Learn where this latest CMS definition currently stands

The concept of “reasonable and necessary” is the legal foundation for Medicare coverage determinations,¹ however, this phrase has long been a subjective determination.

The Medicare benefit, as defined in the Social Security Act, under section 1862(a)(1)(A) “…permits Medicare payment under part A or part B for any expenses incurred for items or services that are reasonable and necessary, defined as ‘safe and effective,’ for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”¹ Thus, with some exceptions, the law requires that an item or service be “reasonable and necessary” to be covered by Medicare.

In this article, I’ll review where the latest definition of “reasonable and necessary” stands, how we got here, and what this means for optometrists, so they can get an idea of what can and cannot be billed to Medicare at this time.

WHERE WE WERE

On the heels of an Executive Order by then President Trump directing the HHS Secretary to clarify the application of coverage standards in October 2019, CMS proposed a regulatory determination for deciding whether an item, device, or service is reasonable and necessary for Medicare Part A and Part B in September 2020. On Jan. 14, 2021, CMS’ rule was finalized and given an effective date of March 2021. In the final rule, reasonable and necessary was defined² as:

• Safe and effective.
• Not experimental or investigational.
• Appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it meets the following criteria:
  1. Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member
  2. Furnished in a setting appropriate to the patient’s medical needs and condition
  3. Ordered and furnished by qualified personnel
  4. Meets, but does not exceed, the patient’s medical need; and
  5. Is at least as beneficial as an existing and available medically appropriate alternative

The rule added criteria for appropriateness to the definition in the Medicare Program Integrity Manual (MPIM). It also stated, “…that an item or service would be ‘appropriate for Medicare patients’ … if it is covered in the commercial insurance market, except where evidence supports that there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals. An item or service deemed appropriate for Medicare coverage based on commercial coverage would be covered on that basis without also having to satisfy the previously listed bullets.” These provisions were repealed in the November 2021 Final Rule.³

HOW WE GOT HERE

The provisions were repealed because CMS believed more stakeholder feedback was necessary before issuing a regulatory definition, and that the provisions did not have sufficient beneficiary protections.

WHAT THIS MEANS FOR ODs

The repeal means more variability in interpretation of “reasonable and necessary,” greater reliance on published Medicare Administrative Carriers local coverage determinations, and continued subjectivity. At press time, Chapter 13 of the Medicare Program Integrity Manual (MPIM)⁴ had not been updated to reflect the Final Rule at the end of 2021. OM

REFERENCES

1. Social Security Act Section 1862 (a)(1)(A). Social Security. Accessed Aug. 30, 2022. https://tinyurl.com/2p9edm6a
2. Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary” [1/14/2021]. Federal Registry. https://tinyurl.com/bdd7hm3v . Published Jan. 14, 2021. Accessed Aug. 30, 2022.
3. Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary” [11/15/2021]. Federal Registry. https://tinyurl.com/3fr9ds7d . Published Nov. 11, 2021. Accessed Aug. 30, 2022.
4. Medicare Program Integrity Manual (MPIM), Chapter 13 - Local Coverage Determinations. CMS. https://tinyurl.com/2wvxdmdc . Revised Feb. 12, 2019. Accessed Aug. 30, 2022.

BRANDY H. SPERRY is an associate consultant for Corcoran Consulting Group, which specializes in coding and reimbursement issues for ophthalmology and optometry practices. Contact her at bsperry@corcoranccg.com or at (800) 399-6565, ext. 238.