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Read the article Diagnosis Coding and Medical Necessity: Rules and Reimbursement by Janis Cogley located on the AHIMA Body of Knowledge (BOK) at http://www.ahima.org.

This article discusses how Medicare Carriers and Fiscal Intermediaries use coverage determinations to establish medical necessity. When the condition(s) of a patient are expected to not meet medical necessity requirements for a test, procedure, or service, the provider has the obligation under the Beneficiary Notices Initiative to alert the Medicare beneficiary prior to rendering the service. The Medicare beneficiary is notified via the Advance Beneficiary Notice (ABN) (see page 235 in Appendix B).

The Medicare beneficiary may choose to complete the ABN and provide out-of-pocket reimbursement for the service, or may elect to not have the service performed. If the provider fails to alert the Medicare beneficiary with an ABN, then the facility may not balance bill the patient for the noncovered charges denied by the Medicare Carrier or FI.

Scenario

You are the Revenue Cycle Coordinator for Anywhere Hospital. The Decision Support Department at Anywhere Hospital is concerned because the volume of remittance advice remark code #M39 (The patient is not liable for payment for this service as the advance notice of noncoverage you provided the patient did not comply with program requirements) on Medicare remittance advice logs has increased over the past 3 months. Further analysis of the denied claims shows that 75% of the claims have code 93798, physician services for outpatient cardiac rehabilitation with continuous ECG monitoring, present. Therefore, they are requesting that the Revenue Cycle Team perform further investigation for this issue.

After auditing the remittance advice logs and medical records for a sample of cardiac rehabilitation claims, the Revenue Cycle Team has determined that medical necessity is not being met for code 93798. Further, they have discovered that a new...
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