The advent of the No Surprises Act Brings Renewed Focus on Medical Necessity

A recent study showed that some common orthopedic procedures aren’t routinely supported by data.

As I am sure others will note, Jan. 1 marked the beginning of the No Surprises Act.

Let’s be clear here: achieving compliance is not a job for case management or utilization review or the physician advisor. Be aware of what your hospital and physicians are doing, but don’t let them make you responsible for the required written notices. It should not be case management’s duty to find out what the anesthesiologist charges when a patient having a scheduled colonoscopy needs to be given a good-faith estimate of all the charges.

Now, I will note that case management may become involved if a patient gets one of these notices and requests to be transferred to an in-network facility, but I don’t expect that to happen very often.

Moving on, one thing we talk a lot about is medical necessity. But what is “medical necessity?” It means something different to every person. But in the broad scheme of things, I like to think about it as “will this service provide benefit to the patient?” In some cases, it is clear: opening a clogged artery during a heart attack provides benefit. On the other hand, it is not clear that opening a clogged artery in a patient who is not having a heart attack provides benefit. And this uncertainty is the genesis of many disputes. The doctor recommends doing something, but the payor doesn’t want to pay, because the benefit to the patient is “not proven.”

The British Medical Journal just published a review article looking at the data supporting the clinical effectiveness of some common orthopedic procedures. And as you can see from the graphic in the article, where green represents proven benefit, there does not seem to be a lot of data supporting many of these procedures, including arthroscopic rotator cuff repair and lumbar spine fusion.

Now, does this mean that these surgeries don’t work? Absolutely not. The lack of data does not mean there is lack of efficacy. This review had very strict inclusion requirements. Literature reviews like this certainly have the potential to lead to many more disputes between payors and providers over medical necessity, but should also make us think twice about whether our care is truly benefitting patients.

An interesting U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) audit was published in late December, looking at a hospital in New York. This one was interesting for two reasons. The first was that this hospital was selected because, as the OIG stated, it was at high risk for noncompliance based upon its refusal to enter into a corporate integrity agreement after settling two False Claims Act cases. Second, this audit found that the hospital was correct in 94 of 100 charts audited.

A 6-percent error rate is almost unprecedented. Almost no one does that well. An audit of a Medicare Advantage (MA) plan released the first week of January showed a 65-percent error rate, by comparison. And five of the six denied charts from this hospital were short-stay inpatient denials, wherein even eight years after the advent of the Two-Midnight Rule, there is significant misinterpretation on both sides.

Despite this stellar result, the OIG still went ahead and extrapolated the result and demanded repayment. The OIG has specific rules about extrapolation, so that is permitted, but it seems to me that the punishment should better fit the offense.

Programming Note: Listen to Dr. Ronald Hirsch every Monday as he makes his rounds during Monitor Mondays, 10 Eastern, and sponsored by R1RCM.