Around the holidays, everyone seems to get excited about closing out the year with a bang—literally, in some cases. But there’s nothing wrong with closing out the year on a calm, gentle note—one without denials, for example. One of the best ways to avoid claim denials is to document defensibly, and to prove that your treatment was undeniably (haha—get it?) a medical necessity. So, what exactly is medical necessity? Don’t worry—that’s one term we’re well-acquainted with, and we’re willing to share all our insider knowledge with you!
What does medical necessity mean?
Defining medical necessity puts the definer (in this case, me) in a big ol’ pickle, because just about every payer has its own individual definition of medical necessity. To give you a bit of perspective, Wikipedia lists 42 different major medical insurance companies—and that doesn’t even include Medicare offshoots or supplemental insurances.
So, for simplicity’s sake (and to avoid deep-diving into 42-plus different definitions of medical necessity), we’re going to stick with the definitions provided by the Centers for Medicare and Medicaid Services (CMS) and the American Physical Therapy Association (APTA).
How does CMS define medical necessity?
Now, I wouldn’t say that CMS’s current definition of medical necessity is totally cut and dried—but this definition used to be even more nebulous. Prior to January 24, 2013, many healthcare professionals actually believed that Medicare would only reimburse claims for rehab therapy (or other skilled care) if a patient showed improvement as a result of that care. Basically, the medical community thought—as we mention in this blog post—“that no progress meant no coverage.” But (spoiler alert) that wasn’t true!
In fact, assumptions around medical necessity were so twisted and tangled that CMS ended up getting slapped with one hardy lawsuit—which it lost. As part of the resulting settlement (Jimmo v. Sebelius), CMS was forced to clarify its definition of medical necessity.
So, how does CMS define medical necessity in this post-Jimmo era? Well, as we explain in this post, to be considered medically necessary, a service must:
- “Be safe and effective;
- Have a duration and frequency that are appropriate based on standard practices for the diagnosis or treatment;
- Meet the medical needs of the patient; and
- Require a therapist's skill.”
CMS’s definition of medical necessity actually allows for a lot of flexibility. For example, it’s up to PTs to determine what, exactly, constitutes a safe and effective treatment—or what duration and frequency are “appropriate” for each patient. At the end of the day, providers must defend their treatment decisions to CMS by offering proof of medical necessity. And you know what they say: the proof is in the pudding—as long as your pudding is defensible documentation. (We’ll come back to that in a bit!)
How does the APTA define medical necessity?
In 2011—prior to the Jimmo settlement, mind you—the APTA established its own definition of medical necessity in an attempt to create a unified definition for payers and providers alike. The APTA’s definition of medical necessity (as detailed in this source) addresses the authority, purpose, scope, evidence, and value of the provided treatment. Per the APTA, physical therapy treatment is medically necessary if:
- A licensed PT determines it is so based on an evaluation;
- It minimizes or eliminates impairments, activity limitations, and/or participation restrictions;
- It is provided throughout the episode of care by the physical therapist under his or her direction and supervision;
- It requires the knowledge, clinical judgement, and abilities of the therapist;
- It is not provided exclusively for the patient’s convenience;
- It’s provided using evidence of effectiveness and applicable standards of practice; and
- The type, amount, and duration of the therapy helps a patient improve function, minimize loss of function, or decrease risk of injury (or disease).
The APTA’s definition of medical necessity is actually a little more strict than CMS’s—but that’s not necessarily a bad thing. The more thorough your documentation, the better. And if you adhere to the most stringent standards of medical necessity, your chances for claim denials drop substantially.
How do I successfully document that a service is medically necessary?
Ultimately, documenting medical necessity boils down to two things:
- documenting correctly, and
- documenting defensibly.
Part of documenting correctly is ensuring that you’re billing the correct ICD-10 code—and no, you shouldn’t just copy the codes you get from referring physicians. As we mention in this blog post, you should “apply the code that most accurately describes the diagnoses you’re actually treating.” For example, say a patient was referred for complications that occurred after a car accident. You wouldn’t simply use an ICD-10 code for the accident, but rather for the specific injuries you treated.
Now, let’s talk about defensible documentation for a moment. As we mention in our Defensible Documentation Toolkit, defensible documentation accomplishes three goals:
- It effectively communicates the patient’s status and future goals to anyone who reads it, enabling care continuity across multiple providers.
- It justifies the treatment (and the attached cost) to the payer.
- It serves as potential legal protection in the event of a lawsuit or audit—and demonstrates that the provider met the standard of care.
Truly defensible documentation is thorough, easy for any provider to digest, and can help prove that a treatment was medically necessary by virtue of being—well—defensible. So, if your treatment fulfills all of CMS’s (and potentially APTA’s) requirements for medical necessity—and you document defensibly—then you’re golden.
How do I document defensibly?
Defensible documentation isn’t as intimidating (or complicated) as it might sound. All it really takes is a little due diligence (and an extra minute or two—tops) when documenting a patient’s treatment. In fact, you can start simply by adhering to the recommendations from our 10 Defensible Documentation Tips for PTs download:
- Document every encounter.
- Make sure your documentation is legible.
- Sign and date all documentation.
- Always record the patient’s full name and identification number (if applicable).
- Include standardized tests and measures.
- Try to avoid using abbreviations.
- Be clear in your communication, and avoid giving vague plan of care instructions.
- Record the patient’s progress (or lack thereof).
- Map out measurable and specific goals.
- Justify your services through evaluation of specific limitations or functional deficits.
None of those suggestions should seem terribly audacious. (But if they do, then you probably want to review your billing practices, ASAP.) And following those tips can help you sidestep claim denials and—dare I say?—audits.
What’s an example of defensible documentation?
“A 33-year-old woman is receiving outpatient physical therapy services for right patellofemoral pain syndrome that interferes with her ability to lead crossfit programs at the local fitness center. Interventions on this visit include lower-extremity flexibility and strengthening exercises, proprioceptive training activities on a mini-trampoline, and modifications to the lower-extremity kettleball techniques she teaches in her classes.”
To properly document this session, you’d start by picking the correct ICD-10 code for patellofemoral pain syndrome: M22.2X1. At that point, you’d determine which CPT codes correspond with the different aspects of the treatment: 97110 (for the leg raises and ITB stretch), 97112 (for the step-downs and training on the mini-trampoline), and 97530 (for the modified American kettleball swings).
For the purpose of this example, we’ll focus on documenting CPT code 97112 (Neuromuscular re-education of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception). Let’s say that initially your documentation read as follows:
- Step-downs x 10 reps
- Mini-tramp landings x 10 reps
But, that documentation is not defensible; in fact, one might argue that it reads more like a gym record than a clinical note. The treatment description is vague, it’s difficult to pinpoint how much therapeutic guidance was provided (if any), and it doesn’t effectively communicate the patient’s status or justify the treatment. Instead, the documentation should read something like this:
- Controlled descent from 6” step standing on R LE x 10 reps; verbal cues for alignment of hip, knee, and ankle
- Mini-tramp controlled landings to half-squat x 10 reps; verbal cues for alignment of hip, knee, and ankle
- Required reduction in sets and reps today due to increased pain
This documentation is much more thorough, and it’s much easier to see how and why a therapist’s input was needed during treatment. It also gives an indication of the patient’s status, as well as what’s typically included in her plan of care.
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Documentation is a cornerstone of ensuring not only high care standards, but also accurate payment—and keeping it defensible it is the key to documenting for medical necessity. So double on down and take the time to make sure your documentation is as solid as your therapeutic input.