Hospitals are always looking for ways to improve operating margins. One reason for a drain in cash flow is due to payment denials because medical necessity is not met. Medical necessity denials are a significant challenge to hospitals not only because of lost revenue, but also because of the resources and time required to resolve denials. Organizations that have made strides in improving the management of medical necessity denials share one key characteristic: their priority is to prevent denials from occurring in the first place.

Hospitals have developed processes to avoid medical necessity denials in two general areas: at patient access (before providing the medical service) and in patient accounting (well after the patient has gone home, but before the bill is submitted for payment). These scenarios are typically referred to as preservice editing and postservice bill scrubbing, respectively.