18 Medical Necessity Issues OK'd for RAC Review

James Carroll, for HealthLeaders Media , August 16, 2010

Nine of the 18 issues posted were also revisions of existing DRG validation issues, which were subsequently selected to add medical necessity review. These are areas where there is a dual vulnerability, where not only are the issues oftentimes considered to be medically unnecessary by the auditor, but also hospitals sometimes miscategorize the DRG as well, according to Taylor.

"There is a concern that some hospitals might be avoiding certain high-risk DRGs by tending to assign other DRGs which don't accurately describe the service, but escape audit," he says. "This will provide the RACs with the ability to make sure hospitals aren't misclassifying these DRGS into something that is a related but inappropriate DRG, in addition to making sure the cases are medically necessary."

There is no doubt that most hospitals have been preparing for the arrival of medical necessity issues for quite some time. For those that have been preparing appropriately, this arrives as an expected development, and will be "life as usual" according to Taylor. But for those who haven't prepared, this serves as the final warning that they've only got weeks until they receive their first potential denials, he says.

"While hospitals should have been preparing for this, I will make the point that it's not necessarily too late for those that haven't," he says. "Be sure you know who is going to be receiving the requests at your organization, and make sure that you can respond to these requests. One of the worst mistakes you can make is to be unprepared for the additional documentation requests that are soon to be coming."

And for those providers outside of Region B that are relieved to see your hospital is not yet susceptible to medical necessity review; don't breath your sigh of relief just yet.

"Expect medical necessity issues from the other RACs very soon," says Taylor. "This will be nationwide in no time."

James Carroll is associate editor for the HCPro Revenue Cycle Institute.
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