Medical Necessity Audits

In today’s highly regulated healthcare system, the management of patient status is a complex, labor intensive process requiring extensive case management expertise. Despite efforts on the part of the Center for Medicare & Medicaid Services and other payers to clarify patient status and medical necessity guidelines, hospitals have difficulty reducing denials while maintaining compliance. In addition to the complex regulatory environment, internal approaches hinder improvement and management efforts. Often considered a “non-core” activity, the process is excluded from continuous improvement methodologies and training activities. There is a significant lack of robust reporting and transparency into reasons for denials, including the role of Coding and/or Case Manager and Provider documentation.

Medical Necessity Audit Overview

Medical Necessity Audit

Medical necessity audits tailored to meet the unique needs of your organization.

Managed care and regulated health insurance companies are becoming increasingly savvy with cutting costs and refusing payment for services. Governmental payors have put reimbursement recovery measures into place with the Recovery Audit Contractor (RAC) Audits which are putting a significant amount of reimbursement at risk. Medicare Severity-Diagnosis Related Groups (MS-DRGs) have posed another obstacle for providers, many of whom are facing the possibility of declining Medicare reimbursement. Additionally, ICD-10 has created an unstable landscape as physicians and coders adapt to new documentation standards and coding guidelines.

This new environment has created revenue disruptions (i.e. reimbursement delays, increased denials due to new coding standards, etc.) and an uptick in organizational compliance risks as facilities find ways to optimize reimbursement.

Access to appropriate resources and technical expertise are essential in generating the increased revenue necessary for a healthcare institution’s survival. Provident Management Consulting’s billing and coding professionals have developed tools and techniques designed to identify cost containment and reimbursement opportunities. Our customized processes allow us to effectively identify problem areas and provide our clients with workable solutions.


Provident’s proprietary medical necessity audit methodology can help your organization identify areas of improvement and educational opportunities as it relates to medical necessity guidelines and documentation.

As part of the medical necessity audit methodology we will audit patient status cases and work with your case management team and physician advisors to determine whether patient status decisions were appropriate. The Provident team will review the patient’s history and medical needs (including comorbid conditions) in addition the following:

  • The severity of the signs and symptoms exhibited by the patient
  • The medical predictability of something adverse happening to the patient
  • The need for diagnostic studies
  • The availability of diagnostic procedures and types of facilities available at the time
  • Hospital admission policies and bylaws

Following the thorough medical necessity audit, Provident will identify opportunities and trends to improve provider documentation and support admission status compliance.

Provident works with our clients to identify timelines, deliverables and educational opportunities that work best for them. Our continuous improvement audit methodologies are tailored to each client to meet the unique needs of the organization to achieve the necessary balance between risk, compliance and performance.


Provident has a national team of dedicated, highly integrated professionals, experienced in providing revenue integrity services. We have extensive experience working with healthcare organizations on a variety of needs including clinical coding and documentation audits and assessments, coding and documentation improvement initiatives, and coding and document training efforts.Provident’s team of clinical reviewers has helped clients increase DRG accuracy rates, optimized DRG assignments and provided continuing education based on findings to coding, clinical documentation improvement staff and providers. Our professionals maintain nationally recognized coding and compliance certifications and credentials including RHIT, CCS, AHIMA approved ICD/CM PCS trainer, JD, CFE and others.

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