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Defining Medical Necessity

Strategies for Promoting Access to Quality Care for Persons with Physical Disabilities and Other Special Health Care Needs

In order for patients to gain access to managed care plans, it depends in part on whether a service or product is found to be "medically necessary". Some definitions of medical necessity may lead to the denial of patients' claims.

Specifications for Defining Medical Necessity

1. A covered service or product is medically necessary if it will do, or is reasonably expected to do, one or more of the following:

a. Arrive at a correct medical diagnosis.
b. Prevent the onset of an illness, condition, injury, or disability in the patient.
c. Reduce, correct, or ameliorate the physical, mental, developmental, or behavioral effects of an illness, condition, injury, or disability.
d. Assist the patient to achieve or maintain sufficient functional capacity to perform at age-appropriate or developmentally appropriate daily activities.

2. The managed care organization or insurer must determine medical necessity on the basis of health information provided by the following persons: the patient (as appropriate to his or her age and communicative abilities), the patient's family, the primary care physician, and consultants with appropriate specialty training, as well as other providers, programs, multidisciplinary teams, educational institutions, or agencies that have evaluated the individual.

3. The determination of medical necessity must be made on an individual basis and must consider:

a. The functional capacity of the person and those capacities that are appropriate for persons of the same age or developmental level.
b. Available research findings, health care practice guidelines, and standards issued by professionally recognized organizations or government agencies.

4. Final determinations will be made by a physician in concert with the following persons: the individual's primary care physician; a consultant with experience appropriate to the individual's age, disability, or chronic condition; and the individual and/or family.

5. Medically necessary services must be delivered in a setting (e.g. an individual's home, school, child care centre, workplace, or community-based agency) that is appropriate to the specific health needs of the individual.

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