Medical necessity
Medical necessity is a payer's coverage standard — whether a service was appropriate for the patient's condition under the plan's published criteria.
Updated
Medical necessity is the standard a payer applies to decide whether a service is covered for a particular patient: whether it was appropriate for the reported condition, consistent with accepted practice, and provided in an appropriate setting. The criteria are published by the payer in its coverage policies.
A medical-necessity denial is a coverage decision, not a clinical judgment about the care that was given. The service may have been entirely appropriate and still fall outside what the plan agreed to cover, or the documentation may not have established the link the policy requires.
In practice
These denials turn on documentation, because the payer sees only what the claim and the record report. The clinical reason for the service has to be present in the record and reflected in the diagnosis reported on the claim; where it is not, the service can look unsupported even when it was not.
Medical necessity is the denial category most often worth appealing rather than writing off, because the evidence that answers it — the clinical record — usually already exists and simply was not in front of the reviewer.
Commonly confused with
- Prior authorization: Prior authorization is the payer's advance approval of a planned service; medical necessity is the coverage standard applied to the service as delivered. An authorization does not by itself guarantee payment.
- Coding accuracy: Coding asks whether the service was reported correctly; medical necessity asks whether the plan covers it for this patient.