You might have received a medical necessity denial with claim adjustment reason code (CARC) CO50/PR50/N115 and description as these are non-covered services because this is not deemed a “medical necessity” by the payer.
This denial reason code is received when a procedure code is billed with an incompatible diagnosis for payment purposes, and the ICD-10 code(s) submitted is/are not covered under an LCD or NCD.
Reason for this Medical Necessity Denial:
The denial is based on the Medical necessity i.e. the diagnosis code may be insufficient to support medical necessity as per the NCD / LCD guidelines.
How to check Medical Necessity of a Procedure Code?
You can review it from the Medicare coverage database by simply putting the CPT and selecting a state.
Following are the Medicare Administrative Contractor for Texas State.
Tips to avoid Medical Necessity Denial:
1- Review NCD / LCD guidelines (http://www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx) before submitting a diagnosis code. Medicare contractors develop LCDs when there is no NCD or when there is a need to further define an NCD
2- Compare the patient records and the NCD / LCD list for appropriate diagnosis.
3- If a payable diagnosis is indicated in the patient’s encounter/service notes or record, correct the diagnosis and resubmit the claim.
4- If a correct diagnosis code is reported with the CPT code as per their medical coverage guidelines and still you receive the denial as Non-covered services, then you may need to check with the insurance for patient’s coverage information. The CPT or diagnosis code may not be covered as per the patient plan, in such cases you may directly bill patient.
PR-204: This service/equipment/drug is not covered under the patient’s current benefit plan
Advance Beneficiary Notice
ABNs allow Medicare patients to make an informed decision about whether to receive a service that is likely to be non-covered on the basis of “not reasonable and medically necessary”.
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