Letters and Explanation of Benefits (EOBs) sent by insurers to patients stating that the medical services their doctor provided were “not medically necessary” have little to do with medical necessity. Instead they are used to punish doctors.
This post explains how insurers determine medical necessity, and the options that doctors and patients have when a service is labeled “not medically necessary.”
Who makes the ‘not medically necessary’ determination?
Although typically insurance claims are auto-processed, certain claims (based on amount, the type of medical service, or who provided it) are kicked out for review by claims personnel (who commonly have no medical training). Astonishingly, reviews by medical professionals or medical doctors (M.D.s) are not the norm. But, they should be.
In fact, reviews to determine “medical necessity” should be made only by M.D.s. Think about it. The medical service at issue was provided by a doctor who actually saw the patient, reviewed their medical history, conducted a physical exam, queried the patient about symptoms, likely ordered, reviewed and considered diagnostic tests, and then reached a diagnosis and determined the necessary treatment. That should not be second-guessed by anyone other than another M.D.
And even when a determination of “not medically necessary” is made by an M.D., the doctor works for and is paid by the insurance company. This presents a serious conflict of interest. It is also notable that most insurance company M.D.s do not even practice medicine and if they do, it’s most likely not in the same specialty as the service they reviewed.
How the medical necessity determination is made
The decision that a medical service was “not medically necessary” is made after a claims person or M.D. (called a medical director by the insurance company) does one, and only one, thing: they look at a medical record.
They do NOT see or talk to the patient.
They do NOT conduct a physical exam.
They do NOT review the patient’s medical history.
They do NOT talk with the patient about their symptoms.
They do NOT review diagnostic tests or results.
They do NOT even talk or consult with the treating doctor.
In fact the only time there is any discussion between claims personnel or a medical director and the patient’s treating doctor, if there is one at all, is after a determination is made and the patient is told their doctor provided services that were “not medically necessary.”
Why it’s punitive
Insurers’ determinations of “not medically necessary” are used to punish doctors. When a patient is told: “the services your doctor provided were not medically necessary” or “the services provided by your doctor were not medically appropriate”, they are led to think that either “my doctor is not very good, because they provided services that were not necessary or appropriate” or “my doctor is just trying to make money by providing services I didn’t need.”
In some cases, insurers’ statements even lead patients to believe their doctor is engaged in improper billing practices.
The insurers’ determinations thus result in damage to doctors’ reputations, in addition to causing financial harm (i.e., they are not paid for services they provided). Most times the insurer’s letter or EOB also tells the patient they “do not need to pay for the service, because it was not medically necessary.”
Don’t let insurers get away with this
If you’re a patient and receive a letter or EOB stating services you received were “not medically necessary”, don’t blame your doctor. Contact them and let them know you would like to be part of the appeal process against the insurer.
If you’re the doctor, you need to appeal the insurer’s decision and document everything you do as part of that process. If the insurer refuses to reverse their decision you have legal rights that protect you.