White Paper on Determination and Documentation of Medical Necessity in Long Term Care Facilities

Published October 1999; Revised August 2001

SECTION I:

Determination of "medical necessity" in nursing facility care

Although a final definition and determination of "medical necessity" still is an unrealized goal of the medical, insurance, regulatory and legislative community, the American Medical Directors Association believes that the attending physician's decision and documentation should be held paramount. A working definition of "medical necessity" that could be accepted is:

Evaluation and management services, diagnostic tests and procedures, treatments, medical/surgical procedures, equipment or supplies that in the judgement of the attending physician (or physician extender [NP or PA] when permitted by federal and state statue) are required to professionally assess, plan, manage and monitor the health care of a resident or patient in the facility within the parameters of generally accepted principles of medical practice.

The physician must be prepared to justify that the service or intervention is sound clinical practice and that it reflects reasonable and realistic goals and expected outcomes. The physician also must be willing to address and defend a rationale in relation to pre-morbid function, excess disability, and the expected positive outcome of any prescribed intervention. However, explanations of the above need not be explicitly documented in detail prospectively in the clinical record.

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SECTION II:

Dispute resolution:

Since the attending physician and medical director bears the ultimate responsibility of the care plan and medication or therapeutic device he or she has prescribed, that treatment should be considered "medically necessary" unless and until an insurer, a regulatory agency or another physician actually assumes the responsibility and liability for superseding the physician's care. In addition, "an insurer may be able to set aside the decision of the treating physician only if the insurer can show that the proposed treatment conflicts with clinical standards of care or that there is substantial scientific evidence, regardless of clinical practices, that the proposed care would be unsafe or ineffective or that an alternative course care of treatment would lead to an equally good outcome. By substantial evidence, we mean a sizable number of studies published in peer-reviewed journals that meet professionally recognized standards of validity and replicability and that are free of conflicts of interest."¹ "Given the enormous power of the payor to influence appropriate medical care by the denial of services", such criteria would prompt insurers to act reasonably and responsibly. AMDA also supports patient and physician access to a speedy, external review process when "medical necessity" is challenged--to ensure impartiality and nondiscrimination based on coverage criteria.

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SECTION III:

Determination and documentation of medical necessity for primary care services:

Medical necessity for a visit by a primary care provider may be, but is not limited to, the following:

• one physician visit to a nursing facility in a calendar month on the presumption that such a visit is "medically necessary" for a person whose condition requires him or her to reside in a facility providing round the clock nursing care--(Non-skilled);
• one physician visit/week on the presumption that such a visit is medically necessary for a person whose condition requires him or her to be receiving sub-acute care--(Skilled);
• the initial nursing facility admission evaluation;
• patient instability or change in condition that the physician documents is significant enough to require a timely medical or mental status evaluation and/or physical examination to establish the appropriate treatment intervention and/or change in care plan--(Skilled or Non-skilled);
• therapeutic issues that the physician documents require a timely follow-up evaluation to assess effectiveness of therapy or treatment--including recent surgical or invasive diagnostic procedures, pressure ulcer evaluation, psychotropic medication regimens, or (for the terminally ill) comfort measures;
• regulatory requirements, including, when warranted, the need for more frequent evaluations and examinations to assist in time-delineated assessments associated with the Prospective Payment System or other regulatory or payor requirements;
• medical conditions--including delirium, dementia, or changes in mental status--manifesting with behavioral symptoms that are primarily organic in nature and that require timely evaluation. (Physician documentation of these conditions and symptoms precludes down-coding to a psychiatric visit.); and
• nursing, rehabilitation, managed care, patient, or family request to address a documented medical issue of concern that requires a physical (or mental status) examination to the concern.

Note: The above list is not exclusive and there may be other times when a medically necessary visit is required. The physician still bears the burden of documenting the need for any and all visits and that documentation needs to support the intensity of coding.