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Local Medical Review Policies (LMRPs) are among the more challenging aspects of complying with Medicare medical necessity criteria. They’re also another potential reimbursement headache for access managers, points out Jim Smith, senior health care consultant for Accelerated Receivables Management LTD, Park Ridge, IL.
LMRPs, developed by local fiscal intermediaries and carriers under the direction of the Health Care Financing Administration, address tests and procedures that have a higher likelihood — based on past history — of not meeting the Medicare criteria for being medically necessary and reasonable, Smith says.
Certain medical indicators, in the form of appropriate diagnosis codes, must be documented and accompany the physician’s order for the tests and procedures impacted by LMRP, he notes. "Should the diagnosis code not support the LMRP medical indications for the test or procedure, local fiscal intermediaries and carriers have edits built into their claim systems, which render the claim denied’ for payment."
In Illinois, for example, there are some 38 LMRPs in existence and nine more in development, Smith adds. "One of the LMRPs is for an electrocardiogram. Should the patient be sent to a hospital for an EKG with the diagnosis of chest pain NEC [not elsewhere classifiable]," the test would be covered according to existing Illinois LMRP for electrocardiogram."
However, he explains, if the physician also orders lab tests — a complete blood count, electrolytes, and blood glucose, for example — the diagnosis does not justify those tests according to the LMRP and the charges would be denied. Additional signs or symptoms, such as "fatigue and malaise," would be required to justify medical necessity, Smith adds.
Medicare guidelines will not allow providers to bill patients for uncovered services based on LMRPs unless an Advance Beneficiary Notice (ABN) is signed by the patient before the service is performed, he says. And, Smith emphasizes, providers may not obtain ABNs on all Medicare patients for all tests ordered to prevent themselves from lost revenue. "ABNs are to be obtained only when the test or procedure ordered is impacted by an LMRP."
Providers must keep proof of signed ABNs on file — hard copy or on-line — to satisfy Medicare auditors, he adds. If the provider bills patients for noncovered services and not be able to demonstrate an ABN was secured before the service, Medicare can hold the facility liable for violating its contractual agreement and may impose significant financial penalties, Smith cautions. "Dollars associated with tests and procedures provided that do not meet LMRP medical necessity criteria are lost unless an ABN is signed in advance. The dollars cannot be written off to bad debt or charity."
Patient access personnel hold the key to successfully managing LMRPs and obtaining ABNs appropriately, he points out, and failure to do so can result not only in lost reimbursement, but in charges of fraud being brought against the provider.
With that in mind, he suggests the following questions be used as a checklist to make sure your department is ready to accept that responsibility:
• Has your access department been educated about LMRPs? Do you know where to secure the LMRPs for your region?
• Do you use or are you investigating technology support (software) to assist in managing compliance with LMRPs?
• Have your physicians and their office staffs been educated about LMRPs?
• Has your Medicare patient community been educated on noncovered services, ABNs, and their financial responsibility?
• Have your key internal managers and ancillary testing staff been educated?
• Who is heading up the coordination of LMRP compliance within your organization? Is your compliance officer involved?
• Are you prepared for customer service issues related to delays in service while medical necessity issues are sorted out?
• Does your access department employ a nurse? If not, how will access personnel secure clinical intervention to negotiate medical indications and documentation with ordering physicians?
• Does quality management provide a resource for the access department?
• If your access functions and management are decentralized, how and who will be accountable to ensure all sites, personnel, and managers are prepared? Who will monitor compliance and provide ongoing education and support?
• Are you using an ABN? Does it contain the required information? Is it kept in the patient’s medical record or patient accounting file or electronically stored? Is a signed copy provided to the patient and the ordering physician? Do your physicians have an acceptable ABN and are they sending it with their patients, when appropriate?
• Do you have a tracking mechanism to identify trends in noncovered tests or procedures ordered by physicians?
• Do you have tracking mechanisms to trend "lost dollars" due to having no ABN on file?