MAC finds insufficient support for observation and assessment

Effective Mar 11, 2013

Published Mar 11, 2013

Last Reviewed Mar 11, 2013

A review of nearly 5,000 home health claims by New England Medicare administrative contractor (MAC) NHIC found agencies didn’t adequately justify medical necessity for observation and assessment services.

In fact, 55H3A (Skilled observation was not reasonable and necessary) was the denial reason for 56% of the denials in the review. Altogether, NHIC denied 52% of the claims it reviewed.

In its report of the review findings, NHIC notes that “services for observation are covered when the patient’s condition is changeable. Once the patient’s condition stabilizes, the nursing services are no longer medically necessary.”

Other denial reasons included:

55HTB: No physician certification, e.g. because the face-to-face encounter documentation didn’t meet Medicare guidelines or the certification wasn’t signed or dated by the physician (15% of claims reviewed)
55H2B: Documentation didn’t support homebound status (14%)
55HTG: Physician orders not signed timely (5%)

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