Not deemed a “medical necessity” by the payer - Insurance denial

What does 'Reasonable and Necessary' mean?

Answer: 
'Reasonable and Necessary' describes services that are:

Safe and effective (Not experimental or investigational)

Appropriate, including the duration and frequency that is considered appropriate for the service, in terms of whether it:

Is provided within accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member

Is furnished in a setting appropriate to the patient’s medical needs and condition

Is ordered and provided by qualified personnel

Meets, but does not exceed, the patient’s medical need

There are several exceptions to the requirement that a service be reasonable and necessary for diagnosis or treatment of illness or injury. The exceptions appear in the full text of The Federal Register at Section 1862(a)(1)(A) external link  and include but are not limited to:

Pneumococcal, influenza and hepatitis B vaccines are covered if they are reasonable and necessary for the prevention of illness

Hospice care is covered if it is reasonable and necessary for the palliation or management of terminal illness

Screen mammography is covered if it is within frequency limits and meets quality standards

Screening pap smears and screening pelvic exam are covered if they are within frequency limits

Prostate cancer screening tests are covered if within frequency limits

Colorectal cancer screening tests are covered if within frequency limits

One pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens

PR 50 These are non-covered services because this is not deemed a “medical necessity” by the payer


(MEDICARE WILL NOT PAY FOR THIS SERVICE FOR THIS CONDITION)

Resources/tips for avoiding this denial

Denial indicates the procedure code billed is incompatible with the diagnosis, for payment purposes.

• Refer to the “Active/Future/Retired LCDs” medical coverage policies for a list of procedure codes, relating to services addressed in the local coverage determination (LCD), and the diagnoses for which a service is/is not considered medically reasonable and necessary.

• Before billing a claim, you may access the Procedure to Diagnosis Lookup/Service Indication Report to determine if the procedure code to be billed is payable under the specific diagnosis.

• Note: Medicare does not cover diagnostic or screening procedures for screening purposes, such as an annual physical. This denial would be appropriate in this case.

• Respond promptly to a request for additional documentation (ADR). Failure to respond to an ADR will result in claim denials.



Tips to correct the denied claim

• If a payable diagnosis is indicated in the patient's encounter/service notes or record, correct the diagnosis and resubmit the claim.

• Do not resubmit an entire claim when a partial payment has been made; correct and resubmit denied lines only.

• If a claim is denied based on failure to respond to an additional documentation request, a request for a redetermination will be necessary to correct the denial.



Definition of Medical Necessity

Medically Necessary service means a health care service that, as determined by the Plan, is required to diagnose or treat a Member's illness, injury, symptom, or complaint and:

• is consistent with the diagnosis and treatment of the Member's health condition and provided in accordance with generally accepted medical practice;

• is supported by scientific evidence concerning the effect on health outcomes and has final approval, if applicable, from the appropriate government regulatory bodies;

• is essential to improve the Member's health and provides a positive effect on health that is greater than its harmful effect;

• is as beneficial as any established alternatives covered under the Member Contract;

• is as cost-effective as any established alternatives;

• is consistent with the level of skilled services that are furnished;

• is furnished in the least intensive type of medical care setting required by the Member's health condition;

• is not furnished solely for the Member's convenience or religious preference or for theconvenience of the Member's family or health care provider; and

• is not a service solely intended to promote athletic achievements or a desired lifestyle or to increase or enhance the Member's environmental comfort.

The Plan or its designee will determine if a health care service is Medically Necessary for the Member. The fact that any Group/Provider has furnished, prescribed, ordered, recommended, or approved a treatment, or that a treatment is offered as a last resort, does not of itself make the treatment Medically Necessary. When applicable, the Plan or its designee will use Medicare guidelines to determine whether a health care service is Medically Necessary. Inclusion of a health care service on the Fee Schedule shall not be considered a determination that the procedure is Medically Necessary or generally acceptable in all circumstances.


All determinations by the Plan of Medical Necessity shall be based upon clinical information regarding the Member that was available to the Group/Provider at the time services were rendered. The Plan will at all times be in compliance with the regulations of the Massachusetts Department of Public Health and Division of Insurance regarding Medical Necessity.

In Applying The Definition Of Medical Necessity To Chiropractic Services Specifically, BCBSMA Evaluates The Following: The treatment should produce or is expected to produce objectively measurable clinical and/or functional improvement in a member’s net health outcome as reflected by a decrease in symptoms and an increase in function. Such treatment or services must be determined to be appropriate for the symptoms, diagnosis, or care of the member with the condition or conditions, provided specifically for the diagnosis or direct care and treatment of those conditions, consistent with stan dards of good health practice within the practitioners’ own professional community, as well as the other professions available to the member for addressing the presenting problems in an integrative manner. Such service is not primarily for the convenience of the member or the practitioner, is the most professionally appropriate dosage of care or level of service, and is as cost effective as any established alternatives. The necessity for therapeutic intervention exists in the presence of an impairment (illness/injury/condition) evidenced by recognized signs and symptoms, and which is likely to respond favorably to the planned treatment within a reasonably predictable period of time.

All covered services, except routine circumcision, voluntary termination of pregnancy, voluntary sterilization, stem cell (“bone marrow”) transplant donor suitability testing, and preventive health services, must be medically necessary and appropriate for the member’s specific health care needs. This means that all covered services must be consistent with generally accepted principals of professional medical practice. The Plan decides which covered services are medically necessary and appropriate for the member by using the following guidelines.