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In our discussion this week, we must understand what medical necessity is. Insurance company payers have the freedom to determine what services they will cover and include in a health insurance policy. An insurance carrier also has the right to determine whether a service provided by a physician is covered under a specific healthcare policy. Each insurance carrier has the right to establish a definition of medical necessity and will write that definition into the contractual agreement that becomes part of an insurance healthcare policy. In general, does the services provided relate to the reason the patient is seeking health care services?
The theory of medical necessity is an important topic in the insurance industry that every employee working in healthcare, billing and coding and claims processing must be aware of. What actually is medical necessity? It refers to the fact that there must be a medical reason for the service provided by the physician to the patient when the diagnostic reason(s) for the healthcare or chief complaint are evaluated. This information is compared to the health insurance coverage of the patient and a determination is made by the insurance carrier as to coverage for service(s) rendered, which eventually will lead to payment to the physician for services rendered.
Are all procedures Medically Necessary? What is and what is not - please explain.
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