Coding Strategies

The True Meaning of Medical Necessity Might Surprise You

coding strategies

The True Meaning of Medical Necessity Might Surprise You


Every time we see a patient, we decide what's wrong with him, if anything, and what to do about it. Right? Well, maybe not every time. Sometimes we look at a patient and decide that nothing is wrong, but he decides he wants to redecorate anyway. If a brown-eyed patient wants baby blues, we smile, do as he asks and bill him our usual and customary fees.

However, in the insurance world, you're entitled to get paid for providing services and materials only if you meet two conditions. First, what you're doing must rise to the level of medical necessity. Second, what you're doing must not be contractually excluded in some way.

Working backward, it's fairly easy to understand if and when something is excluded. If you read your contracts — and you will or pay the consequences — then you'll know what is and is not excluded.

For example, Medicare excludes all contact lenses, regardless of medical necessity, unless they fall under two categories — the contact lens correction of aphakia and therapeutic bandage contact lenses (National Carrier Determination Policies 80.4 & 80.1).

Insurance companies have their own exclusions, and your staff should determine what exclusions might limit coverage for a patient before you see him. We'll talk more about this issue in April and May.

The Real Definition

So what about medical necessity? I'll bet that nine-out-of-10 people reading this can't define the term in a meaningful way, and certainly not according to the definitions any insurance companies use.

If I'm right, then I ask you: if you can't define medical necessity, how in the world are you to abide by it?

In 1999, the Council on Medical Service adopted the American Medical Association definition of medical necessity. Something is deemed medically necessary when it meets the following criteria: Healthcare services or products 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: (1) in accordance with generally accepted standards of medical practice; (2) clinically appropriate in terms of type, frequency, extent, site and duration; and (3) not primarily for the convenience of the patient, physician or other healthcare provider.

Almost every insurance company also has adopted this language. Some have altered it to exclude "experimental tests and procedures," but we can use this definition to determine if what we're doing is medically necessary and to appeal unjustified rejections when they occur on this basis.

Cosmetic contact lenses don't meet the definition because they're for the convenience of the patient. You can't treat keratoconus with leeches because it's not "in a manner that is in accordance with generally accepted standards of medical practice." Also, you can't treat keratoconus with Intacs in the eyelid because it's not inserted in a "clinically appropriate site." See what's going on here?

Using Your Knowledge

So, our newfound knowledge of medical necessity can guide our actions. What is and is not a medically necessary contact lens changes when you know what you're talking about. Does it not?

In next month's column we'll look at some myths, lies and other unprofitable thoughts that are keeping us from reaching our goals. CLS

Dr. Newman has been in private practice in Dallas, Texas since 1986 specializing in vision rehabilitation through contact lenses as well as corneal disease management, optometric medicine and refractive surgery.