Medical necessity

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The page below is a sample from the LabCE course Medicare Compliance for Clinical Laboratories (retired). Access the complete course and earn ASCLS P.A.C.E.-approved continuing education credits by subscribing online.

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Medical necessity

  • Medical necessity means that Medicare is not allowed by law to pay for any tests that are not necessary for diagnosis or treatment of disease.
  • A laboratory may not submit a claim to Medicare or other government payers for any test it knows is not medically necessary except in certain cases:
    • When the patient has signed an advance notice.
    • When a patient has requested the lab to submit such a claim for a determination by Medicare.
  • Medicare does not pay for screening tests or tests that are ordered in the absence of signs or symptoms.
  • Billing department employees are responsible to follow all policies and procedures related to the submission of claims to reduce erroneous billings.