Can hospital CFOs square their medical necessity risks with revenue goals?

Balancing act

There’s a lot of push-and-pull these days between hospitals and federal regulators regarding what’s medically necessary—and therefore, what’s reimbursable by Medicare. With medical necessity, particularly for short-stay admissions under scrutiny by Medicare, hospitals are not only attempting to better understand and anticipate what Medicare is likely to reimburse, they’re also trying to pick the right focus areas when it comes to appealing Medicare denials.

Patient criteria

Many hospitals are trying to better understand the criteria for inpatient or outpatient placement and when the criteria is actually applied in order to help deliver the highest standard of care. Although the balancing act between quality of care and management of costs is not a new challenge for hospitals, the issue of medical necessity has raised the stakes for getting it right.

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Compliance and revenue protection

If CFOs want to reduce revenue losses and compliance challenges associated with medical necessity missteps, they should start getting answers to tougher questions covering a range of issues. In this paper, we’ve outlined five core areas where CFOs should consider focusing on:

  • Redefine the role of case managers
  • Use existing data to establish the baseline
  • Focus on measuring and monitoring
  • Create a document trail and have a defensible process
  • Be more selective about appeals


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Gain insight into tough questions CFOs and their teams should be answering.
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