We are seeing an increased number of payor appeals which state “The HBV review performed is a payment integrity review, not a level of care or a medical necessity review, focused on the payment of services documented in the medical record. Facility documentation submitted and reviewed by HBV has identified outpatient services were delivered, and not acute care inpatient services. HBV is not denying the services provided, rather the review is focused on the payment of services documented in the medical record. In accordance with the application of MCG guidelines, HBV has determined that the services delivered are consistent with an outpatient or observation payment.” We have tried outlining the services performed, resources required, how IP level of care were met by the MCG / IQ criteria they outline. They are still being upheld. What else can we do to argue these denials?

During the latter part of 2023, some providers have been receiving medical necessity audits from third-party auditors where the auditor labels the review a payment dispute review. a payment integrity review, a billing validation, or some other similar name. These are in reality medical necessity status (inpatient versus outpatient) reviews thinly disguised as something else. AHDAM members can read our June 2023 newsletter where we call out this activity for what it is.

If you find yourself receiving a medical necessity denial issued under the guise of a payment dispute review, you’re likely not going to find relief through appealing or complaining to the auditor or the payer alone. Additional steps you can take include filing a grievance with the CMS regional office for your area, consider taking the denials as a group to the payer’s medical director for discussion, or pursuing arbitration or mediation, depending on dispute resolution options in your contracts.

Answered by: Denise Wilson MS, RN, RRT | Senior Vice President Intersect Healthcare + AppealMasters President, AHDAM