Medical Necessity
The standard that services must be consistent with diagnosis and professionally recognized standards to be covered, applied by utilization review and appealable.
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Practice This Concept
Which managed care technique controls health care costs by evaluating the medical necessity of planned services before they are provided?
Utilization review, which may require preauthorization or precertification of non-emergency care — Managed care plans use utilization review (UR) to determine whether proposed treatment is medically necessary, appropriate, and cost-effective before, during, or after care is delivered. In its prospective form, UR requires preauthorization or precertification before a non-emergency admission or procedure; concurrent and retrospective reviews take place while treatment is ongoing or after it has concluded. By denying or limiting care that fails medical-necessity standards, UR controls utilization and holds premium levels down. This tool is a defining cost-containment mechanism of HMOs, PPOs, and EPOs, and it is a standard exam point under managed care delivery systems.
National insurance concept
Most major medical policies limit payment to services that are 'medically necessary.' This means the service must be:
Appropriate and consistent with accepted medical practice to diagnose or treat an injury or illness — The medical necessity requirement ties coverage to services that are consistent with generally accepted standards of medical practice and are required for the diagnosis or treatment of an injury or illness. Services that are experimental, elective, cosmetic, or beyond the level of care appropriate to the condition may be denied as not medically necessary. This standard underpins most coverage decisions under major medical plans and is a defining limitation of the coverage.
National insurance concept
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