So, here are a couple of truths about getting reimbursed by insurance:
- You must prove that your services were “medically necessary” to get paid.
- Medical necessity can be frustratingly subjective and open to interpretation.
With those in mind, your odyssey into capably and confidently billing insurance for your private practice continues.
When you grasp how to prove medical necessity you’ll be able to document your treatment defensibly. And when you can routinely document defensibly, you will be able to avoid claim denials and get paid appropriately with less stress and uncertainty.
Ready to get going? Good! Let’s define our terms:
What Do Payers Mean by “Medical Necessity”?
Unfortunately, in the world of medical billing, simply looking up the term “medical necessity” provides little absolute clarity. Every payer defines medical necessity in its own way, on its own terms. Because medical insurers have chosen to be so obtuse, it is best to use the CMS definition:
The Centers for Medicare and Medicaid Services (CMS) defines medical necessity as services that are:
- safe and effective
- long enough (duration) and often enough (frequency) to align with the diagnosis or treatment standards
- meeting the therapeutic needs of the client
- in need of a therapist’s expertise and not primarily for your or your client’s convenience
It’s important to note that Medicaid is a joint operation. A federal entity, Medicare is run in conjunction with state governments. How this is accomplished varies. For instance, you should know that in California and other states Medicaid adds the following parameters to prove medical necessity:
- service is aimed at relating the functional impairment linked to the diagnosis.
- the client is significantly impaired in an important area of life functioning linked to the diagnosis.
- The treatment significantly diminishes the aforementioned impairment.
In other words, to be reimbursed by Medicaid, it is vital that you specifically identify and note the critical ways the client’s life has been impaired by the condition you diagnosed. Prove you are helping to treat a client’s impairment by showing how you are targeting the symptoms of a disorder listed in the DSM.
How to Document Your Client’s Impairment
You’ll include your client’s impairments in their progress notes. Progress notes need to accurately represent the service provided. It is where your proof resides. The format is up to you as long as you include the essential elements.
Be brief, detailed, and clear. Specificity is a very good thing.
Again, overall, you’ll want to focus on specific issues regarding functioning. You want to list symptoms that impact key parts of your client’s life.
Ultimately, Documenting Medical Necessity is a Two-part Deal
1. Document correctly
To document correctly, be absolutely sure you’re using the proper CPT billing codes. Use the code that most accurately represents your diagnosis and what you are specifically treating at the time.
2. Document defensibly
Defensible documentation isn’t rocket science. It’s really just an exercise in diligence as you note your client’s treatment. To keep you motivated, set your goals when you take notes:
A: communicate client status and goals fostering the ability for any reader to understand, allowing for uninterrupted care regardless of provider
B: capably justify the treatment and cost to the payer
C: afford legal protection should you need it in the event of legal action or a payer audit
In fact, you can start simply. Consider following these 10 Defensible Documentation Tips for PTs below. Though intended for physical therapists, sticking appropriately to the guidance will steer you in the right direction:
- Document every meeting.
- Make sure all documentation is legible and coherent
- Sign and date all documentation.
- Never forget to record your client’s full name and ID number.
- Include standardized tests and benchmarks.
- Avoid using as many abbreviations as possible.
- Prioritize clarity; avoid noting vague care instructions.
- Record your client’s progress (positive or negative).
- Plot clearly measurable and specific treatment goals.
- Explain your services via evaluation of the specific limitations and/or functional deficits present.
Adhering to those suggestions should help you circumvent claim denials and undue attention to your claims.
Software and My Support Can Help
Taking accurate, detailed progress notes is obviously a crucial part of providing credible therapy services. More than just helping you get reimbursed, the notes help you provide correct treatment and harmonize your work with other professionals involved in treatment. There are software and apps available to help make the whole medical necessity process work optimally. When you get the hang of it, you won’t feel bogged down with extra work.
Check out this amazing Webinar, “Don’t Panic: How to pass a rigourous insurance audit”. We discuss documentation standards in depth and how to meet medical necessity and pass an insurance audit with flying colors!
Also, I currently run a Facebook group for insurance billing for Telehealth to help you in real-time. You can talk things through with others who are looking to master telehealth and all that is involved. When you are ready, link here: http://bit.ly/2kKfZXp and join us soon to start making teletherapy billing happen for you.