Compliance

Medical Necessity

Medicare is required by federal law to pay only for services it considers medically necessary to diagnose or treat an illness or injury or to improve the function of a malformed body member. As a result, Medicare often requires a specific diagnosis for certain laboratory tests before they will consider a test medically necessary.

A medical technologist working on a computer

Although physicians may order any tests they believe to be necessary to diagnose and treat a patient appropriately, Medicare will only pay for those that meet the Medicare definition of medical necessity.

Therefore, all Medicare claims submitted by UPHS – Marquette must include complete medical necessity documentation using the ICD-10CM coding system to be compliant and eligible for reimbursement of services provided.

MEDICARE COVERED SCREENING TESTS (Be sure to order correct screening Test)

Routine Screening Tests

Routine screening test(s) are not a Medicare covered service unless specified in Medicare law. The patient is financially responsible for payment of routine screening tests outside of the guidelines.

Points to remember

ICD-10 diagnosis codes in conjunction with a narrative are the only acceptable form of medical necessity documentation.

ICD-10 code(s) submitted must be consistent with documentation in the patient's record.

When choosing an ICD-10 code, always select the code that most accurately describes the patient's condition and reason for testing. The codes should be of the highest level of specificity.

Only physician office or client staff authorized and experienced with coding should provide ICD-10 codes for laboratory services.

Providing ICD-10 codes on the Laboratory Requisition will avoid unnecessary phone calls to physician and client offices as well as delays in service to patients to obtain medical necessity documentation.

An ABN form must be submitted with each lab requisition when a limited coverage test is ordered without an ICD-10 code that supports the medical necessity of the test.

Screening for medical necessity

Laboratory testing is deemed Medically Necessary by Medicare if the test is “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

Any other use of laboratory testing is considered screening. Screening does not always denote that the ordered test is unnecessary or deemed to be poor medical practice. Screening tests cannot be directly linked to an established diagnosis, sign, or symptom.

In order to establish Medical Necessity, the test order must be accompanied by the appropriate diagnostic information justifying the test order. This information should be submitted in the form of an ICD-10 code. Laboratory requisitions have incorporated the commonly used ICD-10 codes for each practice area. Feel free to include additional Diagnoses/ICD-10 if those listed do not reflect the patient’s signs/symptoms/diagnosis accurately.

Local Coverage Determinations (LCD) have also been developed for a limited number of tests (i.e. Flow Cytometry, Reticulocyte Count) in a regional coverage area. The NCD or LCD includes covered diagnoses for each test.

However, there are instances where a practitioner may want to monitor a certain lab test due to a particular treatment protocol (e.g., a medication a patient is taking may affect thyroid function so the practitioner monitors the TSH on the patient). If the patient’s signs/symptoms/diagnoses are not among the diagnoses listed in the appropriate NCD, an ABN must be completed.

The following tests have frequency limitations for Medicare Beneficiaries please see the CMS Manual for further information :