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What Is a Medical Necessity in Medicare?

Medicare only covers services and supplies deemed “medically necessary,” which are services that specifically diagnose, treat, or manage a health condition, illness, injury, or disease. The service must also meet accepted standards of medicine. Certain services and supplies, such as those listed below, require approval for Medicare to pay.

  • Durable medical equipment (DME)
  • Home health care
  • Certain prescriptions
  • Additional preventative screenings

All insurance companies limit coverage based on medical necessity, but their definition may differ from yours. If possible, ensure Medicare will cover your service before receiving it. If your treatment is not medically necessary, you can pay out-of-pocket or appeal Medicare’s decision. This article explores which services require prior approval and how to increase your chances of coverage.

Understanding the Importance of Medical Necessities in Medicare 

Ensuring your desired treatment meets Medicare’s requirements is essential to getting coverage. If covered, you may pay nothing or only pay your cost-sharing portion. 

What Does Medicare Consider a Medical Necessity?

Medicare uses the following factors to determine whether a service or supply is medically necessary.

  • Recommended and fulfilled by a qualified healthcare provider 
  • Necessary or reasonable for the direct diagnosis or treatment of a health condition or its symptoms
  • Fits into Medicare’s scope of benefits
  • Not an experimental or purely cosmetic procedure
  • Not solely for the convenience of you or your provider
  • Meets accepted standards of medical practice

In short, Medicare wants to confirm that a less expensive alternative service cannot achieve the same results. Medicare Advantage plans may require prior authorization before covering treatments or supplies; Original Medicare beneficiaries can typically review these requirements online. Some services need a pre-claim review to ensure coverage. 

What Is The Role of Medical Necessities In Receiving Medicare Services 

Since Part A and Part B cover different sectors of medical practice, they handle medical necessities differently. 

Part A

Also known as “hospital insurance,” Medicare Part A covers skilled nursing facility care, inpatient hospital care, nursing home care, home health care, and hospice care. If you are admitted to a healthcare facility, Original Medicare typically does not require preapproval for services rendered. However, in many cases, your provider must certify that the level of care is critical before you receive coverage. This includes:

  • Getting a private room at an inpatient care facility
  • Home health care services, such as occupational therapy, physical therapy, and speech-language pathology services
  • Full-time care at a skilled nursing facility which requires a prior qualifying hospital stay
  • Hospice care, which requires certification of a terminal illness

Your provider must confirm that you need increased care before Medicare will pay for it. For example, Medicare will not cover a full-time stay if a part-time visit can fulfill your needs.

Part B

Part B, also called medical insurance, covers preventative care and medically necessary supplies and services. This extends to equipment, outpatient care, screenings, and vaccinations. You must often have a doctor’s order and meet Medicare’s eligibility terms to get coverage. Medicare’s website outlines guidelines for which services and supplies must be considered medically necessary, including:

  • Clinical diagnostic lab tests
  • X-rays
  • Durable medical equipment (DME), such as wheelchairs, oxygen supplies, and blood sugar test strips
  • Prosthetics
  • Emergency ambulance transportation
  • More frequent health screenings, such as diabetic tests or bone mass measurements
  • Inpatient and intensive outpatient mental health services 
  • Certain prescription drugs administered by medical professionals or in conjunction with DME

Before booking a specialist appointment or scheduling additional screenings, check whether your circumstance fits Medicare’s eligibility requirements. Otherwise, Medicare may decline your claim. Ask your provider or contact a Medicare representative if you have any concerns.

Medicare Advantage

If you purchased a private Medicare Advantage plan, consult the insurance company to confirm which services need prior approval. Medicare Advantage plans typically bundle Part A, Part B, and Part D (prescription drug coverage). While they must meet minimum coverage requirements, private plans set their eligibility terms and costs. Medicare Advantage plans also adhere to local coverage determinations, so rules vary by state.

Private plans can stipulate where and how you receive care. HMO plans may only cover treatment within their network, while PPO plans offer limited out-of-network coverage. Many Medicare Advantage plans require prior authorization for specialists, non-emergency care, and out-of-network care. If you do not get preapproval, the company can deny your claim. When in doubt, contact your insurer to confirm their terms.

Exceptions

In general, Original Medicare does not require prior authorization like Medicare Advantage plans might. Original Medicare beneficiaries can typically take these actions without a doctor’s order:

  • Get an annual wellness visit 
  • Undergo a yearly depression screening
  • Book a specialist appointment
  • Receive immunizations, such as for the flu or Covid-19

The service should be covered as long as the provider accepts the assignment. Ask the provider or a Medicare representative for clarification if you have any questions. Keep in mind that a doctor’s recommendation does not guarantee coverage. Even if your provider recommends additional screenings, you may not meet Medicare’s eligibility terms. Your provider should inform you if they think Medicare will deny the claim, but you can always call Medicare to confirm. 

What Is a Certificate of Medical Necessity?

As of Jan. 1, 2023, Medicare no longer requires a certificate of medical necessity (CMN) for DME coverage. Previously, providers needed to submit a CMN detailing the patient’s medical condition and why they needed a particular supply. However, the Centers for Medicare & Medicaid Services discontinued using CMNs to increase access and reduce administrative burden. Instead, Medicare relies on the patient’s claim information and medical history to determine whether their DME meets eligibility requirements. 

Still, you can avoid confusion by requesting an advanced coverage decision from your Original Medicare or Medicare Advantage plan. The responding document will explain whether your insurance will cover the service or equipment, plus your anticipated cost.

Alternatively, your provider may give you an Advance Beneficiary Notice of Noncoverage, or ABN, if they think Medicare will not cover their suggested care. You can still receive the service or supply, file a claim, and appeal the decision. 

How To Appeal a Denial

If Medicare rejects your claim in advance or denies part of a claim based on medical necessity, you have the right to appeal the decision. Follow the steps below.

  1. Understand your timeline. You usually have 120 days from the date of service to file an appeal, and you can ask for an expedited process if a delay jeopardizes your health.
  2. Discuss the situation with your healthcare provider. Decide whether you, an authorized representative, or your provider will file the appeal. Collect your medical records and a provider’s statement explaining why you need the treatment. 
  3. Submit your appeal. A licensed healthcare professional will determine the result; you will be notified in writing.
  4. If Medicare upholds the initial decision, ask for a reconsideration. An independent review organization may disagree, and the plan will pay its part.
  5. Pursue higher-level appeals. If your claim is over a specific monetary limit, you can appeal to an Administrative Law Judge, Medicare Appeals Council, and federal court.  

All in All 

As a patient, it can feel confusing when a treatment, medicine, or supply feels critical to your health but still has to go through an approval process. Understanding how Original Medicare and Medicare Advantage plans define “medical necessities” is crucial for limiting out-of-pocket expenses

Gather as much information as possible about your coverage and potential costs before receiving care. Talk to your healthcare provider, research your plan’s terms online, or call a representative to explain specific eligibility requirements. If your care is deemed medically necessary, make sure you see an approved provider, or you may still not receive coverage. 

Frequently Asked Questions

Private Part D plans cover FDA-approved prescription drugs that a doctor has deemed medically necessary. Each plan has its formulary or list of covered drugs but must adhere to specific requirements. Plans cover name-brand and generic drugs. Some use a step therapy protocol: Patients must start with less expensive medications and exhaust their options before the plan covers a costlier drug.

MACs are private insurance companies that process Medicare claims within a specific geographical region. They handle claims related to Part A, Part B, and durable medical equipment (DME). MACs also develop local coverage determinations (LCDs) and decide whether certain services or equipment are covered. Medicare and MACs use the same criteria to determine medical necessity. 

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