Documenting Medical Necessity in Anesthesia: Think Comorbidities

Summary 

In ABC's experience, issues around proper documentation of medical necessity represent the leading cause of anesthesia claims denials. While medical necessity may be thoroughly shown in the anesthesia record, we encourage anesthesia practitioners to ensure that they share this information with their billing and coding partner. ABC clients with questions are encouraged to contact their account executives.

The scenario regarding anesthesia documentation and billing certainly has shifted. Time was when the path between billing for anesthesia care and receiving payment for that care was fairly straightforward. Those simpler days are gone, and the process is not likely to get any easier.

A major case in point is the documentation of medical necessity. In our experience, issues related to medical necessity constitute the single largest cause of anesthesia claims denials. We've seen anesthesia claims denials stemming from problems with documentation of medical necessity increase significantly during the past decade. The provision of monitored anesthesia care (MAC) and other services certainly may be reasonable and medically necessary for a given patient, and that need may be well documented in the anesthesia record, but does the documentation you send your billing and coding partner or department clearly reflect that as well?

A big part of the challenge for anesthesia providers today is grappling with the growing number and complexity of requirements to show medical necessity. These include not only 1) National Coverage Determinations—definitions of coverage developed by the Centers for Medicare and Medicaid Services (CMS) to describe the circumstances in which specific medical services, procedures or devices will (or will not) be reimbursed by Medicare on a national basis; and 2) Local Coverage Determinations—definitions of coverage developed by Medicare claims processing contractors that define coverage for particular services in the contractors' jurisdictions and that may limit or completely prohibit coverage of an item or service for a specific diagnosis; but also, 3) increasingly, the specific and continuously evolving policies and rules of individual third party insurance payers as well.

Carriers are developing more specific policies regarding coverage, taking more time to compare surgery claims against anesthesia claims and reviewing anesthesia claims much more rigorously than they have in the past—a constellation of factors that points to the need for anesthesia practices to communicate more thoroughly than ever with their billing vendor.

In general, documentation of medical necessity in anesthesia usually isn't an issue for major cases, such as coronary artery bypass graft surgery (CABG), in which the need for anesthesia services is clear. Rather, most of the problems arise with anesthesia services for relatively simple cases, including endoscopy, cataract and podiatry procedures, among others. Notable problem areas include the delivery of MAC and use of transesophageal echocardiography for these types of cases.

The ability to show medical necessity in anesthesia hinges on the ability to document that the patient has one or more comorbidities that necessitate anesthesia services beyond sedation (which is usually provided by the clinician performing the procedure). In surgery, need is justified by the diagnosis. In anesthesia, need is justified by the presence of comorbidities in the patient at that moment in time.

Examples would be a patient undergoing cataract removal surgery who is allergic to Versed and, as a result, needs anesthesia with propofol; a patient who is having a relatively simple outpatient procedure but who has an extensive history of myocardial infarction and coded during a previous procedure; or a patient with a history of certain kinds of anxiety for whom sedation would not be sufficient. These comorbidities, which may be discussed during the preanesthetic evaluation and documented in the anesthesia record, should be communicated to your billing and coding partner as well.

ABC Clients: If you have any questions about LCDs, NCDs or policies related to specific carriers, your account executive will be happy to assist you.

With best wishes,

Tony Mira
President and CEO