Documenting Medical Necessity for Major
Joint Replacements
James W. Cope, MD
Jennifer Dupee, RN, JD
Improper Payments Elimination &
Recovery Act of 2010 (IPERA)
Requires Federal Agencies to:
• Identify programs that may be susceptible to significant
improper payments;
• Estimate the amount of improper payments in those
programs;
• Report the estimates to Congress and the public; and
• Describe the actions the agency is taking to reduce improper
payments in those programs.
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CMS Medical Review Entities
Claim Selection
Volume of Claims
Random
Small (Approx. 50,000)
Targeted
Variable upon number of
claims with improper
payments for this provider
To prevent future improper payments
Targeted
Variable upon number of
claims with improper
payments for this provider
To detect and correct past improper
payments and prevent future improper
payments through limited pre-pay review
ZPIC
Targeted
Variable upon number of
potentially fraudulent
claims submitted by
provider
To identify potential fraud
OIG
Targeted
Varies on the focus of the
OIG audit
To identify fraud and improper payments
CERT
MAC
Recovery
Auditors
Purpose of Review
To measure incidence of improper
payments
*While these are the major review entities, CMS may implement additional
special projects requiring medical review
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Comprehensive Error Rate Testing
(CERT)
• Calculate the Medicare Fee-for-Service program improper
payment rate
• Claims are selected randomly from all claims submitted for
payment during the reporting period (~ 50,000 claims)
• Claim reviews are conducted by professional reviewers at the
CERT Review Contractor
– 85 RNs
– 2 Medical Directors
– 6 Coders
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Comprehensive Error Rate Testing
(CERT)
• Determinations are made regarding whether the claim
was paid properly under Medicare coverage, coding,
and billing rules and error categories are assigned
• Claims determined to be paid incorrectly are scored as
errors and payments are adjusted
• Improper payment rates are calculated and reported
- www.cms.gov/cert
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2011 CERT Findings
• Rates
– Adjusted Improper Payment Rate 8.6% ($28.8 Billion)
• Downward adjustment applied for appeal results and receipt of
supporting documentation received after the reporting cutoff
date
 Based on historical trends
– Unadjusted Improper Payment Rate 9.9% ($33.3
Billion)
• High-Error Claim Types:
 Inpatient hospital short stays (medical necessity errors)
 Physician services (coding errors)
 DME (insufficient documentation errors)
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Authority for Medical Review
Social Security Act § 1862(a)(1)(A)
(a) Notwithstanding any other provision of this title, no payment may be
made under part A or part B for any expenses incurred for items or
services—
(1)(A) which, except for items and services described in a succeeding
subparagraph, are not reasonable and necessary for the diagnosis
or treatment of illness or injury or to improve the functioning of a
malformed body member
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Authority for Medical Review
42 CFR § 424.5(a)(6)
(a) As a basis for Medicare payment, the following
conditions must be met:
(6) Sufficient information. The provider, supplier, or
beneficiary, as appropriate, must furnish to the
intermediary or carrier sufficient information to determine
whether payment is due and the amount of payment.
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Documenting Medical Necessity for
Major Joint Replacement (Hip and Knee)
• MLN Matters SE1236: Published by CMS in September, 2012
• CERT & MACs found high improper payment rates among claims for
hip and knee replacements
• Described by CMS as “an educational guide to improve compliance
with documentation requirements for major joint replacement
surgery.”
• To avoid denials, records should contain enough detailed
information to support the medical necessity of the procedure.
• “Painful DJD unresponsive to conservative treatment” is not
enough.
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History
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Description of pain
ADL limitations
Safety
Contraindications to non-surgical treatments
Failed conservative treatments, e.g.,
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–
–
–
–
Meds (e.g., NSAIDs)
Weight loss
Physical Therapy
Intra-articular injections
Braces, orthotics or assistive devices.
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Physical Examination
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Deformity
Range of Motion
Crepitus
Effusions
Tenderness
Gait description
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Investigations
• Results of applicable investigations
– Plain films
– MRI
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Clinical Judgment
• Reasons for deviating from a stepped-care approach
– Intolerant of NSAIDs
– Refused injections
– Joint damage too severe to respond (e.g., AVN femoral head)
Must be clearly documented
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? Questions ?
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