Jane Dotson
Getting a procedure covered by your insurance company often requires that it be deemed medically necessary. This term is used by health insurance providers to describe the coverage they offer and is correlated with what services the plan will pay for. Most health plans will not pay for services that are not medically necessary, such as cosmetic procedures. However, cosmetic procedures done for restorative purposes, such as breast reconstruction after a mastectomy, are generally covered. To avoid surprise medical bills, it is important to understand what your insurance provider defines as medically necessary and follow the procedures your health plan has in place, such as obtaining prior authorization and staying in-network.
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What You'll Learn
Understanding 'medical necessity'
Understanding medical necessity is key to getting a medically necessary procedure covered by your insurance.
In general, "medical necessity" refers to a decision by your health plan that your treatment, test, or procedure is necessary to maintain or restore your health or to treat a diagnosed medical problem. In other words, it is a healthcare service that a physician or healthcare provider, exercising prudent clinical judgment, would provide to a patient. This service must be for the purpose of evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms. It should also be in accordance with the generally accepted standards of medical practice and clinically appropriate in terms of type, frequency, extent, site, and duration. Importantly, it should not be primarily for the convenience of the patient, healthcare provider, or other physicians.
Medically necessary procedures are typically covered by insurance, but this is not always the case. Even if a service is deemed medically necessary, patients may still need to pay for some or all of the cost due to copays, deductibles, and coinsurance. Additionally, insurance companies may have specific guidelines and criteria for what they consider to be medically necessary, and they may not cover procedures deemed experimental or unproven. For example, Medicare and private insurers have varying criteria for determining medical necessity based on the patient's circumstances. Therefore, it is important to review your insurance plan's specific guidelines and criteria to understand what services they will cover.
Preventive care may also be considered medically necessary, but this is governed by the terms of the applicable plan documents. It is important to note that insurance does not always pay for everything that a provider may believe is necessary. For instance, routine annual hearing tests for Medicare beneficiaries may not be covered.
In most cases, the medical care recommended by your doctor will be considered medically necessary by your health plan. However, to avoid unexpected medical bills, it is advisable to follow all the procedures outlined by your health plan, including obtaining prior authorization and staying in-network.
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What your insurance covers
Most health plans will not pay for healthcare services that they do not deem medically necessary, such as cosmetic procedures. Many health insurance companies will also not cover procedures that they determine to be experimental or unproven. However, ""cosmetic" procedures done for restorative purposes, such as breast reconstruction after a mastectomy, plastic surgery after an injury, or the repair of congenital defects, are generally covered by health insurance.
Medicare and private insurers have varying criteria for determining whether a procedure is medically necessary based on the patient's circumstances. Original Medicare uses National Coverage Determinations for some services and Local Coverage Determinations (made by local Medicare Administrative Contractors) to ensure that the criteria for medical necessity are met. Private health plans do not have one standard set of criteria, but they are similar. They will include language in their Evidence of Coverage (EOC) that states what they will cover and why. The EOC will outline any treatments, tests, or procedures they determine are required to diagnose and treat a medical problem.
In addition to medically necessary services, health insurance plans may also cover emergency care, radiology and laboratory services, and neonatal care. It is important to review your plan's EOC to understand what specific medical services are included and excluded from coverage.
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What to do if a procedure is denied
If your insurance denies a medically necessary procedure, you do have options to appeal their decision. Firstly, carefully review the denial letter, which should outline the steps for appealing. You can also refer to your insurer's website for this information. Check your policy documents to ensure that the reasons for the denial are valid and ask them to correct any errors.
If the denial stands, you can start the appeal process. This may involve providing additional paperwork or re-submitting a claim with different information. It is recommended that you call your insurer's customer service line, as some issues can be resolved over the phone. If you need to appeal, it is beneficial to get your doctor involved. Ask your healthcare provider to write a response explaining why they felt the procedure was medically necessary, supported by medical records and clinical notes. This will strengthen your case.
You can also seek help from health advocates who can assist in putting together a strong appeal. These services are often free and provided by private companies, charities, or state-specific organizations. Some employers may even offer health advocacy services as an employee benefit. You can also refer to resources such as free training series and guides on insurance denials and appeals.
It is important to be aware of your insurance policy's coverage, pre-authorization requirements, and out-of-pocket expenses to avoid unexpected costs. Knowing this information in advance can help you make informed decisions about your medical care.
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Surprise bills and your rights
Surprise medical bills are unexpected bills from out-of-network providers or facilities. Before the No Surprises Act, if you had health insurance and received care from an out-of-network provider or facility, your health plan may not have covered the entire out-of-network cost, leaving you with higher costs than if you had received care from an in-network provider or facility. This could include out-of-network cost-sharing (like out-of-network coinsurance or copayments). Additionally, the out-of-network provider or facility could bill you for the difference between the billed charge and the amount your health plan paid, unless banned by state law. This is called "balance billing".
The No Surprises Act, which came into effect on January 1, 2022, protects people covered under group and individual health plans from receiving surprise medical bills when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers. It also establishes an independent dispute resolution process for payment disputes between plans and providers, and provides new dispute resolution opportunities for the uninsured and self-pay individuals.
Under the No Surprises Act, you are only responsible for your in-network cost-sharing. For example, if air ambulance services are covered under your health plan, you are only responsible for your in-network cost-sharing, even if the service was from an out-of-network provider. The air ambulance provider and your health plan can negotiate the total payment amount to the provider. If they do not agree on a payment amount, the health plan or provider may send a dispute to CMS under the Federal independent dispute resolution process.
Your rights under the No Surprises Act depend on whether you have health insurance or are uninsured. If you are insured and your health plan denies all or part of a claim for service, you can appeal that decision. Your plan documents will contain information on the review process and how to request a review of your plan's decision. If you don’t have insurance from an employer, a Marketplace, or an individual plan, some health insurance coverage programs already have protections against surprise medical bills. For example, if you have coverage through Medicare, Medicaid, or TRICARE, or receive care through the Indian Health Services or Veterans Health Administration, you are already protected against surprise medical bills from providers and facilities that participate in these programs.
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Getting a second opinion
If your doctor has informed you of a health problem or suggested a treatment for an illness or injury, you may want to get a second opinion. This is especially true if you are considering surgery or major procedures. Asking another doctor to review your case can be beneficial for several reasons. Doctors have different styles and approaches to treatment. For instance, some may be quicker to suggest surgery or other major treatments, while others may recommend a more conservative approach.
Many health care plans cover second opinions for medically necessary procedures, but it is a good idea to check before making an appointment. Medicare, for instance, will help pay for a second opinion as long as it is deemed medically necessary. Even if you have to pay out of pocket, a second opinion can be well worth the cost. Ask your doctor to recommend another source for a second opinion, be it a specific doctor or a facility. You can also consult your state or local medical society, check websites of area hospitals for experts who treat similar cases, or ask friends and family for referrals.
Once you have chosen a doctor for your second opinion, ask your first doctor to send your test results and other records to the second doctor. Call ahead to ensure the second doctor has received these records, as this can help you avoid repeating any medical tests. Before visiting the second doctor, educate yourself about your condition and the possible treatments. Determine the type of treatment you may want, and write down your concerns to discuss with the second doctor. Bring a list of questions to your appointment.
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Frequently asked questions
Medically necessary refers to a decision by your health plan that your treatment, test, or procedure is necessary to maintain or restore your health or to treat a diagnosed medical problem.
Ask about alternatives. A similar test or treatment that is covered by your insurance may be just as effective as one that isn't. For example, your health insurance plan might not cover a specific medication, but it may cover alternatives that work similarly.
Appeal to the insurance provider. Ask your healthcare provider for the medical codes of the recommended procedures and investigate your insurance company's appeal process. If your health plan is non-grandfathered, the Affordable Care Act requires it to provide access to an internal and external review process.
Contact your insurance company or health plan. If you have health insurance through an employer, the federal Health Insurance Marketplace, a State-based Marketplace, or other individual market coverage, you are protected from unexpected out-of-network charges for emergency medical services in most cases.
In some cases, you may be able to pay more for out-of-network care. However, it's important to note that most health plans will not pay for services they deem to be unnecessary, and you may be responsible for the full cost of the procedure.
