Government spending on healthcare and the cost of healthcare in general has risen dramatically in the past few decades. With costs continuously escalating, the federal government has more incentive than ever before to root out the fraud and corruption in the healthcare sector that costs taxpayers billions of dollars each year.
For any medical treatment to be legally covered under Medicare, it must be verified and documented to be medically necessary. Failing to adequately verify and document the medical necessity of claims billed to Medicare can be considered Medicare fraud as a violation of the False Claims Act. While the government understands the need for healthcare professionals to order or perform any service they deem appropriate, the law dictates that Medicare and other government healthcare programs should only pay claims for treatment that meets the relevant medical necessity standards.
Hospitals have a responsibility to inform their healthcare professionals about the medical necessity requirements for Medicare and other government healthcare programs. In addition, hospitals must be able to present documentation of medical necessity upon request, which requires them to fully inform physicians of the need for documentation and to properly retain that documentation. These requirements are intended to prevent Medicare fraud as some hospitals have been known to admit patients for inpatient care and provide inpatient services that are not medically necessary.