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What Does Medically Necessary Mean?

Summary: Medical Necessity helps determine the medical need for a service or treatment. If a service is deemed medically necessary, Medicare will cover its portion of the costs. However, to determine medical necessity, you may need to go through a process called prior authorization.  Estimated Read Time: 4 min

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Table of Contents:

    1. What is a Medically Necessary Service?
    2. Criteria Used to Determine Medical Necessity
    3. What is Not Considered Medically Necessary?
    4. What happens if Necessary Treatment is Not Covered by Medicare?
    5. What is Medically Necessary Under a Medicare Advantage Plan?
    6. How to Find Out if a Service Medically Necessary

The term medically necessary is used by insurance companies to refer to tests, procedures, and medical equipment that may be required for treatment of specific diagnoses. For care to be deemed medically necessary, your provider must correctly code your diagnosis and reason for the treatment when sending the information to your insurance company. Even the slightest error could cause your treatment to go uncovered by your insurance.

Below we’ll discuss what qualifies as medically necessary and what doesn’t meet the requirement. Then, you can better navigate your Medicare coverage and understand when certain services may be covered and when they may not.

What is a Medically Necessary Service?

According to healthcare.gov, the definition of medically necessary is as follows: “Health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms that meet accepted standards of medicine.”

Thus, if you schedule a procedure that has not been proven as medically necessary, you will not receive coverage. However, in some cases, if the insurance denies your claim, you may submit an appeal with a written letter from your care provider stating why the care was necessary in their eyes and hope for Medicare to grant your appeal.

Understanding which services fall under medical necessity and which do not is crucial for patients utilizing Medicare benefits and could save you thousands of dollars in unexpected medical bills.

Medically necessary examples include:

  • Hospice care
  • Preventive care
  • Hospital care
  • Health screenings
  • Labs
  • X-rays
  • Vaccinations
  • Durable medical equipment
  • Ambulance services
  • Physician visits

Criteria Used to Determine Medical Necessity

Your insurance company may have set rules to gauge whether a service is necessary or not. This typically includes an extensive list of medical ICD-10 codes that have corresponding CPT codes to determine a service necessity.

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A CPT code is a procedure code that is provided by the doctor for each medical service you receive. Even tasks as small as getting a blood draw will have an accompanying CPTcode. ICD-10 codes or diagnosis codes explain to the insurance company why the care is being given. In order to determine if the care is medically necessary, the CPT and ICD-10 codes must match up on the insurance companies master list of corresponding codes.

Typically, your insurance company will not provide you ICD-10 codes and their accompanying CPT codes. However, as part of your care providers training, they should be proficient in understanding which codes match one another. In addition to matching codes, another essential aspect of determining whether or not a service is medically necessary is looking for the limits on how often you can obtain treatment. Insurance may place caps on the number of times they completely cover certain services such as scans or x-rays.

For example, while your insurance may cover the first set of x-rays for a broken arm, they may not pay for a second, even if your doctor feels they may have missed something the first time. Yet, in other cases, they may provide full coverage and full reimbursement for a second set of scans. The result can be different each time and will ultimately depend on whether or not the insurance company feels it is necessary for you to receive multiple scans.

What is Not Considered Medically Necessary?

If a service is not deemed medically necessary, it will not be covered by Medicare. Unfortunately, just because a service is ordered by your physician, it does not always meet the criteria for Medicare coverage. Thus, you will be responsible for the costs or need to submit an appeal.

Most times, these services include:

  • Routine eye exams
  • Cosmetic surgeries
  • Hearing aids
  • Long Term Care
  • Seat lift mechanisms
  • Dental exams, extractions, cleaning, fillings, dentures
  • OTC medications
  • Unwarranted therapies
  • Fertility Treatments
  • Weight loss medications
  • Erectile dysfunction prescriptions
  • Excessive hospital stays

However, we know all healthcare needs are unique. So, depending on your circumstances, there may be instances in which Medicare will cover one or more of these services. Medicare coverage fully depends on the necessity of the service. So, if your doctor can provide a strong enough case, Medicare may provide coverage.

What happens if Necessary Treatment is Not Covered by Medicare?

There are certain services that your doctor may determine to be necessary, but are not covered by Medicare. In this case, you may be required to sign an Advance Beneficiary Notice of Noncoverage.

This notice will provide the full out-of-pocket cost of the service and declares that Medicare won’t cover specific treatments. It also states why they won’t cover the services and provides you with three payment options.

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Option 1: States that the provider will bill Medicare anyway, even though they will likely deny the service. If denied, then you would be able to request and appeal or be responsible for the full cost of the service.

Option 2: States that you do not want to bill Medicare and will pay for the service up front (or receive a bill in the mail).

Option 3: States that you do not want the services due to lack of insurance coverage through Medicare.

Your bill will be handled accordingly based on the billing option you choose on the form.

What is Medically Necessary Under a Medicare Advantage Plan?

If you are enrolled in a Medicare Advantage plan, your plan must go through the same process as Original Medicare to determine the necessity of the service you are receiving.

As you know, Medicare Advantage plans must cover the same services as Original Medicare. However, that does not mean they are limited to those services. In some instances, there may be additional services covered by Medicare Advantage that would not be covered by Original Medicare.

However, you should never rely on these additional services for your coverage needs as they may not be available in your area and can change year over year.

How to Find Out if a Service Medically Necessary

Understanding medical necessity is an important factor in utilizing your Medicare benefits. In order to maximize your coverage, it is important to follow Medicare guidelines and understand your costs before receiving care.

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When necessary, your provider may utilize prior authorization to ensure more costly tests and procedures are covered before getting the green light to schedule your service.

If you are unsure how your plan covers certain services, we are here to help. Our team of educated agents are here to answer any question you may have regarding Medicare coverage. We are even able to help you compare plans and determine the most suitable coverage options available to you in your area.

Don’t waste time – speak to an agent today and get answers! We make Medicare simple. Give us a call at the number above or fill out an online rate comparison form to see which policy is right for you!


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Jagger Esch

Jagger Esch

Medicare Educator
Jagger Esch is the Medicare Educator for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

8 thoughts on "What Does Medically Necessary Mean?"

  1. I have insurance where I wk, I’m 61 would I b eligible for the a and b insurance and flexible spending card

    1. Hi, Jacqueline. To become eligible for Medicare Part A and B you must be 65 years old or have received Social Security disability income for 24 months.

    1. Hi Dot — nursing homes and skilled nursing facilities are not the same. Medicare provides 100 days of rehab in an inpatient skilled nursing facility per benefit period. If it was a nursing home you stayed in and not a skilled nursing facility, you can receive inpatient therapy during a stay at a skilled nursing facility, up to 100 days total in one benefit period. Past the 101st day in rehab at a skilled nursing facility, you are responsible for the full cost.

  2. i have a pt that is 73 years old and is in chronic kidney failure. A prostate screening was done along with other routine labs. G0103-107$. I have received 3 denials and now I need help. co-119

    1. Hi Alicia! Have there been at least 11 months since the last prostate screening was performed? Medicare will deny the claim as Denial Code CO 119 whenever the maximum amount or maximum number of visits or units for the time dated under the plan’s policy is reached. Does your patient have Original Medicare or Medicare Advantage?

  3. Hello Lindsey. Due to extensive radiation last year for stage 4 cancer tumors in my spine, my lower lymphatic system was deeply damaged. I have been going to hyperbaric treatment to help restore and recreate new vessels, and have found a medical massage specialist who can offer lymphodema massage for the fluids causing continual swelling in my legs and feet. My physician felt this would be of great benefit for my health, but this type of therapist is not covered by my insurance. They will cover is at out of network level, so my question is, will the QMB coverage I also have, cover the balance? Thank you~

    1. Hi Virginia! Unfortunately, I don’t think QMB will cover massage therapy since Medicare doesn’t cover it. I would contact your local Medicaid office since they handle your QMB to find out for sure though. Good luck!


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