Concept of medical necessity can support services when being audited

September 1, 2011

With the mandatory integration of electronic medical records (EMR) into the physician's practice, it would seem that future RAC or carrier audits will be seamlessly easy to navigate and win. As more and more dermatologists start using this electronic documentation tool in their offices, however, I am being bombarded by questions and concerns from the new users - both physicians who are clients and those who are not.

Key Points

As more and more dermatologists start using this electronic documentation tool in their offices, however, I am being bombarded by questions and concerns from the new users - both physicians who are clients and those who are not.

I am a proponent of the use of an EMR and have personally recommended the use of Modernizing Medicine's Electronic Medical Assistant (EMA) EMR for my billing service clients. I spent three years trying to create my own, then shopped around and looked at the many other systems out there that tout they are dermatology-specific. When I saw the demonstration of EMA, I knew it was the right system for my billing service clients. And although I do not have any financial interest in this company, I offer the EMR free to my clients for the period of the contract.

I have also received these questions en mass from nonbilling clients who share these concerns. In this article, I will answer these salient questions in the hopes of shedding some light on the pros and cons of electronic medical record systems.

What if the EMR that I purchased now increases my level of care compared to my past utilization patterns - should I be concerned?

There is no doubt that the efficiency with which one can document a medical encounter can be greatly increased once the provider has mastered the use of the EMR. With the click of a mouse or the tap of your iPad, you can document much more in the time it took you compose handwritten notes. For sure, the notes will at least be legible!

It is completely normal that the levels of care will increase for many providers because the provider can now capture documentation that was too time-consuming to include in the chart notes. I assume that the Centers for Medicare and Medicaid Services (CMS) expects an increase in utilization because of the accuracy and completeness of the EMR's basic makeup. However, here is the caveat: Carrier audits will, in the future, concentrate not only on the issue of whether or not the documentation supports the CPT code billed, but more importantly, on the issue of medical necessity.

Medical necessity will be the catchphrase that will either make or break your practice's ability to support its services when audited moving forward. We have all heard about medical necessity, but it may or may not have had any impact on how you write your notes for E/M services, procedures or surgical services. Now, my dear friends, is the time to take heed and pay attention to the importance of this term.

All carriers have medical necessity policies that govern the services they pay for. If you look at your contract with any of the plans that you are contracted with, you will see terminology that states, "We only pay for services that are reasonable and medically necessary." The carrier websites have medical necessity policies for almost every procedure or surgical service. Let us review a few.

Destruction of Benign Lesions (CPT codes 17110-17111). Carriers may vary in their requirements for payment for destruction or removal of benign lesions. When required per carrier policy (check the Benign Skin Lesion Removal Policy), be sure to support the medical necessity of treating benign lesions such as seborrheic keratosis, warts, etc.

The medical record must show the lesion(s) was symptomatic in order for the treatment to be charged to an insurance company. Documentation may be substantiated for the noncosmetic treatment of benign lesions by documenting that at least one of these symptoms are present: inflammation; bleeding; clinical suspicion for malignancy; and/or painful.

Note that the statement "irritated skin lesion" is not sufficient justification for lesion removal when used solely to reference a patient's complaint or a physician's physical findings. The sole use of diagnosis code 702.11 (inflamed seborrheic keratosis) is insufficient to justify lesion removal without medical record documentation of the patient's symptoms and physical findings.