CMS’ recent final rule provides guidance on what is considered reasonable and necessary.

Many policies and publications state that a key requirement for medical care to be covered by insurance and eligible for reimbursement is that the care must be reasonable and medically necessary. Practitioners and patients usually understand that refractive and cosmetic procedures, performed with a medical indication, are non-covered. However, the definition of medical necessity is more specific than simply excluding cosmetic and refractive care.

The Social Security Act (section 1862(a)(1)(A) allows Medicare part A or part B payment “…for any expenses incurred for items or services that are reasonable and necessary, defined as ‘safe and effective,’ for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”¹

The law requires that an item or service be “reasonable and necessary” to be covered by Medicare; there are very few exceptions.

What does that mean in your ophthalmic practice?

The final rule

CMS finalized a rule in January 2021 — following a 2019 executive order by President Trump and proposed CMS action in September 2020 — that focuses on defining when an item, device, or service is reasonable and necessary for Medicare Part A and Part B reimbursement. A reasonable and necessary item or service was defined as the following in the final rule²:

• Safe and effective
• Not experimental or investigational
• Appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it meets the following criteria:
  1. Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member.
  2. Furnished in a setting appropriate to the patient’s medical needs and condition.
  3. Ordered and furnished by qualified personnel.
  4. Meets, but does not exceed, the patient’s medical need; and
  5. Is at least as beneficial as an existing and available medically appropriate alternative.

In addition to the expected language that requires care be furnished in an appropriate setting, the third bullet point above addresses the provider. Care must be “ordered and furnished by qualified personnel” — the order is not optional.³ Standing orders do not suffice, and technicians may not order tests.

Avoiding premature treatments

Pay particular attention to the fourth bullet point in the previous definition — care that “meets, but does not exceed, the patient’s medical need.” This means providers should not advocate a treatment or procedure prematurely. For example, the Tear Film and Ocular Surface Society DEWS II⁴ report speaks to the use of artificial tears and/or ointments prior to providing punctal plugs. Likewise, in glaucoma management, surgeons have a variety of treatment options and should choose what is appropriate for each patient’s needs.

About frequency

In a clinic setting, frequency of tests or treatments could also be challenged if they exceed generally accepted standards or published frequency expectations in payer policies. Expected frequency is often tied to the indication. For example, the Utilization Guidelines in the Novitas Medicare LCD⁵ for scanning computerized ophthalmic diagnostic imaging, posterior segment, retina (SCODI) (CPT 92134) states:

• No more than one (1) exam every two (2) months will be considered medically reasonable and necessary to manage the patient whose primary ophthalmological condition is related to a retinal disease that is not undergoing active treatment.** Note: Please see next bullet if undergoing active treatment.
• No more than one (1) exam per month will be considered medically reasonable and necessary to manage the patient with retinal conditions undergoing active treatment, or in conditions suggestive of rapid deterioration. These conditions include wet AMD, choroidal neovascularization, macular edema, diabetic retinopathy (proliferative and non-proliferative), branch retinal vein occlusion, central retinal vein occlusion, and cystoid macular edema.In addition, other conditions which may undergo rapid clinical changes monthly requiring aggressive therapy and frequent follow-up (e.g., macular hole and traction retinal detachment) may also require monthly scans.

The policy addresses testing for retina patients under a “treat and extend” protocol by stating: “With the development of treat and extend protocols for patients with wet AMD treated with antiangiogenic drugs, it is expected that SCODI (unilateral or bilateral) will be used for therapeutic decision making and utilized at maximum of monthly with subsequent less frequency based on the patient treatment protocol and patient response as documented in the medical record.”

For patients on high-risk medications (eg, hydroxychloroquine), the policy reads: “No more than one (1) exam per year will be considered medically reasonable and necessary for patients being treated with CQ and/or HCQ. These patients should receive a baseline examination within the first year of treatment and as an annual follow-up after five years of treatment. For higher-risk patients, annual testing may begin immediately (without a 5-year delay).”

Review your payer policies for coverage guidelines as they apply to the indications for care, frequency of care, and the appropriate level that does not exceed the patient’s needs.

Who pays if insurance doesn’t?

If you suspect your claim may be considered not reasonable and necessary, you may make the patient responsible for payment.

In this case, prior to performing the service, obtain a signed an Advance Beneficiary Notice of Noncoverage or other financial waiver form to notify beneficiaries of their financial responsibility.

Conclusion

The necessity of an item or service for care should be considered in all patient care encounters. Providing necessary, quality, appropriate care is job one. Staff within your ophthalmic practices must understand your providers’ clinical care protocols and the accepted standard of care.

From the management perspective, the necessity of care is closely tied to reimbursement. Get to know your payer policies and coverage guidelines. OP

REFERENCES:

1. Social Security Administration. Social Security Act Section 1862 (a)(1)(A). https://www.ssa.gov/OP_Home/ssact/title18/1862.htm . Accessed March 31, 2023.
2. Federal Register. Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary.” https://www.federalregister.gov/documents/2021/01/14/2021-00707/medicare-program-medicare-coverage-of-innovative-technology-mcit-and-definition-of-reasonable-and . Accessed March 31, 2023.
3. Centers for Medicare & Medicaid Services. 42 CFR Ch. IV (10–1–03 Edition). www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/downloads/410_32.pdf . Accessed March 31, 2023.
4. Craig JP, Nichols KK, Akpek EK, et al. TFOS DEWS II Definition and Classification Report. Ocul Surf. 2017;15(3):276-283.
5. Centers for Medicare & Medicaid Services. Billing and Coding: Scanning Computerized Ophthalmic Diagnostic Imaging. https://go.cms.gov/3Gyzl8s . Accessed March 31, 2023.

Ms. Johnson is a Certified Professional Medical Auditor and a Certified Professional Coder by the American Academy of Professional Coders. She has also obtained the Certified Ophthalmic Executive (COE) designation. Ms. Johnson conducts business from the Corcoran Consulting Group’s North Carolina office.