What is Medical Necessity?

Confusion abounds in regards to what is the definition of “medical necessity”  when filing dental insurance claims.  If the insurance company wants a medical necessity explanation for any type of treatment whether medical or dental, they have a right to ask for it before paying a claim.

The following explanation from attorney Scott Glovsky is one of the best I have read.

Whether you have a health insurance policy or if you are a member in a health plan, medical necessity is a prerequisite for coverage for all types of treatments.  It is also true regardless of whether you are in a PPO, EPO or HMO.  If an insured seeks coverage for a service that the insurer does not consider medically necessary, then the insurer will not provide any coverage for that service.  This is true whether an insured seeks coverage after a medical service is performed or an insured seeks preauthorization for coverage before a medical service is performed.  This is why it is important to understand what medical necessity means.

“Medical Necessity” includes health care services or supplies that a healthcare worker provides for the purpose of evaluating, diagnosing or treating an illness, injury, disease or its symptoms, in accordance with the generally accepted standards of medical practice.  Such services or supplies must be clinically appropriate, in terms of type, frequency, extent, site and duration, and not merely cosmetic or merely convenient for the patient or healthcare provider. “Generally accepted standards of medical practice” are standards based on credible scientific evidence that is published in peer-reviewed medical literature generally recognized by the relevant medical community and that are accepted by other healthcare workers in the community.

Insurance companies may have slightly different definitions and standards their own use when determining medical necessity.  For this reason, it is always important to check a plan or policy for the relevant definition.  Insurance companies and their medical directors are ultimately responsible for determining whether a service or supply is medically necessary, even if their determination is contrary to the determination of a patient’s doctor.

It is also important to note that medically beneficial is not synonymous with medically necessary.  In other words, just because a procedure might treat a condition that a person has, it does not mean that the procedure is “medically necessary.”  For example, if a less invasive and less expensive procedure which can treat a symptom is available, then a more costly and advanced procedure for treatment of that same symptom will not be medically necessary.  Similarly, an inpatient hospitalization for a treatment will not be medically necessary if such a treatment can be provided adequately in an outpatient setting. The most common medical procedures that are generally not medically necessary are cosmetic and purely elective surgeries.  These include procedures such as Botox injections, hair transplants, and plastic surgery.  This being said, there are certain cosmetic procedures that are medically necessary and so it is worth seeking authorization for coverage for such surgeries from an insurer before or after the procedure.

Understanding “medical necessity” is crucial to understand which procedures or supplies an insurer might cover or pre-authorize.  Without such an understanding of “medical necessity,” consumers risk seeking expensive treatments and procedures which ultimately they will have to pay for out of pocket despite the fact that they have an insurance plan or policy.  However, even with an understanding of medical necessity, it is still possible that insurance companies will deny claims for coverage or pre-authorization with the excuse of medical necessity when it is not applicable. If you find yourself in such a situation and you reside in California, then you should immediately contact an insurance law professional such as the Law Offices of Scott Glovsky.

If you have any questions about medical necessity or the denial of claims for lack of medical necessity, contact the Law Offices of Scott Glovsky for a free consultation.