Pull the Plug on Medical Necessity Ambiguity

Posted on 26 Apr, 2018 |comments_icon 0|By Elizabeth

As is the case with patient’s history, payers and auditors use a similar logic for establishing medical necessity when scanning the PE records for over-documentation. Reviewers may identify elements of the PE that are not consistent with the CC and may determine that services were not medically necessary, thereby decreasing the overall level of the PE. Providers should double check documentation of the CC against the PE to ensure that medical necessity has been established.

Medical Decision-Making Documentation Pointers

Medical Decision Making (MDM) is an assessment plan, the provider’s thought process in devising a treatment plan based on the patient information available to him. MDM documentation has benefitted greatly from the advent of EMRs, as providers need to clearly detail their plans and the problem list.

Expert tips to remember:

  • The A/P section should automatically import all lab history to save time and effort.
  • There should be a log outlining, at a glance, when old medical records were requested, when they were received, and when reviewed.
  • If a provider requests medical records, he should have a drop-down log of options from which he could choose, “prior medical records requested.” Once he receives those files, the provider must remember to summarize that information and put it into a note for easy reference.
  • There should be a section that stores information gathered from someone other than the patient. A patient may be unable to communicate his symptoms and may bring his caretaker to speak on his behalf. Having a separate section to record patient information gathered from the caretaker, instead of the patient, would help keep the source of information accurate.
  • Does the EMR show diagnosis codes when the provider chooses a diagnosis? The provider should choose the diagnosis code with the highest level of specificity and that the documentation supports the code assignment. That way a coder can also be sure that the billing is correct.
  • MDM should drive the code level, with the EMR allowing for documenting counseling time in a format that demonstrates that more than 50 percent of the total visit time was spent by the provider in counseling the patient. A coder can use this time scale to assign the correct E/M code.

Divvy Up the MDM with the Decision-Making Matrix

CPT® has a decision-making matrix that physicians typically don’t utilize as much as they should.

# DXs Manage


Amount Data

For Review

Risk of


Type of Medical

Decision Making

Minimal None/Min Minimal Straightforward
Limited Limited Low Low Complexity
Multiple Moderate Moderate Moderate Complexity
Extensive Extensive High High Complexity


Rule: A provider must attain two out of three components for eligibility to report the desired level.

In theory, physicians would use this matrix and ask themselves when they’re documenting and subsequently coding, “How do I fit into this matrix?” The answer is not straightforward.

Bird’s Eye View: The words’ minimal,’ ‘limited,’ and ‘multiple’ are subjective. ‘Minimal’ could mean almost zero, or perhaps one. ‘Limited’ could mean two or multiple.

Red flag: Physicians must indicate which documentation they have reviewed. While they may not make that documentation a part of the record of this encounter, they can indicate that they reviewed the old X-ray charts, EKG scans, and similar. That review will lend support to the level of decision making.

Plus: The provider should factor in the risk of complications. A patient with a cardiac problem would run a higher risk of complications than a patient with a painful knee.

Lesson: Considering that risk of complications drives up the level of decision making, documenting to that fact substantiates that the level of MDM was significant. MDM drives medical necessity.

Learn More

Master accurate and timely documentation that reflects the scope of services provided with TCI’s Clinical Documentation Sourcebook 2018.



Elizabeth works on an array of projects at TCI, researching and writing about modern reimbursement challenges. Since joining TCI in 2017, she has also covered the nuts and bolts of cybersecurity, compliance with federal laws, and how to tap into the advantages of telehealth services.

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