May 2, 2006 Bottom Line

Bottom Line: Medical Necessity and Medicaid

Clinicians providing speech-language pathology and audiology services to Medicaid beneficiaries must support the medical necessity of their services, including services provided to children in school settings. Clinicians need to understand the definition of medical necessity as it relates to Medicaid, and how the services they provide meet that definition.

Medicaid is a jointly funded program between the federal and state governments to assist states in providing medical care to low-income individuals and those who are categorized as medically needy.

Under this health insurance program, speech-language pathology and audiology services and related devices are covered for children as long as they are medically necessary, and the patients are referred by a physician or other member of the healing arts as defined by the state. Documentation of medical necessity is required for all Medicaid services, regardless of where those services are being provided.

Q: My school district is requiring that speech-language pathologists bill Medicaid for all services provided to eligible students, regardless of medical necessity. Is this appropriate?

No. Medicaid should only be billed if the individual is referred for speech-language pathology services and those services are documented as medically necessary.

Q: What is the definition of medical necessity?

Each state's Medicaid agency may define medical necessity, and an SLP should check with the agency for that definition. There may be an interagency agreement between the agency and the state department of education that includes how medical necessity relates to school-based services.

Q: Does ASHA have a definition of medical necessity that I can use?

ASHA has not defined medical necessity because that is typically defined by payers of health care, such as Medicare, Medicaid, and private payers. However, an ASHA document, "Medical Necessity for Speech-Language Pathology and Audiology Services," discusses why speech-language pathology services meet the definition of medical necessity [PDF].

ASHA's position is that speech-language pathology and audiology services are medically necessary to treat speech-language, swallowing, hearing, and balance disorders. Many of these disorders have a neurological basis and result from specific injury and illness, such as head injury and cerebral palsy.

Determining medical necessity takes into consideration whether a service is essential and appropriate to the diagnosis and/or treatment of an illness or injury. Illness is defined as "disease," which can be further defined as a disorder of body function. Loss of hearing, impaired speech and language, and swallowing difficulties all reflect a loss of body function. Therefore, services to treat such impairments must be regarded as meeting the definition of medical necessity.

Q: How can I document medical necessity?

Medicare policy manuals have provided useful guidelines in providing documentation of medical necessity. Claims for speech-language pathology and audiology services should be supported by the following basic elements of coverage:

  • Reasonable: provided with appropriate amount, frequency, and duration, and accepted standards of practice
  • Necessary: appropriate treatment for the patient's diagnosis and condition
  • Specific: targeted to particular treatment goals
  • Effective: expectation for improvement within a reasonable time
  • Skilled: requires the knowledge, skills and judgment of a speech-language pathologist.

Q: What type of information should I have in the patient's records?

  • Medical history: pertinent medical history that influences that speech-language treatment, brief description of function status of patient prior to the onset of the condition
  • Speech, language and related disorders: the diagnosis established by the SLP, such as expressive aphasia or dysarthria
  • Date of onset of speech, language and related disorder diagnosis
  • Physician referral
  • Initial assessment and date
  • Plan of treatment and date established
  • Progress notes

Q: What should I do if I am being required to bill Medicaid for services that, in my professional opinion, are not medically necessary?

If your school system seems to qualify children for services inappropriately (e.g., treating children whose progress has reached a plateau or providing services because of Medicaid status only), you should consider contacting your state association and state Medicaid agency for assistance.

Q: What can my state association do to help?

The state speech-language-hearing association can determine if there are questionable requests of SLPs related to Medicaid beneficiaries in other schools or local education agencies. The state association may have heard from your colleagues and may want to collect information that show a widespread problem and meet with state Medicaid officials.


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