Health Insurance Articles

Understanding The Concept of Medical Necessity In Health Insurance

2010-07-26

For many Americans, the cost of health insurance is one of the major drains on their monthly incomes. Finding insurance coverage that not only takes care of the basics but will also operate in times of dire need can be difficult, especially after the recent downturn in the economy. Providers are now shy about offering multiple layers of coverage, and finding a reasonable price can be a challenge unto itself. Even if a person is able to obtain a health insurance quote that agrees with his or her budget, problems may still remain. Most health insurance providers in the United States operate under the same rule of medical necessity that applies to Medicare. Understanding what medical necessity is and how it works is important for any policyholder.

Every country with national or private health insurance plans will have a policy similar to that found in the United States, at least when it comes to the governance of health care and the administration of treatment. All of them focus on the same thing-determining when care is necessary and under what circumstances it will be administered. The concept in the Unites States originally came from Medicare, which is bound to provide services that are "reasonable and necessary." This means that a doctor must justify the treatment that he or she is prescribing in order for Medicare to cover the costs. This same concept has now moved over to the private health care industry. In order to have treatments paid for by their insurance company, patients must be able to prove that these treatments were reasonable, justified and necessary.

There are several ways to do this, the most straightforward of which is to visit a care provider or specialist who can then sign off on the treatment. However, it must be understood that the signature of a doctor does not mean that a treatment plan or option will be paid for automatically by an insurance provider. The doctor or specialist must be able to document that the treatment or diagnostic technique described was both necessary and reasonable, both in terms of methodology and price. For example, the use of certain drugs may not be part of a person's standard insurance coverage, but if a physician can show they are necessary for the treatment of a condition, a generic option may be prescribed. Again, however, this is entirely at the discretion of the insurance company. Medical necessity exists as a framework to begin the process of a claim, not to mandate its payment. While no claims are ever guaranteed, it is in a client's best interest to consult with his or her primary care physician for all treatment options.