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Medicare’s medical necessity criteria: A mystery in the making ...continued from page 23 medical service is covered by Medicare, and if so, the amount of the reimbursable expense for that service. That is the role of Medicare contractors. Medicare has developed a complex system for developing coverage policies. Contractors first look to NCDs, which state whether Medicare will cover a particular item or service on a national basis, and often, the circumstances under which it will be covered. NCDs are binding on all Medicare contractors and on adjudicators throughout the Medicare appeals process. If no applicable NCD exists, Medicare contractors look to coverage provisions in Medicare’s interpretive manuals, or develop LCDs. LCDs serve the same purpose as NCDs, but apply only on a contractorwide basis and do not have a binding effect on adjudicators in the claims appeals process, although adjudicators must give “substantial deference” to an LCD that applies in a particular case. Numerous rules exist regarding the development and promulgation of NCDs and LCDs. For example, LCDs must be based on “the strongest evidence available,” including www.broadandcassel.com clinical trials, scientific data, or the consensus of expert medical opinion. Similarly, NCDs must be supported by a compilation of objective clinical scientific evidence that measures the medical benefits of the item or service. These and other guidelines ensure that determinations based on NCDs and LCDs are supported by reliable evidence. In the absence of a NCD or LCD, or other formal written policy, a contractor may still make a determination on a claim, but must do so based on the individual’s particular factual situation. 2 In contrast to the numerous requirements and guidelines for the development of NCDs and LCDs, very little published guidance exists regarding the procedures a contractor must undertake or the evidence a contractor is authorized to use in making individual claim determinations. Medicare policies do, however, state that contractors may not make automated claim denials (i.e., computer-generated denials that involve no personal review) in the absence of a clear written policy such as an NCD or LCD. In addition, Medicare policies require that, in making individual claim determinations, contractors follow standard guidelines We’ve made it a practice to deal with solutions. Our attorneys are available to handle a full range of services including: Health and Hospital Law Regulatory and Transactional Work for Physicians, Ambulatory Surgical Centers and Hospitals Medical Practice Consolidation White Collar Criminal and Civil Health Fraud Defense Corporate Liability, Compliance and Governance and Corporate Investigations and Voluntary Disclosure Litigation and Administrative Proceedings for Health Care Organizations and Professionals For more information, please contact: Gabriel Imperato, Managing Partner One Financial Plaza, Suite 2700, Fort Lauderdale, FL 33394 954-764-7060 | gimperato@broadandcassel.com BOCA RATON DESTIN FT. LAUDERDALE MIAMI ORLANDO TALLAHASSEE TAMPA WEST PALM BEACH for determining that a service is reasonable and necessary. Those guidelines require that contractors conclude that a service is reasonable and necessary only when the item or service is: n Safe and effective; n Not experimental or investigational; and n Appropriate, including the duration and frequency that is considered appropriate for the service, in terms of whether it is: o Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member; o Furnished in a setting appropriate to the patient’s medical needs and condition; o Ordered and furnished by qualifying personnel; o One that meets, but does not exceed, the patient’s medical need; and o At least as beneficial as an existing and available medically appropriate alternative. 3 There appear to be no guidelines that address how a contractor should determine when an item or service is “safe and effective,” “appropriate,” etc., and what evidence it is permitted to rely upon in order to come to that conclusion. This poses a problem for providers and suppliers, who benefit from anticipating which items and services receive Medicare coverage and which do not. The absence of NCDs and LCDs impacts not just a contractor’s initial determination on a claim. When claims initially adjudicated on a case-by-case basis are appealed, subsequent adjudicators will also make determinations without the aid of NCDs or LCDs. In those situations, Medicare guidance as to what evidence or authority those adjudicators may rely on is virtually nonexistent. October 2008 24 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
Is no notice enough notice Legal principles require that the government afford certain procedures (known as “due process”) before depriving individuals of important life, liberty, or property interests. Among those procedures is the right to receive adequate notice before the government undertakes to deprive an individual of one of these protected interests. Providers’ and suppliers’ right to receive reimbursement from the Medicare program is arguably one of the important property interests to which the protections of due process apply, especially when providers or suppliers have already performed the services for which they are being denied payment. It is for this reason that Medicare and its contractors are subject to strict rules requiring that proposed NCDs and LCDs be published before they become effective. Notice of this sort should also be required in the case of individual claim determinations. Providers and suppliers have an important property interest at stake, that being their right to reimbursement by the Medicare program, at least for services which have already been performed. They should not be deprived of that right without adequate notice of the information and evidence a contractor will use in making coverage determinations. Adequate notice would allow providers and suppliers to make informed recommendations to beneficiaries and adjust their treatment options accordingly. Instead, it appears that Medicare contractors and adjudicators are systematically denying claim reimbursement to providers and suppliers, whose remuneration and benefits under the Medicare program will be affected, without adequate notice of the kinds of evidence they use to make those determinations. The notice problem is magnified when the type of authority contractors and adjudicators may use includes Internet Websites, because of the vast amount of information available on-line. It is unreasonable to charge providers and suppliers with a duty of knowing which information on what Websites that Medicare will use to support its coverage and medical necessity determinations. Medicare’s vague or non-existent coverage and medical necessity standards and inadequate guidance in making individual claim determinations ultimately threaten providers’ and suppliers’ ability to practice and earn income. Without meaningful standards and useful, reliable, and consistent guidance, providers and suppliers are often left with no choice but to assume the risk of non-payment if a contractor or adjudicator deems the item or service not to be covered, or worse still, not furnish the item or service at all. Beneficiaries also have an interest in access to clear information regarding what the Medicare program will cover to foster confidence in the health care system and to allow informed decision-making on their part. Limitations on liability The Medicare Act provides financial relief to providers and suppliers by permitting Medicare to make payment for items and services for which Medicare payment would otherwise be denied in instances where the provider or supplier knew, or could reasonably have been expected to know, that the items or services were not covered. These rules are known as the “limitation on liability” provisions. Medicare contractors determine whether the provider or supplier had prior knowledge that services or items would likely be denied or whether knowledge reasonably could have been expected. Aside from having received notice from Medicare (in the form of either actual written notice to the provider or supplier, or manual instructions, bulletins, directives, etc.) that the same or similar items or services are not covered, the only other evidence of a provider’s or supplier’s fault that a contractor can consider is the provision of items and services in a manner “inconsistent with acceptable standards of practice in the local medical community.” Medicare policy states that “acceptable standards of practice in the medical community” are determined by looking to: published medical literature, a consensus of expert medical opinion, and consultations with their medical staff, medical associations, including local medical societies, and other health experts. “Published medical literature” refers generally to scientific data or research studies that have been published in peer-reviewed medical journals or other specialty journals that are well recognized by the medical profession, such as the New England Journal of Medicine and the Journal of the American Medical Association. 4 Providers or suppliers who are found at fault under the limitation on liability provisions may appeal that determination. Those whose individual claims have been denied based on evidence from Internet Websites (in the absence of formal written policy) and who did not receive any other form of written notice from Medicare that the same or similar claims were not covered, may have a good argument that their fault determination should be reversed. In order to argue this successfully, the on-line information referenced in a contractor’s notice of decision cannot be material reprinted from a source which could be considered “published medical literature.” In addition, providers or suppliers should be prepared to present evidence, perhaps by medical associations or health experts, that the consensus of medical opinion and/or Health Care Compliance Association • 888-580-8373 • www.hcca-info.org 25 October 2008
Page 1 and 2: Volume Ten Number Ten October 2008
Page 3 and 4: INSIDE Publisher: Health Care Compl
Page 5 and 6: which ensures that the understandin
Page 7 and 8: Table 1: 14 CLAS Standards U.S. Dep
Page 9 and 10: Scholarship Recipients The Four Dua
Page 11 and 12: and need emergency care (e.g., an i
Page 13 and 14: Court analyzes first case under Sta
Page 15 and 16: It was established in 1969 in respo
Page 17 and 18: and get linked up with e-newsletter
Page 19 and 20: Social networking Many compliance p
Page 21 and 22: Focus on Organizational Compliance
Page 23: Medicare’s medical necessity crit
Page 27 and 28: Exploring the question: Does this r
Page 29 and 30: “Does this really make a complian
Page 31 and 32: Certification - the recognized mark
Page 33 and 34: suffice. This potential error can b
Page 35 and 36: Introducing Compliance & Ethics Soc
Page 37 and 38: who typically sell multiple plans o
Page 39 and 40: n State OIG that fight Medicaid fra
Page 41 and 42: Coordinating external requests for
Page 43 and 44: The what, why and how of Medicare C
Page 45 and 46: The what, why and how of Medicare C
Page 47 and 48: to hear the message first. Educatin
Page 49 and 50: COMPLIANCE ACADEMIES February 2-5 S
Page 51 and 52: or whistleblower lawsuit. Moreover,
Page 53 and 54: SEC Disclosure: Managing informatio
Page 55 and 56: Upcoming Regional Conferences Octob
Page 57 and 58: SEC Disclosure: Managing informatio
Page 59 and 60: Complying with the HIPAA Privacy Ru
Page 61 and 62: Health Care Compliance Association
Page 63 and 64: HM-MDaudit_1_08.qxd 1/25/08 4:10 PM
Page 65 and 66: Complying with the HIPAA Privacy Ru
Page 67 and 68: PHI under false pretenses, that per
Page 69 and 70: Improving competitiveness and compl
Page 71 and 72: Speakers Sharon Anolik Blue Cross B
Page 73 and 74: commitment to overhaul deficient co
Page 75 and 76:
e g i s t e r n o w f o r HCCA’s
Page 77 and 78:
New principles can help advance ind
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New principles can help advance ind
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When to use a monitor Although some
Page 83 and 84:
ASKLEADERSHIP John asks the leaders
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Enforcement actions in health care
Page 87 and 88:
Corruption enforcement actions targ
Page 89 and 90:
“I am a compliance professional a
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n M. Michelle Walker, LifePoint Hos
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600 U.S. BANK PLAZA SOUTH 220 SOUTH
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