Medical necessity a common cause of Medicare claim denials

According to the American Hospital Association's May 2011 RACTrac survey, medical necessity is a leading reason for Medicare claim denials through the Recovery Audit Contractor program, Becker's Hospital Review reports. Specifically, 84 percent of hospitals with complex denials cited medical necessity as a contributing factor.

Medical necessity can be defined as a health plan decision that a service is necessary for the diagnosis or treatment of a patient's medical issue.

In a recent webinar hosted by the news source, Irene Barron – product management officer and chief operating officer of healthcare total point-of-service solution nTelagent – pointed to medical necessity as a major way hospitals can lose accounts receivable at the point of service.

Medical necessity-related overpayments can be mitigated by confirming the need for services using a patient's documentation, as well as upgrading disparate systems.

Leveraging business process automation techniques may help healthcare facilities as they face increased scrutiny from RACs, according to a separate article by the news source. Implementing cloud-based systems or software-as-a-service can expedite claims processing while improving accuracy levels and decreasing the amount of training and support staff needed to be able to complete tasks effectively. 

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