Q&A: Ensuring patient tests are medically necessary

Q: How do we know if our facility is performing too many patient tests? What can we do to prove the tests are medically necessary?

A: Facilities often seek to avoid litigation and document care through testing. However, if the provider does not speak to the value of the testing as an element of the plan of care, then it can be deemed routine or nonessential, such as “daily labs” that are not discussed in the progress note or shown in the documentation of medical decision-making.

This can result in a determination of non–medically necessary testing. With the advent of value-based care and “risk sharing” contracts, overutilization has come into focus for both the provider and payer. In some cases, joint utilization programs have been developed. One example is the Cleveland Clinic Test Utilization program. These programs are geared, as are payer programs, at the reduction of overutilization of testing.

As providers are moving toward value and away from fee-for-service, the focus on reducing overutilization by payers becomes significant. Furthermore, the advent of downside risk sharing arrangements puts overutilization at top of the auditors’ minds and comes into focus in the line item audit. Facilities should conduct ongoing line item internal audits to determine whether they have concerns with overutilization. As we move to a downside risk payer-provider model, one key goal will be reduction in the cost to provide care. Therefore, payer auditors will be focused on this goal.

Editor’s Note: This answer is excerpted from JustCoding's Essential Guide to Coding Audits by Rose T. Dunn, MBA, RHIA, CPA/CGMA, FACHE, FHFMA, CHPS.

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