Case Study: Responding to Insurance Denials Due to Lack of Medical Necessity A medical provider has received an insurance denial due to lack of medical necessity. To review the correctness of this action, the provider’s office obtains the carrier’s policy definition of medical necessity. According to the carrier, the medical necessity criteria includes any treatment which (1) is generally accepted by other medical practitioners for the treatment of that condition; and (2) is provided at the lowest level of care which ensures the insured party’s safety; and (3) must not be experimental. In reviewing the patient’s medical records, the provider believes all three criteria were met and decided to appeal the denial.

The Solution: The medical provider first discussed the denial at length with the initial claims examiner. As a result, the medical provider learned that the insurance carrier believes only the second criteria was unmet by the denied treatment. Therefore, the provider based the appeal on information in the medical records which substantiated the provider’s position that treatment could not have occurred at a lower level of care. They provided information from the Physician’s Desk Reference regarding the effect certain medications were expected to have on the patient and the need for such medication to be closely monitored.

To further support the need for a higher level of care, the provider spoke with the referring doctor about the need for aggressive treatment. The referring doctor agreed to write a letter of medical necessity for the treatment in which he carefully outlined the failure of previous, less aggressive treatment.

Finally, the medical provider specified in the appeal letter that both the treating physician and the patient requested that the appeal only be reviewed by a clinician licensed to provide the type of treatment being reviewed.

As a result, the carrier overturned the previous decision and approved full payment for the more aggressive treatment.

In any medical necessity appeal, first determine what records were reviewed in reaching the initial decision. Submit any additional documentation the carrier indicates would allow approval of the treatment.

If all records have been reviewed, you want to submit additional medical arguments for the treatment and respond to the carrier’s recommended course of treatment. Ask the carrier to provide you with the policy definition of medical necessity as well as the name and clinical background of the person who performed the initial review so that you may address the adequacy of this information in your appeal.

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