What is a Medical Necessity?

Medical necessity is a United States legal doctrine dealing with the determination of whether or not a medical procedure is justified. Also known as clinical medical necessity, the term most commonly applies to findings made by the health care industry — namely, insurance companies — about the reasonable need for a patient to receive a specific medical service. Medicare, Medicaid, and private insurers are often charged with deliberating and concluding on the justification of medical necessity.

Medicare and Medicaid's guidelines stipulate that they will only cover medical procedures that are "reasonable and necessary." In these organizations' terms, "reasonable and necessary" translates to any procedure or service that is mandatory for the diagnosis and treatment of the insured party. This may also include any treatment or service aimed to "improve the functioning of a malformed body member." These clauses illustrate what Medicare and Medicaid consider a medical necessity and, by extension, worthy of coverage.

With Medicare and Medicaid, the U.S. government will require a certificate of medical necessity when medical equipment is prescribed for at-home use. The insured party, the attending physician, and the medical supplier must sign off on the certificate to corroborate the medical necessity of the equipment. It is then submitted to the Centers for Medicare and Medicaid Services, where a decision will be made on whether the item will be covered.

While the terms of medical necessity may be fairly straightforward with Medicare and Medicaid, definitions of the word will vary between private insurance companies. What one company may cover, another may not; what one plan may cover, another may not. The fine point on insurance paperwork typically lays out exactly what the private insurer classifies as medical necessity.

Many patients in need of medical services may find themselves battling insurers over the need for coverage of a specific treatment. A patient soon finds that simply because his or her doctor considers a treatment medically necessary is not a clear indication that the patient's insurance company will agree. For example, cosmetic surgeries are rarely covered under insurance, but if the surgery can be directly attributable to the patient's improved health — and not just his or her appearance — it may qualify as a medical necessity.

The issue of medical marijuana has sparked debate over medical necessity. While some physicians have testified to a patient's need for marijuana, courts have found that the law's stance on illegal drugs cannot be skirted, even in cases of medical necessity. If medical marijuana is fully legal under local laws and prescribed by a doctor, the federal government may still pursue legal action against someone utilizing it.