medical necessity

Mary Thornton & Associates, Inc1

Medical Necessity

Concept in Practice


Medical Necessity: Who Cares?

• What payers?• What about accreditors?• Even for rehab option?

• What about recovery programs and services?

• Isn’t this something only the doctor can determine?

• What about client choice?



• PAYERS– Medicaid – Medicare– Champus/Tricare– ODMH– ODADAS– Commercial insurers


OIG’s Red Book

2002 Red Book once again cites MH:

“the IG found that Medicare could save $685

million by reducing claims error rates for mental health services. (Error) Rates exceeded 34% suggesting numerous and widespread problems. The IG suggested CMS monitor cases of under-utilization, over-utilization, medical necessity and reasonableness.”


OIG Audit of Medicare Part B Outpatient MH Services

• May 2001 Release• Review of core services, not partial

hospital• Review of 1998 services: $1.2

billion spent on mental health by Medicare –60% is outpatient

• Over half of services audited were to beneficiaries who are eligible because of disability, not age



• 34% of individual therapy services inappropriate

• 50% of group therapy services inappropriate

• 40% of psych testing services inappropriate

• 16% of pharmacological services inappropriate



• 41% billed inaccurately: wrong code, non-covered services, excessive billing

• 11% unqualified providers• 65% poor documentation• 23% medically unnecessary• 22% receiving more services than

necessary• 8% not receiving enough services


GAO Testimony on Medicaid Fraud (Nov 1999)

• Three primary categories of fraud and abuse:– Improper billing practices: upcoding,

phantom TX, delivering more treatment than is necessary

– Misrepresenting qualifications: false credentials, performing outside the bounds of one’s license

– Improper business practices: kickbacks for referrals to a provider or product, anti-trust, cost reports issues, enhancement of profits by limiting care


GAO and Medicaid

• This year for first time GAO adds Medicaid to list of programs at High Risk for fraud and abuse– Cites schemes by states to

leverage funds– Waiver programs that

increase costs– Insufficient oversight to

assure providers paid appropriately


GAO and Medicaid

• January 30, 2003 Report– Argues for more and more

aggressive state Medicaid anti-fraud initiatives

– States are not collecting all they could for fraud efforts from feds because they would have to match - .01% being spent on payment safeguards

– Efforts to identify improper payments limited and modest in scope


The OIG’s Work Plan: Other Medicaid Services

• Waiver Programs– Cost neutrality and costs

effectiveness of Medicaid waiver programs being questioned• 2 years ago Home and Community Based

Waiver programs for the Mentally Retarded were cited



• What about accreditors?– Medical necessity is a payment concept– Medical necessity and quality of care

are linked • Treatment should be the least restrictive,

considering the safety of the client and their current status (signs, symptoms, functioning)



• Even for rehab option?– Rehab option services are either

paid for by Medicaid or by state funds that follow the Medicaid model

– Medical necessity is a foundation concept


Medical Necessity: Who Cares?• What about recovery programs and services?

– Many services that are critical to a recovery-based model of care are being paid for through the rehab option, e.g. skill building, psychosocial rehab, residential support, and others

– Some recovery-focused services such as peer support and most recreational services are not paid for under rehab option and payment is not based on medical necessity


Medical Necessity: Who Cares?• Isn’t this something only a

doctor can determine?– No

• Diagnosing professionals• Treatment planning signers• Managers of care

– Once initial case made, continuing confirmation is found in progress notes and other documentation – the entire treatment team participates


Medical Necessity: Who Cares?• What about client choice?

– They can choose to receive services that are not medically necessary•Those services must be paid for by the

client or by alternate available resources

– Billing for non-medically necessary services is a problem•Paybacks•Potential for investigations, fines, etc.


Productivity and Medical Necessity

Capacity

Revenue Risk

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Productivity

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Marketing

RevenueRisk


Medical Necessity: What’s it mean?

Payer Acute Rehab

Medicare Primarily Limited

Medicaid X X

ODMH X X

ODADAS X X

Commercial Primarily Limited


Medical Necessity: What’s It Mean?

• Starts with a qualified professional

– Assessment– Clinical Formulation– Diagnosis– Determination of level of care– Ordering treatment

• Scope of license issues



• Ohio Medicaid:

– Services ordered are necessary for Dx or Tx of disease, illness, or injury and without which the patient can be expected to suffer prolonged, increased or new morbidity, impairment of function, dysfunction of a body organ or part, or significant pain and discomfort.”1

1 Ohio Adminstrative Code, 5101:3-1-01



• Deconstructing Medical Necessity:– “Services ordered are necessary for diagnosis”

• Initial assessments are usually covered unless internal transfer

• Reassessments should be done only if there is a need to update information

– E.g. Medicare pays for an assessment every three years or after any changes to level of care

• Psych testing should be done for diagnostic purposes only and then only if additional information is needed that cannot be obtained from an interview

• Consultations and other diagnostic work – e.g. labs, etc. may be covered in order to diagnose. Need clear link.

1



• Deconstructing Medical Necessity:– Services ordered are necessary for

treatment of disease, illness, or injury• Client must have a reimbursable diagnosis

– Mental health vs substance abuse– DSM vs. ICD-9– Axis III/Medical Conditions important:

» Comorbidities may create additional complexity

» Mental retardation: limits mental health services

» Alzheimers and other forms of dementia» Deafness and other communication

problems



• Deconstructing Medical Necessity:– “without which the patient can be

expected to suffer prolonged, increased or new morbidity, impairment of function, dysfunction of a body organ or part, or significant pain and discomfort.”

– Treatment can be focused on preventing backsliding

– Treatment can be focused on impairment of function

– Treatment can be focused on prevention of new morbidities,



• Ohio Medicaid: – Medically necessary services are

those that: •Are not experimental and are

generally accepted as effective for the problem being addressed

•Delivered at an appropriate intensity•Provided at the appropriate level of

care setting•When used for diagnosing capable of

providing “unique, essential and appropriate information”




those that: •Are not experimental and are

generally accepted as effective for the problem being addressed

» Watch inappropriate psychotherapy




those that: •Delivered at an appropriate intensity

– Be concerned with too little and too much

– Meds only clients– Frequent no shows– Non-compliance




those that: •Provided at the appropriate level of care

setting» Do you have written levels of care that

are accessible, well distributed, and being appropriately used by staff?

» Be concerned with appropriate and timely transfers and discharges

» Be also concerned with non-compliance with appropriate levels of care – good documentation to describe attempts to move clients




those that: •When used for diagnosing capable of

providing “unique, essential and appropriate information”

– Additional diagnostic tests must be capable of providing information that is not available in other, less expensive ways.


Criteria for Payment• In addition to tests of medical necessity, Ohio Medicaid is looking for

additional information before agreeing to pay– Services must be voluntary and initiated by

client– Evidence of client choice of provider– Eligible providers must render service– Compliance with definition of service– Service must be lowest cost service that

effectively addresses client’s problem


Additional Guidance for MH and SA

• DSM IV or ICD 9 CM diagnosis• Client must be active participant• Sufficient cognitive ability to benefit• Services must be:

– Provided according to an individualized service plan

– Least restrictive setting that is available and safe

– Developmentally appropriate for children



• DSM IV or ICD 9 CM diagnosis– Dx alone is not enough

• Dx + Signs/Symptoms• Dx + Functional Status• Dx + Signs/Symptoms and Functional Status

– Current signs/symptoms and functional status is critical to medical necessity

– Acuity/other clinical information in 5th digit of ICD 9

– Each service must be directed toward an appropriate diagnosis



• Client must be active participant– Documentation must be clear about

client’s participation in treatment• Besides being present- what else?

– Non-compliance– Catatonia and other diagnoses that may

prevent participation» Watch billing for these

• Signing treatment plans, progress notes



• Sufficient cognitive ability to benefit– Watch for:

•Very young children•Dementia – all kinds – fight if you think it

is appropriate at early stages of disease •Mental retardation – except for mild and

sometimes moderate•Autism •Other clients who cannot benefit – e.g.

intoxicated



• Services must be: – Provided according to an individualized

service plan• Every service must be ordered

– Least restrictive setting that is available and safe

• Please note available• Rehabilitation option services must be

considered.

– Developmentally appropriate for children


Rehabilitation Option• Federal Definition:

– “Any medical or remedial services (provided in facility, home or other settings) recommended by a physician or other licensed practitioner of the healing arts, within the scope of their practice under state law, for the maximum reduction of physical or mental disability and restoration of the individual to the best possible functional level.”


Rehabilitation Option

IAPSRS Definition of Rehabilitation Model:

– “Focuses on the functioning of the individual in the normal, day to day environment, and looks at the strengths and skills people bring to the rehabilitation process and supports in the community. “


Rehabilitation OptionIAPSRS Definition

of Rehabilitation Model continued:

– “Although an individual may still be symptomatic, the rehabilitation process helps a person learn ways to compensate for the effects of the mental illness thorough environmental supports and coping skills. The person with the mental illness becomes the the expert in managing the disability.”


Why is Rehab Option so important to the payer?• Research has demonstrated that rehabilitation

leads to:– shorter hospitalizations– improved social functioning– greater satisfaction – higher productivity and

integration in community


Rehabilitation Option Services

• Specifically referenced as rehab option covered services in Ohio:– Basic/Daily Skills training– Social Skills training– Residential services– Employment related services– Social/Recreational services– Family Education Services


Rehabilitation Option Services

• Social/Recreational – Medical Necessity Criteria still very clear– “Services may not be for the exclusive

purpose of social or recreational activity but must evidence a clear therapeutic objective specifically identified in the individual’s service plan….”


Rehab Option Model

Community Support Services:

Restoration of basic or daily living skills

Restoration of social or personal skills

Residential Support

Illness Management

Others: Pre-voc/ed

Medication and Somatic TreatmentIndividual and Group Psychotherapy

Other Acute Services: ACT, Partial Hospital, IOP

Peer, Recreational, Employment, Vocational


Documenting Medical Necessity• Documentation: Primary means or determining whether claims should be paid. • Making the case for current and for

on-going medical necessity:– Assessment;– Treatment plans;– Progress notes; and,– Related lab and other diagnostic work


Florida Outpatient

Center

$4.2 mm payback in cash and services

• Management did not act to promote integrity, efficiency and accountability

• Billed for ineligible clients ( did not meet GAF requirement)

• Destroyed audit trail by shredding service tickets.


Florida Outpatient

Center

• Physicians did not always sign treatment plans

• Physicians did not always participate in development of treatment plans or their review

• Tx plans incomplete, sometimes not there at all, or no signature or date of signature

• Geriatric Day Tx usually had no prior certification


Florida Outpatient

Center

• No evidence of efforts to reduce level of care based on impact of Tx

• Tx Plans reflected maximum allowable under Medicaid not goals and needs of patients

• Interns and other students billed w/out sufficient or evidence of supervision

• Dual billing of Medicaid and contracts


Documenting the Medical Necessity of Rehabilitation

• Service focus is on teaching not providing – cueing, reminding, training, overcoming barriers

• “Medical necessity” based on functional criteria.

• Community Support is not case management


Documenting the Recovery Philosophy

• Consumer choice: treatment planning• Empowerment: focus on strengths based

skills development• Non-coercion and self-determination:

engaging the consumer in their own recovery

• Protection of rights: privacy, choice, complain, to choose their provider, and so forth

• Responsibility for managing one’s own health: treatment planning, provider choice, skills and resource development


Rehabilitation Services

• Skills development for restoration to maximum functional state– Organized approach to development of new

or redevelopment of old competencies• Can use curriculum in community support too

– Implies that a baseline has been established – Not clinically focused although clinical

services may play an integral or supportive role in treatment

– Symptom reduction is not the focus – symptom and disability management is


Rehabilitation Services - Examples

• Basic Skills:– Food planning and preparation– Maintenance of living

environment– Community awareness and

mobility skills– Economic issues: bill paying,

budgeting, etc. – Personal hygiene– Medication self-administration



• Social Skills:– Those necessary for

working, getting along with neighbors and landlords, social contacts and development of social network

– Problem solving, conflict resolution

– Management of stress– Relationship building



• Disability management– Identification and management of

symptoms– Effects of medication– Vulnerability to stress– Effects of drugs and alcohol– Early recognition of warning signs of

illness– Development of skills for coping with

deficits resulting from the mental illness


Disability Management: What

is there to do?• What is going on with the consumer behaviorally?– Inconsistent in compliance with meds– Co-morbid medical condition that requires

meds and medical management too– Verbalization of fears/dislike of emotional

or physical side effects– Lack of knowledge of meds, side effects,

usefulness– Unwillingness to take meds at all– Interactions with lifestyle activities

causing negative side effects


Disability Management:

What is there to do? • Goals: a continuum of increased

participation and self-management– Consistent use of meds– Stabilization of mental illness

• Including reduction in symptoms

– Increased understanding of their illness, meds, side effects, etc.

– Increased ability to report accurately about effects of meds on daily activities, peer relationships, mental illness


Disability Management: What is

there to do? • Goals: a continuum of increased participation and self-management

– Development of support network that can assist consumer in self-administration and management of meds and illness

– Decrease in side effects with correct dosing (backed up by blood levels) and lifestyle changes

– Ability to manage with medical team and with or without other support the medication, S&S of mental and physical illnesses, and adverse effects

• Understanding of impact of physical illness on mental illness and vice versa



What is there to do?• Short term objectives:

– Consumer can recognize meds, list them, verbalize when to take

– Consumer cooperates with medical staff in medical management of mental illness•Shows up•Answers questions accurately• Interacts and anticipates or questions




– Consumer cooperates with diagnostic work

– Consumer recognizes signs and symptoms of mental illness• After they happen • Recognizes triggers or coming of S&S’s

– Same as above but for side effects




– Consumer understands where to go to get meds and can afford them

– Consumer develops supportive network to assist in management of mental illness including meds

– Consumer understands why taking meds• Understands why taking each med

– Consumer and medical staff work in an integrated fashion with primary care physician




– Consumer complies with medication regimen• Development of compliance aids• Develop structure for taking meds• Advocate/work towards less complicate dosing

regimen

– Consumer understands lifestyle activities that increase risk, signs and symptoms, aggravate side effects

• Makes lifestyle changes & recognizes cause/effect

– Consumer gets peer support re: meds and lifestyle changes



• Residential Support Services– Early identification of problems in

living situations– Ensuring success in living in a

community setting– Practicing skills in different

settings to show how skills transfer

– Great deal of overlap tween this and basic skills development and social skills development



• Social and Recreational Activities– Be careful but look to the goal of the

service in these cases and not necessarily the service itself

– Should be carefully related to improving skills, reducing disabilities, restoration of functional level

• The government does consider the development of social skills and a social network to be important to the recovering individual

• You have more leeway with kids

– Must be clearly stated in treatment plan



• Employment Related Services– Not vocational but pre-

vocational– Redevelopment of skills needed

for successful employment•Getting along with co-workers and

supervisors•Staying on task•Working at the necessary pace•Following instructions



• Education– Not education but pre-

education– Skills necessary to locate

and engage in a successful academic or other educational program

– Some of these same skills needed to be able to engage in your services as well



• Peer Services and Support– No self help groups covered

– but could be in Tx plan– Peers can sometimes

provide services – make sure of your rules

– Sometimes just provide some social support and encouragement


Documenting Medical Necessity

• Documentation is required under Ohio code:– “all Medicaid providers are required

to keep such records as are necessary to establish medical necessity and to fully disclose the basis for the type, extent, and level of the services provided”


Documenting Medical Necessity• Key Elements in Documentation

– Is there a diagnosis that meets payer criteria? Evidence that this is the correct diagnosis?

– Assessment of client functioning? Sufficient deficits or threats to justify level of care?

– Current ISP? Signed? Is array of services appropriate for the clinical picture?



• Key Elements in Documentation– Services rendered in

accordance with ISP and with payer definitions of services? Is the provider appropriately credentialed?



Key Elements in Documentation

– Is there evidence of client participation? •Cognitive ability: if client has DX that would

normally contraindicate treatment make sure there is an adequate explanation

•Willingness to participate – may be exceptions for those individuals “committed to the board”



• Key Elements in Documentation– Is there evidence that the client is

benefiting from treatment?• Medical necessity is closely linked to

outcomes• If client is not benefiting:

– the services may not be medically necessary– the level of care may be inappropriate

• Services dedicated to prevention of backsliding need continuous testing


Progress Notes

• Required for each billed service• Must describe a service that is

billable• Must indicate necessity for service

–should speak to objective, not overall goals – easier for auditor– Client’s circumstances– Client’s participation– Client’s response


Speaking to Objectives

• Goal: Client wants to go to work - Obj:Client will identify and join a job skills program. “Discussed client’s anxiety in interactions with

strangers. Client identified and role-played strategies to reduce anxiety that she believes will work for her, including, deep breathing and maintaining her own space. Client was anxious during discussion and role-play but understands need to be able to work with strangers in any job or job development setting. She intends to practice new skills this week with two neighbors in her apartment building and report back. ”


The Service Must Be Billable

• “Attempted to call consumer to reschedule appointment but no one home. Left message.”

• “Reviewed treatment plan and wrote up monthly documentation of what services have been provided.”

• “Consumer attended NA/AA conference with community support worker. Consumer picked out workshops and attended all. Very enthusiastic about conference.”


Service Must be Coded Correctly

• “ Engaged client in a discussion of past trauma and coping strategies that have been used in past. Client assigned homework to record at least one positive statement daily about her life experiences.”


Client Should Participate Voluntarily

• “Consumer came in for check. We discussed her plans for weekend. She will see friends and attend church.”– Do not use rep payee status as

hook for services


There must be an intervention

• Met with client today. He appeared well-groomed and in a good mood. He stated he went to choir practice and sang last Sunday at both services. States he felt exhausted. Client did state that he enjoyed himself but that he needed encouragement from family to participate.


The Stable Client

“Met briefly with consumer. He reports that he is psychiatrically stable and taking his medications as prescribed. He agreed to a follow-up appointment. He reported no difficulties at this time.”


Community Support

• Goal: Stable Psychiatric Functioning; Objectives: Consumer will determine housing choice. Consumer will develop a plan for obtaining permanent housing. “Consumer in crisis bed and is homeless

with no entitlements. Educated consumer about options for housing if SSI is denied. Explored consumer’s preferences. Consumer stated she would prefer SRO but is open to other options. Agreed we will follow-up by end of week.”


Community Support

• Goal: Client will return to work; Objective: client will research local supports and benefits for vocational counseling and training.

“Client reports that he called benefits counseling service and located his information about VA benefits as well. Client did not make an appointment because he was anxious about process. We role-played some possible scenarios and client agreed that he will call again this week and set up appointment.”


Community Support

• Goal: Client wants to stay out of hospital; Obj: Travel Training

“ Intervention: Reviewed steps with client on how to catch bus from her apartment to the store, I.e., arriving to the bus stop 10 minutes ahead of time; showing her bus ID to the driver, sitting where she feels comfortable, having her bus schedule available, familiarizing her with names of streets and keeping an eye out for the stops ahead of hers for her apartment and for the store. “


Community Support


R: “Client had her bus schedule available to find out the time for the bus, greeted the bus driver appropriately, showed her ID, sat where she felt comfortable and asked the driver for names of streets for familiarization. Client still very anxious but happy about her progress.”


Community Support


P: “Will accompany client one additional time next week and then plan for a solo visit to the store. The next visit will also include skills development in grocery shopping as per her ISP.”


Documenting Progress

Progress vs. encounter notes


Case Study 1

Mary


Community Support

• Curriculum– Specific instructions for teaching – topics,

step approach to gaining and integrating subject matter – breaking larger goals into smaller, more manageable steps

– Teaching tools – handouts, transparencies, etc.

– Suggestions for discussion, activities, role plays, homework, sub-group work – opportunities for consumer to demonstrate expertise


Community Support

• Curriculum– Plans for how to generalize skills

to community and other environments

– Additional resources for consumers, family, and staff

– Plan for skills retention - individualized


Community Support

• Curriculum– SAMSHA – handouts– Others: see handout


Relevant Coordinating Centers of Excellence

• OMAP: www.bestpractice.com– Promotion of the utilization of medication

algorithms to guide psychiatric medication decision-making in Schizophrenia, Bipolar Disorder, Major Depression

• Clusters: no website yet– Promoting client clustering to organize

services• Illness Management and Recovery: no web-site

yet– Promoting the adoption of illness management

and recovery principals to improve outcomes• Supported Employment: coming soon

http://www.bestpractice.com/


Case Study 2

Paul



• OMAP: www.bestpractice.com– Promotion of the utilization of medication

algorithms to guide psychiatric medication decision-making in Schizophrenia, Bipolar Disorder, Major Depression

• Clusters: – Promoting client clustering to organize

services

• SAMI: www.ohiosamiccoe.cwru.edu– Promoting integrated model of MH/SA care

• Supported employment: coming soon

http://www.bestpractice.com/

http://www.ohiosamiccoe.cwru.edu/


Case Study 3

Frank



• Clusters: – Promoting client clustering to organize

services

• Illness Management and Recovery: – Promoting the adoption of illness

management and recovery principals to improve outcomes

• Learning Excellence: www.cle.osu.edu– Promotion of school-based mental health

services

• ACT: coming soon

http://www.cle.osu.edu/


Coordinating Centers of Excellence

• Coming soon:– ACT– MI/MR– Supported Employment


Thank You

medical necessity

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