18 Medical Necessity Issues OK'd for RAC Review

CGI Technologies is the first Recovery Audit Contractor to post issues approved by CMS. All but one of them comes as no surprise, says one regulatory affairs expert.

Finally, the wait is over. The first set of approved medical necessity issues were posted August 12th by CGI Technologies and Solutions, the Region B Recovery Audit Contractor (RAC), following an AHA announcement last week that the initial review audits had been approved by the Centers for Medicare & Medicaid Services (CMS).

Medical necessity issues have been a hot topic for months. In a May CMS Open Door Forum call, a CMS representative suggested that medical necessity issues had been submitted to CMS, but CMS had not yet approved them —yet anticipated doing so in the "near future." However, the delay comes as no surprise, according to Michael Taylor, MD, senior medical director of government and regulatory affairs at Executive Health Resources in Newtown Square, PA.

"This is very consistent with the pattern we've seen with RACs since the roll out of the permanent program," he says. "CMS has been very deliberate in vetting the subjects that RACs are allowed to review."

Eighteen issues for medical necessity review were posted to the CGI website, and all but one of them comes as no surprise, according to Taylor.

• Syncope and collapse MS-DRG 312 (Medical necessity review and MS-DRG validation)
• Red blood cell disorders with MCC MS-DRG 811 (Medical necessity review and MS-DRG validation)
• Other vascular procedures w CC, w/o CC/MCC MS-DRG 253, 254 (Medical necessity review and MS-DRG validation)
• Other circulatory system diagnoses with MCC MS-DRG 314, 315, 316 (Medical necessity review and MS-DRG validation)
• Chest pain MS-DRG 313 (Medical necessity review and MS-DRG validation)

"In looking at percutaneous cardiovascular procedures, it says that medical necessity is excluded except for DRG 249. This came as a bit of a surprise because during the last year, the MACs have been heavily auditing DRG 247, which is a drug eluting stent, instead of 249, which is non-drug eluting, and a less common target of contractor attention," says Taylor. "It will be interesting to see if the RACs and MACs maintain this slightly different focus; if their areas of review are being purposefully kept apart; or if this is just a temporary situation before the rest of these stents become an approved medical necessity issue for the RACs."

Nine of the 18 issues posted were also revisions of existing DRG validation issues, which were subsequently selected to add medical necessity review. These are areas where there is a dual vulnerability, where not only are the issues oftentimes considered to be medically unnecessary by the auditor, but also hospitals sometimes miscategorize the DRG as well, according to Taylor.

"There is a concern that some hospitals might be avoiding certain high-risk DRGs by tending to assign other DRGs which don't accurately describe the service, but escape audit," he says. "This will provide the RACs with the ability to make sure hospitals aren't misclassifying these DRGS into something that is a related but inappropriate DRG, in addition to making sure the cases are medically necessary."

There is no doubt that most hospitals have been preparing for the arrival of medical necessity issues for quite some time. For those that have been preparing appropriately, this arrives as an expected development, and will be "life as usual" according to Taylor. But for those who haven't prepared, this serves as the final warning that they've only got weeks until they receive their first potential denials, he says.

"While hospitals should have been preparing for this, I will make the point that it's not necessarily too late for those that haven't," he says. "Be sure you know who is going to be receiving the requests at your organization, and make sure that you can respond to these requests. One of the worst mistakes you can make is to be unprepared for the additional documentation requests that are soon to be coming."

And for those providers outside of Region B that are relieved to see your hospital is not yet susceptible to medical necessity review; don't breath your sigh of relief just yet.

"Expect medical necessity issues from the other RACs very soon," says Taylor. "This will be nationwide in no time."