“Medically necessary” is a fundamental term in healthcare and insurance, representing a key factor in determining which services, treatments, and procedures health insurance plans will cover. Understanding this concept is important for patients navigating their healthcare benefits and managing associated costs. Health insurance plans generally provide coverage only for services they consider medically necessary. This determination directly influences whether a patient’s treatment will be paid for by their insurer.
Understanding the Concept
“Medically necessary” generally refers to healthcare services or supplies required to diagnose, treat, or manage an illness, injury, condition, or its symptoms. These services must align with accepted standards of medical practice. The underlying principle is that such services are essential for a patient’s health and well-being, rather than being for convenience or experimental purposes. Medicare, for instance, defines medically necessary as services or supplies needed to diagnose or treat a medical condition that also meet accepted medical standards.
Key Criteria for Coverage
Health insurance companies and healthcare providers use common criteria to determine if a service qualifies as medically necessary. Services should be appropriate for the diagnosis or treatment of a specific condition. They must be provided for the direct care of an illness or injury. Additionally, a service should not be more expensive than another treatment that would achieve comparable results. These criteria are frequently based on evidence-based medicine and established clinical guidelines. Health plans often include a definition of medical necessity in their policies, sometimes also referencing state law.
Services Generally Not Covered
Certain services and treatments are typically not considered medically necessary by insurers, even if a patient desires them. Cosmetic procedures, for instance, are usually excluded unless they are reconstructive following an injury or illness. Experimental or unproven treatments are also commonly not covered. Services primarily for convenience are generally not included. Treatments that do not align with widely accepted medical standards or are considered investigational are also often excluded from coverage.
How Decisions Are Reached
Medical necessity determinations involve several parties. The treating physician initially recommends the service, frequently providing a “Letter of Medical Necessity” to the health plan. Insurance companies then evaluate these requests through their medical review teams, utilizing prior authorization or utilization review. Prior authorization requires approval before certain services are provided, ensuring the treatment is medically necessary and cost-effective. Utilization review assesses the medical necessity and appropriateness of services either before, during, or after treatment, based on clinical documentation and patient history.
Navigating Denials and Appeals
If a healthcare service is denied as not medically necessary, patients have the right to appeal the decision. The first step is typically an internal appeal, where the patient requests the insurer to reconsider its initial denial. This involves submitting required forms and a letter explaining why the service is medically necessary, often supported by documentation from the treating physician. If the internal appeal is denied, patients can then pursue an external review, which involves an independent third party making a binding determination. The Affordable Care Act (ACA) mandates these appeal rights, ensuring consumers have avenues to challenge coverage denials.