Medical Necessity in Private Health Plans

Table 2. Medical Necessity Definitions: Managed Care Industry

Year	Source	Medical Necessity Definition¹
2000	Highmark Blue Cross Blue Shield (from AHRQ report on coverage decisions)	Coverage process-contractual definition of medical necessity, which includes the following criteria for establishing the medical necessity of a service: appropriate for symptoms, diagnosis, and treatment of a condition, illness, or injury; provided for diagnosis, direct care, or treatment; in accordance with the standards of good medical practice; not primarily for the convenience of the member or member's provider; the most appropriate supply or level of service that can be safely provided to the member. To determine what services meet this definition, Highmark has an information-gathering process that includes systematic reviews of published literature, a consulting program with practicing physicians, review of coverage decisions by Highmark managers, review by an independent Medical Affairs Committee.
2001	ValueOptions Providers Manual (available online)	Medically necessary treatment is that which is: intended to prevent, diagnose, correct, cure, alleviate, or preclude deterioration of a diagnosable condition (ICD-9 or DSM-IV) that threatens life, causes pain or suffering, or results in illness or infirmity; expected to improve an individual's condition or level of functioning; individualized, specific, and consistent with symptoms and diagnosis, and not in excess of patient's needs; essential and consistent with nationally accepted standard evidence generally recognized by mental health or substance abuse care professions or publications; reflective of a level of service that is safe, where no equally effective, more conservative, and less costly treatment is available; not primarily intended for the convenience of the recipient, caretaker, or provider; no more intensive or restrictive than necessary to balance safety, effectiveness, and efficiency; and not a substitute for non-treatment services addressing environmental factors.
2000	Anonymous Managed Behavioral Health Plan Provider Packet	"Medical Necessity" is used here to mean care which that is determined to be effective, appropriate and necessary to treat a given patient's disorder. For all levels and types of care, the definition is as follows: (1) the patient must have been diagnosed with a psychiatric illness by a licensed mental health professional; (2) symptoms of this illness must accord with those described in the DSM-IV; (3) the diagnosis must have been arrived at prior to admission in a face-to-face encounter between the professional and patient. [Note: The company defines separate admission and continuing care criteria by type of service, e.g., inpatient and outpatient psychiatric treatment, substance dependence treatment, residential treatment, methadone maintenance, electroconvulsive therapy, psychological testing, etc.]
2000	United Behavioral Health Source: UBH Consent Agreement with Maine Bureau of Insurance	Medical Necessity-health care services and supplies that are determined by the Plan to be medically appropriate, and (1) necessary to meet the basic health needs of the covered person; (2) rendered in the type of setting appropriate for the delivery of the health service; (3) consistent in type, frequency, and duration of treatment with United Behavioral Health guidelines; (4) consistent with the diagnosis of the condition; (5) required for reasons other than the comfort or convenience of the covered person or his or her physician; and (6) of demonstrated medical value. [Available at: http://www.state.me.us/pfr/ins/ins003005.htm]
1999	Cigna Behavioral Health Care Source: Cigna's "Level of Care Guidelines for Mental Health and Substance Abuse Treatment"	In considering the appropriateness of any level of care, the four basic elements of Medical Necessity should be present: (1) a diagnosis as defined by standard diagnostic nomenclatures (DSM-IV or its equivalent in ICD-9-CM) and an individualized treatment plan appropriate for the participant's illness or condition; (2) a reasonable expectation that the participant's illness, condition, or level of functioning will improve through treatment; (3) the treatment is safe and effective according to nationally accepted standard clinical evidence generally recognized by mental health or substance abuse professionals; and (4) it is the most appropriate and cost-effective level of care that can safely be provided for the participant's immediate condition. [Available at: http://apps.cignabehavioral.com/web/basicsite/provider/pdf/levelOfCareGuidelines_2003.pdf]

¹ Definitions have been taken verbatim from the relevant document; quotation marks have been omitted.

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