In our previous articles on avoiding radiology claim denials, we covered the top two reasons payers deny radiology claims — patient eligibility problems and lack of proper authorization. The third most common reason for medical insurance claim denials is failure to document the exam's medical necessity. Let’s take a look at this issue in detail so that your radiology practice can avoid such claims denials. 

Recap of Reasons for Radiology Claim Denials

First, here's an overview of the top reasons for claim denials in radiology practices:

• Patient eligibility problems: Payers could deny claims for eligibility problems if the patient's plan does not cover the site or type of service mentioned in the claim or if their demographic information is outdated. 
• Lack of proper authorization: If a procedure or service requires preauthorization under the patient's healthcare plan, and the provider fails to follow the right preauthorization protocol, the payer may deny the patient's claim.
• Complex process: Documentation is a tedious and time-consuming process, making it prone to errors.
• Failure to document medical necessity: Keep reading this guide to learn more about medical necessity radiology claim denial.

What Is Medical Necessity?

The physician must be sure that the performance of any exam is medically necessary in the diagnosis or treatment of the patient’s condition. The definition of ‘medical necessity’ is made by each insurance payer based on their own payment policies. This means that while a physician might feel a particular procedure is warranted, payment for that procedure might not be made by the payer due to its own medical protocols that dictate the conditions under which certain procedures are to be performed.  Knowing specifically which insurance plan the patient has and what its requirements are is important to maximizing reimbursement and avoiding denials.  

What Causes Medical Necessity Denials?

Denials of claims for medical necessity usually do not result from the physician’s medical decisions but rather from a lack of appropriate documentation provided to the insurance payer. Exams with a positive finding seldom lead to a claim denied for medical necessity, since the finding is usually enough obvious evidence that the exam was necessary. The performance of tests to ‘rule out’ a particular condition is problematic, especially when the result is negative, and this is where it pays to be clear about the reason for the exam.   

When documenting the exam, the radiologist should always include the answer to the question, “Why were we looking for this condition?” For example, a Duplex Scan of Lower Extremity Arteries is performed routinely to rule out blood clots and the vast majority of the results are negative, yet the reason for performing the exam is usually very good. Indications that will most often justify this procedure include swelling of the extremities, limb pain or shortness of breath. A postoperative patient who is immobile for an extended period is also a legitimate candidate for this exam.

There is also a correlation, albeit anecdotally, between the relative cost of the exam and the incidence of a medical necessity denial. Chest X-rays for almost any reason are rarely denied, while CT and MRI exams undergo far closer scrutiny by the payer to determine whether or not payment should be made. It is often useful to indicate in the documentation the types of exams already performed for the current condition, along with their results. Performance of an exam based on a previous abnormal result will usually pass review for medical necessity. 

How to Avoid Medical Necessity Denials 

A good medical history obtained from the patient will usually provide:

• Signs, symptoms and reason for referral: The referring physician can provide the reason for the referral, including the patient’s symptoms. Some referring physician offices are better than others about providing the radiologist with a complete history that includes signs and symptoms. 
• Review of insurance denials: A review of your insurance denials might reveal a pattern of which referring offices are associated with more denials than average.

This information will then help the scheduling staff seek out more complete information from those particular offices. Using a third-party service provider can help manage the complexity of it all. 

Another good source is the technologist, who can gather good information at the time of the exam. Modality worksheets should be reviewed to ensure they include questions about the patient’s history, signs and symptoms, and previous imaging.

What to Do About Denials

While the best course of action is to avoid denials in the first place by understanding the payer’s rules and obtaining good information, a denial for medical necessity is not final. If, after reviewing the denial, the practice feels that it is not correct, it can file an appeal. 

This is where maintaining detailed documentation is invaluable, as it allows a case to be made for payment when the initial claim form might not have contained enough information. Justifications for appeals range from clarifying information about the patient’s history or citing case studies and other evidence to demonstrate the service was necessary under the circumstances.

A denial for medical necessity usually means that while the insurance company has declined to pay, the patient can still be held liable for payment. Medicare, however, has specific rules that govern when collection can be obtained from the patient. Before performing a procedure that is either non-covered or determined by Medicare as not medically necessary, the patient must be given written notice using an Advance Beneficiary Notice (ABN) form. Failure to do so will preclude the practice’s ability to collect payment from the patient. Practices should be aware of the rules covering the proper use of Medicare ABNs.

The practice must keep the patient informed about its activities during any appeal process. When the payer notifies patients that they are going to be responsible for payment after a denial, this will usually be quite upsetting to them. Be proactive and let them know what steps are being taken to resolve the issue between the practice and the payer.

5 Tips to Avoid Medical Necessity Claim Denials

Though failure to establish medical necessity is one of the most common reasons for radiology claim denials, you can minimize these denials by implementing a few best practices. Here's your five-point action plan to avoid medical necessity claim denials:

• Know your payers: Ensure you understand each payer's protocols and policies for recognizing a service as medically necessary.
• Update your records: Train staff to get as much detail about each patient and their coverage as possible. Be sure the registration staff knows the questions to ask when making the appointment and when the patient arrives for the exam. If another physician has referred the patient to you, ensure they give you the patient's history and documentation to support their request for imaging.
• Prioritize workflows, checklists and documentation: If there is a checks-and-balances system within the radiology center or unit, it should be able to quickly catch details that could lead to denials. Additionally, update technologist worksheets to include appropriate questions about history, signs and symptoms. Understand which exams are more likely to be scrutinized and be sure to provide complete information for those exams. Where relevant, provide ICD-10 diagnosis codes with supporting documentation to justify that the service was necessary. 
• Check your billing: Claims must support medical necessity with the right ICD-10 code, matching technique section and appropriate number of views. Code updates happen frequently, so ensure your staff are up to date with developments or partner with a reputable radiology Revenue Cycle Management (RCM) company to ensure accurate billing. Using cutting-edge coding processes can help accelerate the billing process while improving accuracy. 
• Study your denials: Monitor denials reports and act on any trends you identify. Useful data can be gathered about patterns in the referring physician, payer and modality. Perform internal reviews of cases that have been denied and provide feedback to the radiologists about the adequacy of their documentation. Consider appealing a denial if you can make a case for medical necessity by clarifying details, providing further documentation or citing evidence. You could also request a peer-to-peer review.  

Why Trust Healthcare Administrative Partners for Radiology Billing?

Healthcare Administrative Partners is a full-service RCM company that has been serving radiology practices since 1995. All our core leadership team members have at least two decades of healthcare experience. Our team's diversity of skills and experience unites to help radiology practices maximize reimbursements and accelerate cash flow. 

Through our depth and breadth of experience in radiology billing, we are familiar with the various reasons for medical necessity claim denials and have aided radiology practices across the country in preventing and successfully appealing denials. Our certified healthcare billing and coding professionals are well-versed in payer policies as well as ICD, CPT and HCPCS, so we know what it takes to demonstrate medical necessity to insurers.

Browse our video testimonials to discover what our radiology client partners are saying and learn about their experiences with us.

Learn More About Maximizing Practice Revenue

This concludes our series on avoiding radiology claims denials. We regularly update our blog with valuable information for radiology practices looking to ensure compliance and maximize revenue in our evolving healthcare economy. Subscribe now to receive our latest articles about optimizing your revenue cycle as soon as we publish them. 

For personalized support in maximizing your practice's revenue, contact us today.

Related Articles:
How to Avoid Radiology Claims Denials - Authorization
How to Avoid Radiology Claims Denials – Eligibility Problems