Knowledge Base Article

People learn in different ways – some of us are visual learners, some auditory learners, some “hands-on” learners – overall various sources report between three to seven styles of learning. One hard-knocks way to learn is by failure. Medicare claim denials after medical review are an example of this form of learning. It appears from the numbers below that hospitals in some states are learning about the documentation requirements for spinal fusion services. Maybe your hospital can be proactive and learn from others’ mistakes instead of from your own.

This month two Medicare Administrative Contractors (MACs), Palmetto JM and Noridian JF, released findings from targeted and probe reviews of DRG 460, Spinal Fusion except Cervical without MCC. Of the six state areas involved in these reviews, the reviews in three state areas – North Carolina, Virginia/West Virginia, and Oregon – were discontinued with denial rates of 13.8%, 10.7% and 9% respectively. In Palmetto’s JM Jurisdiction (North Carolina, South Carolina, Virginia and West Virginia) this represents a substantial improvement from an initial probe denial rate of 65%.

The three remaining states – South Carolina, Montana, and Washington - will remain under a service-specific targeted medical review for DRG 460. The major reason for denials in all states is that the documentation does not support that the services were reasonable and necessary. As you can see from the examples below, this is more commonly due to insufficient documentation of supporting elements rather than procedures performed without a covered diagnosis.

Some of the specific examples of how documentation failed to support medical necessity include:

• There was no documentation of pain impacting the functional ability of the beneficiary, despite conservative treatment.
• There was no documentation of conservative measures/treatments failed.
• There was no documentation of neurological impairment-spinal stenosis.
• There were no X-ray, CT or MRI results submitted that support advanced degenerative changes, mechanical instability, and deformity of the lumbar spine or neural compression that would require this type of procedure.
• No documented operative report submitted / no medical necessity for procedure.
• Procedure documented as "investigational."

Since insufficient documentation is the culprit for most denials, hospital staff must work as a team with the operating physicians to ensure the medical record contains the necessary elements to support coverage. Some possible actions to ensure complete documentation are:

• Require a copy of the physician’s office note H&P that explains past treatments and patient response to be included in the hospital’s medical record;
• Educate physicians who perform these procedures about the documentation requirements;
• Make sure UR and CDI staff work together to review these types of records for the required documentation.

The probe and targeted review findings of the various MACs are great instructional tools for learning the details of coverage and documentation requirements. So whatever your style of learning, it is easier on your hospital’s finances to learn from instruction than from experience.