While the issue of coding for medical necessity may focus on ICD-9-CM diagnosis coding and the focus of this publication is HCPCS coding, we have received many questions in the past few months regarding this topic. Therefore, we are publishing this article as a service to our readers.
What is medical necessity?
Medicare is required by statute to pay for services that meet medical necessity. This is defined as services and items found to be reasonable and necessary for the diagnosis or treatment of illness or injury, or to improve the functioning of a malformed body member.
Types of Medicare coverage policies
Medicare has two types of coverage policies: National Coverage Decisions (NCDs) and Local Medical Review Policies (LMRPs). The Centers for Medicare & Medicaid Services (CMS) develop NCDs while Medicare contractors have the authority to develop LMRPs.
National coverage decision is defined as “a decision that CMS makes regarding whether to cover a particular service nationally under title XVIII of the Act. An NCD does not include a determination of what code, if any, is assigned to a service or a determination with respect to the amount of payment to be made for the service “ (Federal Register, Vol. 68, No. 216, page 63715, November 7, 2003). NCDs are binding on all Medicare carriers, fiscal intermediaries (FIs), Quality Improvement Organizations (QIOs), Program Safeguard Contractors (PSCs), health maintenance organizations (HMOs), competitive medical plans, and health care prepayment plans.
LMRPs are developed considering medical literature, the advice of local medical societies, medical consultants and public comments. Contractors publish LMRPs to explain how a service should be coded and when it will be considered “reasonable and necessary”. LMRPs only apply to the geographic area served by the contractor. Medicare contractors may make coverage decisions at their own discretion when a specific national coverage decision does not exist. LMRPs may not conflict with national coverage decisions, but they may supplement them.
An LMRP may contain any or all of the following provisions: coding, benefit category, statutory exclusion, and medical necessity. Some contain only a single type of provision, while others may have all four types.
In addition to LMRPs and NCDs, on November 11, 2003, a final rule was published establishing local coverage determinations (LCDs). The main difference between LMRPs and LCDs is that LCDs consist only of “reasonable and necessary” information, while LMRPs may also contain benefit category or statutory provisions.
Effective December 7, 2003, Medicare contractors began issuing LCDs instead of LMRPs. The term LCD refers to both reasonable and necessary provisions of an LMRP and an LCD that contains only reasonable and necessary language. Any non-reasonable and necessary language will be communicated to providers through articles. Over the next two years, existing LMRPs will be converted to LCDs and articles.
Role of coding in LMRPs
LMRPs may describe the national and/or local coding rules that pertain to a given service. According to the Medicare Program Integrity Manual, “the presence and use of billing codes (e.g. HCPCS, revenue codes, RUGs, etc), either describing a specific category of product/service or describing products/services not otherwise classified…does not automatically guarantee coverage or payment.” LMRPs typically identify the following coding information:
- Type of bill code
- Revenue codes
- CPT/HCPCS codes
- ICD-9-CM codes that support medical necessity
- ICD-9-CM codes that do not support medical necessity
- Non-covered ICD-9-CM codes
- Coding guidelines
Medicare coverage database
All LMRPs are posted on the contractor’s website. All LMRPs must also be listed in the Medicare Coverage Database using a standard format. The Medicare Coverage Database is available on the web at www.cms.hhs.gov/mcd. The database may be searched for national coverage and local coverage issues. National coverage searches will provide access to lists of NCDs and NCDs by section (e.g. labs, supplies, prosthetic devices, medical procedures). Local coverage searches will provide lists of articles and LMRPs/LCDs by contractor, by state, or alphabetically. The database may also be searched by ICD-9-CM or CPT/
HCPCS code. It is important to note when searching for LMRPs and LCDs that there are different policies based on the provider’s geographic area or the contractor.
For example, a search across all states for LMRPs for troponin testing (CPT codes 84484, Troponin, quantitative; and 84512, Troponin, Qualitative) revealed 25 matches. Seventeen of these matches were for carrier contractors and the rest were for fiscal intermediaries. This meant that not all states or contractors are subject to LMRPs for troponin testing. There are also differences between LMRPs for the same test. The troponin testing LMRP for the FI with jurisdiction over South Carolina included ICD-9-CM codes to support medical necessity for rheumatic heart disease (391.8 and 398.91), hypertensive heart disease with heart failure and renal failure (402.01-404.93) while the FI for New York State did not. This means that the same troponin test submitted with a diagnosis code of 402.01 would meet medical necessity in South Carolina, but not in New York State. A review of the LMRP from South Carolina indicates that the additional codes were added to the list of ICD-9-CM codes that support medical necessity in August 2002.
CMS has defined the problem of “truncated codes” as codes that “do not include the full range of digits,” (Federal Register, Vol. 68, No. 247, December 24, 2003). In other words, a truncated code is an incomplete code when a code requires five digits, but only four digits are assigned. According to the ICD-9-CM Official Guidelines for Coding and Reporting, Section IV (G)(2), “A three-digit code is to be used only if it is not further subdivided. Where fourth-digit subcategories and/or fifth-digit subclassifications are provided, they must be assigned. A code is invalid if it has not been coded to the full number of digits required for that code.” Many LMRPs/LCDs make a reference to truncated diagnosis codes not being acceptable. They also state that it is the provider’s responsibility to select code(s) carried to the highest level of specificity.
Coding of presenting complaints
The ICD-9-CM Official Guidelines for Coding and Reporting, Section I (B)(7) instruct users that signs and symptoms that are integral to the disease process should not be assigned as additional codes. Sometimes a presenting complaint would have met the medical necessity requirement for an LMRP/LCD or an NCD, but coding rules preclude the coding of a symptom code because it is integral to another condition. In this instance, the code for the presenting complaint symptom may be reported on the “patient’s reason for visit” field (form locator 76), while the definitive condition would be reported in the diagnosis code fields (form locators 68-75) on the UB92 claim form.
Coding of symptoms vs. definitive diagnoses
Under the Health Insurance Portability and Accountability Act (HIPAA), ICD-9-CM and its Official ICD-9-CM Guidelines for Coding and Reporting have been designated as the approved code set for reporting diagnoses and inpatient procedures. The following ICD-9-CM coding guidance is in compliance with the Official Guidelines, advice previously published in Coding Clinic for ICD-9-CM, and Medicare Transmittal AB-01-144 dated September 26, 2001. Please note that this advice pertains only to diagnostic coding for outpatient laboratory, pathology and radiology encounters.
- Code what is known at the time of code assignment. If a physician has confirmed a definitive diagnosis based on the results of the diagnostic test, code that diagnosis.
- Code signs and symptoms only if they are not fully explained or related to the confirmed diagnosis.
- If the diagnostic test did not provide a diagnosis, or was normal, code the sign(s) or symptom(s) that prompted the treating physician to order the study.
- Do not code unconfirmed diagnoses as if they were present. These are conditions listed as “probable”, “suspected”, “questionable”, “rule out” or “possible.” Code only the sign(s) or symptom(s) that prompted the study.
- Incidental findings should never be listed as primary diagnoses. They may be reported as secondary diagnoses.
- Unrelated and co-existing conditions/diagnoses may be reported as additional diagnoses.
Coding of screening tests
Screening is the testing for disease or disease precursors in seemingly well individuals so that early detection and treatment can be provided to those who test positive for the disease. Screening codes are only used when a diagnostic test is ordered in the absence of signs, symptoms or other evidence of illness or injury. If a screening test is performed and a condition is discovered during the screening, the code for the condition may be used as a secondary diagnosis code following the screening V code. (Coding Clinic for ICD-9-CM, Fourth Quarter 2001, pages 55-56).
Revising NCDs and LMRPs
Contractors must provide for both a comment and notice period for all new LMRPs, revised LMRPs that restrict existing LMRPs (for example deleting previously covered ICD-9-CM codes), and revised LMRPs that make a substantive correction. Draft LMRPs are available for comment on the Medicare Coverage Database mentioned earlier in this article.
Only an aggrieved party may initiate a review of a local coverage decision or national coverage decision by filing a complaint.
According to the Medicare Program Integrity Manual, contractors who have the task of developing LMRPs must have an LMRP reconsideration process. This is a mechanism whereby interested parties can request a revision to a final LMRP. Any part of an LMRP may be reconsidered including covered and non-covered ICD-9-CM codes. Also, an entire LMRP may be reconsidered. Contractors are required to post their reconsideration process on their web site. Requests must be submitted in writing and identify the LMRP language addition or deletion being proposed. The request should include justification supported by new evidence affecting the LMRPs content or basis, including copies of published evidence.
Coding Disputes with Payers
Payment policies may contradict each other, or may be inconsistent with ICD-9-CM rules and conventions. The following excerpt was published in Coding Clinic for ICD-9-CM (Third Quarter 2000, pages 13-14) to help providers resolve coding disputes with payers:
- First, determine whether it is really a coding dispute and not a coverage issue. For example, a payer may deny codes V72.5 and V72.6, for encounters for radiology and laboratory examinations. These codes are to be used only for routine examinations without signs or symptoms. Many payers do not provide coverage for routine tests. So, such denials are not due to incorrect coding, but rather relate to non-coverage of routine tests, e.g. annual physical exams, screening tests without signs or symptoms. Therefore, always contact the payer for clarification if the reason for the denial is unclear.
- If a payer really does have a policy that clearly conflicts with official coding rules or guidelines, every effort should be made to resolve the issue with the payer. Provide applicable coding rule/guideline to payer. For Medicare claims, contact the fiscal intermediary (FI) or carrier contractor for clarification. If you are not satisfied with the answer you receive, follow up with the HCFA [CMS] Regional Office. The FI or carrier should be able to provide you with information as to which Regional Office has jurisdiction over your area.
- If the payer refuses to change its policy, obtain the payer requirements in writing. If the payer refuses to provide their policy in writing, document all discussions with the payer, including dates and the names of individuals involved in the discussion. Confirm the existence of the policy with the payer’s supervisory personnel.
- Keep a permanent file of the documentation obtained regarding payer coding policies. It may be come in handy in the event of an audit.