Medical Necessity

Practical Tools for Seminar Learning

© Copyright 2007 American Health Information Management Association. All rights reserved.
Disclaimer

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Faculty
Dianne Wilkinson, RHIT

Dianne Wilkinson is in her 38th year working in healthcare. The first 25 were in the
hospital setting, working in medical records, quality assurance, JCAHO coordination,
risk management, and utilization management. She earned her RHIT credential in
1980, her CPHQ (Certified Professional in Healthcare Quality) in 1988, and her CCP
(Credentialed Compliance Professional) in 2004. In 1995 she was recruited to the
physician office setting in her current position, Quality Manager/Compliance Officer for
MedSouth Healthcare in Dyersburg, Tennessee.

Ms. Wilkinson performs consulting services for physician clients in West and Middle
Tennessee who outsource their compliance activities, especially the education and
auditing/monitoring components. Ms. Wilkinson says she still passionately loves what
she does for a living, just as she did when she began working in the healthcare field in
1969.

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Table of Contents
Disclaimer ..................................................................................................................... i
How to earn one (1) CEU for participation ......................................................................... i
Faculty .........................................................................................................................ii
Medical Necessity and Medicare: Some Facts................................................................... 1
Local Coverage Decisions (LCDs) ..................................................................................... 2
National Coverage Decisions (NCDs) ................................................................................ 2
What do LCDs and NCDs Mean to the Physician Practice: .................................................. 3
Challenges for Physicians Associated with Medicare Rules for LCDs/NCDs ........................... 3
Medical Necessity: Best Practices in Coding and Billing .................................................. 4-6
Medical Necessity: Best Practices in Documentation ...................................................... 6-8
Resource/Reference List ................................................................................................. 8
Helpful CMS Resources on Medical Necessity ........................................................ 9
AHIMA Audio Seminars ................................................................................................... 9
About assessment quiz ..................................................................................................10
Thank you for attending (with link for evaluation survey) .................................................10
Appendix ..................................................................................................................11
Resource List .......................................................................................................12
Attachments ........................................................................................................13
“Reasonable and Necessary” section of the OIG Final Compliance Program,
Guidance for Individual and Small Group Physician Practices
Notice of Exclusions from Medicare Benefits (NEMB)
Advance Beneficiary Notice
Assessment Quiz
CE Certificate and Sign-in Instructions
Quiz Answer Key
Medical Necessity Notes/Comments

Medical Necessity and Medicare: Some Facts

• Medicare defines medical necessity as a service provided for

the diagnosis or treatment of an illness or injury or to improve
the functioning of a malformed body member (42 U.S.C.
1395y(a)(1)(A).
• Despite this very clinical definition, physicians should think of
“medical necessity” as a billing term for Medicare patients
rather than a clinical term.
• In 1996, an audit by the Office of the Inspector General
showed that $23 billion was paid out in erroneous Medicare
claims (approximately 14% of all Medicare fee-for-service
claims). From then until now, about 70% of the amount paid
in erroneous Medicare claims is due to documentation
problems and failure to properly establish medical necessity
for services billed.
Continued…
1

Medical Necessity and Medicare: Some Facts

(Continued)

• “Reasonable and necessary services” is identified as a key risk

area in the O.I.G. Model Compliance Guidance for the
Physician Office Setting issued in September 2000.
• While Medicare recognizes that many tests and procedures
constitute “good medicine” and are appropriate for treatment,
Medicare will only pay for services that meet Medicare’s
definition of “reasonable and necessary”.
• It is a fair statement to say that most physicians probably do
not understand all they should about Medicare’s rules
regarding medical necessity of services performed and billed
and the related documentation required (particularly about
services with limitations of coverage).

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Medical Necessity Notes/Comments

Coverage criteria within the Medicare Coverage Database

—Local Coverage Decisions (LCDs)

• Established by Section 522 of the Benefits

Improvement and Protection Act.
• A determination made at the Medicare carrier level
(usually State by State) as to whether a service will
be considered “reasonable and necessary”, and/or
any coverage restrictions which might be imposed
(e.g. by diagnosis, by frequency, etc.).
• Established by final rule effective December 7,
2003, CMS’ contractors began to issue LCDs rather
than LMRPs (local medical review policies).

Coverage Criteria within the Medicare Coverage Database

—National Coverage Decisions (NCDs)

• Are made through an evidence-based process, with opportunities for

public participation, e.g. CMS’ own research supplemented by an
outside technology assessment and/or consultation with the
Medicare Coverage Advisory Committee.
• In the absence of a national coverage policy, an item or service may
be covered at the discretion of the Medicare contractors based on a
local coverage decision (LCD).
• The most commonly used NCDs for physicians are the Laboratory
NCDs, developed as part of the Balanced Budget Act of 1997. These
Laboratory NCDs were developed for 23 lab tests and are published
with three lists for each NCD: Covered codes, non-covered codes,
and codes that do not support medical necessity.
• The NCDs were published under the Administrative Procedures Act in
the Federal Register of November 23, 2001.
• CMS updates the NCD code list as often as necessary to incorporate
new codes, make corrections, etc. These updates can be
downloaded from the CMS web site.
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Medical Necessity Notes/Comments

What do LCDs and NCDs Mean to

the Physician Practice?

• That many tests and procedures they want to order have coverage
restrictions by Medicare.
• That if the physician just re-located from New York to Tennessee, he
will not necessarily find the same tests and procedures that have
restricted coverage in both States.
• A Medicare carrier’s list of current LCDs can change often; individual
LCDs can be revised often; LCDs can be declared inactive, but for
practical purposes should still be followed!
• Failure to stay current with your carrier’s LCDs puts you at risk for
lost reimbursement; because if you receive a denial from Medicare
due to medical necessity which cannot be appealed, and you have
not obtained an Advance Beneficiary Notice (ABN) from your patient,
your only option is a write-off.
• If a physician Practice is writing off large amounts due to medical
necessity denials from Medicare, the patients are not paying for
these services; this perpetuates a common “myth” among Medicare
patients… that Medicare covers “everything”.
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Challenges for Physicians Associated with

Medicare Rules for LCDs/NCDs:

• Since not all tests and procedures have limited Medicare coverage,
the burden is on physicians to know on any given day which ones do
(and are pertinent to their Practice) for their particular Medicare
carrier.
• This involves the physician, or a nurse or other staff person, checking
the carrier’s web site for current LCDs (and Lab staff staying abreast
of current NCDs and keeping physicians informed). In a significant
number of physician Practices, physicians are not staying current
with their State’s LCDs. This will most certainly result in Medicare
denials for medical necessity.
• Reviewing LCDs and obtaining the Advance Beneficiary Notice if
needed must be done prior to rendering the service. Most physicians
are not focusing on billing issues at the beginning of a patient
encounter. At the end of the encounter, it’s too late.
• LCDs and NCDs are often revised; LCDs can be rendered inactive;
new LCDs are published. Someone in the Practice needs to stay
current with all this information from Medicare carriers and publish it
to all physicians and pertinent staff. In my experience, this is not
done as consistently as it should be.
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Medical Necessity Notes/Comments

Medical Necessity:
Best Practices in Coding and Billing

• Always choose diagnosis codes to the highest specificity

possible.
• In coding diagnoses or conditions from a chart note, all
diagnoses or conditions that were worked up, treated, or that
impacted the patient’s care should be coded. Per ICD.9’s
Diagnostic Coding and Reporting Guidelines for Outpatient
Services (including provider-based office visits):
• The principal reason (diagnosis, symptom, etc.) for the visit
should be sequenced first.
• Code all conditions that co-exist at the time of the encounter and
require or affect patient care treatment or management (“V”
codes may be used as secondary codes if they impacted current
care or treatment).
• Chronic diseases treated on an ongoing basis may be coded and
reported as many times as the patient receives treatment and
care for the condition(s). Continued…
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Medical Necessity:
Best Practices in Coding and Billing (Continued)

• Regarding CPT/HCPCS procedure codes, do not choose a code that

reflects more work than was done and documented.
• Observe the National Correct Coding Initiative (NCCI) edits
regarding codes that may be bundled (not paid separately).
• Do not choose three procedure codes in a code “family” when ONE of
those codes would fully describe the work that was done and
documented.
• Very important: Every test and/or procedure performed or ordered
per the superbill should be linked to the diagnosis or condition which
establishes medical necessity. This is most effectively done by the
person who ordered the test/procedure.

Continued…
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Medical Necessity Notes/Comments

Medical Necessity:
Best Practices in Coding and Billing (Continued)

• Learn to code and bill preventive visits correctly, honoring the

specific coverage guidelines of Medicare and other payers. This is an
area of billing that is always a challenge for physicians and
coding/billing staff.
• Have a good working knowledge of CPT and HCPCS modifiers that
affect your Practice. Especially know when to use –GA, -GY, and –GZ
which apply specifically to Medicare coverage requirements.
• Be aware of hospital or nursing home policies, in place because of an
accrediting or regulating entity, which may require action on the part
of the physician (e.g., dictating a History and Physical), but which
not be a billable service to Part B Medicare.
• For proceduralists, be aware of Medicare guidelines for billing an
E&M service on the same day as a minor procedure. In order for the
E&M service to be billable, it must be a significant service, OVER AND
ABOVE the evaluation/management associated with the procedure
itself. If that requirement is met, the E&M service may be billed with
a -25 modifier; the use of the -25 modifier is always under scrutiny
by Medicare.
Continued…
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Medical Necessity:
Best Practices in Coding and Billing (Continued)

• Regarding billing Evaluation and Management services, be aware of

the following information recently shared with Medicare carriers
from CMS which was gleaned from Comprehensive Error Rate
Testing (CERT) reviews and other reviews of pre or post-claim
documentation:
• Medical necessity of an E&M encounter is often visualized only when
viewed through the prism of its characteristics captured in specific
History of Present Illness (HPI) elements.
• Medical necessity of E&M services is generally expressed in two ways:
Frequency of services and intensity of service (current CPT level).
• Medicare’s determination of medical necessity is separate from its
determination that the E&M service was rendered as billed.
• Medicare determines medical necessity largely through the experience
and judgment of clinical coders along with guidelines provided in CPT and
by CMS; at audit, Medicare will deny or downcode E&M services that, in its
judgment, exceed the patient’s documented needs.
• Medicare uses the history, exam, and decision-making to determine the
physician’s cognitive work of the E&M service, based on such attributes as
the number, acuity, and severity/duration of problems addressed; the
context of the encounter among all other services previously rendered for
the same problem; the complexity of comorbidities that clearly influenced
physician work; and the physical scope encompassed by the problems
(number of physical systems affected by the problems).
Continued… 10

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Medical Necessity Notes/Comments

Medical Necessity:
Best Practices in Coding and Billing (Continued)

• Best practice coding and billing summary statement:

Do all the clinical work necessary for the patient, based on the
nature of presenting problem(s); document history, exam, and
decision-making based on what was necessary to work up and/or
treat the patient’s problem(s). Include all tests and procedures
performed or ordered. Then code and bill from what was
documented, assuring that the superbill is an accurate reflection of
the chart note, and that all codes are accurate, appropriate modifiers
are used, and that every test/procedure on the claim is linked to the
appropriate diagnosis code that establishes medical necessity.

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Medical Necessity:
Best Practices in Documentation

• Ensure that the chart note includes the diagnosis or condition

that establishes medical necessity for every test or procedure
that was ordered or performed.
• Ensure that the superbill is an accurate reflection of the chart
note as to diagnoses and procedures.
• If a separate requisition form is used to order a diagnostic
test, as a supplement to the superbill, be sure that the
diagnosis or condition listed on the requisition form to
establish medical necessity matches the diagnosis or
condition reflected in the chart note.
• Beware of using a “standard combo” of diagnosis code to CPT
code because you know it is listed in an LCD as a covered
diagnosis (e.g., a pattern of using “fatigue” linked to virtually
all orders for CBC, when the chart notes do not mention
fatigue… risky business!).
Continued…
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Medical Necessity Notes/Comments

Medical Necessity:
Best Practices in Documentation (Continued)

• Most carriers have an LCD for removal of benign skin lesions. If

more than one benign lesion is being treated, list them separately in
the History of Present Illness, and describe each one as to whether
medical necessity can be established (e.g., bleeding), or whether it
must be categorized as cosmetic surgery and therefore non-covered
by Medicare.
• Some LCDs, like the one for removal of benign skin lesions, require a
-KX modifier indicating that documentation is on file in the medical
record that establishes medical necessity. Part of your compliance
activities should be auditing for this documentation when the -KX
has been submitted on the claim.
• For an LCD involving a CPT code with specific requirements, be sure
the chart note contains all the information called for by the code
(e.g., trigger point injections… one code affects one or two muscle
groups, another, which is higher-paying, affects three or more
muscle groups).
Continued…
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Medical Necessity:
Best Practices in Documentation (Continued)

• Regarding billing Evaluation and Management Services,

medical necessity is the overarching criterion for payment in
addition to the individual requirements of a CPT code…the
volume of documentation should not be the primary influence
upon which a specific level of service is billed (Carriers
Manual, Part 3, 15501, B.).
• Years ago, Medicare often said to physicians, “you don’t have
enough documentation to support your E&M level”. Now, we
often hear, “the volume of your documentation appears to
exceed the patient’s medical need”.
• Consequently, Medicare warns against cloned notes (whether
electronic or not), checklists, pre-printed visit forms, or other
tools that facilitate upcoding and that also result in notes that
have little clinical validity and could adversely affect patient
care.
Continued…
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Medical Necessity Notes/Comments

Medical Necessity:
Best Practices in Documentation (Continued)

• All clinical work done for the patient should be documented,

even if a lower E&M level is selected. The chart note is not
primarily a billing document but should be an accurate
reflection of all that was done during the encounter. Accurate
and complete chart notes are the best protection from a
quality assurance standpoint, a risk management standpoint,
and a billing standpoint.

• Delinquent chart completion is an enemy to Medicare

compliance. No one can remember all that was done during a
patient encounter days or weeks after the fact. In particular,
the documentation of medical necessity for all that was
performed or ordered could suffer.

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Resource/Reference List

Book
• AHIMA Publication: Health Information Management Compliance: Guidelines
for Preventing Fraud and Abuse, Fourth Edition; by Sue Bowman.
https://imis.ahima.org//orders/productDetail.cfm?pc=AB102107
Articles
• “Reasonable and Necessary” section of the OIG Final Compliance Program
Guidance for Individual and Small Group Physician Practices (October 5,
2000; FR page 59439): www.oig.hhs.gov/fraud/complianceguidance.html
• "Comprehensive Error Rate Testing (CERT) Report," article from July, 2007
"Medicare Bulletin: Tennessee" by Cigna Government Services, regarding
medical necessity of evaluation and management (E&M) services (pg. 1):
www.cignamedicare.com/partb/pubs/mb/2007/07_07/PDFs/TN_07_07.pdf
• “Medical Record Cloning, ”article from March/April, 1999 "Medicare Bulletin:
Tennessee" by Cigna Government Services (pg. 12):
www.cignamedicare.com/partb/pubs/mb/1999/99_2/PDFs/b992tn.pdf
• “Phantom Double Plays, Histories and Physicals," article from December,
2001 "Medicare Bulletin" from Wisconsin Physicians Service (pp. 2-3):
www.wpsmedicare.com/provider/pdfs/1201bltn.pdf
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Medical Necessity Notes/Comments

Helpful CMS Resources on Medical Necessity

• Notice of Exclusions from Medicare Benefits (NEMB), which lists services that
are statutorily non-covered, and therefore would never be considered
“medically necessary” for Medicare payment (these services should be the
patient’s responsibility to pay)
www.cms.hhs.gov/BNI/Downloads/CMS20007English.pdf
• Example of a dedicated Advance Beneficiary Notice (ABN).
Form Number: CMS R 131-G
www.cms.hhs.gov/cmsforms/downloads/cmsr-131-g.pdf

• CMS Medicare Coverage Center: www.cms.hhs.gov/center/coverage.asp

• Overview of Medicare Coverage Database:
www.cms.hhs.gov/mcd/overview.asp
• Local Coverage Determinations:
www.cms.hhs.gov/DeterminationProcess/04_LCDs.asp
• Lab National Coverage Decisions (NCDs):
www.cms.hhs.gov/CoverageGenInfo/04_LabNCDs.asp
• Overview of Medicare Coverage Determination Process:
www.cms.hhs.gov/DeterminationProcess/
• Example of an LCD for Bone Mass Measurement (#L5803, Cigna/Tennessee):
www.cms.hhs.gov/mcd/viewlcd.asp?lcd_id=5803&lcd_version=31&show=all
17

AHIMA Audio Seminars

Visit our Web site

http://campus.AHIMA.org
for updated information on the
current seminar schedule.
While online, you can also register for
live seminars or order CDs and
Webcasts of past seminars.

© 2007 American Health Information Management Association

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Medical Necessity Notes/Comments

Assessment

To access the assessment quiz that follows this

seminar, download the seminar’s resource book at

http://campus.ahima.org/audio/fastfactsresources.html

Thank you for attending!

Please visit the AHIMA Audio Seminars

Web site to sign-in and complete your
evaluation form online at:

http://campus.ahima.org/audio/fastfactsresources.html

Each person seeking CE credit must complete

the sign-in form and evaluation in order
to view and print their CE certificate.

Certificates will be awarded for AHIMA

CEUs and ANCC Contact Hours.

10
Appendix

Resource List
Attachments
“Reasonable and Necessary” section of the OIG Final Compliance Program, Guidance for
Individual and Small Group Physician Practices
Notice of Exclusions from Medicare Benefits (NEMB)
Advance Beneficiary Notice
Assessment Quiz
CE Certificate and Sign-in Instructions
Quiz Answer Key
Appendix

Resource List

Attachments

“Reasonable and Necessary” section of the OIG Final Compliance Program, Guidance for Individual and Small
Group Physician Practices (October 5, 2000; Federal Register pages 59439-40)
http://www.oig.hhs.gov/fraud/complianceguidance.html

Notice of Exclusions from Medicare Benefits (NEMB); Form No. CMS-20007 (January 2003)

Advance Beneficiary Notice; Form No. CMS-R-131-G (June 2002)

Book

AHIMA Publication: Health Information Management Compliance: Guidelines for Preventing Fraud and Abuse,
Fourth Edition; by Sue Bowman.
https://imis.ahima.org//orders/productDetail.cfm?pc=AB102107

Articles

“Reasonable and Necessary” section of the OIG Final Compliance Program Guidance for Individual and Small
Group Physician Practices (October 5, 2000; FR page 59439)
http://www.oig.hhs.gov/fraud/complianceguidance.html

"Comprehensive Error Rate Testing (CERT) Report," article from July, 2007 "Medicare Bulletin: Tennessee" by
Cigna Government Services, regarding medical necessity of evaluation and management (E&M) services (pg. 1)
http://www.cignamedicare.com/partb/pubs/mb/2007/07_07/PDFs/TN_07_07.pdf

“Medical Record Cloning,” article from March/April, 1999 "Medicare Bulletin: Tennessee" by Cigna Government
Services (pg. 12)
http://www.cignamedicare.com/partb/pubs/mb/1999/99_2/PDFs/b992tn.pdf

“Phantom Double Plays, Histories and Physicals," article from December, 2001 "Medicare Bulletin" from
Wisconsin Physicians Service (pp. 2-3)
http://www.wpsmedicare.com/provider/pdfs/1201bltn.pdf

CMS

Medicare’s Notice of Exclusions from Medicare Benefits (NEMB), which lists services that are statutorily non-
covered, and therefore would never be considered “medically necessary” for Medicare payment
(These services should be the patient’s responsibility to pay)
http://www.cms.hhs.gov/BNI/Downloads/CMS20007English.pdf

Example of a dedicated Advance Beneficiary Notice (ABN). Form Number: CMS R 131-G
http://www.cms.hhs.gov/cmsforms/downloads/cmsr-131-g.pdf

CMS Medicare Coverage Center: http://www.cms.hhs.gov/center/coverage.asp

Overview of Medicare Coverage Database: http://www.cms.hhs.gov/mcd/overview.asp

Local Coverage Determinations: http://www.cms.hhs.gov/DeterminationProcess/04_LCDs.asp

Lab National Coverage Decisions (NCDs): http://www.cms.hhs.gov/CoverageGenInfo/04_LabNCDs.asp

Overview of Medicare Coverage Determination Process: http://www.cms.hhs.gov/DeterminationProcess/

Example of an LCD for Bone Mass Measurement (#L5803, Cigna/Tennessee)

http://www.cms.hhs.gov/mcd/viewlcd.asp?lcd_id=5803&lcd_version=31&show=all
“Reasonable and Necessary” section of the OIG Final Compliance Program
Guidance for Individual and Small Group Physician Practices
(October 5, 2000; Federal Register pages 59439-40)
Online at: www.oig.hhs.gov/fraud/complianceguidance.html

Office of Inspector General's Compliance Program Guidance for Individual and Small
Group Physician Practices: II(B) Step 2 (1)(b)

b. Reasonable and Necessary Services.

A practice’s compliance program may provide guidance that claims are to be
submitted only for services that the physician practice finds to be reasonable and
necessary in the particular case. The OIG recognizes that physicians should be able to
order any tests, including screening tests, they believe are appropriate for the treatment of
their patients. However, a physician practice should be aware that Medicare will only pay
for services that meet the Medicare definition of reasonable and necessary.23
Medicare (and many insurance plans) may deny payment for a service that is not
reasonable and necessary according to the Medicare reimbursement rules. Thus, when a
physician provides services to a Medicare beneficiary, he or she should only bill those
services that meet the Medicare standard of being reasonable and necessary for the
diagnosis and treatment of a patient. A physician practice can bill in order to receive a
denial for services, but only if the denial is needed for reimbursement from the secondary
payor. Upon request, the physician practice should be able to provide documentation,
such as a patient’s medical records and physician’s orders, to support the appropriateness
of a service that the physician has provided.

Footnote:
23 ‘‘* * * for the diagnosis or treatment of illness or injury or to improve the functioning
of a malformed body member.’’ 42 U.S.C. 1395y(a)(1)(A).

Excerpt from: Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices
 NOTICE OF EXCLUSIONS FROM MEDICARE BENEFITS (NEMB)
There are items and services for which Medicare will not pay.
• Medicare does not pay for all of your health care costs. Medicare only pays for covered benefits.
Some items and services are not Medicare benefits and Medicare will not pay for them.
• When you receive an item or service that is not a Medicare benefit, you are responsible to pay for it,
personally or through any other insurance that you may have.
The purpose of this notice is to help you make an informed choice about whether or not
you want to receive these items or services, knowing that you will have to pay for them yourself.
Before you make a decision, you should read this entire notice carefully.
Ask us to explain, if you don’t understand why Medicare won’t pay.
Ask us how much these items or services will cost you (Estimated Cost: $_____________).

Medicare will not pay for: ________________________________________________

______________________________________________________________________;

□ 1. Because it does not meet the definition of any Medicare benefit.

□ 2. Because of the following exclusion * from Medicare benefits:

□ Personal comfort items. □ Routine physicals and most tests for screening.
□ Most shots (vaccinations). □ Routine eye care, eyeglasses and examinations.
□ Hearing aids and hearing examinations. □ Cosmetic surgery.
□ Most outpatient prescription drugs. □ Dental care and dentures (in most cases).
□ Orthopedic shoes and foot supports (orthotics). □ Routine foot care and flat foot care.
□ Health care received outside of the USA. □ Services by immediate relatives.
□ Services required as a result of war. □ Services under a physician’s private contract.
□ Services paid for by a governmental entity that is not Medicare.
□ Services for which the patient has no legal obligation to pay.
□ Home health services furnished under a plan of care, if the agency does not submit the claim.
□ Items and services excluded under the Assisted Suicide Funding Restriction Act of 1997.
□ Items or services furnished in a competitive acquisition area by any entity that does not have a contract
with the Department of Health and Human Services (except in a case of urgent need).
□ Physicians’ services performed by a physician assistant, midwife, psychologist, or nurse anesthetist,
when furnished to an inpatient, unless they are furnished under arrangements by the hospital.
□ Items and services furnished to an individual who is a resident of a skilled nursing facility (a SNF)
or of a part of a facility that includes a SNF, unless they are furnished under arrangements by the SNF.
□ Services of an assistant at surgery without prior approval from the peer review organization.
□ Outpatient occupational and physical therapy services furnished incident to a physician’s services.
* This is only a general summary of exclusions from Medicare benefits. It is not a legal document.
The official Medicare program provisions are contained in relevant laws, regulations, and rulings.

Form No. CMS-20007 (January 2003)

Patient’s Name: Medicare # (HICN):

ADVANCE BENEFICIARY NOTICE (ABN)

NOTE: You need to make a choice about receiving these health care items or services.
We expect that Medicare will not pay for the item(s) or service(s) that are described below.
Medicare does not pay for all of your health care costs. Medicare only pays for covered items
and services when Medicare rules are met. The fact that Medicare may not pay for a particular
item or service does not mean that you should not receive it. There may be a good reason your
doctor recommended it. Right now, in your case, Medicare probably will not pay for –
Items or Services:

Because:

The purpose of this form is to help you make an informed choice about whether or not you
want to receive these items or services, knowing that you might have to pay for them yourself.
Before you make a decision about your options, you should read this entire notice carefully.
• Ask us to explain, if you don’t understand why Medicare probably won’t pay.
• Ask us how much these items or services will cost you (Estimated Cost: $_________________),
in case you have to pay for them yourself or through other insurance.

PLEASE CHOOSE ONE OPTION. CHECK ONE BOX. SIGN & DATE YOUR CHOICE.
… Option 1. YES. I want to receive these items or services.
I understand that Medicare will not decide whether to pay unless I receive these items
or services. Please submit my claim to Medicare. I understand that you may bill me for
items or services and that I may have to pay the bill while Medicare is making its decision.
If Medicare does pay, you will refund to me any payments I made to you that are due to me.
If Medicare denies payment, I agree to be personally and fully responsible for payment.
That is, I will pay personally, either out of pocket or through any other insurance that I have.
I understand I can appeal Medicare’s decision.

… Option 2. NO. I have decided not to receive these items or services.

I will not receive these items or services. I understand that you will not be able to submit a
claim to Medicare and that I will not be able to appeal your opinion that Medicare won’t pay.

_____________ _ _________________________________________
Date Signature of patient or person acting on patient’s behalf

NOTE: Your health information will be kept confidential. Any information that we collect about you on this
form will be kept confidential in our offices. If a claim is submitted to Medicare, your health information on this form
may be shared with Medicare. Your health information which Medicare sees will be kept confidential by Medicare.
OMB Approval No. 0938-0566 Form No. CMS-R-131-G (June 2002)
Assessment Quiz – Medical Necessity

To earn continuing education credit of one (1) AHIMA CEU, Fast Facts Audio Seminar listeners must also complete
this 10-question quiz. This CE credit is for attending the audio seminar AND completing this quiz. Please keep a
copy of the completed quiz with your CE certificate. Do not send a copy to AHIMA.

1. True or false? In the interest of promoting 6. True or false? Medicare rules prohibit the use of
preventive care, Medicare covers all tests for templates and pre-printed office visit forms.
screening. True
True False
False
7. True or false? Medical necessity must be clearly
2. True or false? Medicare rules state that evident in the physician’s (or non-physician
physicians are only to bill Medicare for covered practitioner’s) documentation for all tests and
services unless the claim is submitted in order to procedures submitted on the claim.
receive a denial so that the patient may be billed. True
True False
False
8. True or false? It is the coder’s responsibility to
3. True or false? In the absence of a National determine why tests and procedures were
Coverage Decision, Medicare carriers are allowed ordered, based on the diagnosis list provided by
to develop Local Coverage Decisions at their the physician/NPP.
discretion. True
True False
False
9. True or false? If a medical necessity denial is
4. True or false? The only risk that medical received from Medicare, indicating that the
necessity denials from Medicare pose to a patient is not responsible for payment, this can
Practice is the loss of revenue from write-offs. be corrected by calling the patient and obtaining
True his permission to bill him at that point, as long as
his permission is obtained in writing.
False
True
False
5. True or false? Medical necessity, based on the
patient’s medical need, is the most important
driver in the choice of E&M code selection. 10. True or false? Local Coverage Decisions (LCDs)
True may vary from Medicare carrier to carrier as to
coverage criteria.
False
True
False

Do not send a copy of completed quizzes to AHIMA. Please keep them with your CE certificate, for your records.
Be sure to sign-in and complete your evaluation form, to receive your certificate, at
http://campus.ahima.org/audio/fastfactsresources.html.

ANSWERS to this quiz are found on the last page of the

seminar resource book, Practical Tools for Seminar Learning.
 To receive your

CE Certificate

visit
http://campus.ahima.org/audio/fastfactsresources.html

click on the link to

“Sign In and Complete Online Evaluation”
listed for this seminar.

You will be automatically linked to the

CE certificate for this seminar after completing the
evaluation.

Each participant expecting to receive continuing education credit

must complete the online evaluation and sign-in information,
in order to view and print the CE certificate.
Quiz Answer Key
Fast Facts Audio Seminar: Medical Necessity

1: false; 2: true; 3: true; 4: false; 5: true; 6: false; 7: true; 8: false; 9: false; 10: true

Do not send a copy of your completed Fast Facts Audio Seminar quiz to AHIMA.
Please keep it with your CE certificate, for your records.