Decode Medical Necessity: Boost Your Healthcare Practice's Revenue Cycle
Sanbir Kapoor
CEO at Unify Healthcare Services | CEO at Unify Logistic Solutions | CEO at Unify Holidays | CEO at Unify Medicraft | Lead Operator & Strategic Director
Healthcare providers often miss out on the aspect of medical necessity, but it is crucial to attain adequate revenue. This is one of the criteria for insurance providers in reimbursing medical claims. Prioritizing medical necessities can help healthcare providers streamline administrative management.??
In this blog, we will understand the basics of medical necessity and learn how healthcare providers can navigate through this complex factor.??
Let's begin the blog by establishing the term!?
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Defining Medical Necessity??
Under the insurance policy of a patient, any diagnosis, treatment, or procedure must be to rebuild health and cure a medical problem. In short, patients are only provided with insurance for medically necessary conditions and not for further enhancement. In medical billing, this is known as a medical necessity.??
For healthcare providers, they get reimbursement only for treating ailments that are medically necessary and covered in the insurance policy.??
There are five essential factors of medical necessity, and they are:?
Diagnosis, Clinical Guidelines, the acuteness of symptoms, prognosis, and cost-effectiveness.??
Medical necessity is also defined in both Medicare and CMS guidelines highlighting its importance.??
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Medically Necessary Services Included in Medicare??
Both Medicare Part A and B define medically necessary services.??
Medicare Part A??
Medicare Part B??
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Healthcare providers are constantly struggling to keep up with the medical billing process and maintain revenue cycle management effectively. Amidst this, if they fail to fulfil a medical necessity, their practice can lead to reimbursement leakage.??
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Lack of Medical Necessity Could Result in Claim Denial!?
If there is absence of medical necessity in a claim, the insurance company may deny it. Healthcare providers may also face some issues and they are:?
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Non-Reimbursement??
The insurance provider may not pay the due revenue to healthcare providers and practices.?
Responsibility on Patients??
The responsibility of reimbursement may shift to the patients, leaving them dissatisfied.??
Increase in Scrutiny??
Such denials may put healthcare providers in a place of scrutiny leading to even more denials.??
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Preventing Medical Necessity Claim Denials!?
Healthcare providers need to fix the issue of medical necessity to ensure adequate revenue. With a few easy tips, you can prevent your healthcare practice from denials, and they are:??
Identify the Reason for Denials?
The first step in rectification is identifying the reason behind denials. You must find out common reasons for denials such as inaccurate coding or lack of medical necessity.??
Verify Coding & Documentation??
The second step is to ensure that all documents and medical records are up-to-date and correct. You must double-check if the codes match with the rendered healthcare services. Make sure the documents showcasing medical necessity are complete.??
Communicate with Payer Representatives??
When there are denials, the best way can be to communicate with the insurance payer and find out the reason behind the denials. This way you can understand the further course of action for resubmissions.??
File an Appeal??
The last step is filing an appeal to recover the lost revenue due to lack of medical necessity. You must file the appeal after making sure that all documents and evidence are accurate and complete. Do follow up the process after filing the appeal as well.??
Final Thoughts??
Medical Necessity is an essential element in medical billing and healthcare providers must prioritize it. It is crucial to attain adequate revenue and keep the healthcare practice profitable. This will help healthcare providers reduce the risk of denials, maintain accuracy, and improve efficiency.??
Healthcare providers can optimize their process by following the above-mentioned tips. However, if they still feel the burden and continue to face hurdles, they can choose to outsource medical billing services. This will maximize their reimbursement and uplift the operational management leading to a better bottom line.??
Prioritizing medical necessities in revenue cycle management is crucial for streamlining operations and enhancing financial performance. This approach not only ensures better resource allocation but also supports improved #patientcare.