Introduction
You’ve been in a car accident, and you’re in pain. The doctor recommends physical therapy or surgery to treat your injuries, but your insurance company says no. You think the treatment is medically necessary—and even required by law—but your insurer doesn’t agree. How do you know what’s covered and what isn’t under your health plan? You need to understand the medical necessity process as it relates to coverage decisions made by insurance companies, which can vary from one plan to another.
What is medical necessity?
Medical necessity is defined as the reason for a patient’s treatment or drug. In order to qualify as medical necessity, there must be a clear connection between your diagnosis and the treatment you are seeking. This means that your physician must prove that your condition requires this specific type of care in order to treat it effectively.
In addition to being connected with your diagnosis (the reason why you need treatment), it also needs to be proven that this type of care actually works for those who suffer from similar conditions as yours. For example: if someone has high blood pressure and their doctor prescribes them medication for it, then that would be considered “medical necessity.” However if someone without high blood pressure were prescribed this same medication without any other symptoms present outside of normal levels then this would not qualify under “medical necessity.”
It’s not the same thing as coverage.
Medical necessity is not the same thing as coverage. Coverage is the amount of money an insurance company will pay for a service or treatment. Medical necessity is the medical reason for needing a service or treatment; it’s what makes it medically appropriate for you to receive care.
Medical necessity doesn’t always mean that your provider can provide whatever treatment he thinks you need, however–it depends on what kind of plan you have with your insurance company, whether they cover certain procedures at all (and how much), and how much they’ll pay per visit or procedure.
Types of medical necessity
As a patient your health care provider will be asked to provide documentation of medical necessity. To do that, they must first understand the difference between “clinical” and “administrative” medical necessity.
- Clinical: This is a determination made by the physician or other health care professional based on the facts and circumstances surrounding their condition and treatment plan. The determination is made in accordance with accepted standards of practice in your field of medicine (i.e., using clinical judgment).
- Administrative: An administrative review looks at whether or not there are sufficient resources available within an organization (such as an insurance company) to cover services without adversely affecting its ability to pay claims from other patients who submit similar requests for reimbursement for similar services/products/drugs/devices; in other words, if something isn’t considered medically necessary under this type of review process then it won’t be paid out by the insurance company regardless of whether or not it would otherwise meet criteria for coverage under another type
Without clear standards, you could be denied care you need.
Medical necessity is a legal term that refers to the requirement for treatment. It’s not the same as being able to afford treatment or being eligible for it. To determine medical necessity, your doctor must consider all of your circumstances, including:
- Your condition and its severity;
- Your current symptoms;
- The likely benefits and risks associated with each therapy option (including non-treatment); and
- Any other relevant factors affecting your health status at this time or over time (e.g., age).
How long does the medical necessity review take?
The length of the process depends on the complexity of your case and how quickly you respond to requests for information. Typically, it takes anywhere from a few weeks to several months for an appeal decision to be made.
If you do not submit all required documentation with your initial appeal request, it may take longer for us to review your case.
Insurance companies can’t make blanket decisions.
You may have heard that insurance companies are allowed to deny claims because of “medical necessity.” This is true, but only in certain situations. Insurance companies can’t make blanket decisions about what treatments they will pay for. Instead, they must justify their decisions with evidence that shows the treatment isn’t medically necessary and/or not appropriate based on clinical guidelines. In addition, all health plans must have a medical director who reviews claims before they’re denied; if you disagree with your insurer’s decision during this review process (and feel like it wasn’t justified), you can appeal the decision or file suit against them under
ERISA law (which protects employee benefits).
How often can I request a re-review of a denied service or treatment?
The frequency of re-reviews depends on the type of service or treatment you are requesting. Most insurance companies limit the number of times you can request a re-review, but some will allow unlimited requests for services that are not covered by your plan. If your request is denied at any point during this process, you can appeal to your state’s insurance department if you feel it was not handled correctly.
Know the Process – Medical Necessity
Understanding the medical necessity process will help you navigate the insurance claims process and avoid unnecessary delays in getting the care you need. In the event of an appeal, you will be notified in writing of the outcome. After reviewing all of your medical records and documentation, in general the Insurance Payer may either:
- Approve your claim as originally submitted; or
- Reject it and provide an explanation for their decision. If this occurs, you have 30 days from the date of notification to request a reconsideration by sending a letter stating why they should reconsider their decision (you can find examples here). You’ll also want to include any new information that supports your case or that was not previously considered by them when making their initial determination.
Conclusion
Medical necessity is an important concept to understand, especially if you have insurance and need care. Knowing the facts can help you navigate the process and get the best possible outcome. It’s also important to know that there are options if your insurance company denies coverage for non-medical reasons or fails to respond in a timely manner. If you’re unsure whether your treatment falls under medical necessity guidelines, talk with your doctor about how best to proceed–and always keep copies of all records related to care received!
