Diagnosis Codes & Medical Documentation

Medical Necessity of Documentation

Lack of medical necessity documentation is one of the most common reasons for claim denials. As a lab, we do not have immediate access to information that determines medical necessity. Insurance companies expect the ordering entity (clinic) to document why they are ordering a laboratory test. Every insurance company has written policies defining what they consider medical necessity; however, this is anything but uniform. What one may consider necessary another may not.

The best way to overcome this is to document the evidence supporting a course of treatment based on the patient’s set of symptoms or other diagnostic results. Basically, an insurance company is saying, “Show us why we should pay this claim regarding the test you ordered, with your documentation.” 

Specific Diagnosis Codes

CMS (Center for Medicare/Medicaid Services) and commercial insurance payers have coverage policies that specify the diagnosis codes supporting medical necessity for certain procedures (in our case, lab orders). ILDP attempts to supply providers with the most commonly used diagnosis codes for certain tests ordered however, they must match up with the documentation made at the time of the office visit. Additionally, the diagnosis must be specific to the test ordered. It does no good to use the diagnosis for alcohol abuse, uncomplicated, and then order a drug test for Opioids. Similarly, ordering a PCR test for sexually transmitted pathogens with a urinary tract infection code will not work. 

Determining the Correct Diagnosis Codes

Another common issue seen at the lab is the clinic using the same diagnosis code they used to be paid for their evaluation and management service. For instance, a patient enters the office with complaints of acute low back pain, fever, and painful urination. The diagnosis codes used at the clinic may be M54.50 – Low back pain unspecified, R50.9 – Fever, unspecified, and R30.0 – Dysuria.

Upon examination, the provider determines this patient is showing signs of a UTI, documents all of their findings, and orders a PCR test to determine the specific pathogen causing the issue. Using M54.50 or R50.9 to order a PCR test is a non-starter. In this case, the primary diagnosis for the ordered PCR test would be R30.0 – Dysuria (painful urination) and the secondary would be N39.0 – Urinary Tract Infection, site not specified.

With the correct diagnosis for the lab test ordered and great documentation from the provider, should the insurance request it, the patient will receive the proper insurance benefits for which they pay and the lab, as well as the physician, will be compensated for their services. 

Yes, documenting and making office notes available, is a pain in regions unmentioned, however, this is the world we live in. Thanks to all of you who respond quickly with great office notes when the lab reaches out. We work hard to give you quick and accurate lab results and we greatly appreciate your assistance when needed. 

Lance Benedict

President/CEO Industry Lab Diagnostic Partners