What is Medical Necessity?

“Medically Necessary” or “Medical Necessity” shall mean health care services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of evaluating, diagnosing or treating an illness, injury, disease or its symptoms…1

The term “medical necessity” is used by healthcare providers and insurers to determine whether a medication, diagnostic test, or even a surgery is reasonable and necessary for patient care and treatment.

While each state may enforce different regulations on how a provider must evaluate the medical necessity of a practice, the key to appropriate evaluation is evidence based treatment provided with regard to the needs of the patient.  Medical necessity policies are in place to safeguard both public and private resources and to avoid unnecessary health risks for patients.

In order for an insurance company to cover and pay for a health care service recommended or prescribed by a physician, the testing and treatment provided must be within the bounds of those medical standards. The appropriate standard of care for any disease, injury or symptom is based on collaborative efforts, involvement in safety and quality initiatives, published, peer-reviewed information and overall unanimity of opinion in the medical community2.

Lexar Laboratories works with commercial insurance companies, including Medicare and Medicaid, advocating on behalf of healthcare providers and their patients to ensure open access to our vital services.  Knowing what medications are being taken and how they are being used by the patient can be an essential element of the treatment planning for clinicians.

The question of medical necessity isn’t always black and white.  There can be instances where a patient may benefit from a test or treatment that is outside an insurance company’s “medically necessary” policies.  Sometimes the guidelines for treatment may have been narrowed by a payor’s interpretation of health care reforms or changes in the laws that govern what insurance companies may consider “medically necessary”.

References:

  1. 42 U.S.C Section 1395y(a); 42 USC Section 1320c-5(a),
  2. American Medical Association, Clinical Practice Improvement and Patient Safety