Limiting Liability Relative to Medical Necessity Issues

The following actions should be useful in dealing with the new medical necessity rules:

• (a) Initiate educational programs for physicians and laboratory staff so that both understand what is required in terms of medical necessity documentation.
• (b) Note any local Medicare carrier policy regarding medical necessity published in Medicare bulletins and disseminate to both laboratory personnel and physicians.
• (c) Make sure that the source of ICD-9 codes can be documented and traced to the ordering physician.
• (d) Review all laboratory requisitions to make sure they comply with Medicare medical necessity rules. All automated tests should be ordered individually unless the selected tests constitute one of the new organ/disease-oriented panels listed in the 1998 CPT.
• (e) Make sure you have all current medical necessity policy from your carrier.
• (f) Create educational materials that help physicians select the correct ICD-9 codes. For example, lists of ICD-9 codes that relate to particular tests or CPT codes.
• (g) Institute a compliance program that ensures the education of all personnel involved in coding and billing Medicare tests, which includes education, periodic third party review, and punitive measures for individuals who do not follow the rules.