8 October

Combatting Medical Necessity Denials for Total Joints in the ASC

Healthcare is continuously evolving. It’s necessary for advancements; it’s challenging when it comes to reimbursement. As leaders in the ambulatory surgery center (ASC) space, it’s important to understand how to effectively combat those challenges when they arise.


Not all that long ago, surgical procedures were only performed in a hospital. Technological advancements have paved the way for procedures to be offered in the ASC versus the hospital setting.

Total joint replacements are just some of the procedures making their way to the ASC. What previously required a lengthy hospital stay can now be performed in the outpatient setting due to improved technology and outcomes. It is expected that 52% of all hip and knee total replacements will be performed in the ASC by 2026, increasing the percentage performed in an ASC by 77% over the last 10 years. 1,2 With the proposed addition of total joint replacements to the CMS fee schedule for ASCs in 2020, it’s easy to see how this can become reality.

In addition to improved outcomes, cost savings have impacted the shift from hospital to ASC for total joint replacement. Moving total joints to the ASC results in a 40% decrease in cost.2 These savings benefit patients as well as commercial and government payers.

In order to remain competitive and gain market share, it’s important to evaluate the potential benefit of adding new services at your ASC. One component of expanding service lines is reliant on establishing procedures to ensure your facility can receive reimbursement for these new services. The viability of the facility relies upon successful implementation of these procedures. Unfortunately, the ability to perform procedures, such as total joint replacement, in an ASC isn’t enough to guarantee the insurance company will pay.


Denials can occur, and commonly they are related to medical policy criteria. Understanding what that criteria is and what is considered medically necessary helps the facility create procedures for ensuring and expediting payment.

Medicare defines medical necessity as “services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

Commonly cited reasons for medical necessity denials include:

  • Lack of prior conservative treatment
  • Diagnosis related issues (not covered per medical policy)
  • Imaging confirmed diagnoses (MRI confirmations)
  • Age-related exclusions
  • Other medical policy related denials


A combined approach that prevents common reasons for denial on the front end, as well as steps for handling denials on the back end is imperative. Facilities need to implement proactive tactics to decrease the prevalence of medical necessity denials. However, when those denials do happen, it’s also important to have a plan of reactive responses.

Documentation is the foundation for the proactive approach. Knowledge is power, and understanding payer policies guides documentation. Medical policies can change throughout the year, making it important to keep up to date with each payer. Take time to read information sent out by payers, and share with physicians to ensure everyone in the facility has accurate information on hand. When verifying benefits, determine if authorization or pre-determination is necessary, then take appropriate steps to obtain as necessary. One last step on the proactive side is sometimes overlooked – a quick check by the billing team prior to sending out a claim as a final step can prove vital to reimbursement. Educate your billing team on how to perform a front-end review of medical necessity, such as checking diagnoses, before sending the claim.

If a denial is received, some well-conceived steps can guide your reactive response. Reviewing the medical policy and ASC documentation will help you develop your case - why should the payer reimburse? Using information gathered from the review, write an appeal argument that isn’t a carbon copy of every other appeal you’ve ever sent. Create a targeted appeal with details specific to the case. Once completed, make sure to get the appeal to the correct place, in the correct format to avoid having to send another appeal. Finally, utilize a strong appeal follow-up schedule until the denial is resolved.


Don’t give up! If you encounter continued issues, try sending the claim to the medical director for review. You can also request a peer review or outside review.

Utilizing the steps outline above, and tracking responses to allow for identification of new approaches can ensure your facility receives appropriate reimbursement for procedures performed in your facility.


1 Are You Prepared for the Shift to Outpatient Total Knee Replacement? Sg2 VP Kristi Crowe 10.11.16

2 14 Key points on total joint replacements in ASCs for 2018, Laura Dyrda. 2.12.18


  • 8 October 2019

    Combatting Medical Necessity Denials for Total Joints in the ASC

    Read More

Latest Blog Post

8 October 2019

Combatting Medical Necessity Denials for Total Joints in the ASC


  • 8 October 2019

    Combatting Medical Necessity Denials for Total Joints in the ASC

    Read More