Medical Necessity Coverage Overview

Click the "Show Me" button to view a movie...

Click an image below to view more information...

Medicare issues National and Local Coverage Determinations (NCD and LCD). These documents specify guidelines for code use. Many list ICD codes that justify the medical necessity of either a service the physician wishes to perform, or a test that might enhance the delivery of patient care through better diagnosis or monitoring.

This is how they work:
• Once a coverage determination is issued, it becomes the provider's responsibility to know of any procedure codes that are affected, plus know if the ICD code they have matched to the procedure codes for billing is on the list of codes that justify the procedure.
• If the ICD code does not justify the procedure that is to be performed, the provider must inform the patient that medicare will not pay for the service and have the patient either:

      -sign a form that allows the physician to bill the patient for the test separately OR

      -have the patient decline having the test performed since it will not be covered.

The form that must be signed is called the Advanced Beneficiary Notification (ABN) form.

Remember, all of this has to be done BEFORE the test is performed! If the test gets done, and the ICD code is not on the approved list, medicare will not pay - and will not allow you to bill the patient after the test or procedure has been performed.