DURING MY RECENT attendance at the American Optometric Association’s Leaders Summit, I was dealing with definite writer’s block. But then a colleague mentioned to me that her students were confused about what is medically necessary and how they establish that necessity. That seemed like an excellent topic to tackle this month, so here goes…
There are two things that are often confused when it comes to medical necessity. First is the definition of medical necessity. Second is how to identify medical necessity for the purposes of reimbursement.
The 1999 American Medical Association (AMA)’s definition of medical necessity reads, “Health care services or procedures that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site and duration; and (c) not primarily for the economic benefit of the health plans and purchasers or for the convenience of the patient, treating physician or other health care provider.”
The Centers for Medicare and Medicaid Services (CMS)’s Report 13 – I-99 modified that definition to exclude procedures, drugs, and devices that were not approved by the U.S. Food and Drug Administration (FDA), and that definition stood for a long time (CMS, 1999). In 2021, former President Trump issued Executive Order 13890 to revamp the definition to include “innovative technologies” as defined by the Medicare Coverage of Innovative Technologies, or MCIT.
The new definition can be found at CMS Pub. 100-08, Ch. 13, § 13.5.4, which adds the definition of “reasonable and necessary” to the federal regulation at 42 CFR § 405.201 (b). This change also modifies the Exclusion from Coverage Section of the Social Security Act, found at §1862(a)(1)(A) (U.S. Government Publishing Office, 2021).
Now, this change applies only to Medicare and Medicaid. For the other payors, one needs to search each payor’s definition of medical necessity. Most of those are similar to the above definition and includes the prohibition on non-FDA-approved procedures, drugs, and devices.
When one looks at current procedural terminology (CPT), one sees the requirements for establishing medical necessity. First, CPT Codes are always inappropriate unless medical necessity has been established. Second, according to the CMS Claims Processing Manual, the patient’s chief complaint must rationally direct which diagnostic tests or treatments are medically reasonable or necessary. No chief complaint—no payment!
Further, to establish medical necessity, the test has to be ordered by the practitioner and interpreted by the practitioner, and the results must affect the clinical decision-making of the practitioner. Some tests, like a visual field, must be performed before a change can be detected. In that case, the decision-making requirement is waived.
Some services have “limited data sets” of ICD-10-CM Codes that limit the diagnoses available for the establishment of medical necessity. The vision care plans (VCPs) also limit covered conditions under their necessary contact lens benefits. Read each of these policies from the VCPs so that you know what is covered and not covered. It is also helpful to state in the assessment that medically necessary contact lenses are indicated due to the diagnosis claimed.
REFERENCES
1. American Medical Association. AMA PolicyFinder. 2023. Available at policysearch.amaassn.org/policyfinder/detail/H320.953?uri=%2FAMADoc%2FHOD.xml-0-2625.xml. Accessed 2024 Feb 23.
2. U.S. Government Publishing Office. Federal Register. 2021 Jan 14. Available at govinfo.gov/content/pkg/FR-2021-01-14/pdf/2021-00707.pdf. Accessed 2024 Feb 23.
