When you walk into the doctor’s office holding your sick child’s hand, that physician’s license to practice medicine will be prominently posted on the wall, and most people just assume that this visit to the doctor’s office will be paid for by their major medical insurance.
What most people are not aware of is how this doctor’s visit may be interpreted by the insurance company based on “medical necessity” and how that term may impact this visit to the physician with their sick child.
I am aware I’m leaving out volumes of technicalities which I will provide on request.
What is the issue?
In 2014, a major insurance company denied a claim for mental health care as not being “medically necessary” based on “…internal coverage guidelines.”
This is important because your doctor has a license to practice medicine and has taken an oath to treat your illnesses to the best of their ability.
The insurance company does not have a license to practice medicine, they have agreed to accept risk and have spelled out in your contract what they will actually cover. This is frequently based on the insurance companies’ interpretation of medical necessity.
And then what happened?
When the insurance company denied the claim, the court declared in favor of the insurance company but then changed their mind and decided in favor of the people who had the claims.
Why would that matter?
“By holding otherwise, the panel put medical necessity in the hands of (the insurance company) finance department rather than the medical community,” Brendan Pearson, Reuters, March 10, 2023
Why is this important?
Your insurance company is not practicing medicine; they are managing financial agreements.
But they also have a responsibility to process claims considering “generally accepted standards of care.” Those standards are established by people with an actual medical license and are the underlying basis of determining medical necessity.
It is important to understand how your insurance policy works; however, if you have a claim denied you can ask your doctor to demonstrate that based on generally accepted standards of care the treatment was medically necessary; and to remind the insurance claims department that your doctor actually has a license to practice medicine.