Understanding the ins and outs of medical necessity

Discovering the variance between different types of insurance coverage and what you can be reimbursed for is always an eye-opener. There are plenty of rules and variations among insurance companies for most treatments.

This is especially true for determining medical necessity as far as insurance defines it. Not only can it be varied depending on the procedure, test, or treatment, but it may also be different due to state laws that govern health benefits.

While it’s admittedly difficult to wrap this up in a readable blog, we did want to talk about medical necessity and provide an overview of the basics. We looked at some expert sites to get an idea of what the landscape of medical necessity looks like at the moment.

Defining the term 


Let’s first go over the concept of medical necessity as it relates to insurance. The “necessity” is any treatment procedure or test that can treat a diagnosed health concern, usually defined as acceptable in the traditional standards of medical practice.

While an insurance company can determine that they will cover the cost of a medically necessary procedure, it doesn’t mean the entirety of it, nor will it be reimbursable. For your patients, there will likely still be associated fees with any procedure, such as deductibles or co-pays.

Different rules in play 



Where things are murky and potentially a pain point for a medical practice is the criteria itself. As the American Medical Association points out, each payer has its definition of what “medical necessity” means. This makes going through the process fraught with differences instead of something more uniform throughout the insurance industry.

For instance, Medicare uses a list they call National Coverage Determinations, which is amended to Local Coverage Determinations if your patient is on a Medicare Advantage private plan. Also, state and federal laws may be weighed in for individual private insurance.

This is one reason why the AMA advocates for clinical guidelines developed by the society governing each specialty type. They believe it would make it clearer for everyone if this was established.

We can be your partners in patient communication

Knowing about authorization questions such as medical necessity can be a key to informing your patients in the best way possible about the care they can or cannot get covered by insurance. It’s an area of communication in which National Recalls excels.

As a longtime leader in administrative services for the medical industry, our strength lies in that vast experience with customer care knowledge to give you and your patients the needed results. To find out more about what we offer, please visit our website.