximal tibial fracture, malignancy of the knee joint, or avascular necrosis of the knee meet the structural abnormality requirements. 
  3. Conditions necessitating a revision procedure. While documentation requirements vary a bit between MACs, most require one of the following coverage indicators to be present: a) loosening, failure, or fracture of a component or periprosthetic fracture, b) infection, c) malalignment, or d) instability. In the case of infection, the record should include pathology reports and course of treatment for the infection. 
  4. Potential risks versus benefits of the procedure. Many LCDs are now requiring, in patients with significant comorbidities, that the risks and benefits of any noncardiac surgery, be adequately addressed and documented in the patient record. 

Document the Details of Patient Visit

The record should also include supporting details, such as:

  1. The patient’s experience. Document falls, physical limitations (cannot walk up steps to front door, can no longer participate in exercise activities), daily living restrictions (cannot raise arms to dress herself), and other ways the disability affects him or her. 
  2. Failed conservative therapy. Examples might include medication allergies or experiencing no relief from therapeutic injections. 
  3. Medication history. Include a list of all NSAIDs given, how long they were used, and how they affected the patient’s condition. 
  4. The nature of the patient’s pain. The H&P should discuss limitations in range of motion, note any crepitus or effusion, and describe the degree of pain and tenderness. 

If you have any questions about medical necessity for your joint replacement procedures, contact us today for a coding, billing, and documentation consultation. 


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