How to Stop Medicare Claim Denials Due to Medical Necessity

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With the shift towards value-based care coupled with the ICD-10 coding requirements, Medicare claim denials for medical necessity will most likely continue to plague your healthcare revenue cycle. Because medical necessity denials usually stem from inadequate documentation on the claims, the first line of attack to conquer the problem must come from physician documentation. ICD-10 calls for greater specificity than ever before. What may have passed under ICD-9 as proper coding for medical necessity may be insufficient today.

[CASE STUDY] How to Reduce Claim Denials - Read Case Study

Clinicians or Coders?

After the initial intake process, the success of claims depends heavily on the details documented by your care providers. Yet it's unreasonable to expect physicians to memorize what could be classified as administrative minutia when patient health is on the line. It takes a team to provide quality care and to ensure proper compensation. But technology to help at the point of diagnosis and care delivery can go a long way towards eliminating necessity denials, which renders the work of the claims department more fruitful.

AI: Automated Intelligence and Artificial Intelligence

When the physician has the right tool at hand to comply with ICD-10 and Medicare documentation standards, hospitals can slow, or even stop the revenue bleeding from necessity denials.

Natural language processing (NLP) is a technology that can analyze physician notes and documentation, searching for word combinations and relationships that denote clinical meaning. Like internet search algorithms and spell checking applications, NLP learns to detect language that may not be specific enough to explain medical necessity on a Medicare claim.

With the right AI technology, physicians, while making their clinical notes, can receive prompts and alerts to indicate a potential coding problem up ahead. In real time, the clinician can alter the documentation and add greater specificity as required.

Learn how to speed up your claim reviews process by 500% - Read Case Study

Help for Revenue Cycle Managers

Not only does NLP and machine learning assist physicians at the point of care to be more detailed, it also renders itself useful to your back office in charge of managing denials. Because NLP searches unstructured data, that found in free-form notes, it can boost your claim denial analytics. Denial responses from your Medicare Administrative Contractor can be scanned. Patterns of improper coding and medical necessity unsupported by specific documentation required by Medicare come to light. You can then identify any emerging error trends or tendencies and take appropriate steps to remediate them.

Keeping Current on Changing Codes

Of course, the seismic shifts at the Center for Medicare and Medicaid Services doesn't help much. You scramble to stay on top of all the changes and new requirements, but it's tough to overhaul coding databases seemingly on the fly. It may become more cost-effective to partner with a service provider dedicated to maintaining an up-to-the-minute ICD database and who has the expertise to help prevent medical necessity denials or advocate for you when they do occur.

Suffering Medicare claim denials for medical necessity takes a bite out of the bottom line. With overall Medicare compensation on the decline, avoiding them should be paramount. Help your physicians work with your team to properly code and document medical necessity at the point of care. Utilize your unstructured and structured data to pinpoint recurring issues that result in denials. Choose IT tools that can open up information silos and centralize data, not only for analysis, but also for claim reviews and appeals. Make sure your coding database remains fresh and accurate. Automate as much of your claims process as possible to reduce human error. Finally, choose a health information partner capable of implementing a technology system that leverages NLP and AI for more efficient use of your data.

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