The Definition of Medical Necessity and Using It When Dealing With Health Insurers

Physicians, meet Mrs. "Smith." She's undoubtedly resembles many of your own patients. Like them, she is very frail and has more than her fair share of chronic conditions. Thanks to your diligent care, she has a good chance of seeing her great granddaughter this summer and, if the both of you are lucky, she won't see the inside of a hospital for years to come.

Unfortunately, however, the times they are a changin'. Mrs. Smith's health insurance may no longer "cover" your referral for a specialist consultation, your order for a expensive radiological imaging study or your prescription for a new medication. That's because she has been caught up in a thicket of shifting benefit designs, utilization management initiatives and coverage exclusions. Dealing with her insurance company is a maze-like exercise in professional frustration that sucks the joy out of medical practice faster than salaried docs exiting an Urgent Care Clinic at the end of their shift.

When the DMCB teaches, lectures and provides conferences for young physicians and medical students, it says the fix for Mrs. Smith's dilemma is two-fold.

First of all, it says, physicians need to familiarize themselves with the basics of health insurance. Once docs understand risk transfer, underwriting, trending, contracts, reserving, surplus management and regulatory oversight, the DMCB thinks they'll be better able to advocate on behalf of their patients at both a local and national level. That will take time and effort. It's too important to leave to the experts. One good way to deal with that is for docs to regularly read the DMCB.

Secondly, docs need to learn to use the words "medical necessity." This is one of those basics described above that, if raised at the right time when dealing with an uncooperative health insurer, is more likely to get Mrs. Smith the coverage for the services.

Medical necessity is a key concept used by insurers and regulators to describe any health care intervention that is:

(a) recommended by the health care provider;
(b) treatment for a medical condition;
(c) at an appropriate level of service or supply
(d) considered to be effective in improving health outcomes, as determined by scientific evidence, accepted standards of medical practice, or, expert opinion
(e) cost-effective for this condition compared to alternative interventions
(f) not solely for the covered person’s convenience or the convenience of the covered person’s family or physician.

While there are exceptions, health insurers are obliged to cover all medically necessary services.

The DMCB recognizes that calling an insurer's 800 number, faxing copies of medical records, completing preauthorization forms and tabbing through a web site can a dreadful and demeaning experience. That's not the point. The point is that, a live employee of the insurer is going to have to eventually read or listen to what you have to say. Physicians' chances of prevailing on behalf of Mrs. Smith will be significantly increased if that employee hears or reads the words "medically necessary" somewhere in the course of your appeal. If they know that you can argue the merits on that basis, your chances on behalf of Mrs. Smith will improve.

How not to deal with an initial denial for payment coverage for a CAT scan:

"I want to rule out a tumor, so I need this imaging study stat. Please approve"

A better way to deal with that denial for a CAT scan:

"As a physician, I've determined that this patients' new symptom of pain could be consistent with a diagnosis of cancer. A CAT scan is the best first step imaging study to address this possibility based on my professional judgment and prevailing practice standards. There is no reasonable alternative imaging modality or other option to adequately address the diagnosis. I and my patient look forward to hearing from you shortly about coverage for this medically necessary service."