STOP! Listen to THIS Podcast Before Auditing Medical Necessity and MDM

In this episode of Compliance Conversations, I chatted with Charla Prillaman, the Regional Vice President for Healthicity Audit Services and 30-year audit veteran, about the crucial differences between Medical Necessity and Medical Decision Making (MDM). I have to say, it’s one of my favorite episodes to date because she’s such an incredibly knowledgeable expert and she’s really good at breaking everything down in a way that’s easy to understand and put into practice.

Currently, Prillaman assists Healthicity’s leadership with subject matter expertise to ensure that all our team is well prepared, and tune into this ever-changing landscape.

During our chat, Prillaman pointed out that more often than not, Medical Necessity and MDM are incorrectly used interchangeably, though they have distinctly different meanings. It’s a big problem.

“Medical Necessity is the foundation for payment for all medical services. We find the original or the beginning statement about medical necessity being the overarching criteria all the way back into the social security act…Now the complexity of medical decision making is that it’s intended to somehow or another quantify a provider’s cognitive work in a specific encounter with the patient.” Said Prillaman.

In this highly requested episode, Prillaman breaks down how to properly document medical necessity and medical decision making and how to quantify something as difficult as “cognitive effort” for MDM.

Tune into this episode of Compliance Conversations, with me, CJ Wolf, and Charla Prillaman for the full scoop on Medical Necessity and MDM, including The History of Both Medical Necessity and MDM, Key Differences to Medical Necessity and MDM and the Way to Properly Quantify and Document MDM.

Episode Transcript

CJ: Welcome everybody to another episode of Compliance Conversations. I’m CJ Wolf, Healthicity's Sr. Compliance Executive. Today we have a wonderful guest, Charla Prillaman, who isHealthicity's Regional Vice President of Audit Services. Welcome to the show, Charla.

Charla: Hi CJ, thanks!

CJ: Glad that you’re here. I know that you’ve been on prior episodes, so we’re welcoming you back. Just to remind folks what you do a little bit before we jump into our conversation today, would you mind introducing yourself a little bit and telling our audience a little bit about what you do and your experience in the area?

Charla: Sure, I’m glad too, and thanks again for inviting me. My name is Charla Prillaman. I currently serve as the Regional Vice President for Healthicity Audit Services. I come with about, as much as I hate to admit it, 30 years in the field, and have been involved in coding, auditing, compliance planning and all of those various and sundry activities in a number of capacities. Currently, I assist our leadership with subject matter expertise to ensure that all our team is well prepared, and well-tuned into this ever-changing landscape.

CJ: Yeah, you must have been a prodigy starting at 5 years old if you’ve been doing this for 30 years.

Charla: Don’t I wish!

CJ: And I know that you have worked with auditors on the professional side, both here at Healthicity as well as with clients, but you’re also interacting with clients. So, you kind of eat breathe and live to audit from an E/M and professional service and other areas as well. I thought it would be great for us to talk about the differences and the nuances of medical decision making, that element of an E/M service, versus or comparing to medical necessity. I’m sure you have a lot of thoughts on that area. Maybe we can kind of just start with those terms, medical decision making and medical necessity. You get coders, maybe beginner coders, or auditors, as well as providers, maybe physicians, who hear both of those terms in the course of a conversation about compliance or audits, and they might confuse the two as the same thing. What are your thoughts about those terms and how they are similar or different?

Charla: Well you’re exactly right. Those terms are often incorrectly used interchangeably. They have distinctly different meanings. Medical Necessity is the foundation for payment for all medical services. We find the original or the beginning statement about medical necessity being the overarching criteria all the way back into the social security act. It’s been updated and brought forward, and our various Medicare carriers and insurers have added some clarification language surrounding medical necessity. But the bottom line is that is why a provider decides to provide a service for a patient. The intent, of course, is that the government feels they should pay for services that are appropriate for the care of an individual. Of course, Congress has expanded Medicare’s coverage over the years. As the original earlier form, it was only for illness. Now we have some preventive services that are also covered but still comes under that umbrella of necessity. Now complexity of medical decision making, or a more shortcut to an MDM acronym, is a tool, a calculation tool--it is not a clinical term. The complexity of medical decision making is intended to somehow or another quantify a provider’s cognitive work in a specific encounter with the patient. One of the advantages of talking to somebody that has been around forever is back in the day when E/M codes were introduced in 1992, shortly thereafter when, what we now fondly call the 95 documentation guidelines were introduced, Medicare, at that time, they were hip to announce EMF, put on a series of train the trainer’s webinars. And I was fortunate enough to participate in one of those sessions. I still have the original little book that they gave me because at heart I’m one of those audit coders that keeps stuff.

CJ: Hold onto that, it could go into the museum of coding.

Charla: Perhaps!

CJ: We could start one.

Charla: My family thinks I should, they think I’m a hoarder. When it comes to coding materials, we all do. But anyway, back in those conversations HIPAA was very clear to say that the terminology, the complexity of MDM as a part of an evaluation manual code is not to be confused with medical necessity, the overarching criteria for any service.

CJ: Right.

Charla: It’s so easy to get them mixed up. One of the things that I recall from those conversations was the explanation that the AMA’s codes, the ENM Codes, for established patient encounters, required two of three key elements. History examination, or complexity of medical decision making, and the reason it’s written that way, is that in certain medical circumstances, and in the example that has stayed with me these many years, is an oncology practice who’s seeing patients in follow up care. Their disease may be stable as of this moment, no life-threatening events are happening today during this twenty-minute encounter, yet the patient is ultimately suffering from a terminal illness. The calculation, that MDM calculation, is going to reflect, and of course all of you auditors out there are familiar with the terminology “one stable problem”, and even with a high-risk factory, that reduces, and I’m using air quotes when I say reduce. It creates a complexity of medical decision making of straight forward. If confused with medical necessity would drive all of those services to the very lowest level, and I think just even common sense tells us that patients that are battling those kinds of diseases will have services throughout their course of care that vary in intensity and certainly would not be the very lowest care, even though that calculation would view it that way.

CJ: Right. Or on the contrary, the very highest, right?

Charla: Correct.

CJ: Especially nowadays with cancer treatments, doesn’t automatically mean you’re going to die. There are so many new therapies out there that, and it’s complex, it’s a case by case determination of course, but you know, there may be somebody that’s diagnosed with cancer, and they are living 3, 4, 5, 6 years. Not every single visit with the oncologist is going to be that highest medical decision making, right?

Charla: Absolutely. I tell people, one of the activities that are part of my job is that I’m often called on to talk with providers and help them understand their leveling. In the days of EMR’s now, we have so much information in every single note, and I have been known to say, our patients don’t come to us by way of a codebook.

CJ: Right.

Charla: Each patient encounter, it reflects a unique individual and their circumstances, to have everything at a certain level is just out of the realm of what even makes sense.

CJ: Right. You mentioned the electronic health records. There is so much now at the fingertips of the provider to paint a picture and to check all those boxes. I’m going to come from my provider perspective for a moment. "Oh hello, Charla, you’re my auditory or educator. Look, my electronic medical record has all of this history; it has all of this exam, it has all of this decision making that I’ve outlined and the electronic medical records even helping me fill in all the blanks, so to speak." But just because you can document a pretty note, and now I’m getting a little smart-alecky, but just because you can document a pretty note, doesn’t mean it is medically necessary for that level five to be reported, right? Am I in the right ballpark?

Charla: Oh, you’re exactly home run over the fence in the ballpark. You know, even before the days of electronic records, those of us who audit, could write a note that would look like a level 5, and I’m not licensed to take care of people, I don’t have that knowledge, and to me, that’s a demonstration perhaps of medical necessity. I can write something down, right here in my office without any patients, without any authority to see a patient and make it look like a record that supports a high-level service, but it wouldn’t be one.

CJ: That’s right.

Charla: So much of what we ask, in terms of documentation to validate services does rely on the words that are selected to paint that picture, but it has to be a picture of what really happened between provider and patient, and what that patient, what that provider needed to do for and with that patient to enhance their health.

CJ: Yeah. What do you, I know that you guys are auditing not just E/M’s right? You do your auditing procedures as well. As a compliance officer I’ve seen legal cases and settlements, where the doctor, just like you said, I can describe and dictate a beautify note. Now, this is in a realm, let me just throw out an example, a realm of cardiac catheterization, this was a case that was in Tennessee a few years back, where the note read beautifully, right? If you’re a coder or auditor, and you read the procedure note for the cardiac catheterization, you would be able to code it, and code it with all these codes perfectly, but was it medically necessary to even perform that cardiac catheterization, and that’s where this particular physician got in trouble. He was performing cardiac Cath’s on patients where the blockage was not, from a medical perspective it wasn’t severe enough to be doing those, but he was doing them, and the government came in and enforced against that, mainly because you’re putting that patient at risk just to give them a cardiac catheterization, when the benefits don’t outweigh the risks in some circumstances. That was a major settlement, not because their documentation was poor, but because the government contended that it wasn’t medically necessary for him to be doing these in the first place. If you have a situation like that, how do you explain to coders or auditors, look your auditing just off the medical record today? We’re not doing a medical necessity audit, because that would require a clinical perspective or examination of where was this patient’s health. Can you comment on that at all? What do you tell coders that are looking at beautifully written notes, but how do they decide if it’s medically necessary for that procedure or for that service to be performed?

Charla: Well, that is kind of a spectrum of answers to that question, CJ, and I do recall the case you're talking about. It was very widely publicized. A couple of things. A skilled and experienced auditor hopefully will have gained information and knowledge not to make a final decision as far as whether or not a patient should receive a cardiac Cath, but to the level where they might turn to the appropriately trained clinician and say this looks excessive to me.

CJ: Yeah.

Charla: What do you think? And then that clinician can look at the images that show the blockages, that show where and how, and can help make that determination. How do you learn that? We auditors typically are not strongly clinically trained. We are language-trained. Yet after you do it, as many Cath reports as I’ve read, I’ve learned what that terminology means, and how doctors apply it. Now I can’t apply it, I’m not licensed, I don’t have that knowledge or capacity, but we can develop a sense, it’s almost a sixth sense, to say this almost seems excessive. One of the clues would be exact repetition. It’s okay to do things in a standard manner, and there are only so many ways to say that a particular artery is 65% occluded, you don’t have to use that language, but if you sample big and they are all exactly alike, that’s a clue.

CJ: Yep.

Charla: The other thing I caution auditors, be careful. Do not confuse medical decision making with medical necessity, but… and it’s a pretty big but, that left column on the table of risk is the nature of the preventive problem. The nature of the presenting problem is the closest in the auditing tools that we have beyond pure clinical knowledge, is the closest alignment to the necessity, in my opinion.

CJ: Yeah. That’s really good feedback. Let’s go back, if I could, to that ENM that you talked about. How do you, besides that presenting risk, or that initial risk of the presenting complaint, talk me through a little bit more, what else a coder or auditor should be looking at in that medical decision making, to make sure that they’re not going to confuse medical decision making with medical necessity. What other elements of that MDM are in there that should be considered.

Charla: Well the MDM is a three-component calculation of which two are necessary. I’ve often said two-thirds of ABC equals MDM and then explained the ABC. A is the number of conditions or differential diagnoses that are considered during that visit, B is the data that is ordered or considered during that visit. By data, we mean everything from a simple urinalysis to the most complex diagnostic radiology procedure that may be ordered. Conversations with other physicians, there is a whole list of them, and you add up the point values that have been assigned. And then the C part is the three-column table of risks, which include the nature of the presenting problem, the interventions that may be offered, and the diagnostic options that could be considered. You put all those three together, you could have A and C, how many things that could be considered, and what are you doing about it, or A and B, how many things are you considering and how much different kinds of data do you need, or even B and C, you could have data and table of risk put together, and that will give you your MDM. Your medical necessity comes from what closely aligns with the single column in the table of the risk but is not purposefully aligned with any piece of that puzzle.

CJ: Gotcha. I’ve talked to, I’m curious if you’ve worked with clients that have done this. I’ve worked in organizations over the years where they’ve made the arbitrary decision, so on an ENM that only requires two or three components, maybe an established patient. That when there is, they’ve made internal policies to say look, one of those two you can not exclude the medical decision making, we want medical decision making to be one of those two in order to get a level. Have you heard of that before, and what are your thoughts about that?

Charla: Oh yes, a lot of people have done that. It’s a very conservative approach. I’ve kind of, in another role, prior to coming to Healthicity, in one of my jobs I did an informal study of cases, and just kind of wanted to see if my instinct was correct. What I proved to myself, again not using the scientific method, just kind of grouping things, was that if you force an MDM calculation to always drive your code, and you’re a multi-specialty organization, you will probably be under coding a certain segment of your services. You won’t be over coding unless you have efficient documentation. I always like to look, I learned to audit from a physician. I didn’t learn to audit the way we teach it now. I always turn my brain on from the bottom up, if you will. I start with why is the patient here, what did we do for them, what is their prognosis, kind of that whole necessity in MDM place, and then I go to, quote, the top part of the note, and look at the history and examination documentation to ensure that it fulfills the criteria posted with that complexity. Having learned to think that way, as opposed to the way we talk about it, history, exam, MDM, I think has opened my mind to see scenarios just a little bit differently.

CJ: Okay.

Charla: And I’ve tried to share that.

CJ: Yeah, and what I hear you saying is that if you do that conservative approach, you could be under coding in certain areas.

Charla: You could be, and it’s unlikely that it would cause any difficulty in the other direction.

CJ: So in your opinion, it’s a very conservative approach.

Charla: I think so, and I think there is a good reason for it. I certainly understand the thought process. My preference is we as auditors and signers and advisors and consultants to medical professionals, really ought to value the bullseye accuracy most.

CJ: Gotcha. Yeah, I think that’s fair. So, Charla, we’re coming up to the end of our time together for this episode, but I want to give you the last few minutes to mention anything else on this topic of MDM, medical necessity, any closing remarks that you think would be important?

Charla: CJ, thanks for letting me talk about this. It’s one of the soapbox topics that I love to talk about, and I appreciate the opportunity, and I think it all comes down to both are components of billing of medical services, both medical necessity and complexity of medical decision making in the evaluation of management world. Both are necessary, we need to be careful to try not to mix up the language, and I think most of the people that listen to our podcast are trying to do the right thing, and if we’re wanting to do the right thing, and we think about where words can be confused, I think it helps to untangle some of those language webs that we get artificially misplaced, and I thank you for bringing that to our folks.

CJ: Yeah, absolutely, and thank you for your time and expertise, and kind of a shout out for audit services here at Healthicity. I know they work with many clients on these things, so if you’re struggling with these concepts, please reach out to us, and to audit services. I know they have reached out to me at certain points, to help from a clinical perspective on if it’s medically necessary to even do the service. I know they have other experts that they reach out to in different specialties that can help if those are the types of question you have. Then of course if you’re in need of some auditing help straight with the medical decision making, they are experts there as well. Thank you again, Charla, and thank you again, everybody, for listening to another episode. Until next time, do some good coding and good compliance. Thanks.