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Medical Necessity Documentation 101

    Medical Necessity: A Top Reason for Denials

    During the first quarter of 2021, the top five reasons for denials identified by Medicare Administrative Contractors revolve around inadequate medical necessity documentation. This can also be linked to a related data from Q1 of 2020 identifying 32% of home health claims were denied due to lack of sufficient documentation justifying the need for skilled services.

    For instance, a common denial code is 5HN18 – ‘Skilled nursing services were not medically necessary’. Skilled nursing services for observation and assessment (O&A) is a frequent cause for denial when the skill is used beyond the accepted three-week time period. In this case, it must be clear that the nurse is not only assessing the acute problem but also analyzing the observations. Documentation is key to painting the full picture of patient needs.

    Defining and Documenting Medical Necessity

    Medical necessity refers to the criteria of being “medically necessary and reasonable,” which is tailored to a patient’s unique medical condition and needs. There is no single process or template for documenting medical necessity as each patient presents unique goals, intervention needs, and outcomes. 

    Inadequate medical necessity in the face-to-face (F2F) documentation is a source of many denials, and auditors will look specifically for accurate F2F and medical necessity documentation that supports the skilled services provided to patients.

    Furthermore, every visit performed by all disciplines must also have substantial documentation that can stand alone. Visit notes should be able to identify the skilled service performed, the reason the skilled service is necessary, and the patient’s response to the individualized care. 

    Best Practices for Medical Necessity Documentation


    Keep in mind that a copy of the F2F encounter note, regardless of where it occurred (e.g. physician office visit, hospital, or telehealth visit) must be obtained by the home health agency. If the patient is admitted to home health directly from the community, the certifying physician (or their allowed non-physician provider) must perform the F2F encounter. If the patient is admitted to home health from an acute or post-acute care facility and the F2F is performed by an allowed provider other than the certifying physician, the certifying physician must acknowledge that they reviewed the F2F encounter. This can be documented in various ways:

    • Include the F2F date on the plan of care
    • Obtain a separate attestation from the certifying physician attesting to the F2F date
    • Certify physician’s dated co-signature on the F2F encounter note

    A valid F2F requires four key elements:

    1. Timeliness (90 days prior to the start of care date or within 30 days after the start of care date)
    2. The complete encounter note, signed and dated by an allowed provider
    3. Relation to the primary reason services are rendered
    4. Evidence of the patient’s homebound status

    Common F2F denials are due to unclear determination of why the patient requires home health services. The F2F note must provide the physician’s comprehensive assessment documentation that supports the patient’s need for home health services.

    Visit Notes

    Every visit performed must include documentation that substantiates the patient remains homebound. Avoid the use of template-based language when describing the patient’s homebound status, such as “taxing effort,” because it is vague and incomplete. Instead, clinicians should explain in detail how the patient’s current condition makes leaving home medically inadvisable and describe the effects causing the considerable and taxing effort when leaving home. 

    Since the purpose of medical necessity is to capture the patient’s story, asking “what, when, why, and how” can help create more accurate documentation.

    • What: Interventions addressed during the visit, including the patient or caregiver’s response to the performed interventions
    • When: Time spent providing care and demonstration of the patient’s progress towards achievement of desired outcomes (did the patient require extended time to perform or learn; if repetitive teaching is necessary, include a rationale – any variances from the expected outcomes)
    • W​​hy: A description of the patient’s needs at the time of the visit and a clear description detailing why the patient requires the skill of a clinician
    • How: A description of how the interventions were performed (i.e. therapy exercises or wound care performed)

    Finally, it is important to avoid vague descriptions when documenting medical necessity. For example, documenting statements such as “patient tolerated treatment well” and “continue with plan of care” are not clear enough for auditors to gain the full picture of the patient’s response to the skilled care performed. Rather, capturing objective measurements of physical outcomes and/or details about the patient’s change behavior secondary to provided education is necessary. Inclusion of the patient or caregiver’s response to the care plan should be included in each visit note as well.

    Getting Expert Documentation Support

    Documenting medical necessity can be tricky and complicated as it is subject to various regulations and standards without a single template-based process to follow. Best practices are a good start as guidelines, with a single principle to always keep in mind: “If it was not documented, it was not done.” 

    Beyond that, what is needed is a well integrated clinical staffing solution that can reinforce your in-house team and support back-office functions such as making sure F2F, visit notes, and other medical records are accurate, compliant, and consistent with each other. Clinicians may be excellent at patient care, but documenting it is another story; they are different functions that require different skills. To ensure that good patient care is reflected in your documentation, a smart approach would be to focus on patient care and get the right expert support to back you up.