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Balancing Act

Can hospital CFOs square their medical necessity risks with revenue goals? Here’s how.


There’s a lot of push-and-pull these days between hospitals and federal regulators regarding what’s medically necessary – and therefore, what’s reimbursable by Medicare. With medical necessity, particularly for short-stay admissions under scrutiny by Medicare, hospitals are not only attempting to better understand and anticipate what Medicare is likely to reimburse, they’re also trying to pick the right focus areas when it comes to appealing Medicare denials.

For many hospitals, that translates into an effort to better understand what criteria are being applied to place patients as inpatients or outpatients and when those criteria are actually being applied – all the while seeking to deliver the highest standard of care. Although the balancing act between quality of care and management of costs is not a new challenge for hospitals, the issue of medical necessity has raised the stakes for getting it right.

If CFOs want to reduce revenue losses and compliance challenges associated with medical necessity missteps, they should start getting answers to tougher questions covering a range of issues. In this paper, we’ve outlined five core areas where CFOs should consider focusing on:

  • Redefine the role of case managers
  • Use existing data to establish the baseline
  • Focus on measuring and monitoring
  • Create a document trail and have a defensible process
  • Be more selective about appeals

Download the paper to gain insight into some of the tough questions CFOs and their teams should be answering.

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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