Terms and Definitions to Debate


MEDICALLY NECESSARY CARE: The supplies and services used to diagnose and treat a medical condition within the standards of good medical care. The revenues from health insurance premiums spent to pay for the medical services covered by the plan. Usually referred as a ratio, such as 0.95, which means that 95% of premiums were spent on purchasing medical services. The goal is to keep this ratio below 1.00–preferably in the 0.75, range, since the insurance plan’s profit comes from premiums.

MEDICALLY NEEDY: Patients eligible for Medicaid whose medical bills and total income is below certain limits.

MEDICALLY UNNECESARY CARE: That part of a stay in a facility [case manager] determined as excessive to diagnose and treat a medical condition in accordance with the standards of good medical practice and the medical community. Excessive may be because stay was too long or available in a less costly or more efficient setting.

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On Baseline Medical Practice Compliance Audits

Establishing a Reference Point is Key to Success

Submitted by Pati Trites; MPA, CHBC with Staff Reporters 


There are several types of compliance audits that a medical practice, clinic or healthcare organization might need to perform. The starting point is to obtain a baseline audit. The next step, discussed elsewhere on this ME-P, is periodic audits or reviews that are performed after information is obtained from the baseline audit.

Baseline Audits

Baseline audits are preliminary assessments to develop a reference point. Until a medical practice or healthcare organization establishes a track record with items such as coding accuracy or documentation to support medical necessity, it is difficult to determine any performance issues. In the spirit of Total Quality Management [TQM], the information that is shared should be done in a non-punitive manner to demonstrate that the intent of the process is to create a positive environment geared towards fixing the problems. A baseline audit can help any organization understand where the program is and establish a reference for future activities.


Additional audits can also be performed whenever new employees are added, or if there are complaints, or issues that arise in the course of business.


And so, your thoughts and comments on this Medical Executive-Post are appreciated? Have you ever discovered an untoward past event, or interesting prior fact, with your baseline audit?

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