What is "Medical Necessity"?

“Medical Necessity” affects your medical care at every level as well as your wallet.

Are you aware of what it means exactly?

A.   CLINICAL POINT OF VIEW

“Medical Necessity” is what your Doctor or medical practitioner deem to be the necessary, appropriate, indicated, responsible steps needed now to establish a diagnosis and prescribe the safest, most effective course of treatment.

“Medical Necessity” is also what the physician has established as “best practice” under the circumstances: the same level of care as other professionals would undertake and prescribe in a similar situation.

“Medical Necessity” also means taking measures that follow the established “standard of care in the US”.

In a nutshell, for your doctor, “Medical Necessity” is what your doctor has determined is the best and proven care he/she can prescribe, and that your health situation requires at that time.

B.    INSURANCE POINT OF VIEW

“Medical Necessity”, for your insurance, is what the medical policy says.

A medical policy is a list of clinical guidelines which establish how and when your insurance holds itself responsible for payment of a certain drug, treatment, intervention, surgery or device.

The medical policy is used by the Utilization Department when reviewing a request for an authorization for services. If criteria are met, the approval is issued.

The medical policy will also be used as “final say” in case of appeals.

The medical policy determines whether a service can be considered “medically necessary” or will be treated as “investigational or experimental” and therefore denied.

Think of it as a coverage road map. If the steps are met: right diagnosis, right circumstances, right medical history including previous treatments, and more, then the destination (authorization and/or payment) can be expected.

Medical policies are great advance notices and can definitely help medical providers anticipate what will be covered, how and when.

However:

““Medical Necessity” can also mean the following to an insurance:

·      Most cost-effective

·      Most conventional and traditional

·      Least invasive or least aggressive

For example, a proven but potentially less effective or more debilitating treatment will be approved instead of a more innovative, targeted but more expensive one.

A generic option will be preferred over a new expensive brand-name, even if the generic one may not as effective.

A course (or more!) of pain management drugs will be authorized over a non-emergency surgical intervention.

That a medical policy is not updated yet, or that a new treatment has not gotten its own medical policy, should not be a valid reason to deny coverage or payment!

C.    “EXPERTS” POINT OF VIEW

“Medical Necessity” is also established by federal health agencies, including the FDA, CDC, National Institute of Health to name the main ones.

They issue guidelines, which are understood to constitute the basis for “medical necessity”.

Web.MD and the national Cancer Institute may also become sources of documentation relating to what may constitute “medical necessity”, as does the National Library of Medicine.

Trials results, data from specific disease organizations, reports and recommendations from professional medical organizations and especially the American Medical Association, can also define “Medical necessity”.

Peer-reviewed articles and literature published in medical journals, (drug) manufacturers’ reports, data in Compendia are also good sources of information and evidence.

Last but not least: CMS. If Medicare covers it for the condition and/or under the circumstances, then commercial insurance plans should too.

D.   How can an advocate help you?

Patient advocates either specializing in medical guidance, or those focused on Billing and Insurance-related issues can be of assistance, not only to help you understand your options, but also fight on your behalf, especially as fewer and fewer medical providers do so.

Your insurance may alter treatment, force a specific (cheaper) option or even deny claims if “medical necessity” has not been justified with medical records, and adherence to a medical policy is unproven. Your advocate can help prove the medical policy is obsolete or too narrow by uncovering other insurances' medical policies, finding Medicare's guidelines (usually considered «Standard of Care») or invoking specific State laws to force coverage. 

As “Medical Necessity” is a fluid term, depending on who is defining it, it can be altered, updated or contested based on new evidence, published documentation and articles, updated guidelines and protocols, other insurers’ policies, medical opinions and articles by health agencies. An advocate can do this more in depth clinical research, something few offices have time and manpower for. 

A proven advocate can also file an Appeal on your — and your provider's — behalf, as is your Right. An appeal is a request for the insurance to review the case, and potentially reverse its initial decision based on new evidence. Too many providers do not have resources or experience to do so, and might appreciate the expertise a third party such as an advocate can bring. 

A Medical Necessity denial is not the end of the road. With clinical justification, in-depth research and well-presented arguments and evidence, the chances of a reversal by your insurance can be quite high.