Medical Necessity Reviews

on Wednesday, 16 June 2010. All News Items

As RACs gear up for Medical Necessity audits no later than end of 2010, MMP, Inc. believes it is important to be aware of medical necessity reviews already being conducted by Medicare Administrative Contractors (MAC).  

Examples of issues that have already been looked at by the Alabama MAC (Cahaba GBA) was in April of 2009 when they reviewed DRG 313 (Chest Pain), 552 (Medical Back Problems without MCC) and 690 (Kidney and Urinary Tract Infections without MCC).  Cahaba’s medical review decisions were based on InterQual® Level of Care Criteria for Acute Care.

Medical Necessity Findings of this review included:

  • Documentation indicated that care could have been appropriately managed in a less intense setting.
  • The patient status billed did not match the physician’s admission order.

In April 2010 Cahaba GBA announced a new widespread review of DRG 392: Esophagitis, Gastroenteritis and Miscellaneous Digestive Disorders without MCC.  

On May 24, 2010 the Jurisdiction 4 MAC Trailblazer Health Enterprises, LLC (Trailblazer) released the findings of their review of DRG 392.  Trailblazer manages claims for Colorado, New Mexico, Oklahoma and Texas.  Trailblazer’s total annual claims volume as of September 30, 2008 was 9% of the national workload.  The only MAC with a larger national workload is the Jurisdiction 12 MAC that includes Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania who handles 10.2% of the national workload.  Information about all of the MACs can be accessed on the CMS website at:

Key points of the Trailblazer DRG 392 review:   

  • The probe evaluated claims from July 2008 through June 2009.
  • The focus of the probe included verifying medical necessity and appropriateness of the care setting.
  • The review included a random sample of 100 records from seven providers whose billing patterns were higher than their peers.  

Findings of the Trailblazer DRG 392 review:  
•    91 of the 100 claims (91%) were denied fully or partially.

o    98% of the denials were due to the level of services not being supported by the medical record documentation.
o    2% of the denials were due to incomplete documentation in the record.  

Further, the report reminded providers that “the use of consultants when making the decision regarding the appropriateness of admitting a patient to an inpatient level of care versus admitting the patient to an outpatient level of care may not impact payment decisions.”   
The entire Trailblazer article can be accessed at

It is important to be mindful of the Medicare Benefit Policy Manual Chapter 1, section that indicates that “the physician or other practitioner responsible for a patient’s care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient.  The decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient’s medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital’s by-laws and admission policies, and the relative appropriateness of treatment in each setting.”   The physician should  document in the medical record  all factors that he/she considered in making the decision to admit a patient in order to support the medical necessity of the inpatient admission.

This entire section of the Medicare Benefit Policy Manual can be accessed at:

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