CMHS8 01 Cover - Substance Abuse and Mental Health

MEDICAL NECESSITY IN PRIVATE HEALTH PLANS

Implications for Behavioral Health Care

CMHS8_01_Cover.qxd 5/9/2003 2:01 PM Page c1

U.S. Department of Health and

Human Services

Substance Abuse and Mental HealthServices Administration

Center for Mental Health Services

Sara RosenbaumBrian KamoieD. Richard MaueryBrian Walitt

Special Report

MEDICAL NECESSITY

IN PRIVATE HEALTH PLANS

Implications for Behavioral Health Care

Special Reportii

AcknowledgmentsThis report was prepared by the Center for Health Services Research and Policy, Departmentof Health Policy, The George Washington University School of Public Health and HealthServices under contract number 01M008689 for the Substance Abuse and Mental HealthServices Administration (SAMHSA), U.S. Department of Health and Human Services(DHHS). Jeffrey Buck, Ph.D., Associate Director for Organization and Financing, Center forMental Health Services, served as project officer for this report. William L. Wallace, Ph.D.,assisted with the preparation of this report.

Disclaimer

The views, opinions, and content of this publication are those of the authors and do notnecessarily reflect the views or policies of SAMHSA or DHHS.

Public Domain Notice

All material appearing in this report is in the public domain and may be reproduced orcopied without permission from SAMHSA. Citation of the source is appreciated. However,this publication may not be reproduced or distributed for a fee without the specific, writtenauthorization of the Office of Communications, SAMHSA, DHHS.

Electronic Access and Copies of Publication

This publication can be accessed electronically at www.samhsa.gov/. For additional freecopies of this publication, please call SAMHSA’s Mental Health Services Information Center1-800-789-2647.

Recommended Citation

Rosenbaum, S., Kamoie, B., Mauery, D. R., Walitt, B. (2003). Medical Necessity in PrivateHealth Plans: Implications for Behavioral Health Care. DHHS Pub. No. (SMA) 03-3790.Rockville, MD: Center for Mental Health Services, Substance Abuse and Mental HealthServices Administration.

Originating Office

Office of the Associate Director for Organization and Financing, Center for Mental HealthServices, Substance Abuse and Mental Health Services Administration, U.S. Department ofHealth and Human Services (DHHS), 5600 Fishers Lane, 15-87, Rockville, MD 20857.DHHS Publication No. (SMA) 03-3790Printed 2003

Table of ContentsI. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Research Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Structure and Organization of the Review . . . . . . . . . . . . . . . . . . . 6

III. Medical Necessity and the Published Literature . . . . . . . . . . . . . . . . . . . 7

IV. Industry Practices in the Managed Care Industry . . . . . . . . . . . . . . . . . 11

Analysis of the Structure of Medical Necessity Definitions . . . . . . 11

Interviews With Managed Care Officials on the Processes of Medical Necessity Determinations . . . . . . . . . . . . 13

Managed Care Accreditation Organizations . . . . . . . . . . . . . . . . . 16

Judicial Case Law, Official Investigations, and Legal Actions . . . . 19

Judicial Case Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Investigations and Official Legal Actions . . . . . . . . . . . . . . . . . 21

New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Connecticut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

V. State Law Regulation of Medical Necessity . . . . . . . . . . . . . . . . . . . . . 25

Laws That Regulate the Content of Insurance Contracts . . . . . . . . 25

Independent Review Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

VI. Relevant Federal Laws Pertaining to Medical Necessity Reviews . . . . . . 29

ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Office of Personnel Management Standards: FEHBP . . . . . . . . . . . 31

VII. Synthesis and Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

VIII. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

IX. Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Medical Necessity in Private Health Plans iii

FiguresFigure 1: The Five Dimensions of the Medical Necessity Definition:

Industry Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Figure 2: NCQA and JCAHO Utilization Management Standards . . . . . . 17

Figure 3: NCQA and JCAHO External Appeals Standards . . . . . . . . . . . . 18

Figure 4: Common Procedural Problems in Medical Necessity Determination Processes Noted in Investigations, Litigation, and Case Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Figure 5: Medical Necessity Utilization Review and Appeals Procedures . . . 31

TablesTable 1. Medical Necessity Definitions in Published

Literature (See Also Appendix C) . . . . . . . . . . . . . . . . . . . . . . . 45

Table 2. Medical Necessity Definitions: Managed Care Industry . . . . . . . 50

Table 3. Medical Necessity Definitions Identified in Case Law (Sorted by Case Name) . . . . . . . . . . . . . . . . . . . . . . . 51

Table 4. Medical Necessity Definitions Contained in State Statutes and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Table 5. State Independent Review Statutes and Regulations . . . . . . . . . . 64

Table 6. Medical Necessity Definitions: State InsuranceLaws and IRO Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Table 7. State Independent Review Statutes With Specific Behavioral Health Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Table 8. Qualifications of External Reviewer in State IRO Statutes . . . . . 71

Table 9. Independent Reviews: Standard of Review for Medical Necessity Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

AppendicesAppendix A. Selected Published Literature on Medical Necessity

(Sorted by Year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Appendix B. NCQA and JCAHO Utilization Management and External Appeals Standards . . . . . . . . . . . . . . . . . . . . . . . . 92

Appendix C. Litigation Regarding Medical Necessity Definitions and Procedures (Sorted by Case Name) . . . . . . . . . . 95

Appendix D. State Investigations and Legal Actions Regarding Medical Necessity Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Special Reportiv

I.This report addresses how the term “medical necessity” is

defined in private health insurance coverage decisions. Itsummarizes a review of the literature, an extensive review of

legal cases that challenge insurer decisions, materials prepared by theinsurance industry, consultation with experts in the field, a review ofinvestigations conducted by State departments of insurance and attor-neys general, and interviews with health care executives regarding thedecisionmaking process itself. The report does not explore factors thatcan affect access to care that might be considered clinically necessary bytreating professionals or the effects of medical necessity decisions ontherapeutic outcomes.

Executive Summary

Sources of medical necessity definition: Fewregulations address the definition of medicalnecessity. There is no Federal definition,and only slightly more than one-third ofStates have any regulatory definition ofmedical necessity. As a result, the meaningof “medical necessity” is most commonlyfound in individual insurance contracts thatare defined by the insurer and hold primacyin most determinations.

Rather than turning simply on whether aproposed treatment meets professional med-ical standards, the prevailing definition ofmedical necessity is broadly framed, multi-dimensional, and controlled by the insurer,not the treating professional. The process ofmedical necessity determination is rarely pub-lic information. Even where a claimant canshow that a clinical recommendation is con-sistent with professional clinical standards,the insurer may reject a proposed treatmentif it is inconsistent with other definitionalelements such as relative cost and efficiency.

The multiple dimensions of the prevailingmedical necessity definition: The evidencesuggests that the medical necessity definitionspans five dimensions:1. Contractual scope—whether the contract

provides any coverage for certain proce-dures and treatments, such as preventiveand maintenance treatments that are notnecessary to restore a patient to “normalfunctioning.” This dimension preemptsany other coverage decision.

2. Standards of practice—whether the treat-ment accords with professional standardsof practice.

3. Patient safety and setting—whether thetreatment will be delivered in the safestand least intrusive manner.

4. Medical service—whether the treatmentis considered medical as opposed to socialor nonmedical.

5. Cost—whether the treatment is consideredcost-effective by the insurer.

Medical Necessity in Private Health Plans 1

Regulation of the medical necessity defini-tion and coverage determination process:Some State external review laws provideappeals procedures that permit reviewers toreject the insurer’s medical necessity defini-tion and look at the evidence with a fresh

eye. However, many State laws parallelinsurers’ multidimensional definitionalapproach. It does not appear that eitherthe State or Federal regulatory processhas moved away from the industry’sprevailing medical necessity standard.

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II.Under basic principles that guide the American health care

system, decisions regarding which particular treatments, orthe amount of treatment, are medically necessary are made

by medical professionals in light of their patients’ condition and desires,and the state of health care knowledge. Despite all the changes that havetaken place in the health system over the past generation, medicalprofessionals remain legally and ethically obligated to make treatmentrecommendations that reflect sound professional judgment and that areappropriate in light of their individual patients’ needs.

Introduction

At the same time, however, whether apatient ultimately will receive care consid-ered necessary by a treating professional isinfluenced heavily by the availability ofhealth insurance coverage to finance the rec-ommended treatments (Hadley, 2002). Theinfluence of health insurance on access toand utilization of behavioral health servicesis well documented and is a consequence ofthe high cost of treatment that frequentlycan involve expensive and (in the case ofchronic conditions) long-term therapies(Buck, Teich, Umland, & Stein, 1999). Forthis reason, the coverage decisions made byhealth insurers and employee health benefitplans are fundamentally linked to the ques-tion of whether individuals will have accessto health services that their treating profes-sionals consider medically necessary andappropriate.

In the early years of the modernAmerican health insurance era (said to dateto the Second World War, when employer-sponsored group health insurance became

increasingly common), insurers paid forwhatever health services treating physi-cians recommended (Rosenblatt, Law, &Rosenbaum, 1997; Rosenblatt, Rosenbaum,and Frankford, 2002). As health care costsescalated, first public and then privatehealth insurers introduced utilization reviewtechniques. These techniques were designedto verify coverage and to independentlyassess the treatment recommendationsmade by health professionals. These earlyutilization review decisions, as they wereknown, were made retrospectively (afterthe fact). Subsequent analyses of theseearly cost containment efforts led to theconclusion that retrospective review wasineffective; as a result, insurers increasinglyturned to prospective and concurrentreview techniques.

Prospective and concurrent reviews soonbecame an industry standard, particularlywith the growth of managed care. Inmanaged care–style insurance, coverage iseither entirely or partially conditioned on


a patient’s receipt of care from a medicalprofessional who has been accepted into theplan’s treating provider network and whosecovered treatment recommendations aresubject to the standards set by the plan. Aninsurer or health plan can exercise controlin one of two ways. The intermediary mightin the first instance issue general treatmentguidelines that are supposed to guide physi-cians in their treating recommendations.Alternatively, the treating professional maysubmit specific recommendations for treat-ment to the insurer or health plan on behalfof an individual patient. Both approachestypically are present in any health plan; thatis, a treating professional may apply stan-dard guidelines to many patient treatmentdecisions (Domino et al., 1998; Institute ofMedicine, 1990; Manderscheid, Henderson,& Brown, 2001; Varble, 2001), reservingpatient-specific requests for treatment to arelatively small number of cases that do notappear to fit the parameters of such standardguidelines (e.g., patients with co-occurringconditions that place them out of standard-ized norms or particularly complex versionsof a recognized health problem).

This analysis, prepared for the SubstanceAbuse and Mental Health ServicesAdministration of the U.S. Department ofHealth and Human Services, focuses onmedical necessity in health insurance as theconcept applies to utilization managementdecisions by health insurers and employeebenefit plans in specific patient cases. Thisanalysis does not consider other factorsthat can influence access to coverage in themodern insurance system, such as the qualityof the general treatment guidelines used byinsurers or the contractual limitations oncoverage that can exclude certain treatmentsaltogether, no matter how medically neces-

sary (a phenomenon that has received enor-mous attention in the case of behavioralhealth as a result of the mental health paritydebate). Nor does this analysis considerlimitations on access to care that can resultfrom restrictions on the size and availabilityof a provider network established and usedby an insurer or health plan.

Instead, this analysis focuses on those situ-ations in which, in response to the perceivedneeds of an individual patient, a treatinghealth professional recommends treatmentthat may require specific approval of cover-age by an insurer or health plan. This analy-sis examines both the standards and proce-dures that insurers and health plans useexplicitly to determine whether recommend-ed services are necessary in specific instances;it does not address the process involved indetermining the amount of treatment deemedappropriate.

The structure of this review is based onthe assumption that, in determining whethera recommended course of treatment is med-ically necessary under the terms of the insur-ance contract, the definition of medicalnecessity and the process by which the con-tract is applied to a particular patient are ofequal importance. In assessing the processof decisionmaking, this report considers thequalifications and impartiality of the review-er as well as the extent to which the reviewerconsiders the specific condition of the indi-vidual patient, not merely what treatmentsare generally recommended in preset treat-ment guidelines. The procedural aspects ofcoverage decisionmaking are critical because,as this analysis shows, medical necessity defi-nitions are broad and ambiguous and vestinsurers with a great deal of discretion overthe treatment of individual patients. Howan insurer goes about deciding the necessity

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of care is a particularly important questionin the case of patients whose conditionsare further complicated by the existence ofco-occurring health problems or a historyof failure under standard treatments.

This review examines a broad range ofinformation, including peer-reviewed litera-ture, judicial decisions construing contractterms, legislation, and documents developedby insurers themselves. Much of the evidenceregarding medical necessity presented in thisanalysis is found in legal documents, includ-ing judicial decisions in cases brought bypatients whose requests for treatment havebeen denied, as well as in investigations con-ducted and actions brought by State attor-neys general and insurance departments inresponse to evidence of systemic problems inobtaining access to insured coverage as aresult of ongoing medical necessity denials.

Judicial decisions and official investiga-tions frequently involve complaints regardingaccess to behavioral health coverage. This isprobably not surprising, given the cost oflong-term treatment for health conditionsrelated to mental illness and substance abusedisorders as well as evidence of major effortsby insurers over the past decade to achievesignificant reductions in behavioral healthspending (DHHS, 1999). Because of thelengthy and costly process of pursuing a caseagainst an insurer or health plan, reportedjudicial decisions are rare. (Indeed, in greatpart in response to the difficulty of pursuinglegal claims against health plans that havedenied coverage, Federal and State lawmak-ers have sought in recent years to establishsimpler, less formal, and less costly externalappeals procedures to challenge insurerdenials) (Dallek & Pollitz, 2000).1 At thesame time, it is in these official sources ofevidence that one is able to see most clearly

the terms of the contract (which outside alegal setting is a confidential and closely helddocument) as well as the process by whichan insurer or health plan administratorreached a decision. Medical necessity deter-minations that do not rise to the level ofappeal or complaint are beyond the scope ofthis analysis.

Research MethodsThe following research methods were used toconduct this review:■ Completing a literature review and syn-

thesis of findings regarding the definitionand process of delimiting medical necessityin a behavioral health context. Sourcesincluded the peer-reviewed medical andhealth services literature on medical neces-sity, as well as judicial decisions, Federaland State laws, illustrative contract terms,accreditation standards, materials gath-ered from the industry, and State-levelinvestigations and legal settlementsregarding medical necessity practices.2

■ Convening a working group of 20 expertsfor a half-day consultation (May 7, 2002)on issues related to medical necessity inbehavioral health care to provide commentand feedback on the draft literature review.Experts included professionals in clinicalpractice (e.g., psychiatry, psychology),employer purchasers of health care insur-ance, officials with managed care accredi-tation organizations, representatives ofconsumer advocacy organizations, andindividuals with expertise in insurance andhealth plan regulation at the State andFederal levels. Officials from three largemanaged care organizations who were notable to attend the May 7 meeting werelater interviewed by telephone. Officialsfrom two State attorneys general offices


(New York and Connecticut) and a Statebureau of insurance (Maine) were inter-viewed by telephone to provide additionalinsight for the section on legal settlementsand investigations. This report wasrefined based on the expert consultation,feedback, and assistance provided bythese advisors.

Structure and Organizationof the ReviewPart 1 summarizes peer-reviewed and pro-fessional literature on medical necessity, andconsiders the views and recommendationsof researchers and analysts regarding boththe definition of medical necessity and thestructure of the review process.

Part 2 describes industry practices asevidenced by individual insurer practicesand accreditation standards, as well as judi-cial opinions and official investigations thathave examined contract terms and decision-making procedures.

Part 3 reviews State insurance laws andexamines in detail not only the definition ofmedical necessity adopted by States as partof their insurance regulation laws, but alsothe procedural elements of their independentreview statutes.

Part 4 examines two major sources of lawrelevant to understanding the medical neces-sity review process in the private insurancecontext—the bodies of regulations that gov-ern private employee health benefit planscovered by the Employee Retirement IncomeSecurity Act (ERISA) and standards applica-ble to medical necessity determinations andappeals under the Federal Employee HealthBenefits program.

This review concludes with a synthesisof findings and a discussion of their impli-cations for coverage of behavioral healthservices.

Tables 1–9 and Appendixes A–D can befound at the end of this review.

Special Report6

III.Table 1 presents definitions of medical necessity drawn from

a search of peer-reviewed journals, trade journals, and indus-try and organization publications. A full list of these sources

appears in Appendix A. Over the past decade, authors have paid con-siderable attention to the question of medical necessity as prospectiveutilization review has come to dominate health insurance.

Medical Necessityand the PublishedLiterature

While variation exists in the opinionsexpressed, the articles summarized in Table 1display a significant level of consensus onthree basic issues. The first is that merelybecause a recommended treatment falls with-in the zone of professionally accepted med-ical practice does not mean it must be cov-ered. Only one source (the National HealthLaw Program) confines the evidence to theopinion of the treating physician. The secondis that a recommended definition of medicalnecessity should be multidimensional andshould consider factors such as cost, conven-ience, and relative effectiveness compared toother treatments based on various forms ofevidence. Third, the authors uniformly rec-ommend broadening the scope of when anintervention can be considered necessary(i.e., not merely to diagnose and treat an ill-ness but also to improve functioning, avertdeterioration, and maintain functioning).

Several authors address the issue of thequality, reliability, and relevance of the evi-dence considered when making a medicalnecessity determination; in addition, one

article examines the question of who bearsthe burden of proof in a medical necessitydetermination, an issue that has not beendirectly addressed in State or Federal law.

From the health services research commu-nity, probably the most seminal work is bySinger, Bergthold, Vorhaus, and Enthoven(1999). The definition of medical necessitythey crafted was the result of a consensusprocess among project participants (Singer,Bergthold, Vorhaus, & Enthoven, 1999):

For contractual purposes, an interven-tion will be covered if it is an otherwisecovered category of service, not specifi-cally excluded, and medically necessary.An intervention is medically necessaryif, as recommended by the treatingphysician and determined by the healthplan’s medical director or physiciandesignee, it is (all of the following):A health intervention for the purposeof treating a medical condition; themost appropriate supply or level ofservice, considering potential benefitsand harms to the patient; known to beeffective in improving health outcomes.


For new interventions, effectiveness isdetermined by scientific evidence. Forexisting interventions, effectiveness isdetermined first by scientific evidence,then by professional standards, then byexpert opinion; and cost-effective forthis condition compared to alternativeinterventions, including no intervention.“Cost-effective” does not necessarilymean lowest price. An intervention maybe medically indicated yet not be a cov-ered benefit or meet this contractualdefinition of medical necessity. A healthplan may choose to cover interventionsthat do not meet this contractual defi-nition of medical necessity.

This definition requires a review of thetreating clinician’s recommendation to ensurethat it is “for the purpose of treating a con-dition” and “the most appropriate” interven-tion in light of the patient’s particular condi-tion, benefits, and risks. The definition alsoassumes plan review of the provider’s treat-ment recommendations. The authors alsocontemplate that cost-effectiveness will be abasic element of the decision, but clarify thatthe question of cost-effectiveness is not oneof price alone. In addition, the authors createa hierarchy of evidence, with “scientific”evidence classified as the best evidence. Nodistinction is made by type of condition.

Of particular significance in the Singer/Bergthold analysis is its emphasis on theprimacy of coverage limitations, a majorconcern of insurers. The authors recognizethat once a particular type of treatment isexcluded for a specific condition as a con-tractual matter,3 no general finding of med-ical necessity can override the exclusion.This emphasis on the primacy of the con-tract in controlling the range of treatmentsand procedures that will be considered atall in a medical necessity determination isreinforced by the Health Insurance

Association of America (Schiffbauer, 1999),which has stated:

When the provider, rather than thehealth plan or insurer, interprets thescope of coverage under the contract,health plan fiduciaries cannot guaranteeto the insured that health care dollarsare being spent fairly and equitablyon medical treatments that are safe,proven, and effective.

The American Medical Association(AMA), representing physicians (includingpsychiatrists), has created a prototypemedical necessity definition as part of itsModel Managed Care Contract project:

Section 1.9 defines medically neces-sary/medical necessity as health careservices or products that a prudentphysician would provide to a patientfor the purpose of preventing, diag-nosing, or treating an illness, injury,disease, or its symptoms in a mannerthat is a) in accordance with generallyaccepted standards of medical practice;b) clinically appropriate in terms oftype, frequency, extent, site, and dura-tion; and c) not primarily for the con-venience of the patient, physician, orother health care provider.4

Like the others this definition is multi-dimensional but it focuses the utilizationreview on what a prudent physician wouldconclude based on the evidence rather thanwhat the insurer would determine. Whilethe definition is crafted in such a way as totransfer more medical decisionmaking powerback to the provider, the practical impact ofthis distinction is difficult to assess, since thedecision remains reviewable and the reviewis multidimensional. However, cost consider-ations as an explicit measure are removed.By using the “prudent physician” rather thanthe insurer as the standard of measurementwhere judgment is concerned, the definition

Special Report8

seeks to focus the determination on “general-ly accepted” medical opinion (and thus thephenomenon of multiple schools of thought)rather than the opinion of utilization reviewprofessionals who may or may not be physi-cians and who view their task as selectingthe single best form of treatment. Thus, inan appeal made under the AMA definition,a claimant would be able to introduce a widerange of schools-of-thought evidence from“prudent physicians” to show the variationin treatments that prudent physicians mightrecognize.

Several authors focus on definitions ofmedical necessity in the behavioral healtharena, although their proposed definitionsappear to differ more in terminology than insubstance. Paul Chodoff (1998) and WilliamFord (1998, 2000) have called for replacingthe term with “health necessity,” “treatmentnecessity,” or “clinical necessity.” In Chodoff’sview, health necessity criteria would befounded on a biopsychosocial rather than ona medical model. The former model requiresa view of health as encompassing quality-of-life factors and not just the absence ofdisease. The terms “biopsychosocial” and“psychosocial” arose from the need to differ-entiate between mental and physical health.5

The practical effects of this distinctionwould be on the “scope” element of thedefinition, that is, the range of possibleconditions for which treatment, if necessary,would be approved. Interventions wouldnot be solely for the diagnosis or treatmentof an illness, but also for the achievement ofbroader health goals. Furthermore, Chodoffproposes consideration of services for indi-viduals whose diagnoses may not easily fitinto categories defined by the Diagnosticand Statistical Manual of Mental Disorders(DSM-IV), a reference often cited as a clini-

cal standard in medical necessity definitionsfor behavioral health (APA, 1994).

Ford’s (1998, 2000) behavioral health caredefinition urges a movement away from cov-ering only acute care to covering longer-termcare designed to manage and prevent dete-rioration of chronic conditions and onsetof acute conditions. This definition wouldinclude access to psychiatric rehabilitationservices when needed for the treatment ofchronic mental conditions. (This definition ofcourse would require a dramatic expansionof the terms of coverage under conventionalinsurance, which, unlike Medicaid, tends tobe confined to relatively short-term therapiesto help an individual significantly improve orrecover in a relatively short period of time.)(Rosenbaum, forthcoming; Rosenbaum &Rousseau, 2001) Like Chodoff, Ford stressesthe importance of both the quality of day-to-day functioning as a goal of treatment, andthe need to cover treatment designed for alle-viation of symptoms in addition to “cure.”

Ireys, Wehr, and Cooke (1999) proposea specific definition of medical necessityfor persons with developmental disabilities,mental retardation, and other special healthcare needs. Their article represents a detailedand specific attempt to articulate individual-ized decisionmaking criteria that can “assistthe individual to achieve or maintain suffi-cient functional capacity to perform age-appropriate or developmentally appropriatedaily activities.”(p. 19) The authors callfor an expanded view of the informationsources an insurer should consider beyond“medical evidence” (i.e., information fromthe patient, the family, collateral providers,and support institutions). They also empha-size the effect of treatment on day-to-dayfunctioning and require that final determina-tions be made by a physician employed by


the insurer (rather than a claims reviewerwith lesser qualifications).

Two articles (Appendix A) deal specificallywith evidentiary matters and the use of evi-dence in decisionmaking. David Eddy (1994)posits that when determining the appropriateuse of an intervention, analysis of its poten-tial value should shift from qualitative toquantitative, with use of randomized, con-trolled clinical trials as a definitive evidencebase. Furthermore, in his view, a shift fromindividual-based decisionmaking to popula-tion-based decisionmaking is needed, basedlargely on the utility of controlled clinicaltrials that demonstrate treatment efficacyacross large numbers of people. He advo-cates for the development of explicit criteriato sort out high-value practices from thoseof little or no value and believes that theterm “medical necessity” is too vague andopen to too much variability in interpreta-tion. By contrast, Rosenbaum, Frankford,Moore, and Borzi (1999) recommend anemphasis on individualized decisions ratherthan across-the-board conclusions based onthe application of generalized guidelines andresearch results to specific cases. They callfor strict scrutiny of the reliability and rele-vance of scientific evidence, as well as forgreater emphasis on the facts of an individ-ual case and expert judgment. They also rec-ommend shifting the burden of proof to thehealth plan in any review of its decision onmedical necessity, arguing that the plan hasbest access to the evidence, and that fairnessin allocating the burden of proof wouldplace the burden on the party with the bestaccess to evidence.

Sabin and Daniels (1994) address thequestion of the utility of medical necessity

definitions for mental health services fromthe perspective of severity of diagnosis.While no question exists that severe mentalillness such as schizophrenia, clinicaldepression, and bipolar depression are cov-ered by traditional medical necessity defi-nitions, Sabin and Daniels investigate theextent to which such definitions also shouldcover conditions such as shyness, unhappi-ness, and lack of personal fulfillment. Usingsix illustrative case studies, such as “TheShy Bipolar,” “The Unhappy Husband,”“The Cranky Victim,” (pp. 5–7) and others,Sabin and Daniels illustrate the differencesof opinion between “hard-line” and“expansive” clinicians (p. 5) in decidingwhether psychiatric services are needed.Following an analysis of three models ofmedical necessity, the authors conclude thatthe most rational model is one that treatsa medically defined diagnosis, such as onedelineated in the DSM-IV, to decrease theimpact of disease or disability. A typicalmental health medical necessity definitionwould be “those mental health serviceswhich are essential for the treatment of aMember’s mental health disorder as definedby the DSM-IV in accordance with general-ly accepted mental health practice”(p. 12).Sabin and Daniels note that diagnostic cate-gories continue to change but that society“needs a publicly acceptable and adminis-terable system for defining the boundariesof health insurance coverage.” To that end,the DSM-IV (and subsequent editions) pro-vides a workable definition of those bound-aries, to the extent that it is “the result ofa highly public process open to scientificscrutiny, field testing, and repetitive criti-cism over time.”6

Special Report10

IV.Insurers have continued to customize and streamline their defini-

tion of medical necessity over time to expand their control over,and the allocation of, health plan resources. By defining medical

necessity and controlling the coverage determination process, insurerscan attempt both to stem what they perceive to be the unnecessaryexpenditure of resources and to improve the quality of health care.7

Industry Practices in the Managed Care Industry

Analysis of the Structure ofMedical Necessity DefinitionsInsurers and insuring organizations rarelymake their medical necessity definitionsand determination procedures public. Thedefinitions and procedures are typicallycontained in contracts and internal opera-tional documents such as provider manualsand operating guidelines that are consideredproprietary and confidential.8 While manymanaged care organizations (MCOs) haveWeb sites, most require registration andpasswords from contracted providers toaccess detailed information about theirmedical necessity definitions and proce-dures. Consumers and researchers usuallyare permitted Web site access only togeneral health plan information.

Table 2 presents five insurer definitionsobtained for this research. An exception tothe rule, ValueOptions allows public accessto its Web site, which contains the text of itsprovider manuals. Cigna Behavioral HealthCare provides online access to its “Levelsof Care Guidelines for Mental Health and

Substance Abuse Treatment,” which con-tains a definition of medical necessity.9 Table2 also contains definitions from HighmarkBlue Cross, an anonymous managed behav-ioral health plan, and United BehavioralHealth. The Highmark definition wasobtained from the proceedings of an Agencyfor Healthcare Research and Quality(AHRQ) User Liaison workshop on coveragedecisions by Hill, Hanson, and O’Connell(2000). The third medical necessity defini-tion in Table 2 was obtained from materialsprovided to one of this review’s authorsduring a December 2001 meeting withbehavioral health care providers to discussmedical necessity issues. The company’sname is not disclosed for purposes of confi-dentiality. The United Behavioral Health(UBH) medical necessity definition wascontained in a consent agreement that UBHentered into in 2000 with the Maine Bureauof Insurance, published on the MaineDepartment of Professional & FinancialRegulation Web site.10 The consent agreementitself is discussed in Legal Settlements below.


Despite the limited number of definitionsavailable directly from the industry, thoseavailable suggest that insurers and insuringorganizations use a definition of medicalnecessity far more complex than whetherthe prescribed treatment is consistent withaccepted practice in the field. The use of adefinition of medical necessity that extendswell beyond the threshold question ofwhether the care is professionally sound canbest be understood as an attempt to mitigatethe “schools of thought” doctrine. This doc-trine, a critical element of professional med-ical liability law, assumes the existence ofmultiple and equally professionally accept-able approaches to professional medicalpractice in any particular case (Rosenblatt,Law, & Rosenbaum, 1997). For this reason,insurers have adopted definitions that vestthem with the power to select among variousschools of thought for the approach that,in the insurer’s view, also best satisfies theother elements of the definition.

The first dimension of the medical neces-sity definition found in Table 2 (and the onereflected in the overall structure of agree-ments themselves) can be thought of as con-tractual scope. This dimension is concernedwith whether the contract provides any cov-erage for certain procedures and treatments,such as those that prevent the worseningof a condition or that allow an individualto maintain or promote functioning. It ispossible, in other words, for the definitionto exclude any procedures that, in the viewof the insurer, do not yield recovery orresult in what the insurer considers a sig-nificant short-term improvement. Table 2shows that Highmark, the anonymousmanaged behavioral health organization(MBHO), and UBH limit the concept ofmedical necessity to services necessary for

the diagnosis or treatment of illness. Thus,a treatment necessary to respond to a con-dition not regarded as an illness (e.g., adevelopmental disorder in a child) mightfall outside the furthest reaches of the con-tract no matter how necessary the care oreffective the treatment. Similarly, if thetreatment is designed to avert deteriorationrather than treat illness to a point ofsignificant improvement, it might also beconsidered outside the scope of coverage.11

ValueOptions, in contrast, will recognizeas covered (if medically necessary) servicesaimed at preventing illness or avoiding dete-rioration. The Cigna definition, while stillincluding a “reasonable expectation” forimprovement, does include “level of func-tioning” in addition to a patient’s conditionor illness, an important criterion for per-sons with mental and physical disabilitieswhose treatment needs extend beyond thetraditional medical model.

The second dimension of the definitionreflects whether the treatment is in accordwith professional standards of practice. Thisdimension is most directly related to profes-sional opinion and clinical judgment. In thecase of ValueOptions and Cigna, the specificframe of reference is national practice stan-dards, although the fact that Highmark doesnot specifically reference national standardsis probably not particularly important, sincethe professional standard of care has beenrecognized as a national benchmark formore than 40 years.12 The UBH definitionspecifically refers to its own internal guide-lines as the standard to measure the appro-priateness of the type, frequency, and dura-tion of treatment.13

The third dimension can be thought ofas patient safety and setting. It considerswhether the prescribed treatment will be

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delivered in a manner that the insurer con-siders to be safe and effective.

The fourth dimension is whether, in theinsurer’s view, the treatment is medical innature and not prescribed either as a matterof convenience or as a result of social orenvironmental considerations. In all of thedefinitions, convenience is measured in termsof the patient, the family, or the provider, notin terms of the managed care organization.

The fifth dimension of the definitionis cost. Table 2 suggests that a review oftreatment should include consideration ofwhether there is an equally effective andsafe, but less costly, alternative to the rec-ommended treatment. It is unclear whetherthe UBH reference to “of demonstratedmedical value” refers to treatment effec-tiveness, cost-effectiveness, or both.

The various sources of information thatsuggest the existence of these definitionaldimensions also suggest that the terms tendto remain undefined, allowing an insurertremendous leeway to define the termswithin the context of each determination.

Consistent with the issue of contractualscope, the ValueOptions definition explicitlyconsiders whether care, no matter hownecessary, is a service that falls outside thecontractual limits of the plan. This consid-eration can be seen in that portion of thedefinition that authorizes consideration ofwhether the recommended course of treat-ment would result in “non-treatment ser-vices addressing environmental factors.” Itis unclear how this element of the definitionwould work in practice. An example mightbe refusal to cover in-home care to a patientunable to obtain transportation to an out-patient provider, while providing the sameservices in-home to a patient medicallyunable to travel. Even though the care is

technically medically necessary in bothcases, ValueOptions could refuse to coverthe in-home care to the first on the groundsthat such care results from environmental(i.e., lack of transportation) rather thanmedical need.

These dimensions of the medical necessitydefinition delineate the criteria to be fulfilledfor an individual to be eligible for coverage.By choosing a high evidentiary, or tightlylimited, standard regarding the evidence thatmust be present in order to satisfy coverageeligibility, such as the evidence-based medi-cine standard of requiring two controlled,randomized clinical trials before a medicalintervention can be proven effective, insurerscould impose limits on many types of care.

Figure 1 summarizes the five dimensions ofthe medical necessity definition derived fromthe preceding analysis of industry practice.

Interviews With Managed CareOfficials on the Processes ofMedical Necessity DeterminationsIn mid-June 2002, semistructured telephoneinterviews were conducted with three offi-cials (two medical directors and a chief exec-utive officer) of two large MBHOs and onenationally based integrated health plan.14


Figure 1: The Five Dimensionsof the Medical Necessity Definition:Industry Practice

• The contractual scope of coverage: whetherproposed treatment is explicitly included orexcluded in the health plan contract

• Whether the proposed treatment is consistentwith professional standards of practice

• Patient safety and setting of the treatment• Whether the treatment is medical in nature

or for the convenience of the healthprofessional or patient and family

• Treatment cost

These officials, who, due to scheduling diffi-culties, were unable to participate in the May7 meeting of the expert panel, also reviewedthe draft of this document. The interviewquestions focused on the processes used inthe managed behavioral health care industryfor making initial medical necessity determi-nations and resolving appeals of claimsdenials, as well as internal quality manage-ment procedures used to incorporate andupdate treatment guideline information intodecisionmaking processes.

One official noted that his MBHO prefersto use the term “clinical appropriateness”rather than “medical necessity.” In the offi-cial’s view, the latter term implies a restric-tive orientation relating to the question ofwhether or not a patient needs care (a clini-cal decision that can only be made by theprovider and the patient). The officialemphasized that, in his opinion, the pivotalquestion is what level of services in whichsettings are most clinically appropriate fora given patient in light of his or her clinicaland social needs. Thus, as the definition sug-gests, the MCO medical director views histask as analyzing the health professional’srecommendations in accordance with thosedimensions of the medical necessity defini-tion that focus on how the care will be fur-nished, by whom, and in what settings, notwhether the professional was justified inconcluding that some particular approachto treatment was needed. In this vein, thecoverage decision concentrates more on theform and manner of treatment than whetherany treatment at all will take place.

The interviews confirmed that managedcare executives view their jobs not as deter-mining the necessity of care from a profes-sional point of view but as determiningwhether the professional’s treatment judg-

ment is consistent with the terms of coveragein the contract. The organizations view theirtask as administering and managing a pack-age of contractual benefits to determine whatis included in the benefit package purchasedby an employer, not to determine what thebenefit package should contain. Within thatdetermination is the task of ensuring thatthe levels of care and treatments providedare appropriate for an enrollee’s needs andcovered in the benefit package.

When asked why behavioral health med-ical necessity definitions have been the sub-ject of a higher level of discussion and scruti-ny than in general medicine, the intervieweesoffered several reasons:

■ The nature of behavioral health care serv-ices compared to general physical medicalcare is such that there is less “objective”evidence available to guide decisions thatreflect a consensus as to what the appro-priate treatments should be for a givendiagnosis. While progress has been madein developing a clinical evidence base forbehavioral health care, it has not yetreached the level of precision as in, forexample, cardiology or orthopedics.Behavioral health conditions are definedby “clusters” of symptoms (e.g., as foundin the DSM-IV), and the technology avail-able to provide confirmations of diagnosesis less precise than in general medical care(e.g., X-ray, magnetic resonanace imaging,blood enzyme levels).

■ Heterogeneity of providers and varietyof treatment modalities and settings ismuch greater in behavioral health than ingeneral medical care. Behavioral healthcare providers include M.D. psychiatriststo Ph.D. psychologists, clinical nurse spe-cialists, psychiatric social workers, addic-

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tion disorder treatment providers, andothers, all receiving different professionaleducations and with different preferencesfor how they approach and work withpatients. The range of treatment modali-ties spans psychoanalysis, problem-focused and insight-oriented psychothera-py (e.g., cognitive, behavioral),psychopharmacology, intensive inpatientcare and crisis management, and long-term treatment of severe mental illness.This heterogeneity relates to the “schoolsof thought” doctrine discussed above.

■ Compared to behavioral health, generalmedical health plans enjoy greater clarityand specificity as to the scope of coveredbenefits. The more clear and specific theterms of the contract are, the less likely itis that disputes will occur.

■ One interviewee cited greater antagonismfor managed care in behavioral healthprovider associations, which has led totheir encouraging members to file appealsin situations that they feel are questionable.

The officials from all three organizationsstated that requests for authorization of serv-ices are handled by clinical intake staff withat least a master’s degree, supplemented byongoing in-house training. The guidelinesused to “vet” a request for authorizationfocus on two criteria: a) level of care criteria(e.g., inpatient, partial hospitalization, outpa-tient therapy in individual or group settings),and b) treatment guidelines (e.g., crisis inter-vention, psychotherapy, prescription drugs).One MBHO preauthorizes 10 outpatientvisits, requiring the provider to request andjustify additional needed visits.

In all three organizations, board-certifiedor board-eligible staff psychiatrists mustreview all denied claims. The vast majority

of disputed claims arise for inpatient admis-sions. As one interviewee noted, in behav-ioral health, unlike general medicine, mostinpatient admissions are unplanned andoccur because a person (or family memberor provider on behalf of that person) seeksemergency crisis admission. Typically theinpatient facility calls for authorization.While the initial admission usually isapproved, disputes may arise over length ofstay, treatment plans, and care management.The interviewees stated that many of thesedisputes are later resolved when additionalinformation regarding the patient’s clinicalneeds is provided. If such information hadbeen provided at the outset, the claim wouldnot have been denied. Most claims disputesare resolved through internal appealsprocesses; only a few go to the externalappeals process.

Interviewees cited a variety of sourcesfor the treatment guidelines used in the caremanagement and review processes: amongthem guidelines developed by providerorganizations, such as the AmericanPsychiatric Association and the AmericanPsychological Association; guidelines prom-ulgated by accreditation organizations; andongoing feedback and advice from contract-ed providers. One MBHO reported the useof local clinical advisory committees in eachlocation, including subject matter specialists(e.g., addiction disorder providers) who pro-vide feedback and information on treatmentadvances. Guidelines are updated annuallybased on actual practice and expert opinion.

Interviewees stated that guidelines are notmandates or absolute protocols; rather, theyare considered “guideposts” to be informedby, and adapted to, individual circumstancesand psychosocial needs of patients. Ongoingaudits, performance measurement of in-house


care managers and contracted providers, andmember and provider satisfaction surveys areused to monitor the appropriate use of treat-ment guidelines in medical necessity decisionsand to build in quality improvements at alllevels of decisionmaking.

Managed Care AccreditationOrganizationsAccreditation organizations such as theNational Committee for Quality Assurance(NCQA) and the Joint Commission on theAccreditation of Healthcare Organizations(JCAHO) have not formulated a medicalnecessity definition. For example, NCQAofficials say they want to avoid conflicts withexisting laws governing the definition ofmedical necessity (Pawlson, 2002). Instead,the accreditation bodies focus on the medicalnecessity review process, including both uti-lization management and internal appeals.In addition, NCQA and JCAHO specify theexistence of an external appeals process as acondition of accreditation.

Figures 2 and 3 and Appendix B excerptutilization management and external appealsstandards promulgated by NCQA andJCAHO (JCAHO, 1997, 2001; NCQA,2000, 2001). NCQA’s procedural standardsfor MBHOs stress the individualization ofthe process. The entity must consider evi-dence from the individual patient’s case(as well as the characteristics of the localdelivery system) and therefore, presumablycannot rely on national treatment guidelinesfor specified conditions.15 NCQA standardsalso assume involvement of practitioners inthe development of criteria, though not nec-essarily in the evaluation of individual cases.

The JCAHO standards are written fromthe point of view of providers and providernetworks, typically the focus of JCAHO

accreditation. Standard CC 1 stipulates pro-vision of health care appropriate to the soci-ocultural needs of the provider’s patient pop-ulation and consistent with the provider’smission and contractual obligations, as wellas being based on an individual patient’sneeds. Disclosure of the review criteria usedin adverse determination decisions, timelynotice, and a review of adverse decisions bya physician, dentist, or behavioral clinicianprior to notification to the enrollee or pre-scribing provider are all required by JCAHO.

The JCAHO guidelines for MBHOs arevery similar to its general MCO guidelines.However, in some instances the MBHOguidelines are somewhat more explicit.Decisions regarding a member’s eligibilityfor entry into specific treatment programscan be interpreted as a frame of referencefor meeting medical necessity criteria.

CC 2.1: Criteria define the informationnecessary to determine a member’s eligi-bility for entry to a program or servicewithin the delivery system.

Intent of CC 2.1: The delivery system’scentral operations require care and serv-ice provider organizations to define theinformation necessary to determine amember’s eligibility for entry to a pro-gram or service. The care and serviceprovider organization defines the mini-mum essential information needed todetermine a member’s eligibility forentry to a setting or program. The cri-teria are based on the specific programor service that can meet or respond tothe member’s needs or presenting condi-tions. To add clarity, entry criteria alsoinclude exclusionary statements thatindicate the information needed to initi-ate referral to another, more appropriatecare and service provider organization.

JCAHO takes a condition/treatment-specific view for substance abuse services

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NCQA Managed Behavioral HealthUtilization Management Standards

UM 2. To make utilization decisions, themanaged healthcare organization useswritten criteria based on sound clinicalevidence and specifies procedures forapplying those criteria in an appropriatemanner:

• The criteria for determining medicalnecessity are clearly documentedand include procedures for apply-ing criteria basedon the needs ofindividual patients and characteris-tics of the local delivery system.

• The managed healthcare organ-ization involves appropriate, activelypracticing practitioners in its devel-opment or adoption of criteria andin the development and review ofprocedures for applying criteria.

• The managed healthcare organi-zation reviews the criteria atspecified intervals and updatesthem, as necessary.

• The managed healthcare organi-zation states in writing howpractitioners can obtain the UM[Utilization Management] criteriaand makes the criteria availableto its practitioners upon request.

• At least annually, the managedcare organization evaluates theconsistency with which the healthcare professionals involved inutilization review apply thecriteria in decision making.

Figure 2: NCQA and JCAHO Utilization Management Standards

JCAHO Utilization Management Standards

CC 1: Health care services provided directly or by arrangement areappropriate:

• In scope to meet the health care needs of the population served;• To the health care needs, as influenced by socio-cultural

characteristics, of the population served;• To the network’s mission;• To the network’s contractual obligations.

CC 8: When the network or an external entity conducts a utilizationreview of a licensed independent practitioner’s or a network com-ponent’s care that results in denial of payment, decisions by thelicensed independent practitioner or network component regardingongoing care or discharge are based on the care required by themember’s assessed needs.CC 8.1: When utilization review results in an adverse utilization man-agement decision, the network provides the criteria for the decisionand information regarding appeal to the licensed independent prac-titioner responsible for the member’s care.JCAHO provides examples of implementation. “These examplesare simply ideas for your network to consider.”Example of implementation for CC 8: The network requests thereview criteria used by any external entity that carries out a utiliza-tion review on the network’s members. The review criteria are madeavailable to those within the network responsible for treatment anddischarge decisions. When the external utilization review organiza-tion’s recommendation conflicts with the member’s medical carerequirements, justification for the course of action taken is docu-mented. Information from the external entity is collected and incor-porated into the network’s assessment and improvement activities.RI 2: The network provides for member involvement in care andtreatment decisions.RI 2.1: The network provides an authorization process for care andtreatment that is timely, efficient, and meets member health careneeds.The network’s process for authorizing care and treatment includes:

• Providing members with a description of the treatmentauthorization process.

• Initial decisions made by an appropriately trained health careprofessional using evidence-based, network approved criteria toauthorize admission, care, and transition to another care setting.

• A review of all initial treatment authorization denials by aphysician, dentist, or behavioral clinician prior to notifying themember or their representative(s) of an adversedetermination.

• Informing members in a timely manner, in writing, when arequest to authorize treatment has been denied.

• Informing members of the basis and reason(s) for the adversedeterminations.

• Informing members of the review criteria used to make thedetermination.

• Providing members with information as to whether, and underwhat circumstances, investigational procedures are availableand are covered by the network.

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Figure 3: NCQA and JCAHO External Appeals Standards

NCQA Managed Behavioral Health External Appeals Standards

UM 7.5 The managed behavioral healthcare organi-zation has a procedure for providing independent,external review of final determinations, including:Eligibility criteria stating that the MBHO offersenrollees the right to an independent, third party,binding review whenever:

• The enrollee is appealing an adverse deter-mination that is based on medical necessity,as defined by MBHO.

• The MBHO has completed two levels of inter-nal reviews and its decision is unfavorable tothe enrollee, or has elected to bypass one orboth levels of internal review or has exceededits time limit for internal reviews, without goodcause and without reaching a decision.

• The enrollee has not withdrawn the appealrequest, agreed to another dispute resolutionproceeding, or submitted to an external disputeresolution proceeding required by law.

• Notification to enrollees about the independ-ent appeals program and clear and timelyexplanations of denials and approvals toboth enrollees and their physicians.

Use of an independent review organization that meetsthe following criteria:

• Conducts a thorough review in which it consid-ers anew all previously determined facts,allows the introduction of new information,considers and assesses sound medicaladvice, and makes a decision or conclusionsthat are not bound by the decisions or con-clusions of the internal appeal.

• Has no material professional, familial, orfinancial conflicts of interest with the MBHO.

• MBHO non-interference with the proceedingsof the external review.

• Enrollee exemption from the cost of externalreview, including filing fees, and allowanceof designating a representative to act on thebehalf of the enrollee.

• Implementation of independent review organ-ization decision within specified timeframe.MBHO data tracking of external appeals foruse in evaluating its medical necessity deci-sion making process.

JCAHO External Appeals Standards

RI 2.2: The network provides a method for resolvingdisagreements between the network and the memberor designated decision maker(s) regarding care ortreatment authorization decisions.The network’s process includes:

• Informing members how to seek appeals ofadverse determinations.

• Defined timeframes in which the member cananticipate response to an appeal.

• Appeal timeframes that are appropriate to theurgency of the member’s health care needs.

• An appeal review panel including health careprofessionals who are appropriately trained,experienced, and competent with respect tothe care and treatment involved, and whowere not involved in the initial determination.

• Informing members about further steps avail-able when disagreements cannot be resolvedthrough the treatment authorization andappeal process, such as an internal grievanceprocess, arbitration, legal proceedings, andany other external review processes.

RI 5: The network provides for the receipt andresolution of complaints and grievances frommembers in a timely manner.The member has the right to voice complaints withoutfear of recrimination about the care received and tohave complaints reviewed and, whenever possible,resolved. This right and the way it is protected areexplained to the member. The network has a meansof providing for the following:

• Procedures for registering and managing com-plaints and grievances, including identifyingthe party receiving complaints and grievances.

• Aggregating and reporting actions taken oncomplaints and grievances.

• A timely response to the member, substantivelyaddressing the action taken on the complaintor grievance.

• Including the aggregate complaint and griev-ance information in performance improvementactivities.

• An appeal process for grievance decisions.• Member protection from any sanctions or

penalties resulting solely or primarily fromusing the complaint or grievance process.

as well. In discussing how an MBHO canprovide access to the appropriate level ofcare to meet an enrollee’s needs, it providesthe following example:

The alcohol/drug program of a commu-nity mental health center establishedseparate admission criteria for subpop-ulations. Separate criteria are in placefor alcoholism, cocaine dependence,dual diagnosis, and heroin dependence.Members are placed in levels and sitesof care in accordance with the primarysubstance(s) being abused.

In sum, neither NCQA nor JCAHO pro-vide prototypical medical necessity defini-tions but rather focus on the adequacy of thedecision processes used by the organizationsthey accredit. As is shown in the discussionof case law below, the procedures used tomake these decisions are as important as, andat times more important than, the structureand content of the definitions upon whichthey are based.

Judicial Case Law, OfficialInvestigations, and Legal ActionsSince the introduction of the concept of med-ical necessity into insurance contracts, count-less challenges have been made to insurerand health plan denials of coverage basedon medical necessity criteria. In deciding amedical necessity case, a court must construethe terms of an agreement; consequentlythese decisions offer a rich source of con-tractual medical necessity definitions, sincethe court’s opinion almost invariably setsout the relevant contract terms.

Judicial Case Law

Two types of medical necessity cases pre-dominate. The first type of case involveschallenges to the actual decision on themerits, with the claimant arguing that the

insurer’s conclusions about a treatment’smedical necessity are not supported by theevidence in the record. The second type ofchallenge goes to alleged flaws in the deci-sionmaking process, such as a decisionmak-er’s failure to follow applicable legal proce-dural standards in reviewing the case orconsidering the evidence. In all such casesthe claimant (i.e., the provider and/or thepatient) carries the burden of proving thatthe insurer’s decision was contrary to theterms of the agreement.

Other cases raise questions of medicalnecessity in a malpractice context. In suchcases, a managed care organization’s alleged-ly negligent treatment (and subsequent cover-age) decisions are claimed to be a proximatecause of death or injury. These cases typicallyappear in the case law at a threshold point(i.e., before there is any review on the meritsof the claim) and are decided on ERISA pre-emption grounds. For this reason, these casesare omitted from this review. Two of the bestknown managed care liability cases involvingbehavioral health services are Moscovitch v.Danbury State Hospital (1998) and Lazorkov. Pennsylvania Hospital (2000). Both casesinvolved suicides by individuals covered byERISA health plans. The patients wereordered to be discharged from treatment fol-lowing a determination by the MCO thatcare was not medically necessary. Both caseswere permitted to proceed as malpracticeactions after a judicial determination that theclaims in question fell outside of the scope ofERISA because they raised issues of State lawprofessional liability rather than ERISA cov-erage claims.

For this review, an online search wasconducted for all cases decided since 1992involving challenges to medical necessity cov-erage decisions. The search was confined to


the past decade in order to avoid examiningcontracts whose terms may be significantlyoutdated. A total of 54 medical necessitycases were identified, 21 of which involveappeals by insurers and health plans seekingreversals of treatment orders issued by lowercourts, and 33 of which are cases broughtby providers and patients that seek toreverse a claims denial. Insurers are slightlymore likely to prevail in these cases with29 of the 54 cases decided in favor of theinsurers while in only 25 of the cases theinsurers’ denials were reversed. A summaryof all of the cases reviewed can be found inAppendix C.

The fact that insurers are somewhat morelikely to prevail in medical necessity casesmay reflect the merits of their decisions. Itmay also reflect the difficulties claimantsencounter in challenging a medical necessitydenial. For example, the plaintiff carries theburden of proof and generally is barred fromintroducing new medical evidence on appeal,since review is limited to the evidentiaryrecord before the court. Thus, if the insureror plan failed to consider certain evidenceor misconstrued the evidence before it, theplaintiff typically cannot rectify the short-coming in court. Furthermore, under prin-ciples of contract and trust law (the twobodies of law that apply to decisions oncoverage in the case of employee healthplans) (Firestone Tire and Rubber v. Bruch,1989), insurers and health plan administra-tors are vested with considerable power todecide whether contract beneficiaries areentitled to the benefits they seek. A court’sscope of review is therefore limited underjudicial principles, and a court will generallyscrutinize a record closely if it considers theinsurer or plan to have a clear conflict of

interest that has colored its views (Bedrickv. Travelers Ins. Co., 1996).16

Of the 54 identified cases, 28 contain adefinition of medical necessity (Table 3).Jones v. Kodak Medical Assistance Plan(1999), not included in Table 3 but summa-rized in Appendix C, is the leading case forthe proposition that insurers have the powerto contractually limit the types of necessarytreatments they will cover by building theirguidelines directly into the structure of theplan documents. As a result, Jones, whichconcerned treatment of alcoholism, con-tained no medical necessity definition per sebut instead a provision construed by thecourt as limiting treatment to the guidelinesused by the managed behavioral healthsubcontractor.

Other cases shown in Table 3 containa more traditional definition of medicalnecessity and reflect the multidimensionalapproach seen in Table 2. This finding sug-gests that rather than being isolated events,the multidimensional definitions found inTable 2 are the prevailing industry standard.That is, the insurance industry today uses anapproach to defining medical necessity thatgoes beyond assessing whether treatmentmeets a professional standard of care andpermits the insurer to select among thetreatments that ostensibly are all appropri-ate in favor of one that is the safest, theleast costly, and not only for the conven-ience of the member or provider.

Four of the definitions drawn from thecase law contain an explicit reference to thesite of care, identifying treatment delivery inoutpatient settings as preferable to inpatientcare (Dettmer Clinic v. Associated InsuranceCompanies, Inc.; Kornman v. Blue CrossBlue Shield of Louisiana; Milone v. ExclusiveHealth Care, Inc.; Scalamandre v. Oxford

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Health Plans, Inc.). For example, in the 1995case Kornman v. Blue Cross Blue Shield ofLouisiana, the insurer’s third criterion formedical necessity was as follows: “as toinpatient care, could not have been providedin a Physician’s office, in the Outpatientdepartment of a Hospital, or in a lesserfacility without affecting the patient’s condi-tion or quality of medical care rendered.”17

Forty-two of the 54 cases reviewed—thesingle largest subgroup—involved a challengeto a medical necessity determination basedon a treatment exclusion clause or an allegedflaw in the insurer’s decisionmaking process-es. Twenty-two cases focused on exclusionsbased on the allegedly experimental status ofthe requested treatment and thus dealt withthe proper application of an exclusionaryterm rather than a medical necessity denialon the merits. Twenty cases involved allega-tions that the insurer improperly applied thedefinition in its determination procedures.Plaintiffs most typically alleged that theinsurer acted in an arbitrary or capriciousmanner by unfairly denying claims in somecases while approving them in equivalentcases.

Four of the 54 cases involved mentalhealth and substance abuse services (Heilv. Nationwide Life, Koenig v. MetropolitanLife, Burrell v. United Health Care Insurance,and Jones v. Kodak Medical AssistancePlan). The Heil and Burrell cases involveddenials of inpatient hospitalization for amental condition, and the Koenig and Jonescases involved denial of substance abusetreatment services. All four were concernedwith alleged flaws in the insurers’ determi-nation procedures.

Investigations and Official Legal Actions

In addition to cases decided in courts of law,State attorneys general and bureaus of insur-ance have responded to complaints filed byproviders and patients regarding adversedeterminations based on MCOs’ medicalnecessity criteria. In New York, Maine, andConnecticut, official investigations werelaunched in response to alleged instances ofarbitrary and capricious decisionmaking,inconsistent application of criteria, failure tomeet disclosure requirements, and conflictsof interest on the part of MCO decisionmak-ers. In New York and Maine, MCOs enteredinto settlement agreements with the States;in Connecticut, an MCO’s alleged abusesformed the basis for remedial legislation.Figure 4 summarizes the most commonproblems identified from these investigationsof the procedures used by health plans andinsurers to make medical necessity determi-nations, followed by descriptions of each ofthese States’ legal actions.

New York

The series of October 2001 settlement agree-ments reached between the New York StateAttorney General’s Office and six largeMCOs was a significant legal developmentregarding medical necessity.18 Following a2-year investigation into how these MCOsinformed their providers and enrollees ofadverse determination decisions on thegrounds of medical necessity, the AttorneyGeneral found that these MCOs were not incompliance with New York State’s utilizationreview law (discussed in more detail in PartV below). The focus of the investigation wason the processes used by the MCOs to makedeterminations and to inform providers andenrollees, rather than the content of the med-ical necessity definitions themselves. The


Attorney General’s office found, for example,that MCOs were often denying authorizationor reimbursement for inpatient mental healthand substance abuse treatment and offeringnothing more than a generic explanation thatthe service was “not medically necessary.”There was often no disclosure of the under-lying reasons or clinical rationale the MCOsused in making their decisions, which isrequired in New York’s utilization reviewlaw (see Appendix D for more details).

A representative of the New YorkAttorney General’s Office indicated thatalthough their investigation did not reviewthe underlying substance of claims deniedowing to medical necessity, behavioralhealth patients appeared to be more vulnera-ble to abusive medical necessity practicesthan patients with physical conditions. Inthe representative’s view, medical necessity isharder to define and measure in behavioralhealth. The representative cited New York’sutilization review law as an effort to over-come this difficulty by ensuring that all

patients receive individualized medical neces-sity decisions based on specific clinical factsand individualized assessments. Despite thisstatute, the New York Attorney General’soffice continues to receive complaints fromproviders and patients regarding the medicalnecessity decision process used by MCOs inbehavioral and physical health cases.

The Attorney General’s Office representa-tive cited the lack of a uniform medical neces-sity definition in State insurance laws as themost significant problem in medical necessitydecisionmaking and investigation of abusivepractices. External appeal statutes, utilizationreview regulations, and other insurance lawsuse medical necessity definitions and stan-dards that are often conflicting or confusing.No uniform criteria are required. As a result,each health plan uses its own definition, andthis variation makes regulation of medicalnecessity practices difficult.

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Figure 4: Common Procedural Problems in Medical NecessityDetermination Processes Noted in Investigations, Litigation, and Case Law

• Decision made in arbitrary or capricious manner without consideration of individual patient needs• Decision made inconsistently (i.e., some patients’ claims denied while others in equivalent circumstances

approved)• Claims reviewers unqualified or not appropriately trained• Application of arbitrary and unreasonable caps on coverage and/or dollar limits• Insufficient information provided in claims denials:

– No disclosure of clinical rationale used in making decision– No disclosure of qualifying credentials of reviewer– No disclosure of evidence or documentation used in decision– No description of the procedures, timeframes, and consumer rights for grievance and appeal

• Failure to consult with treating physician• Failure to consider medical evidence provided by patient• Failure to provide full and fair review to patient appealing claims denial• Lack of clarity and specificity in plan documents of excluded services (e.g., definitions of “experimental,”

“convenience”)• Conflict of interest of MCO decisionmaker that biased impartial judgment

Maine

In 2000, both United Behavioral Health andCigna Behavioral Health, Inc., entered intoconsent agreements with the Maine Bureau ofInsurance.19 These agreements were reachedas a result of complaints filed with the bureauby health plan enrollees concerning denials ofcoverage based on medical necessity grounds.The bureau determined that the denials werenot in conformance with Maine rules regard-ing utilization review (see Appendix D formore details).

A representative from the Maine Bureauof Insurance indicated the potential for med-ical necessity abuses is similar in the physicaland behavioral health care contexts, but thatbehavioral health medical necessity determi-nations in Maine are qualitatively differentfrom those in other jurisdictions. Both therural character of the State and generalshortage of behavioral health care providershave a significant effect on the application ofmedical necessity criteria. For example, thereis only one practicing psychiatrist inWashington County, which has a populationof over 30,000 people. Since outpatient set-tings are scarce, national MCOs that dobusiness in Maine often apply medical neces-sity and “appropriate setting” criteria toresist coverage of inpatient behavioral healthtreatment, sometimes all that is available incertain regions of the State.

The paucity of providers also affects griev-ance procedures. Maine requires MCOs tooffer an independent medical review as partof their internal grievance process (it also hasan external review statute for further appealsafter the internal process has been exhaust-ed). The shortage of providers leads MCOsto find reviewers from other jurisdictions.These reviewers often question the medicalnecessity or appropriateness of inpatient

behavioral health care even though outpatientcare is not available or not practical owingto distance. Maine consumers and providersfile complaints with the Bureau of Insuranceover these issues and the general shortage ofbehavioral health care providers and services.

Maine’s Insurance Code contains a defi-nition of “medically necessary health care,”and according to the representative, insur-ers generally appear to understand thedefinition and the statute’s process require-ments (despite the frequent struggle overinpatient behavioral health services). Therepresentative indicated that several high-profile consent agreements with insurersthat failed to follow Maine’s definition orprocess requirements have had a deterrenteffect on other insurers.

Connecticut

A recent case that dramatically highlights thepotential for misconduct in the area of med-ical necessity decisionmaking by health plansinvolves an investigation conducted by theConnecticut Attorney General into the activi-ties of the State’s largest insurer, AnthemBlue Cross/Blue Shield, and its subcontractor,Psych Management, Inc. (PMI). In a widelydisseminated report issued in February 2002,the Attorney General reported that AnthemBlue Cross/Blue Shield (which enrolls600,000 State residents), prompted bydesires for significant savings and profitmaximization, contracted with PMI toadminister the behavioral health componentof its product line following a notably lowproject bid. The investigation found thatPMI’s president had serious financial con-flicts of interest and engaged in inappropriateuse of aggressive utilization management anddenials of medically necessary care solely to


improve PMI’s profit margin (Blumenthal,2002) (see Appendix D for more details).

A representative of the ConnecticutAttorney General’s Office indicated that theirinvestigation showed that the potential forabuses of medical necessity is greater in thebehavioral health context than in physicalhealth cases. In the view of the office, notonly is it harder to define what is medicallynecessary in behavioral health, but thepatients involved are more vulnerable andpolitically weak. In addition, the representa-tive indicated that the behavioral healthprovider lobby in Connecticut is relativelyweak and not effectively organized.

The Connecticut Attorney General’s officereceives more complaints from providers andconsumers regarding behavioral health care

than physical health care. The complaintsinclude a failure to pay claims in a timelymanner, arbitrary coverage denials (citingmedical necessity), and difficulties in findingbehavioral health providers due to out-of-date provider lists given to consumers(commonly known as “phantom panels”).

Finally, the representative indicatedthat the arbitrary financial goals, phantompanels, and lack of regulatory oversightof subcontractors are the most pressingproblems they found during their investi-gation. The Connecticut Department ofInsurance has taken the position thatthe State’s laws regulating managed carepractices do not give the departmentjurisdiction over subcontractors.

Special Report24

V.In their capacity as insurance regulators, States have developed an

extensive body of law related to the insurance industry. State lawsfall into two basic categories: laws that regulate the actual content

of the insurance contract itself (e.g., mandated benefit laws); and lawsthat regulate other aspects of the business of insurance (e.g., consumerprotection laws, antidiscrimination law, corporate law, laws providingfor oversight of insurance practice, and administrative and judicial reviewof insurer determinations). This section examines two types of State insur-ance laws that address medical necessity: insurance contract statutes andlaws that establish independent review procedures for medical necessitydeterminations.

State Law Regulationof Medical Necessity

Laws That Regulate the Contentof Insurance ContractsIn addition to detailing specific classes ofbenefits and services that must be includedin a contract of insurance sold in the State(e.g., pediatric immunizations, in vitro fer-tilization, inpatient psychiatric care),20 anumber of States have attempted to definemedical necessity. This effort to define med-ical necessity by statute is relatively recentand tracks the growth of (and backlashagainst) managed care. It probably would beincorrect to view the evolution of medicalnecessity definitions in State law solely inthe context of consumer protection. Indeed,codifying a medical necessity definition instatute actually might favor the industry,since once a statutory definition exists, acourt cannot insert its own definition intothe contract. Today it is still relatively com-mon to find insurance contracts that author-ize an insurer to decide issues of medical

necessity without a precise definition of theterm.21 In the face of this silence, a courtcan fashion its own definition under com-mon law principles of jurisprudence.22 Inso doing, a court might be inclined to useprinciples of professional liability law toarrive at a definition and adopt a standardthat measures the recommended treatmentagainst accepted standards of professionalpractice, as established through the testimo-ny of experts.23

The absence of a medical necessity defi-nition can be as harmful to insurers as itmight be to patients. In this situation, itwould be in the interest of the industry aswell as consumers to adopt a definition,particularly if the definition adopted ismultidimensional, giving the insurer dis-cretion to select among competing schoolsof thought in accordance with criteriaother than whether the treatment meetsprofessional standards of practice.


Seventeen definitions of medical necessitywere found in the course of this review.Table 4 sets forth these definitions, whichvary considerably in length and scope.For example, at one end of the spectrum,Massachusetts defines medical necessity as“health care services that are consistentwith generally accepted principles of pro-fessional medical practice.”24 At the otherend, Hawaii offers:

A health intervention is medicallynecessary if it is recommended by thetreating physician or treating licensedhealth care provider, is approved bythe health plan’s medical director orphysician designee, and is: (1) For thepurpose of treating a medical condi-tion; (2) The most appropriate deliveryor level of service, considering poten-tial benefits and harms to the patient;(3) Known to be effective in improv-ing health outcomes; provided that:(A) Effectiveness is determined first byscientific evidence; (B) If no scientificevidence exists, then by professionalstandards of care; and (C) If no pro-fessional standards of care exist orif they exist but are outdated or con-tradictory, then by expert opinion;and (4) Cost-effective for the medicalcondition being treated comparedto alternative health interventions,including no intervention. For thepurposes of this paragraph, cost-effective shall not necessarily meanlowest price.25

It is evident that Hawaii’s definitionapproximates those found in modern indus-try practices, while Massachusetts’s defini-tion tracks the unidimensional standardthat limits the authority of the industry tochoose among equally appropriate typesof treatments. Of special note is the factthat Hawaii’s definition, enacted in 2000,is virtually identical to the prototype defi-

nition proposed in 1999 by Singer et al. (seePart 1 and Table 1).

Independent Review StatutesBy 2002, 40 States and the District ofColumbia had enacted external review lawsthat allow enrollees to appeal to an inde-pendent review organization (IRO) healthplan decisions to deny, reduce, or terminatecare. Nearly half of these States have draftedregulations pursuant to their IRO statutes.26

Table 5 lists the statutory and regulatorycitations of these laws.

External review laws are a recent develop-ment. Only Michigan (1978) and Florida(1985) had external review statutes prior to1990. By 1998, the number of statutes hadgrown to 13 (Dallek & Pollitz, 2000), withthe remaining 28 statutes enacted within thepast 4 years.

IRO statutes and administrative regula-tions raise, and try to answer, many ques-tions. This section focuses on questions inthree critical areas that courts consider tobe basic issues of fairness in decisionmaking:(1) whether the States are tailoring statutesspecifically to address appeals of denialsinvolving behavioral health care; (2) the keyprocedural elements of the statutes, includingwho may serve as an IRO and the qualifica-tions of IRO reviewers (including the posses-sion of expertise relevant to the case underreview); and (3) how much deference theIRO must give to the initial decision andwhether new evidence may be introducedduring the IRO review. In addition, thestatutes were reviewed to determine whetherthey specify who has the burden of proofin the appeal (i.e., whether the insurer mustpresent evidence defending its initial decisionor the claimant must present evidence tochallenge it). Only one State, Maryland,

Special Report26

addresses the specific burden of proof andplaces it on the MCO to demonstrate thatits initial adverse decision was correct.27

In States that regulate the definition ofmedical necessity under their insurance con-tent statutes, the IRO presumably would beguided by this definition. Among States thatdo not have a definition of medical necessityin their insurance laws but that have enactedIRO statutes, seven include a definition ofmedical necessity in the IRO statute itself.Table 6 lists these States and the definitionof medical necessity that they have adoptedfor IRO purposes.

Only two States, Pennsylvania andVermont, specifically mention behavioralhealth care in their IRO statutes.28 Table 7sets forth the relevant provisions from Statelaw. Pennsylvania’s statute identifies licensedpsychologists as qualified reviewers; Vermontspecifies an independent review system forappeals involving mental health services andsubstance abuse treatment. While most StateIRO statutes use broad language that couldinclude a range of providers to review behav-ioral health determinations, the Vermontstatute is unique in its explicit recognitionof behavioral health reviewers.

The independent reviewer: Who, howchosen, and what qualifications? Central tothe process of obtaining external review arequestions about who performs the review,how the reviewer is chosen, and what qualifi-cations the reviewer possesses. Table 8 setsforth information on the review process. All41 statutes provide some detail about whatentities qualify to perform IRO functions.Most States require that the IRO obtain certi-fication or a license from the State insuranceor health department, and many States useaccreditation by a national accrediting organ-ization as a proxy for State certification.

Thirty-seven of the 41 States require thatreviewers used by the IRO have appropriatelicense, board certification (if applicable),and experience in the medical condition orhealth care service under review. Of theremaining four States, three do not specifysuch a requirement, and the last makes uti-lizing relevant expertise an option “whennecessary,” but does not define when thatis or who makes that determination.

In seven States, the MCO chooses theindependent review organization to performthe review (either from an approved insur-ance/health department list or from any qual-ified IRO). The insurance or health depart-ments assign the reviewer in the remainingStates. A number of States require a rotationof the IRO so no MCO is reviewed by thesame organization for every case.

Thirty states disqualify an IRO fromserving as a reviewer if the entity has finan-cial or other conflicts of interest with theparties to the case. Nine of the 11 remainingStates do not explicitly prohibit conflicts,and one State requires only that the conflictbe disclosed.

Standard of review and permissible evi-dence: Table 9 addresses the issue of stan-dard of review, identifying those States inwhich review is de novo (i.e., brand new)and those in which additional evidence ofnecessity can be submitted. The standardof review specifies how much deference,if any, the IRO should or must give to theprior decision made by the MCO. In ade novo review, the IRO is not bound atall by an earlier decision and no deferenceis required. Six States accord this absolutereview power to their IROs. Few Statesspecify any level of review short of denovo, and the majority of State IROstatutes and regulations are silent on


what standard of review to apply to priordecisions by the MCO.

Twenty-seven of the States permit theenrollee requesting the review to submitadditional evidence for consideration by theIRO. The statutes range from allowing spe-cific additional medical evidence to allowingany evidence the enrollee considers relevantto the appeal. Three States allow the enrolleeto request or attend a review hearing.

Additional process questions: The statutesand regulations compiled in this reviewcontain additional process questions worthnoting. Most States require an enrollee toexhaust an MCO’s internal appeals processbefore filing a request for external review,but there are notable exceptions. SomeStates require a preliminary review by thedepartment of insurance or IRO to deter-mine whether the request is eligible forreview. Many States require the enrolleeseeking review to pay a filing fee. MostStates require the MCO to pay the cost ofeach appeal, but other States have assessed afee for each MCO operating in the State tocover the costs of the entire appeals system.Almost every statute includes detailed time-lines for filing requests for appeal andresponses, and some States require that theappeal be filed on specific forms. Whilenone of these process questions answer largequestions, taken together, they allow anexamination of the burdens that enrollees

face when attempting to invoke the right toan external review.

Viewed as a whole, State independentreview statutes suggest a desire on the partof States to afford insured persons a rightto a second opinion in the case of medicalnecessity determinations. While State insur-ance law contains minimal regulation ofinsurers’ internal utilization managementand internal appeals processes, these statutessuggest that States are willing to establishminimum standards for how insurer deci-sions are to be reviewed, including absolutereview powers, impartial reviewers, andthe authority to consider new evidence inreviewing a medical necessity determination.Few IRO statutes contain independentdefinitions of medical necessity, althoughthe State’s content definition presumablywould apply where one exists.

The power of the procedural standardsto support the overturning of a denial maybe somewhat limited, however. For exam-ple, if the definition of medical necessitygives the insurer discretion to select fromamong several professionally acceptablecourses of treatment, one would expectan independent reviewer to uphold theinsurer’s decision unless it was not sup-ported by the evidence (i.e., the insurer’schoice among selected treatments was notgrounded in sufficient evidence to justifya rejection of other choices).

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VI.

This part considers two sources of law relevant to medicalnecessity determinations. First, two sets of Federal standardsgoverning employee health plans are examined. The first set of

standards is embodied in the regulations promulgated by the Departmentof Labor in 2000 that set forth the “full and fair review” proceduralrequirements that all ERISA health benefit plans must meet. The secondset is embodied in the standards governing medical necessity reviews thatare currently in use by the U.S. Office of Personnel Management.

Relevant FederalLaws Pertaining toMedical NecessityReviews

ERISAThe ERISA statute regulates health and wel-fare benefits for more than 140 million work-ers and their families (Rosenbaum, Frankford,Moore, & Borzi, 1999). ERISA requires everyhealth benefit plan within its scope to provideadequate notice in writing to a participantwhen a claim is denied, “setting forth the spe-cific reasons for such denial, written in a man-ner calculated to be understood by the partici-pant.”29 In addition, ERISA affords a healthplan member whose claim has been denieda “reasonable opportunity . . . for a full andfair review by the appropriate named fidu-ciary of the decision denying the claim.”

In November 2000, the Department ofLabor issued final regulations that revise thefull and fair review requirements for appealsof denials of claims for health benefits,including both retrospective and prospective

claims. These regulations became effectivefor group health plans on July 1, 2002.Although ERISA does not define medicalnecessity or provide a right to externaladministrative review,30 these regulationsestablish extensive standards for internalreviews required in the case of healthclaims.31

The November 2000 regulations requireERISA-covered plans to “establish andmaintain reasonable procedures governingthe filing of benefit claims, notificationof benefit determinations, and appeal ofadverse benefit determinations.”32 A plan’sclaims procedures must safeguard and verifythat claims are made in accordance withgoverning plan documents and that planprovisions are applied consistently forsimilarly situated claimants.


The full and fair review regulations wereintended to make the claims process “faster,fairer and fuller.” With respect to the speedof the process, the regulations shortened thepermissible time for initial claim decisionsand appeals. Instead of 90 days under theprior applicable regulation, the November2000 rule requires initial decisions in 72hours for urgent care claims, 15 days forpre-service claims, and 30 days for post-service claims.33 Health plans are allowedone 15-day extension for pre- and post-service claims. On appeals of denied claims,instead of 60 days under the prior applicableregulation, the new regulation requires deci-sions on appeals within 72 hours for urgentcare claims, 30 days for pre-service claims,and 60 days for post-service claims. Thereare no extensions of time for health plansin determining appeals.34

Under the “fairness” category, the regula-tion allows claimants more time to file anappeal (180 days instead of 60 under theprior regulation). The decisionmaker cannotbe the same person who denied the initialclaim or that person’s subordinate. Theclaimant also has the opportunity to submitwritten comments, documents, records, andother information related to the claim, andthe review must take into account all infor-mation submitted by the claimant (whetheror not the information was considered inthe initial benefit determination).35

If the appeal involves a decision basedon medical judgment, including whetheran item or service was medically necessary,the health plan must consult with a “healthcare professional who has appropriatetraining in the field of medicine involved inthe medical judgment.” The health careprofessional must not have been involvedwith the initial decision or be a subordinate

of the initial decisionmaker. Upon request,the health plan must disclose the identity ofthe health care expert it consulted. Healthplans cannot require more than two levelsof internal review of denied claims, and ifthere are two levels, both levels must becompleted within the time frames requiredof one level.36

The “fullness” category relates toimproved access to information by personsappealing an adverse determination. Asan initial matter, the plan must provide allplan members with a full description ofthe plan’s claims and appeals procedures.Claimants appealing an adverse determina-tion must have access to any informationrelevant to their claim upon request andfree of charge. Relevant informationincludes any information the health planrelied on in making the initial decision;any information submitted, considered, orgenerated while making the initial decision;and any statements of policy or guidanceconcerning the denied treatment or benefit,even if such documents were not reliedupon in making the decision.37 In addition,when a health plan denies a claim basedon a protocol or guidelines, the plan mustdisclose such reliance and inform theclaimant that a copy of the protocol isavailable upon request. Similarly, when thedenial is based on medical necessity, therule requires the plan either to explainthe scientific or clinical judgment used inapplying the plan’s terms or to include astatement that such an explanation willbe provided free of charge if requested.38

With disclosure of protocols and explana-tions of the application of medical necessity,the Federal full and fair review regulationsexceed the reach of State utilization andindependent review statutes and regulations.

Special Report30

Office of Personnel ManagementStandards: FEHBPAnother relevant Federal law establishesseparate standards for reviewing claimsinvolving the denial of medical necessity forFederal employees. The Federal EmployeesHealth Benefit Plan (FEHBP)39 provideshealth insurance coverage to more thannine million Federal employees and theirdependents. The U.S. Office of PersonnelManagement (OPM), which contracts withhealth plans to serve Federal employees,administers the FEHBP.

Neither the FEHBP statute nor its imple-menting regulations define “medical necessi-ty” or how health plans are to make suchdeterminations. The FEHBP regulations,however, do offer enrollees a right to appealto OPM if the health plan denies a claim asecond time after reviewing its first denial orif it fails to respond to an enrollee’s requestfor reconsideration of a claim’s denial.40 Theenrollee must exercise the right to appealwithin 90 days of the health plan’s decision,or within 120 days of the request for recon-sideration if the health plan failed torespond. In reviewing the claim denied bythe health plan, OPM may (1) request thatthe claimant submit additional information;(2) obtain an advisory opinion from anindependent physician; (3) obtain any otherinformation it believes is required to make adecision; or (4) make its determination basedsolely on the information the claimant sub-mitted with the request for OPM review.41

Neither the OPM statute nor its implement-ing regulations specify the standard OPMis to use in reviewing denied claims. If aclaimant wishes to sue, the suit must be filedin Federal court to review OPM’s final actionon the claim, but the claimant is limited toERISA remedies. The suit must be broughtagainst OPM, not the health plan or itscontractors, and a recovery in such a suitis limited to a court order directing OPM torequire the health plan to pay the amountof the benefits in dispute.42

Figure 5 presents the key elements of med-ical necessity review and compares ERISAprocedures with those established by OPM.

Although the ERISA full and fair hearingregulations and the FEHBP provide furtherprocedural safeguards to health planenrollees, both have important limitations.The ERISA regulations do not contain aright to an external appeal, despite providingimportant additional access to informationand better claims procedures not previouslyavailable. The FEHBP, limited to Federalemployees, provides a right to appeal outsidethe health plan to the OPM or to Federalcourt if necessary, but, as with ERISA plans,monetary damages are limited to paymentfor the cost of the denied benefit itself (i.e.,punitive and “pain and suffering” damagesare not available).

As a result of the modest reach of Federallaw, the definition of medical necessity isstill governed by the terms of the contractnegotiated between buyers and sellers.


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Figure 5: Medical Necessity Utilization Review and Appeals Procedures

Issue ERISA FEHBP

Standards for initial utilization review process ✓

Standards for internal appeals of initial denials ✓

Timelines ✓ ✓

Qualifications of reviewer ✓

De novo review ✓

Evidentiary standards ✓

Access by claimant to health plan evidence ✓

Treatment guidelines ✓

Definition of medical necessity

External de novo administrative review of health plan decision

VII.As recently as 30 years ago, health professionals had virtual

autonomy to determine whether health care was medical-ly necessary. Today the evidence suggests that this autono-

my had a profound impact on both health care cost and quality. Aftertentative incursions on decisionmaking through retrospective utilizationreview, the health insurance industry has moved to prospective reviewand has developed increasingly tight coverage provisions and definition-al terms. Some commentators such as Eddy, Singer, and Bergthold havefocused on the importance of scientific evidence in decisionmaking.Others such as Rosenbaum and Frankford have readily acknowledgedthe need for external review of clinical judgment.

Synthesis andImplications

The evidence presented in this literaturereview suggests that the modern definitionof medical necessity is multidimensional andturns only in part on the consideration ofwhether the treating professional’s recom-mendations fall within professionally accept-ed standards. Whether in State statutes,insurance contracts, case law, or peer-reviewed literature, the modern medicalnecessity definition assumes external controlof the ultimate decision. Furthermore, rela-tively widespread consensus has beenreached that the definition of medical neces-sity should have certain specific dimensions.

The first dimension (and the one that ismost embedded in the structure of the agree-ment itself and often the most elusive) is bestthought of as contractual scope. Does theagreement cover treatments that preventworsening and maintain or promote func-tioning, or is the agreement limited to treat-ments that show recovery or at least signifi-

cant improvement in the short term?43 Thesecond dimension is the professional stan-dard. Is the treatment in accord with profes-sional standards of care in the relevant areaof practice? The third dimension can bethought of as patient safety and setting. Isthe prescribed treatment gauged to be deliv-ered in the safest and most effective setting?The fourth dimension is that the treatmentbe medical and not a convenience matter orone that emanates from social or environ-mental factors.

The fifth dimension is cost. Here, however,most of the definitions (and the literature aswell) are vague on exactly what is meant bycost. Ford (2000) attempts to grapple withwhat is meant by cost, emphasizing long-termover short-term in order to permit coverageof care and services that, while not capableof producing immediate improvements, showlong-term payoff. At this point, of course,one begins to cross over from questions


related to the necessity of covered services tothe underlying issue of coverage itself, sincecoverage may be structured to categoricallyexclude services of certain duration or ser-vices that do not show recovery or significantimprovement within a brief period of time.

One of the notable aspects of this reviewis that there is little to suggest that healthinsurers, State legislators, accreditationbodies, or the experts consider behavioraldisorders to be so unique that the generalmultidimensional test used to measure med-ical necessity is not appropriate. A numberof commentators call for a broadening ofcoverage to include services related to thetreatment and management of chronic condi-tions, where the goal is to attain or maintainfunctioning over the long term. Such goalscan be thought of as a form of significantimprovement: attaining the ability to func-tion better can be thought of as a significantimprovement in the case of individuals withserious and chronic behavioral health disor-ders. But the improvement in such cases isnot on a “recovery” trajectory (in the sensethat the insurer may equate “recovery”with “leading to cure”) and so may continueto fall outside the scope of coverage. Thisrepresents an inconsistency with treatmentfor many persons with severe mental illness,wherein recovery, as evidenced by improvedfunctioning, is a primary treatment goal.

The evolution of a multidimensional defi-nition of medical necessity reflects the prob-lems inherent in a standard that measuresthe proposed treatment simply against theprevailing standard of care. As the schools-of-thought doctrine in liability law under-scored, the professional standard is built oncustom, practice, clinical observation, andconsultation and may embody several possi-ble approaches to a single condition. Were

an insurer to seize on one school of thoughtto the exclusion of all others, its determina-tion would be vulnerable on appeal. Evenif the plaintiff carries the burden of proof,it is possible to introduce evidence showingthe full range of possible and professionallyappropriate approaches to a particularproblem, thereby undermining the insurer’sinsistence on one particular approach.

The modern definitions found in theindustry’s own materials, the case law, Statestatutes, and the literature all point to anemerging standard of medical necessitythat effectively permits an insurer or healthplan vested with decisionmaking discretionto select among a series of professionallyaccepted approaches to care and to choosethe approach that best satisfies other con-siderations, including cost, safety, and con-venience factors. This power to choose onespecific approach to treatment, as opposedto being obligated to recognize the fullrange of treatments that fall within theprofessional standard of care, is the essenceof what separates the modern definitionfrom its predecessors.

Furthermore, depending on how thedefinition is drafted, an insurer or healthplan can exclude all evidence from itsconsideration other than evidence gleanedfrom certain sources of information suchas randomized controlled studies (Harrisv. Mutual of Omaha Co., 1993).

This shift to a multidimensional test ofnecessity can be expected to affect any condi-tion where there are multiple professionallyrecognized approaches to the treatment ofany particular condition. Because profes-sional opinion varies to a disproportionatedegree in the area of behavioral health, theissue of medical necessity has generatedheightened attention in this area. However,

Special Report34

experts in behavioral health who write aboutmedical necessity do appear to advocate adefinition that allows a decisionmaker toselect among competing approaches inaccordance with numerous other factors.

The cost dimension of the modern med-ical necessity definition also may have anespecially strong impact in behavioral healthif treatments for such illnesses vary widely incost. A course of treatment that emphasizesprescribed medications and brief therapymay have radically different costs from onethat is long-term and emphasizes psychother-apy over medication. Similarly, a require-ment of prior failure as a precondition tothe use of more expensive prescription drugtherapies may have a greater impact inbehavioral health, depending on the cost ofemerging medication treatments comparedto existing treatments. A corollary consider-ation is that of consumer choice, which israrely, if ever, addressed in medical necessitydefinitions except in the context of exclu-sions for “convenience.”

The concept of convenience is a difficultone. For example, could a “fail first” policybe designed to limit “convenience” treat-ments for patients and thus be a basis fordenying access to emerging and professional-ly accepted treatments? There has been arapid increase in the development of a newgeneration of psychopharmaceuticals used totreat unipolar and bipolar depression, anxi-ety, schizophrenia, and alcohol and opiateaddictions. These drugs have usually beenfound in clinical development testing to havegreater effectiveness and fewer negative sideeffects than previous drugs, thus increasingthe likelihood that patients who use themwill be able to adhere to the treatment regi-men. Since these drugs are new to the marketand not yet widely prescribed, they are typi-

cally relatively expensive. A “fail first” testused as part of the convenience or costdimension of the medical necessity reviewwould result in a denial of access to certainadvanced medications. The impact of thisdecision might extend beyond the immediatedenial of certain forms of recognized treat-ment. Because the modern medical necessitydefinition turns in part on what is the accept-ed treatment, the fact that insurers andhealth plans reject use of the treatment ona widespread basis may lengthen the delaybefore the treatment becomes “accepted.”

The evidence also shows a consensus inthe law and literature for an independentreview of an insurer’s medical necessity deci-sion. More than 40 States have enacted leg-islation that, to varying degrees, establishesan independent review process and the abili-ty to introduce additional relevant and reli-able evidence. While the burden of proof isnot specifically addressed in these laws,these statutes lean toward creating an inde-pendent second opinion process, in whichthe original determination is given no bene-fit of weight or presumption. Federal regula-tions revising the full and fair review processin the case of ERISA plans also emphasize(to the extent possible given the internalnature of these reviews) independence, freshevidence, and claimant access to the plan’sevidence and information. On June 20,2002, the U.S. Supreme Court ruled thatIllinois’s independent review statute is notpreempted by ERISA. The majority opinion(five justices) stated that: “[A]n HMO isboth: it provides health care, and it does soas an insurer.... [R]egulating insurance tiedto what is medically necessary is probablyinseparable from enforcing the quintessen-tially state-law standards of reasonablemedical care.” (Rush Prudential HMO, Inc.,


Petitioner, v. Debra C. Moran et al., 2002)The practical effect of the decision is toleave intact the status quo regarding States’abilities to enact independent reviewstatutes, thus preserving consumers’ right topursue State-level appeals of claims denials,which occur in behavioral health care casesmore often than in general medical care.

Regardless of how the process is struc-tured, however, the importance of themodern medical necessity definition is thepower it affords an insurer or health plan toselect from among professionally acceptedtreatments the one treatment that it willelect to cover. Depending on the qualityof the evidence pointing to one treatmentas preferable to all others, this power mayrepresent an advance in the effort to stan-dardize the approach to the treatment ofcertain conditions. But to the extent that theevidence is weak, unreliable, or irrelevant,

or that little focus is given to a particularpatient’s condition (or conditions) in thecourse of evaluating possible treatments,the power to select on the basis of factorsother than the professional standard ofcare may result in the rejection of possibletreatment approaches that are beneficial inthe long run.

Finally, even the broadest definition ofmedical necessity that tolerates multipleschools of thought and that calls for exten-sive consultation with the treating physicianin arriving at the right treatment cannotovercome contractual terms that limit orexclude long-term maintenance treatmentsdesigned to avert deterioration or maintainfunctioning in the case of persons withchronic behavioral health conditions. Thisis a wholly separate issue, and one that isof increasing importance for behavioralhealth care services.

Special Report36

VIII.References

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Bedrick v. Travelers Ins. Co., 93 F.3d 149(4th Cir. 1996).

Blumenthal, R. (2002). Report of theAttorney General’s InvestigationConcerning Psych Management, Inc.and Anthem Blue Cross and Blue Shieldof Connecticut. Available at http://www.cslib.org/attygenl/mainlinks/tabindex6.htm. Accessed April 3, 2002.

Buck, J. A., Teich, J. L., Umland, B., &Stein, M. (1999). Behavioral health bene-fits in employer-sponsored health plans,1997. Health Affairs, 18(2), 67–78.

Chodoff, P. (1998). Medical necessity andpsychotherapy. Psychiatric Services,49(11),1481-1483.

Dallek, G. & Pollitz, K. (2000). Externalreview of health plan decisions: Anupdate. Prepared for the Kaiser FamilyFoundation (Washington, DC).

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Domino, M. E., Salkever, D. S., Zarin, D. A.,& Pincus, H. A. (1998). The impact ofmanaged care on psychiatry.Administration & Policy in MentalHealth, 26(2),149–157.

Eddy, D. (1994). From theory to practice:Rationing resources while improvingquality: How to get more for less.JAMA, 272, 817–824.

Firestone Tire and Rubber v. Bruch, 489 U.S.101 (1989).

Ford, W. (1998). Medical necessity: Itsimpact in managed mental health care.Psychiatric Services 49(2), 183-184.

Ford, W. (2000). Medical necessity and psy-chiatric managed care. Psychiatric Clinicsof North America, 23(2), 309-317.

Hadley, J. (2002). Sicker and poorer: Theconsequences of being uninsured: Areview of the research on the relationshipbetween health insurance, health, work,income and education. Prepared for theKaiser Commission on Medicaid and theUninsured. Available at http://www.kff.org/content/2002/20020510/4004.pdf.Accessed May 29, 2002.

Harris v. Mutual of Omaha Co., 992 F.2d706 (7th Cir. 1993).

Hill, H., Hanson, A., & O’Connell, B.(2000). Using evidence: Coveragedecisions. Proceedings from Agencyfor Healthcare Research and Quality(AHRQ) User Liaison ProgramWorkshop for State and LocalHealthcare Policymakers. Available athttp://www.ahrq.gov/news/ulp/evidence/ulpevdnc5.htm. Accessed December 15,2001.


Institute of Medicine. (1990). Clinicalpractice guidelines: Directions for a newprogram. Washington, DC: NationalAcademy Press.

Ireys, H., Wehr, E., & Cooke, R.E. (1999).Defining medical necessity: Strategiesfor promoting access to quality care forpersons with developmental disabilities,mental retardation, and other specialhealth care needs. Washington, DC:National Center for Education inMaternal and Child Health Report.

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Jones v. Kodak Medical Assistance Plan.,169 F. 3d 1287 (10th Cir. 1999).

Kaplan, A. (1999). Medical necessity: Whatis it? Psychiatric Times, 16:12 Availableat http://www.psychiatrictimes.com/p991238.html.

Kornman v. Blue Cross Blue Shield ofLouisiana 662 So. 2nd 498 (1995).

Lazorko v. Pennsylvania Hospital., 237 F. 3d242 (3d Cir. 2000).

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Milone v. Exclusive Health Care, Inc., 224F.3rd 615 (8th Cir. 2001).

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NCQA. (2001). Standards for the accredita-tion of MCOs (Effective July 1, 2001).Washington, DC: Author.

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Pawlson, G., (April 3, 2002). NCQA,personal communication.

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Special Report38

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IX. Endnotes

1 Legislation to establish simplified review proce-

dures for all health benefit plans maintained by

private employers is currently pending in the

107th Congress. Since 1997 the Medicare pro-

gram has offered an informal administrative

review system, and courts have consistently held

that external impartial review of health plan

treatment decisions is a legal right of Medicaid

managed care enrollees (Rosenblatt, Law, &

Rosenbaum, 1997).

2 Review of the medical and health services

literature was conducted via searches on

MEDLINE, HealthSTAR, and PsycINFO.

Legal cases and decisions were retrieved using

LEXIS-NEXIS. Additional research included

retrieval of information from State attorneys

general Web sites. A unified database was

created using EndNote 5 to facilitate org-

anization and analysis of medical necessity

definitions across all sources of information.

3 It is worth noting that the Senate mental health

parity legislation would appear to allow con-

tractual treatments to vary by diagnosis, even

as it constrains insurer discretion to formulate

mental illness-specific coverage limitations for

broad classes of benefits. Thus, an insurer pre-

sumably could specify covered contractual treat-

ments in the case of mental illness while using

a broader and more flexible individualized

“medical necessity” decisionmaking approach

in the case of physical illness.

4 Available at http://www.ama-assn.org/ama1/pub/

upload/mm/368/supplement1.pdf. Accessed

December 19, 2001.

5 The plausibility of this distinction has been

most recently called into question in Fitts v.

Fannie Mae, No. 98-00617, 2002 U.S. Dist.

LEXIS 3071 (D. D.C. Feb. 26, 2002).

6 According to the American Psychiatric

Association, “the DSM-IV (Diagnostic and

Statistical Manual of Mental Disorders, Fourth

Edition), published in 1994 was the last major

revision of the DSM. It was the culmination of a

six-year effort that involved over 1,000 individu-

als and numerous professional organizations.

Much of the effort involved conducting a com-

prehensive review of the literature to establish a

firm empirical basis for making modifications.

Numerous changes were made to the classifica-

tion (i.e., disorders were added, deleted, and

reorganized), to the diagnostic criteria sets, and

to the descriptive text based on a careful consid-

eration of the available research about the vari-

ous mental disorders.” The APA has recently

begun considering “relational disorders” as a

new diagnostic code in the future DSM-V

(expected for publication in 2010). See http://

www.psych.org/clin_res/dsm/dsmintro81301.cfm.

7 The fact that the industry views the utilization

review process as linked to both health care

quality and cost is best evidenced in industry

accreditation standards, which identify an

appropriate utilization management program

as an essential feature of health care quality

and thus, of accreditation. See, e.g., JCAHO

(1997, 2001) and NCQA (2000, 2001).

8 Full and fair hearing review regulations issued

in 2000 by the U. S. Department of Labor


require ERISA health benefit plans to disclose

any relevant information to claimants appealing

a benefit denial through the plan’s internal

review system. See 65 Fed. Reg. 70246 (Nov.

21, 2000); 29 C.F.R. Part 2560 (2001). When a

health plan denies a claim based on a protocol

or guidelines, the plan must disclose such

reliance and inform the claimant that a copy

of the protocol or guideline is available upon

request. Similarly, when the denial is based on

medical necessity, the rule requires the plan

either to explain the scientific or clinical judg-

ment used in applying the plan’s terms to the

claimant’s medical circumstances or to include

a statement that such an explanation will be

provided free of charge if requested. These

regulations are effective for claims filed under

an ERISA health plan on or after July 1, 2002.

The regulations effectively reverse a series of

judicial decisions holding that under ERISA,

health plans’ fiduciary obligations do not

require disclosure of treatment guidelines.

See Jones v. Kodak, 169 F.3d 1287 (10th Cir.

1999); Doe v. Travelers Ins. Co., 187 F.3d 53

(1st Cir. 1999). 9 Available at https://apps.cignabehavioral.com/

web/basicsite/provider/pdf/CBHguide.pdf.

Accessed September 22, 2002.10 In RE: United Behavioral Health, Consent

Agreement with Maine Bureau of Insurance,

Docket No. 00-3005. Available at http://

www.state.me.us/pfr/ins/ins003005.htm.

Accessed April 16, 2002.11 It is typical for insurers to limit the concept of

treatment to interventions that are calculated

to yield either a full recovery or a significant

improvement. See McGraw v. Prudential Ins.

Co., 137 F.3d 1253 (10th Cir. 1998) and

Bedrick v. Travelers Ins. Co., 93 F.3d 149 (4th

Cir. 1996). Where the patient cannot improve or

show significant recovery, an insurer may deny

the coverage as unnecessary. Courts that have

considered this limitation have tended to uphold

it where it is explicit in the contract and have

rejected it when it is not an express limitation

on coverage. See McGraw v. Prudential Ins.

Co., 137 F.3d 1253 (10th Cir. 1998) and


Cir. 1996) (rejecting limitation when not explicit

in contract’s medical necessity definition).12 In Shilkret v. Annapolis Emergency Hospital,

349 A.2d 245, 249-50 (Md. 1975), Maryland’s

highest court set forth what is still viewed as the

seminal articulation of the modern standard of

care for measuring professional liability:

“...that degree of care and skill which is expected

to a reasonably competent practitioner in the

same class to which he belongs, acting in the

same or similar circumstances. Under this stan-

dard, advances in the profession, availability

of facilities, specialization or general practice,

proximity of specialists and special facilities,

together with all other relevant considerations,

are to be taken into account.”

See also Law and the American Health Care

System, op. cit., at 846.

13 Since the UBH guidelines were not available

to the authors, it is not known to what extent

they refer to professional or national stan-

dards of care.

14 For purposes of confidentiality, we do not

identify the managed care organizations or the

officials by name.

15 Of course, if the contract limits coverage for

specified conditions to certain treatments, this

limitation in coverage would take precedence.

16 It would probably seem that any insurer has

an inherent conflict of interest because it is at

risk for the cost of its decision. In fact, courts

do not perceive the dual role of insurers as risk

bearers and decision makers as a fatal flaw,

although many will more closely review a

record as a result.

Special Report42

17 Advocates note the qualitative advances inher-

ent in emphasizing outpatient over inpatient

care wherever appropriate. Chris Koyanagi,

Bazelon Center for Mental Health Law.

Personal communication. April 5, 2002. (By

the same token of course, on the outpatient

side, providers of long-term psychotherapy and

psychoanalysis have seen restrictions put on the

scope and duration of their treatments, with a

particular emphasis on short-term behavioral

and cognitive therapy as preferred.)

18 Aetna/U.S. HealthCare Inc./Prudential Health

Plan of Hartford, CT; Excellus Health Plans

of Rochester; Group Health Inc. of Manhattan;

HIP Health Plan of Greater New York, Inc.;

Oxford Health Plans of Trumbull, CT; and

Vytra Health Plans of Long Island, Inc. See:

“Landmark Agreements Give Consumers New

Protections in HMO Disputes.” NY Attorney

General’s Office Press Release. October 16,

2001. Available at http://www.oag.state.ny.us.

Accessed October 29, 2001.

19 In RE: United Behavioral Health, Consent

Agreement with Maine Bureau of Insurance,

op. cit. In RE: Cigna Behavioral Health, Inc.,

Consent Agreement with Maine Bureau of

Insurance, Docket No. 00-3003. Available at

http://www.state.me.us/pfr/ins/ins003003.htm.

Accessed April 17, 2002.

20 In Metropolitan Life Insurance v.

Massachusetts, 471 U.S. 724 (1985), the

Supreme Court affirmed the power of states to

set minimum content standards in the case of

insured ERISA plans. The case involved a

Massachusetts state law mandating inpatient

hospitalization coverage up to certain levels in

the case of mental illness.

21 A recent decision illustrating the still common

practice of insurers to leave critical terms unde-

fined is Bynum v. Cigna Healthcare of North

Carolina, Inc., 287 F.3d 305 (4th Cir., 2002) in

which an insurer denied reconstructive facial

surgery for a severely deformed infant on the

grounds that the construction was excluded

as “cosmetic” without ever defining the term.

22 See Dallis v. Aetna Life Ins. Co., 574 F.Supp.

547 (N.D. Ga. 1983), aff’d, 768 F.2d 1303 (11th

Cir. 1985) (finding “no consensus among the

courts” as to the definition of “necessary” care).

23 The prospective nature of utilization review

means that managed care affects not only cover-

age but access to the care itself. Courts therefore

might consider professional liability law as a

relevant source of law from which to derive an

insurance standard of medical necessity. In recent

years, courts have repeatedly noted the “two

hats” of managed care, affecting both coverage

and health care quality through their conduct.

See Pegram v. Herdrich, 530 U.S. 211 (2000).

24 Mass. Ann. Laws ch. 176O (1) (2001).

25 HRS § 432E-1.4 (2000).

26 We limited our review of state regulations to

those available in the LEXIS-NEXIS legal

databases.

27 Md. Ins. Code Ann. § 15-10A-03(e) (2001).

28 28 Pa. Code § 9.504 (2001) and VT. Stat. tit. 8,

§ 4089f (2001).

29 29 U.S.C. § 1133 (2001).

30 Individuals may seek judicial review of a claim’s

denial. In such a case the review is on the record

rather than de novo. Under the standard of

review set forth by the United States Supreme

Court in Firestone Tire and Rubber v. Bruch,

489 U.S. 101 (1989), the plan administrator’s

decision is upheld unless the claimant can

demonstrate that it is arbitrary and capricious

or an abuse of discretion. Courts may conduct

a more rigorous review when a claimant is able

to demonstrate a conflict of interest; however,

although the fact that the internal review was

conducted by the insurer or the health plan


administrator raises the potential for conflict,

the interest is not sufficient to compel a more

rigorous review in every case. See Firestone Tire

and Rubber v. Bruch, 489 U.S. 101 (1989);


Cir. 1996).

31 Pending patients’ bill of rights legislation before

Congress would establish independent review as

a basic element of ERISA for all covered plans

and health insurance arrangements. See H.R.

and S. 1052, 107th Cong., 1st sess.

32 29 C.F.R. § 2560.503-1(b) (2001).

33 See 29 C.F.R. §§ 2560.503-1(f), (i) (2001).

34 See 29 C.F.R. §§ 2560.503-1 (i) (2001).

35 29 C.F.R. §§ 2560.503-1(h) (2001).

36 See id.

37 See id.

38 See id.

39 5 U.S.C. § 8901 (2001).

40 5 C.F.R. § 890.105 (2001).

41 Id.

42 5 C.F.R. § 890.107(c) (2001).

43 Several cases have focused specifically on the

use of “significant improvement” and “recov-

ery” by insurers to narrow the scope of the

treatments that can be considered medically

necessary. See McGraw v. Prudential Ins. Co.,

137 F.3d 1253 (10th Cir. 1998) and Bedrick v.

Travelers Ins. Co., 93 F.3d 149 (4th Cir. 1996).

Where the concept is not contractual but is a

“gloss on the contract” imposed by utilization

management review, courts have tended to

overturn the insurer’s decision. But where the

contract documents actually specify recovery

or short term improvements, courts will honor

the limitation.

Special Report44


1994

Sabi

n, J

ames

E.

and

Nor

man

Dan

iels

Thos

e m

enta

l hea

lth s

ervi

ces

that

are

ess

entia

l for

the

treat

men

t of a

Mem

ber’s

men

tal h

ealth

dis

orde

r as

defin

ed b

y th

e DS

M-IV

in a

ccor

danc

ew

ith g

ener

ally

acc

epte

d m

enta

l hea

lth p

ract

ice.

The

auth

ors

pose

d th

e qu

estio

n, “

Shou

ldm

enta

l hea

lth in

sura

nce

cove

r onl

y di

sord

ers

foun

d in

DSM

-IV, o

r sho

uld

it be

ext

ende

d to

treat

men

t for

ord

inar

y sh

ynes

s, u

nhap

pine

ss,

and

othe

r res

pons

es to

life

’s ha

rd k

nock

s?”

Thro

ugh

the

use

of s

ix il

lust

rativ

e ca

se s

tud-

ies,

the

auth

ors

exam

ined

the

reas

onin

gbe

hind

the

dete

rmin

atio

ns o

f med

ical

nec

es-

sity

. The

arti

cle

incl

udes

a d

iscu

ssio

n of

are

curr

ent c

onfli

ct b

etw

een

“har

d-lin

e” a

nd“e

xpan

sive

” vi

ews

of m

edic

al n

eces

sity

,no

ting

that

it fr

eque

ntly

refle

cts

unre

cog-

nize

d m

oral

dis

agre

emen

t abo

ut th

e ta

rget

sof

clin

ical

inte

rven

tion

and

the

ultim

ate

goal

sof

psy

chia

tric

treat

men

t. Th

e au

thor

s pr

esen

tth

ree

mod

els

for d

efin

ing

med

ical

nec

essi

tyan

d ar

gue

a de

fens

ible

ratio

nale

for t

he“n

orm

al”

mod

el, w

hich

com

pris

es a

targ

etof

a m

edic

ally

def

ined

dev

iatio

n in

tend

ed to

decr

ease

the

impa

ct o

f dis

ease

or d

isab

ility

.Th

ree

test

s of

med

ical

nec

essi

ty a

re o

ffere

d:(1

) Doe

s it

mak

e di

stin

ctio

ns th

e pu

blic

and

clin

icia

ns re

gard

as

fair?

(2) C

an it

be

adm

in-

iste

red

in th

e re

al w

orld

? (3

) Doe

s it

lead

tore

sults

that

soc

iety

can

affo

rd?

The

auth

ors

conc

lude

that

the

DSM

-IV s

tand

ard

prov

ides

wor

kabl

e bo

unda

ries

for m

edic

al n

eces

sity

defin

ition

s.

“Det

erm

inin

g‘M

edic

alN

eces

sity

’ in

Men

tal H

ealth

Prac

tice”

Hast

ings

Cen

ter

Repo

rt24

(6):5

–13

Year

Auth

orTi

tle, S

ourc

eSu

mm

ary/

Abst

ract

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 1

. Med

ical

Nec

essi

ty D

efin

itio

ns

in P

ub

lish

ed L

iter

atu

re (

See

Als

o A

pp

end

ix C

)

1 Defin

ition

s ha

ve b

een

take

n ve

rbat

im fr

om th

e re

leva

nt d

ocum

ent;

quot

atio

n m

arks

hav

e be

en o

mitt

ed.

Special Report46

1998

Chod

off,

Paul

“H

ealth

Nec

essi

ty”

wou

ld re

ly o

n m

edic

al c

riter

ia w

hen

they

are

rele

vant

but

wou

ld a

lso

ackn

owle

dge

that

the

heal

th o

f the

citi

zenr

y ca

n be

per

ceiv

ed in

broa

der t

erm

s. A

theo

retic

al fo

unda

tion

for t

his

conc

ept m

ay b

e fo

und

in th

ebi

opsy

chos

ocia

l mod

el. H

ealth

nec

essi

ty w

ould

be

base

d on

thre

e br

oad

fund

amen

tals

: uni

form

qua

lific

atio

ns fo

r pra

ctiti

oner

s, a

ccep

tabl

e pr

ofes

sion

alid

entit

ies,

and

com

pete

nce;

crit

eria

for t

he k

inds

of s

ervi

ces

that

wou

ld b

epr

ovid

ed a

nd c

over

ed; a

nd a

fair

mec

hani

sm fo

r res

olut

ion

of d

ispu

tes

abou

tqu

estio

ns o

f ser

vice

cov

erag

e. T

he c

riter

ia fo

r ser

vice

s w

ould

incl

ude

biot

ech-

nica

l med

ical

crit

eria

whe

n ap

prop

riate

, as

wou

ld b

e th

e ca

se in

mos

t ord

inar

ym

edic

al p

ract

ice,

but

they

wou

ld b

e ac

know

ledg

ed to

be

only

a s

ubse

t of t

hehe

alth

nec

essi

ty c

riter

ia. F

or m

enta

l hea

lth n

eeds

, a b

road

rang

e of

ser

vice

sco

uld

also

be

cons

ider

ed, i

nclu

ding

app

ropr

iate

psy

chot

hera

py fo

r ind

ivid

uals

who

may

not

fit c

omfo

rtabl

y w

ith D

SM-IV

dia

gnos

tic c

ateg

orie

s bu

t who

suf

fer

a si

gnifi

cant

deg

ree

of d

istre

ss a

nd in

terp

erso

nal i

mpa

irmen

t.

Man

aged

car

e an

d, s

peci

fical

ly, t

he n

eed

toco

nfor

m to

med

ical

nec

essi

ty re

quire

men

tsha

ve h

ad a

dra

mat

ic e

ffect

on

the

med

ical

and

psyc

hiat

ric p

ract

ice,

esp

ecia

lly o

nps

ycho

ther

apy.

The

aut

hor d

escr

ibes

the

prog

ress

ion

of th

e co

ncep

t of m

edic

alne

cess

ity fr

om a

sim

ple

acco

untin

g of

serv

ices

reim

burs

able

by

insu

ranc

e co

m-

pani

es to

an

ambi

guou

s te

rm w

ithou

tde

finiti

onal

con

sens

us. H

e de

scrib

es it

sre

latio

nshi

p to

the

med

ical

mod

el a

nddi

scus

ses

the

inco

ngru

ity b

etw

een

med

ical

nece

ssity

and

certa

in a

spec

ts o

f psy

chot

her-

apy.

He

prop

oses

a b

road

er c

once

pt—

heal

thne

cess

ity—

base

d on

an

eval

uatio

nof

the

adva

ntag

es, d

isad

vant

ages

, and

cost

sof

med

ical

and

psy

chia

tric

serv

ices

.

“Med

ical

Nec

essi

ty a

ndPs

ycho

ther

apy”

Psyc

hiat

ricSe

rvic

es49

(11)

:148

1–14

83

Year

Auth

orTi

tle, S

ourc

eSu

mm

ary/

Abst

ract

Med

ical

Nec

essi

ty D

efin

ition

1

1998

Ford

, Will

iam

“T

reat

men

t nec

essi

ty”

or “

clin

ical

nec

essi

ty”

wou

ld re

quire

that

, to

qual

ify fo

rpa

ymen

t, a

serv

ice

mus

t be:

for t

he tr

eatm

ent o

f men

tal i

llnes

s an

d su

bsta

nce

use

diso

rder

s, o

r sym

ptom

s of

thes

e di

sord

ers,

and

impa

irmen

ts in

day

-to-d

ayfu

nctio

ning

rela

ted

to th

em; f

or th

e pu

rpos

e of

pre

vent

ing

the

need

for a

mor

ein

tens

ive

leve

l of m

enta

l hea

lth a

nd s

ubst

ance

abu

se c

are;

for t

he p

urpo

se o

fpr

even

ting

rela

pse

of p

erso

ns w

ith m

enta

l illn

ess

and

subs

tanc

e ab

use

diso

r-de

rs; e

ffici

ent,

in th

e se

nse

that

a le

ss e

xpen

sive

trea

tmen

t wor

ks a

s w

ell a

s a

mor

e ex

pens

ive

treat

men

t; an

d no

t for

the

patie

nt’s

or p

rovi

der’s

con

veni

ence

.

Disc

usse

s th

e im

pact

of m

anag

ed c

are

med

ical

nec

essi

ty d

efin

ition

s on

psy

chia

tric

care

. Poi

nts

to s

ome

poss

ible

reas

ons

why

MBH

Os fo

cus

on c

uttin

g sh

ort-t

erm

cos

tsra

ther

than

man

agin

g lo

ng-te

rm c

osts

,in

clud

ing

shor

t con

tract

term

s an

d la

bor-

inte

nsiv

e re

view

s.

“Med

ical

Nec

essi

ty:

ItsIm

pact

inM

anag

ed M

enta

lHe

alth

Car

e”Ps

ychi

atric

Serv

ices

49(2

):183

–184

Tab

le 1

. Co

nti

nu

ed


1999

Sing

er, S

ara

J.,

Lind

a A.

Berg

thol

d,Ca

rol V

orha

us,

Alai

n En

thov

en,

et a

l.

For c

ontra

ctua

l pur

pose

s, a

n in

terv

entio

n w

ill b

e co

vere

d if

it is

an

othe

r-w

ise

cove

red

cate

gory

of s

ervi

ce, n

ot s

peci

fical

ly e

xclu

ded,

and

med

ical

lyne

cess

ary.

An

inte

rven

tion

is m

edic

ally

nec

essa

ry if

, as

reco

mm

ende

d by

the

treat

ing

phys

icia

n an

d de

term

ined

by

the

heal

th p

lan’

s m

edic

al d

irect

oror

phys

icia

n de

sign

ee, i

t is

(all

of th

e fo

llow

ing)

: a h

ealth

inte

rven

tion

for t

hepu

rpos

e of

trea

ting

a m

edic

al c

ondi

tion;

the

mos

t app

ropr

iate

sup

ply

or le

vel

of s

ervi

ce, c

onsi

derin

g po

tent

ial b

enef

its a

nd h

arm

s to

the

patie

nt; a

nd k

now

nto

be

effe

ctiv

e in

impr

ovin

g he

alth

out

com

es. F

or n

ew in

terv

entio

ns, e

ffect

ive-

ness

is d

eter

min

ed b

y sc

ient

ific

evid

ence

. For

exi

stin

g in

terv

entio

ns, e

ffect

ive-

ness

is d

eter

min

ed fi

rst b

y sc

ient

ific

evid

ence

, the

n by

pro

fess

iona

l sta

ndar

ds,

then

by

expe

rt op

inio

n; a

nd th

e co

st-e

ffect

iven

ess

for t

his

inte

rven

tion

isco

mpa

red

to a

ltern

ativ

e in

terv

entio

ns, i

nclu

ding

no

inte

rven

tion.

“Co

st-

effe

ctiv

e” d

oes

not n

eces

saril

y m

ean

low

est p

rice.

An

inte

rven

tion

may

be

med

ical

ly in

dica

ted

yet n

ot b

e a

cove

red

bene

fit o

r mee

t thi

s co

ntra

ctua

lde

finiti

on o

f med

ical

nec

essi

ty. A

hea

lth p

lan

may

cho

ose

to c

over

inte

r-ve

ntio

ns th

at d

o no

t mee

t thi

s co

ntra

ctua

l def

initi

on o

f med

ical

nec

essi

ty.

This

is a

n in

-dep

th re

port

look

ing

into

the

ques

tion

of m

edic

al n

eces

sity

. It d

eals

with

the

varia

tion

and

inco

nsis

tenc

ies

of d

efin

i-tio

ns th

at th

e va

rious

sta

keho

lder

s ha

ve.

Itno

tes

a pa

ucity

of r

esea

rch

rega

rdin

ghe

alth

pla

n de

cisi

on-m

akin

g an

d w

heth

erm

edic

al n

eces

sity

def

initi

ons

play

a re

al ro

lein

dec

isio

n-m

akin

g. It

doc

umen

ts a

num

ber

of c

onfe

renc

es a

nd o

rigin

al re

sear

ch,

even

tual

ly c

oncl

udin

g w

ith a

con

sens

usfo

ra m

odel

dec

isio

n-m

akin

g pr

oces

s an

dm

edic

alne

cess

ity d

efin

ition

s. It

con

clud

esby

revi

ewin

g th

e va

rious

sta

keho

lder

s, th

eir

conc

erns

, and

wha

t act

ions

they

cou

ld ta

keto

dec

reas

e m

edic

al n

eces

sity

var

iabi

lity.

“Dec

reas

ing

Varia

tion

inM

edic

alN

eces

sity

Deci

sion

Mak

ing”

Stan

ford

Univ

ersi

ty,

Augu

st, 1

999

Year

Auth

orTi

tle, S

ourc

eSu

mm

ary/

Abst

ract

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 1

. Co

nti

nu

ed

1999

Ireys

, Hen

ry T

.,El

izabe

th W

ehr,

and

Robe

rt E.

Coo

ke

A co

vere

d se

rvic

e or

item

is m

edic

ally

nec

essa

ry if

it w

ill d

o, o

r is

reas

onab

lyex

pect

ed to

do,

one

or m

ore

of th

e fo

llow

ing:

arr

ive

at a

cor

rect

med

ical

dia

g-no

sis;

pre

vent

the

onse

t of a

n ill

ness

, con

ditio

n, in

jury

, or d

isab

ility

(in

the

indi

-vi

dual

or i

n co

vere

d re

lativ

es, a

s ap

prop

riate

); re

duce

, cor

rect

, or a

mel

iora

teth

e ph

ysic

al, m

enta

l, de

velo

pmen

tal,

or b

ehav

iora

l effe

cts

of a

n ill

ness

, con

di-

tion,

inju

ry, o

r dis

abili

ty; a

nd a

ssis

t the

indi

vidu

al to

ach

ieve

or m

aint

ain

suffi

-ci

ent f

unct

iona

l cap

acity

to p

erfo

rm a

ge-a

ppro

pria

te o

r dev

elop

men

tally

appr

opria

te d

aily

act

iviti

es. T

he M

CO o

r ins

urer

mus

t det

erm

ine

med

ical

nece

ssity

on

the

basi

s of

hea

lth in

form

atio

n pr

ovid

ed b

y th

e fo

llow

ing

pers

ons:

the

indi

vidu

al (a

s ap

prop

riate

to h

is o

r her

age

and

com

mun

icat

ive

abili

ties)

,th

e in

divi

dual

’s fa

mily

, the

prim

ary

care

phy

sici

an, a

nd c

onsu

ltant

s w

ith a

ppro

-pr

iate

spe

cial

ty tr

aini

ng, a

s w

ell a

s ot

her p

rovi

ders

, pro

gram

s, m

ultid

isci

plin

ary

team

s, e

duca

tiona

l ins

titut

ions

, or a

genc

ies

that

hav

e ev

alua

ted

the

indi

vidu

al.

The

dete

rmin

atio

n of

med

ical

nec

essi

ty m

ust b

e m

ade

on a

n in

divi

dual

bas

isan

d m

ust c

onsi

der t

he fu

nctio

nal c

apac

ity o

f the

per

son

and

thos

e ca

paci

ties

that

are

app

ropr

iate

for p

erso

ns o

f the

sam

e ag

e or

dev

elop

men

tal l

evel

and

avai

labl

e re

sear

ch fi

ndin

gs, h

ealth

car

e pr

actic

e gu

idel

ines

, and

sta

ndar

dsis

sued

by

prof

essi

onal

ly re

cogn

ized

orga

niza

tions

or g

over

nmen

tal a

genc

ies.

Fina

l det

erm

inat

ions

will

be

mad

e by

a p

hysi

cian

in c

once

rt w

ith th

e fo

llow

ing

pers

ons:

the

indi

vidu

al’s

prim

ary

care

phy

sici

an; a

con

sulta

nt w

ith e

xper

ienc

eap

prop

riate

to th

e in

divi

dual

’s ag

e, d

isab

ility

or c

hron

ic c

ondi

tion;

and

the

indi

vidu

al a

nd/o

r fam

ily. M

edic

ally

nec

essa

ry s

ervi

ces

mus

t be

deliv

ered

ina

setti

ng th

at is

app

ropr

iate

to th

e sp

ecifi

c he

alth

nee

ds o

f the

indi

vidu

al.

Disc

usse

s m

edic

al n

eces

sity

det

erm

inat

ions

in re

gard

s to

per

sons

with

dev

elop

men

tal

disa

bilit

ies.

The

repo

rt ha

s a

flow

cha

rtsh

owin

g th

e dy

nam

ics

of m

edic

al n

eces

sity

deci

sion

s w

ithin

cur

rent

ser

vice

sys

tem

s.It

also

pro

vide

s its

ow

n sp

ecifi

catio

ns fo

rde

term

inin

g m

edic

al n

eces

sity

.

“Def

inin

gM

edic

alN

eces

sity

:St

rate

gies

for

Prom

otin

gAc

cess

toQu

ality

Care

for

Pers

ons

with

Deve

lopm

enta

lDi

sabi

litie

s,M

enta

lRe

tard

atio

n,an

dOt

her S

peci

alHe

alth

Car

eN

eeds

”

Nat

iona

l Cen

ter

for E

duca

tion

inM

ater

nal a

ndCh

ild H

ealth

,Ge

orge

tow

nUn

iver

sity

1 Defin

ition

s ha

ve b

een

take

n ve

rbat

im fr

om th

e re

leva

nt d

ocum

ent;

quot

atio

n m

arks

hav

e be

en o

mitt

ed.

2000

Ford

, Will

iam

Co

mpr

ehen

sive

refo

rm to

incr

ease

com

mer

cial

psy

chia

tric

insu

ranc

e co

ver-

age

mus

t inc

lude

cha

ngin

g th

e de

finiti

on o

f med

ical

nec

essi

ty b

y re

orie

ntin

gin

sure

rs fr

om a

n ac

ute

care

mod

el to

a m

odel

that

pro

vide

s bo

th c

are

for

acut

e ep

isod

es a

nd lo

nger

-term

car

e de

sign

ed to

man

age

chro

nic

cond

ition

s.Su

ch lo

nger

-term

man

agem

ent i

nclu

des

deliv

erin

g se

rvic

es d

esig

ned

toav

oid

futu

re a

cute

epi

sode

s. C

omm

erci

al in

sura

nce

ough

t to

unde

rsta

nd th

ata

legi

timat

e fu

nctio

n of

psy

chia

tric

serv

ices

is to

mai

ntai

n be

havi

oral

hea

lth in

addi

tion

to re

turn

ing

som

eone

to h

ealth

afte

r an

acut

e ep

isod

e. F

ord

prop

osed

the

conc

ept o

f “tre

atm

ent n

eces

sity

” or

“cl

inic

al n

eces

sity

” to

enc

ompa

ssth

is b

road

er v

iew

of t

he g

oals

of p

sych

iatri

c se

rvic

es. T

reat

men

t nec

essi

tyre

quire

s a

serv

ice

to b

e: fo

r the

trea

tmen

t of m

enta

l illn

ess

and

subs

tanc

eab

use

diso

rder

s, o

r sym

ptom

s of

thes

e di

sord

ers,

and

impa

irmen

ts in

day

-to-

day

func

tioni

ng re

late

d to

them

; for

the

purp

ose

of p

reve

ntin

g th

e ne

ed fo

r am

ore

inte

nsiv

e le

vel o

f psy

chia

tric

care

; for

the

purp

ose

of p

reve

ntin

g re

laps

eof

per

sons

with

psy

chia

tric

diso

rder

s; c

onsi

sten

t with

gen

eral

ly a

ccep

ted

clin

ical

pra

ctic

e fo

r psy

chia

tric

diso

rder

s; a

nd n

ot s

olel

y fo

r the

pat

ient

’s or

prov

ider

’s co

nven

ienc

e.

The

conc

ept o

f med

ical

nec

essi

ty is

one

tool

used

by

third

-par

ty p

ayer

s to

con

tain

thei

rfin

anci

al ri

sk in

a s

eem

ingl

y no

narb

itrar

ym

anne

r. Th

e de

finiti

ons

tend

to re

flect

corp

orat

ion

philo

soph

ies

that

wou

ld n

eed

toch

ange

to a

chie

ve re

al p

arity

.

“Med

ical

Nec

essi

ty a

ndPs

ychi

atric

Man

aged

Car

e”

The

Psyc

hiat

ricCl

inic

s of

Nor

thAm

eric

a23

(2):3

09–3

17

Special Report48

1999

Nat

iona

l Hea

lthLa

w P

rogr

amM

edic

ally

nec

essa

ry c

are

is th

e ca

re w

hich

, in

the

opin

ion

of th

e tre

atin

gph

ysic

ian,

is re

ason

ably

nee

ded:

to p

reve

nt th

e on

set o

r wor

seni

ng o

f an

illne

ss, c

ondi

tion,

or d

isab

ility

; to

esta

blis

h a

diag

nosi

s; to

pro

vide

pal

liativ

e,cu

rativ

e, o

r res

tora

tive

treat

men

t for

phy

sica

l and

/or m

enta

l hea

lth c

ondi

tions

;an

d to

ass

ist t

he in

divi

dual

to a

chie

ve o

r mai

ntai

n m

axim

um fu

nctio

nal c

apac

ityin

per

form

ing

daily

act

iviti

es, t

akin

g in

to a

ccou

nt b

oth

the

func

tiona

l cap

acity

of th

e in

divi

dual

and

thos

e fu

nctio

nal c

apac

ities

that

are

app

ropr

iate

for i

ndi-

vidu

als

of th

e sa

me

age.

“Med

ical

Nec

essi

tyDe

finiti

on,

Mod

elM

edic

aid

Man

aged

Car

eCo

ntra

ctPr

ovis

ions

”

1999

Corli

n, R

icha

rd

“Med

ical

nec

essi

ty”

mea

ns: “

Heal

th c

are

serv

ices

or p

rodu

cts

that

a p

rude

ntph

ysic

ian

wou

ld p

rovi

de to

a p

atie

nt fo

r the

pur

pose

of p

reve

ntin

g, d

iagn

osin

gor

trea

ting

an il

lnes

s, in

jury

, dis

ease

or i

ts s

ympt

oms

in a

man

ner t

hat i

s:(1

) in

acco

rdan

ce w

ith g

ener

ally

acc

epte

d st

anda

rds

of m

edic

al p

ract

ice;

(2)c

linic

ally

app

ropr

iate

in te

rms

of ty

pe, f

requ

ency

, ext

ent,

site

, and

dur

atio

n;an

d (3

) not

prim

arily

for t

he c

onve

nien

ce o

f the

pat

ient

, phy

sici

an, o

r oth

erhe

alth

car

e pr

ovid

er.”

“Sta

tem

ent o

fth

eAM

A to

the

Com

mitt

eeon

Heal

th,

Educ

atio

n, L

abor

and

Pens

ions

,U.

S. S

enat

e”

Year

Auth

orTi

tle, S

ourc

eSu

mm

ary/

Abst

ract

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 1

. Co

nti

nu

ed


Year

Auth

orTi

tle, S

ourc

eSu

mm

ary/

Abst

ract

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 1

. Co

nti

nu

ed

2000

Flei

shm

an, M

artin

AM

A co

unci

l on

med

ical

ser

vice

def

ined

med

ical

ly n

eces

sary

trea

tmen

t as:

heal

th c

are

prod

ucts

or s

ervi

ces

that

a p

rude

nt p

hysi

cian

wou

ld p

rovi

de to

apa

tient

for t

he p

urpo

se o

f dia

gnos

ing

or tr

eatin

g an

illn

ess,

inju

ry, d

isea

se, o

rits

sym

ptom

s in

a m

anne

r tha

t is:

(1) i

n ac

cord

ance

with

gen

eral

ly a

ccep

ted

stan

dard

s of

med

ical

pra

ctic

e; (2

) clin

ical

ly a

ppro

pria

te in

type

, fre

quen

cy,

leve

l, si

te, a

nd d

urat

ion;

and

(3) n

ot p

rimar

ily fo

r the

con

veni

ence

of t

hepa

tient

, phy

sici

an, o

r oth

er h

ealth

car

e pr

ovid

er.

Revi

ews

AMA’

s de

finiti

on o

f med

ical

nec

es-

sity

and

poi

nts

out p

robl

ems

with

its

appl

ica-

tion

to p

sych

iatry

. Rec

omm

ends

its

own

defin

ition

for p

sych

iatry

afte

r a d

iscu

ssio

n of

HIPA

A la

w a

nd p

ossi

ble

impl

icat

ions

for

fraud

in p

sych

iatry

.

“Wha

t is

Psyc

hiat

ric‘M

edic

alN

eces

sity

’?”

Psyc

hiat

ricSe

rvic

es51

(6):7

11–7

12, 7

19

2001

Forc

e, C

. T.

The

CCD

belie

ves

that

a fe

dera

l def

initi

on o

f med

ical

nec

essi

ty s

houl

d re

quire

plan

s to

cov

er s

ervi

ces

that

are

: cal

cula

ted

to p

reve

nt, d

iagn

ose,

cor

rect

, or

amel

iora

te a

phy

sica

l or m

enta

l con

ditio

n th

at th

reat

ens

life,

cau

ses

pain

or

suffe

ring,

or r

esul

ts in

illn

ess,

dis

abili

ty, o

r inf

irmity

; cal

cula

ted

to m

aint

ain

orpr

eclu

de d

eter

iora

tion

of h

ealth

or f

unct

iona

l abi

lity;

indi

vidu

alize

d, s

peci

fic,

and

cons

iste

nt w

ith s

ympt

oms

or c

onfir

med

dia

gnos

is o

f the

illn

ess,

dis

abili

ty,

or in

jury

und

er tr

eatm

ent;

not i

n ex

cess

of t

he in

divi

dual

’s ne

eds;

nec

essa

ryan

d co

nsis

tent

with

gen

eral

ly a

ccep

ted

prof

essi

onal

med

ical

sta

ndar

ds a

sde

term

ined

by

the

Secr

etar

y of

Hea

lth a

nd H

uman

Ser

vice

s or

the

stat

eDe

partm

ent o

f Hea

lth; a

nd re

flect

ive

of th

e le

vel o

f ser

vice

that

can

be

safe

lypr

ovid

ed a

nd fo

r whi

ch n

o eq

ually

effe

ctiv

e tre

atm

ent i

s av

aila

ble.

“A S

trong

and

Cons

iste

ntDe

finiti

on o

fM

edic

alN

eces

sity

For

ms

the

Core

of

Mea

ning

ful

Patie

ntPr

otec

tions

”

Cons

ortiu

m fo

rCi

tizen

s w

ithDi

sabi

litie

s

2000

Amer

ican

Med

ical

Asso

ciat

ion

Sect

ion

1.9

defin

es m

edic

ally

nec

essa

ry/m

edic

al n

eces

sity

as

heal

th c

are

serv

ices

or p

rodu

cts

that

a p

rude

nt p

hysi

cian

wou

ld p

rovi

de to

a p

atie

nt fo

rth

e pu

rpos

e of

pre

vent

ing,

dia

gnos

ing,

or t

reat

ing

an il

lnes

s, in

jury

, dis

ease

,or

its s

ympt

oms

in a

man

ner t

hat i

s (1

) in

acco

rdan

ce w

ith g

ener

ally

acc

epte

dst

anda

rds

of m

edic

al p

ract

ice;

(2) c

linic

ally

app

ropr

iate

in te

rms

of ty

pe,

frequ

ency

, ext

ent,

site

, and

dur

atio

n; a

nd (3

) not

prim

arily

for t

he c

onve

nien

ceof

the

patie

nt, p

hysi

cian

, or o

ther

hea

lth c

are

prov

ider

.

AMA

Mod

elPr

ovid

er C

ontra

ct

1 Defin

ition

s ha

ve b

een

take

n ve

rbat

im fr

om th

e re

leva

nt d

ocum

ent;

quot

atio

n m

arks

hav

e be

en o

mitt

ed.

Special Report50

2000

Unite

d Be

havi

oral

Heal

thSo

urce

: UBH

Cons

ent

Agre

emen

t with

Mai

ne B

urea

uof

Insu

ranc

e

Med

ical

Nec

essi

ty—

heal

th c

are

serv

ices

and

sup

plie

s th

at a

re d

eter

min

ed b

y th

e Pl

an to

be

med

ical

ly a

ppro

pria

te, a

nd (1

) nec

essa

ry to

mee

tth

eba

sic

heal

th n

eeds

of t

he c

over

ed p

erso

n; (2

) ren

dere

d in

the

type

of s

ettin

g ap

prop

riate

for t

he d

eliv

ery

of th

e he

alth

ser

vice

; (3)

con

sist

ent

inty

pe, f

requ

ency

, and

dur

atio

n of

trea

tmen

t with

Uni

ted

Beha

vior

al H

ealth

gui

delin

es; (

4) c

onsi

sten

t with

the

diag

nosi

s of

the

cond

ition

;(5

)req

uire

d fo

r rea

sons

oth

er th

an th

e co

mfo

rt or

con

veni

ence

of t

he c

over

ed p

erso

n or

his

or h

er p

hysi

cian

; and

(6) o

f dem

onst

rate

d m

edic

alva

lue.

[Ava

ilabl

eat

: http

://w

ww

.sta

te.m

e.us

/pfr/

ins/

ins0

0300

5.ht

m]

1999

Cign

a Be

havi

oral

Heal

th C

are

Sour

ce: C

igna

’s“L

evel

of C

are

Guid

elin

es fo

rM

enta

l Hea

lthan

d Su

bsta

nce

Abus

eTr

eatm

ent”

In c

onsi

derin

g th

e ap

prop

riate

ness

of a

ny le

vel o

f car

e, th

e fo

ur b

asic

ele

men

ts o

f Med

ical

Nec

essi

ty s

houl

d be

pre

sent

: (1)

a d

iagn

osis

as

defin

edby

sta

ndar

d di

agno

stic

nom

encl

atur

es (D

SM-IV

or i

ts e

quiv

alen

t in

ICD-

9-CM

) and

an

indi

vidu

alize

d tre

atm

ent p

lan

appr

opria

te fo

r the

parti

cipa

nt’s

illne

ss o

r con

ditio

n; (2

) a re

ason

able

exp

ecta

tion

that

the

parti

cipa

nt’s

illne

ss, c

ondi

tion,

or l

evel

of f

unct

ioni

ng w

ill im

prov

e th

roug

htre

atm

ent;

(3)t

he tr

eatm

ent i

s sa

fe a

nd e

ffect

ive

acco

rdin

g to

nat

iona

lly a

ccep

ted

stan

dard

clin

ical

evi

denc

e ge

nera

lly re

cogn

ized

by m

enta

lhe

alth

or s

ubst

ance

abu

se p

rofe

ssio

nals

; and

(4) i

t is

the

mos

t app

ropr

iate

and

cos

t-effe

ctiv

e le

vel o

f car

e th

at c

an s

afel

y be

pro

vide

d fo

r the

parti

cipa

nt’s

imm

edia

te c

ondi

tion.

[Ava

ilabl

e at

: http

s://a

pps.

cign

abeh

avio

ral.c

om/w

eb/b

asic

site

/pro

vide

r/pdf

/Lev

elof

Care

Guid

elin

es_2

003.

pdf]

2000

High

mar

k Bl

ueCr

oss

Blue

Shi

eld

(from

AHR

Qre

port

on c

over

-ag

e de

cisi

ons)

Year

Sour

ceM

edic

al N

eces

sity

Def

initi

on1

2000

Anon

ymou

sM

anag

edBe

havi

oral

Hea

lthPl

an P

rovi

der

Pack

et

“Med

ical

Nec

essi

ty”

is u

sed

here

to m

ean

care

whi

ch th

at is

det

erm

ined

to b

e ef

fect

ive,

app

ropr

iate

and

nec

essa

ry to

trea

t a g

iven

pat

ient

’sdi

sord

er. F

or a

ll le

vels

and

type

s of

car

e, th

e de

finiti

on is

as

follo

ws:

(1) t

he p

atie

nt m

ust h

ave

been

dia

gnos

ed w

ith a

psy

chia

tric

illne

ss b

y a

licen

sed

men

tal h

ealth

pro

fess

iona

l; (2

) sym

ptom

s of

this

illn

ess

mus

t acc

ord

with

thos

e de

scrib

ed in

the

DSM

-IV; (

3) th

e di

agno

sis

mus

t hav

ebe

enar

rived

at p

rior t

o ad

mis

sion

in a

face

-to-fa

ce e

ncou

nter

bet

wee

n th

e pr

ofes

sion

al a

nd p

atie

nt. [

Not

e: T

he c

ompa

ny d

efin

es s

epar

ate

adm

issi

on a

nd c

ontin

uing

car

e cr

iteria

by

type

of s

ervi

ce, e

.g.,

inpa

tient

and

out

patie

nt p

sych

iatri

c tre

atm

ent,

subs

tanc

e de

pend

ence

trea

tmen

t,re

side

ntia

l tre

atm

ent,

met

hado

ne m

aint

enan

ce, e

lect

roco

nvul

sive

ther

apy,

psy

chol

ogic

al te

stin

g, e

tc.]

2001

Valu

eOpt

ions

Prov

ider

s M

anua

l(a

vaila

ble

onlin

e)

Med

ical

ly n

eces

sary

trea

tmen

t is

that

whi

ch is

: int

ende

d to

pre

vent

, dia

gnos

e, c

orre

ct, c

ure,

alle

viat

e, o

r pre

clud

e de

terio

ratio

n of

a d

iagn

osab

leco

nditi

on (I

CD-9

or D

SM-IV

) tha

t thr

eate

ns li

fe, c

ause

s pa

in o

r suf

ferin

g, o

r res

ults

in il

lnes

s or

infir

mity

; exp

ecte

d to

impr

ove

an in

divi

dual

’s co

n-di

tion

or le

vel o

f fun

ctio

ning

; ind

ivid

ualiz

ed, s

peci

fic, a

nd c

onsi

sten

t with

sym

ptom

s an

d di

agno

sis,

and

not

in e

xces

s of

pat

ient

’s ne

eds;

ess

entia

lan

d co

nsis

tent

with

nat

iona

lly a

ccep

ted

stan

dard

evi

denc

e ge

nera

lly re

cogn

ized

by m

enta

l hea

lth o

r sub

stan

ce a

buse

car

e pr

ofes

sion

s or

publ

icat

ions

; ref

lect

ive

of a

leve

l of s

ervi

ce th

at is

saf

e, w

here

no

equa

lly e

ffect

ive,

mor

e co

nser

vativ

e, a

nd le

ss c

ostly

trea

tmen

t is

avai

labl

e;no

tprim

arily

inte

nded

for t

he c

onve

nien

ce o

f the

reci

pien

t, ca

reta

ker,

or p

rovi

der;

no m

ore

inte

nsiv

e or

rest

rictiv

e th

an n

eces

sary

to b

alan

cesa

fety

, effe

ctiv

enes

s, a

nd e

ffici

ency

; and

not

a s

ubst

itute

for n

on-tr

eatm

ent s

ervi

ces

addr

essi

ng e

nviro

nmen

tal f

acto

rs.

Tab

le 2

. Med

ical

Nec

essi

ty D

efin

itio

ns:

Man

aged

Car

e In

du

stry

Cove

rage

pro

cess

—co

ntra

ctua

l def

initi

on o

f med

ical

nec

essi

ty, w

hich

incl

udes

the

follo

win

g cr

iteria

for e

stab

lishi

ng th

e m

edic

al n

eces

sity

of

ase

rvic

e: a

ppro

pria

te fo

r sym

ptom

s, d

iagn

osis

, and

trea

tmen

t of a

con

ditio

n, il

lnes

s, o

r inj

ury;

pro

vide

d fo

r dia

gnos

is, d

irect

car

e, o

r tre

atm

ent;

inac

cord

ance

with

the

stan

dard

s of

goo

d m

edic

al p

ract

ice;

not

prim

arily

for t

he c

onve

nien

ce o

f the

mem

ber o

r mem

ber’s

pro

vide

r; th

e m

ost

appr

opria

te s

uppl

y or

leve

l of s

ervi

ce th

at c

an b

e sa

fely

pro

vide

d to

the

mem

ber.

To d

eter

min

e w

hat s

ervi

ces

mee

t thi

s de

finiti

on, H

ighm

ark

has

anin

form

atio

n-ga

ther

ing

proc

ess

that

incl

udes

sys

tem

atic

revi

ews

of p

ublis

hed

liter

atur

e, a

con

sulti

ng p

rogr

am w

ith p

ract

icin

g ph

ysic

ians

,re

view

of c

over

age

deci

sion

s by

Hig

hmar

k m

anag

ers,

revi

ew b

y an

inde

pend

ent M

edic

al A

ffairs

Com

mitt

ee.


Year

Case

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 3

. Med

ical

Nec

essi

ty D

efin

itio

ns

Iden

tifi

ed in

Cas

e La

w (

So

rted

by

Cas

e N

ame)

1996

Banc

roft

v.Te

cum

seh

Prod

ucts

Com

pany

Cove

red

char

ges

incl

ude

only

thos

e in

curr

ed fo

r ser

vice

s or

item

s sp

ecifi

cally

reco

mm

ende

d by

a li

cens

ed p

hysi

cian

as

nece

ssar

y fo

r the

dia

gnos

is,

care

, or t

reat

men

t of a

phy

sica

l or m

enta

l con

ditio

n, a

nd fa

lling

with

in th

e Pl

an g

uide

lines

. For

a s

ervi

ce to

be

dete

rmin

ed a

s ne

cess

ary

for m

edic

alca

re, i

t mus

t be

wid

ely

acce

pted

by

med

ical

pro

fess

iona

ls in

the

Unite

d St

ates

as

effe

ctiv

e, a

ppro

pria

te, a

nd e

ssen

tial u

nder

reco

gnize

d he

alth

care

sta

ndar

ds.

1994

Blue

Cro

ss a

ndBl

ue S

hiel

d of

Virg

inia

v.

Kath

arin

e Ke

ller

A m

edic

ally

nec

essa

ry s

ervi

ce is

one

requ

ired

to id

entif

y or

trea

t an

illne

ss, i

njur

y, o

r pre

gnan

cy-r

elat

ed c

ondi

tion

whi

ch a

Pro

vide

r has

dia

gnos

edor

reas

onab

ly s

uspe

cts.

To

be m

edic

ally

nec

essa

ry, t

he s

ervi

ce m

ust:

be c

onsi

sten

t with

the

diag

nosi

s of

you

r con

ditio

n; b

e in

acc

orda

nce

with

the

stan

dard

s of

goo

d m

edic

al p

ract

ice;

not

be

for t

he c

onve

nien

ce o

f the

pat

ient

, the

pat

ient

’s fa

mily

, or t

he P

rovi

der;

and

be p

erfo

rmed

in th

e le

ast

cost

ly s

ettin

g re

quire

d by

you

r med

ical

con

ditio

n.

1996

Bedr

ick

v.Tr

avel

ers

Insu

ranc

e

The

Trav

eler

s de

term

ines

, in

its d

iscr

etio

n, if

a s

ervi

ce o

r sup

ply

is m

edic

ally

nec

essa

ry fo

r the

dia

gnos

is a

nd tr

eatm

ent o

f an

acci

dent

al in

jury

or

sick

ness

. Thi

s de

term

inat

ion

is b

ased

on

and

cons

iste

nt w

ith s

tand

ards

app

rove

d by

Tra

vele

rs m

edic

al p

erso

nnel

. The

se s

tand

ards

are

dev

elop

ed,

in p

art,

with

con

side

ratio

n to

whe

ther

the

serv

ice

or s

uppl

y m

eets

the

follo

win

g: *

It is

app

ropr

iate

and

requ

ired

for t

he d

iagn

osis

or t

reat

men

t of

the

acci

dent

al in

jury

or s

ickn

ess.

*It

is s

afe

and

effe

ctiv

e ac

cord

ing

to a

ccep

ted

clin

ical

evi

denc

e re

porte

d by

gen

eral

ly re

cogn

ized

med

ical

prof

essi

onal

s an

d pu

blic

atio

ns. *

Ther

e is

not

a le

ss in

tens

ive

or m

ore

appr

opria

te d

iagn

ostic

or t

reat

men

t alte

rnat

ive

that

cou

ld h

ave

been

use

din

lieu

of th

e se

rvic

e or

sup

ply

give

n. A

det

erm

inat

ion

that

a s

ervi

ce o

r sup

ply

is n

ot m

edic

ally

nec

essa

ry m

ay a

pply

to th

e en

tire

serv

ice

or s

uppl

yor

to a

ny p

art o

f the

ser

vice

or s

uppl

y.

1993

Dettm

er C

linic

v.

Asso

ciat

edIn

sura

nce

Com

pani

es, I

nc.

The

grou

p co

ntra

ct d

efin

es “

med

ical

ly n

eces

sary

” or

“m

edic

al n

eces

sity

” as

thos

e: s

ervi

ces

or s

uppl

ies,

pro

vide

d by

a P

rovi

der,

Faci

lity,

or

Prov

ider

Indi

vidu

al, w

hich

are

requ

ired

for t

reat

men

t of i

llnes

s, in

jury

, dis

ease

d co

nditi

on, o

r im

pairm

ent a

nd a

re: (

a) c

onsi

sten

t with

the

Insu

red’

sdi

agno

sis

or s

ympt

oms;

(b) a

ppro

pria

te tr

eatm

ent a

ccor

ding

to g

ener

ally

acc

epte

d st

anda

rds

of m

edic

al p

ract

ice;

(c) n

ot p

rovi

ded

only

as

aco

nven

ienc

e to

the

Insu

red

or P

rovi

der (

d) n

ot In

vest

igat

iona

l or u

npro

ven;

and

(e) n

ot e

xces

sive

in s

cope

, dur

atio

n, o

r int

ensi

ty to

pro

vide

saf

e,ad

equa

te, a

nd a

ppro

pria

te tr

eatm

ent t

o th

e In

sure

d. A

ny s

ervi

ce o

r sup

ply

prov

ided

at a

Pro

vide

r Fac

ility

will

not

be

cons

ider

ed m

edic

ally

nece

ssar

y if

the

Insu

red’

s sy

mpt

oms

or c

ondi

tion

indi

cate

that

it w

ould

be

safe

to p

rovi

de th

e se

rvic

e or

sup

ply

in a

less

com

preh

ensi

ve s

ettin

g.Th

e fa

ct th

at a

ny p

artic

ular

Pro

vide

r Ind

ivid

ual m

ay p

resc

ribe,

ord

er, r

ecom

men

d, o

r app

rove

a s

ervi

ce, s

uppl

y, o

r lev

el o

f car

e do

es n

ot, o

fits

elf,

mak

e su

ch tr

eatm

ent m

edic

ally

nec

essa

ry o

r mak

e th

e ch

arge

a C

over

ed C

harg

e un

der t

his

Cont

ract

.

1996

Esda

le v

.Am

eric

anCo

mm

unity

Mut

ual I

nsur

ance

Com

pany

Med

ical

ly n

eces

sary

mea

ns re

com

men

ded

by a

lice

nsed

phy

sici

an a

nd c

omm

only

reco

gnize

d in

the

licen

sed

phys

icia

n’s

prof

essi

on a

s pr

oper

care

or tr

eatm

ent.

Med

ical

ly N

eces

sary

doe

s no

t mea

n a

proc

edur

e th

at is

dee

med

exp

erim

enta

l or i

nves

tigat

iona

l in

natu

re b

y an

y ap

prop

riate

tech

nolo

gica

l ass

essm

ent b

ody

esta

blis

hed

by a

ny s

tate

or f

eder

al g

over

nmen

t.

1993

Evan

s v.

Blu

eCr

oss

Blue

Shi

eld

of S

outh

Car

olin

a

Med

ical

ly N

eces

sary

: ben

efits

are

pay

able

for s

ervi

ces

or s

uppl

ies

that

are

med

ical

ly n

eces

sary

. The

sim

ple

fact

that

a p

hysi

cian

has

per

form

edor

pres

crib

ed s

omet

hing

doe

s no

t mea

n th

at it

is m

edic

ally

nec

essa

ry. S

ome

serv

ices

or s

uppl

ies

that

you

get

may

not

be

cove

red

unde

r you

rin

sura

nce

heal

th p

olic

y. E

xpen

ses

for t

he fo

llow

ing

will

not

be

paid

: *S

urge

ry ju

st to

mak

e yo

u lo

ok b

ette

r (us

ually

cal

led

cosm

etic

sur

gery

) *E

xper

imen

tal s

urge

ry o

r ser

vice

s, s

uch

as a

cupu

nctu

re o

r sex

cha

nge

*Ser

vice

s or

sup

plie

s th

at a

re n

ot m

edic

ally

nec

essa

ry, i

nclu

ding

luxu

ry o

r con

veni

ence

item

s an

d tra

vel e

xpen

ses

(exc

ept t

hose

pro

vide

d fo

r hum

an o

rgan

tran

spla

nts)

.

1 Defin

ition

s ar

e ve

rbat

im fr

om c

ase

law

; quo

tatio

n m

arks

hav

e be

en o

mitt

ed.

Special Report52

1992

Farle

y v.

Ben

efit

Trus

t Life

Insu

ranc

eCo

mpa

ny

The

insu

ranc

e co

ntra

ct d

efin

es “

med

ical

ly n

eces

sary

” tre

atm

ent a

s “d

rugs

, the

rapi

es, o

r oth

er tr

eatm

ents

that

are

requ

ired

and

appr

opria

te c

are

for t

he s

ickn

ess

or th

e in

jury

; and

that

are

giv

en in

acc

orda

nce

with

gen

eral

ly a

ccep

ted

prin

cipl

es o

f med

ical

pra

ctic

e in

the

U.S.

at t

he ti

me

furn

ishe

d; a

nd th

at a

re a

ppro

ved

for r

eim

burs

emen

t by

the

Heal

th C

are

Fina

ncin

g Ad

min

istra

tion;

and

that

are

not

exp

erim

enta

l, ed

ucat

iona

l, or

inve

stig

atio

nal;

and

that

are

not

furn

ishe

d in

con

nect

ion

with

med

ical

or o

ther

rese

arch

.”

1993

Flor

ence

Nig

htin

gale

Nur

sing

Ser

vice

,In

c. v

. Blu

e Cr

oss

Blue

Shi

eld

ofAl

abam

a

Med

ical

ly N

eces

sary

mea

ns th

e us

e of

a H

ospi

tal o

r the

furn

ishi

ng o

f oth

er s

ervi

ces

or s

uppl

ies

whi

ch a

re n

eces

sary

to tr

eat a

Mem

ber’s

illn

ess

orin

jury

. To

be m

edic

ally

nec

essa

ry, t

he s

ervi

ces

and

supp

lies

furn

ishe

d m

ust (

as d

eter

min

ed b

y th

e Cl

aim

s Ad

min

istra

tor):

be

appr

opria

te a

ndne

cess

ary

for t

he s

ympt

oms,

dia

gnos

is, o

r tre

atm

ent o

f the

Mem

ber’s

con

ditio

n, d

isea

se, a

ilmen

t, or

inju

ry; b

e pr

ovid

ed fo

r the

dia

gnos

is o

r dire

ctca

re o

f the

Mem

ber’s

med

ical

con

ditio

n; b

e in

acc

orda

nce

with

sta

ndar

ds o

f goo

d m

edic

al p

ract

ice

acce

pted

by

the

orga

nize

d m

edic

al c

omm

unity

;an

d no

t be

sole

ly fo

r the

con

veni

ence

of t

he M

embe

r, hi

s fa

mily

, his

Phy

sici

an o

r ano

ther

pro

vide

r of s

ervi

ces;

not

be

expe

rimen

tal o

r inv

estig

ativ

e;an

d be

per

form

ed in

the

leas

t cos

tly s

ettin

g th

e M

embe

r’s m

edic

al c

ondi

tion

requ

ires.

1994

Feni

o v.

Mut

ual o

fOm

aha

Insu

ranc

eCo

mpa

ny

“Med

ical

ly N

eces

sary

” se

rvic

e or

sup

ply

mea

ns o

ne w

hich

: (a)

is a

ppro

pria

te a

nd c

onsi

sten

t with

the

diag

nosi

s in

acc

ord

with

acc

epte

d st

anda

rds

of c

omm

unity

pra

ctic

e; (b

) is

not c

onsi

dere

d ex

perim

enta

l or i

nves

tigat

ive;

(c) c

ould

not

hav

e be

en o

mitt

ed w

ithou

t adv

erse

ly a

ffect

ing

the

insu

red

pers

on’s

cond

ition

or q

ualit

y of

med

ical

car

e.

Year

Case

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 3

. Co

nti

nu

ed

1996

Harr

ison

v. A

etna

Life

Insu

ranc

eCo

mpa

ny

“Nec

essa

ry”

mea

ns a

ser

vice

or s

uppl

y w

hich

is n

eces

sary

for t

he: d

iagn

osis

; or c

are;

or t

reat

men

t; of

the

phys

ical

or m

enta

l con

ditio

n in

volv

ed.

Itm

ust b

e w

idel

y ac

cept

ed p

rofe

ssio

nally

in th

e Un

ited

Stat

es a

s: e

ffect

ive;

and

app

ropr

iate

; and

ess

entia

l; ba

sed

upon

reco

gnize

d st

anda

rds

ofth

ehe

alth

car

e sp

ecia

lty in

volv

ed.

1995

Gret

he v

.Tr

ustm

ark

Insu

ranc

eCo

mpa

ny

The

term

“M

edic

ally

Nec

essa

ry”

as u

sed

abov

e m

eans

: dru

gs, t

hera

pies

, or o

ther

trea

tmen

ts th

at a

re re

quire

d an

d ap

prop

riate

for c

are

of th

esi

ckne

ss o

r the

inju

ry; a

nd th

at a

re g

iven

in a

ccor

danc

e w

ith g

ener

ally

acc

epte

d pr

inci

ples

of m

edic

al p

ract

ice

in th

e U.

S. a

t the

tim

e fu

rnis

hed;

and

that

are

reim

burs

ed b

y M

edic

are;

and

are

not

dee

med

to b

e ex

perim

enta

l, ed

ucat

iona

l, or

inve

stig

atio

nal i

n na

ture

by

any

appr

opria

te te

chno

-lo

gica

l ass

essm

ent b

ody

esta

blis

hed

by a

ny s

tate

or f

eder

al g

over

nmen

t; an

d th

at a

re n

ot fu

rnis

hed

in c

onne

ctio

n w

ith m

edic

al o

r oth

er re

sear

ch.

2001

Hund

ley

v.W

enze

lM

edic

ally

nec

essa

ry m

eans

that

a s

ervi

ce o

r sup

ply

is n

eces

sary

and

app

ropr

iate

for t

he d

iagn

osis

and

trea

tmen

t of a

n ill

ness

or i

njur

y ba

sed

on g

ener

ally

acc

epte

d cu

rren

t med

ical

pra

ctic

e. A

ser

vice

or s

uppl

y w

ill n

ot b

e co

nsid

ered

med

ical

ly n

eces

sary

if a

ny o

f the

follo

win

g ap

ply:

(1)I

t is

prov

ided

onl

y as

a c

onve

nien

ce to

the

cove

red

pers

on o

r pro

vide

r; (2

) It i

s no

t app

ropr

iate

trea

tmen

t for

the

cove

red

pers

on’s

diag

nosi

sor

sym

ptom

s; (3

) It e

xcee

ds (i

n sc

ope,

dur

atio

n, o

r int

ensi

ty) t

he le

vel o

f car

e th

at is

nee

ded

to p

rovi

de s

afe,

ade

quat

e, a

nd a

ppro

pria

te d

iagn

osis

or tr

eatm

ent;

(4) I

t is

part

of a

n ex

perim

enta

l tre

atm

ent.

The

fact

that

any

par

ticul

ar d

octo

r may

pre

scrib

e, o

rder

, rec

omm

end,

or a

ppro

ve a

serv

ice

or s

uppl

ydo

es n

ot, o

f its

elf,

mak

e th

e se

rvic

e or

sup

ply

med

ical

ly n

eces

sary

.

2000

Julia

no v

. HM

O of

New

Jer

sey,

Inc.

,db

a U.

S.He

alth

Care

The

Cont

ract

def

ines

“M

edic

ally

Nec

essa

ry o

r Med

ical

Nec

essi

ty”

as a

ppro

pria

te a

nd n

eces

sary

ser

vice

s as

def

ined

by

HMO

whi

ch a

re re

nder

edto

a M

embe

r for

a c

ondi

tion

requ

iring

, acc

ordi

ng to

gen

eral

ly a

ccep

ted

prin

cipl

es o

f goo

d m

edic

al p

ract

ice,

the

diag

nosi

s or

dire

ct c

are

and

treat

-m

ent o

f an

illne

ss o

r inj

ury

and

whi

ch a

re n

ot p

rovi

ded

only

as

a co

nven

ienc

e.


Year

Case

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 3

. Co

nti

nu

ed

1998

Killi

an v

s.He

alth

Sour

cePr

ovid

ent

Adm

inis

trato

rs,

Inc.

Med

ical

ly N

eces

sary

and

/or M

edic

al N

eces

sity

—Se

rvic

es o

r sup

plie

s pr

ovid

ed b

y a:

(1) H

ospi

tal,

(2) P

hysi

cian

, or (

3) o

ther

qua

lifie

d pr

ovid

er...

are

med

ical

ly n

eces

sary

if th

ey a

re: (

1) re

quire

d fo

r the

dia

gnos

is a

nd/o

r tre

atm

ent o

f the

par

ticul

ar c

ondi

tion,

dis

ease

, inj

ury

or il

lnes

s; (2

) con

sist

ent

with

the

sym

ptom

or d

iagn

osis

and

trea

tmen

t of t

he c

ondi

tion,

dis

ease

, inj

ury,

or i

llnes

s; (3

) com

mon

ly a

nd u

sual

ly n

oted

thro

ugho

ut th

e m

edic

alfie

ld a

s pr

oper

to tr

eat t

he d

iagn

osed

con

ditio

n, d

isea

se, i

njur

y, o

r illn

ess;

and

(4) t

he m

ost f

ittin

g su

pply

or l

evel

of s

ervi

ce w

hich

can

be

safe

lygi

ven.

1998

McG

raw

v.

Prud

entia

lIn

sura

nce

To b

e co

nsid

ered

“ne

eded

”, a

ser

vice

or s

uppl

y m

ust b

e de

term

ined

by

Prud

entia

l to

mee

t all

of th

ese

test

s: (a

) It i

s or

dere

d by

a D

octo

r; (b

) It i

sre

cogn

ized

thro

ugho

ut th

e Do

ctor

’s pr

ofes

sion

as

safe

and

effe

ctiv

e, is

requ

ired

for t

he d

iagn

osis

or t

reat

men

t of t

he p

artic

ular

sic

knes

s or

inju

ry,

and

is e

mpl

oyed

app

ropr

iate

ly in

a m

anne

r and

set

ting

cons

iste

nt w

ith g

ener

ally

acc

epte

d Un

ited

Stat

es m

edic

al s

tand

ards

; (c)

It is

nei

ther

edu

-ca

tiona

l nor

exp

erim

enta

l or i

nves

tigat

iona

l in

natu

re. T

he c

ase

also

men

tions

: “As

we

read

the

reco

rd, P

rude

ntia

l has

mod

ified

its

defin

ition

of

“med

ical

nec

essa

ry”

with

the

addi

tiona

l req

uire

men

t the

trea

tmen

t pro

vide

a m

easu

rabl

e an

d su

bsta

ntia

l inc

reas

e in

func

tiona

l abi

lity

for a

con

di-

tion

havi

ng p

oten

tial f

or s

igni

fican

t im

prov

emen

t.”

1995

Korn

man

v. B

lue

Cros

s Bl

ue S

hiel

dof

Lou

isia

na

1985

pol

icy

defin

es “

med

ical

ly n

eces

sary

” as

hea

lth s

ervi

ces

whi

ch: a

re a

ppro

pria

te a

nd c

onsi

sten

t with

the

diag

nosi

s an

d w

hich

, in

acco

rdan

cew

ith a

ccep

ted

med

ical

sta

ndar

ds in

the

Stat

e of

Lou

isia

na, c

ould

not

hav

e be

en o

mitt

ed w

ithou

t adv

erse

ly a

nd s

ever

ely

affe

ctin

g th

e pa

tient

’sco

nditi

on; a

re n

ot p

rimar

ily c

usto

dial

car

e; a

re a

ppro

pria

te a

nd c

an b

e sa

fely

use

d un

der t

he c

ircum

stan

ces.

Inpa

tient

hos

pita

l ser

vice

s sh

ould

be

used

onl

y w

hen

a le

sser

equ

ippe

d fa

cilit

y (e

.g.,

outp

atie

nt h

ospi

tal s

ervi

ces,

phy

sici

an’s

offic

e, e

tc) c

ould

adv

erse

ly a

nd s

ever

ely

affe

ct th

e pa

tient

’sco

nditi

on. 1

987

polic

y: “

Med

ical

ly N

eces

sary

” m

eans

a s

ervi

ce o

r tre

atm

ent w

hich

, in

the

judg

men

t of t

he p

lan:

(1) I

s ap

prop

riate

and

con

sist

ent

with

the

diag

nosi

s an

d w

hich

, in

acco

rdan

ce w

ith a

ccep

ted

med

ical

sta

ndar

ds in

the

Stat

e of

Lou

isia

na, c

ould

not

hav

e be

en o

mitt

ed w

ithou

tad

vers

ely

affe

ctin

g th

e pa

tient

’s co

nditi

on o

r the

qua

lity

of m

edic

al c

are

rend

ered

; (2)

Is n

ot p

rimar

ily c

usto

dial

car

e; a

nd (3

) as

to in

stitu

tiona

l car

e,co

uld

not h

ave

been

pro

vide

d in

a p

hysi

cian

’s of

fice,

in th

e ou

tpat

ient

dep

artm

ent o

f a h

ospi

tal,

or in

a le

sser

faci

lity

with

out a

ffect

ing

the

patie

nt’s

cond

ition

or q

ualit

y of

med

ical

car

e re

nder

ed.

1999

Milo

ne v

.Ex

clus

ive

Heal

thca

re, I

nc.

A m

edic

ally

nec

essa

ry s

ervi

ce o

r sup

ply

mea

ns o

ne w

hich

is o

rder

ed o

r aut

horiz

ed b

y th

e Pr

imar

y Ca

re P

hysi

cian

, and

with

the

Prim

ary

Care

Phys

icia

n, o

ur m

edic

al s

taff

or o

ur M

edic

al D

irect

or a

nd/o

r a q

ualif

ied

party

or e

ntity

sel

ecte

d by

us

dete

rmin

es is

: (1)

pro

vide

d fo

r the

dia

gnos

isor

dire

ct tr

eatm

ent o

f an

inju

ry o

r sic

knes

s; (2

) app

ropr

iate

and

con

sist

ent w

ith th

e sy

mpt

oms

and

findi

ngs

or d

iagn

osis

and

trea

tmen

t of t

hem

embe

r’s in

jury

or s

ickn

ess;

(3) p

rovi

ded

in a

ccor

d w

ith g

ener

ally

acc

epte

d m

edic

al p

ract

ice

on a

nat

iona

l bas

is; a

nd (4

) the

mos

t app

ropr

iate

supp

ly o

r lev

el o

f ser

vice

whi

ch c

an b

e pr

ovid

ed o

n a

cost

-effe

ctiv

e ba

sis

(incl

udin

g, b

ut n

ot li

mite

d to

, inp

atie

nt v

s. o

utpa

tient

car

e, e

lect

ric v

s.m

anua

l whe

elch

air,

surg

ical

vs.

med

ical

or o

ther

type

s of

car

e). T

he fa

ct th

at th

e m

embe

r’s p

hysi

cian

pre

scrib

es s

ervi

ces

or s

uppl

ies

does

not

auto

mat

ical

ly m

ean

such

ser

vice

s or

sup

plie

s ar

e m

edic

ally

nec

essa

ry a

nd c

over

ed b

y th

e Co

ntra

ct.

2001

Milo

ne v

.Ex

clus

ive

Heal

thCa

re, I

nc.

The

Plan

def

ines

med

ical

nec

essi

ty a

s fo

llow

s: A

med

ical

ly n

eces

sary

ser

vice

or s

uppl

y m

eans

one

whi

ch is

ord

ered

or a

utho

rized

by

the

Prim

ary

Care

Phy

sici

an, a

nd w

hich

the

Prim

ary

Care

Phy

sici

an, o

ur m

edic

al s

taff

or o

ur M

edic

al D

irect

or a

nd/o

r a q

ualif

ied

party

or e

ntity

sel

ecte

d by

us

dete

rmin

es is

: (a)

pro

vide

d fo

r the

dia

gnos

is o

r dire

ct tr

eatm

ent o

f an

inju

ry o

r sic

knes

s; (b

) app

ropr

iate

and

con

sist

ent w

ith th

e sy

mpt

oms

and

find-

ings

or d

iagn

osis

and

trea

tmen

t of t

he m

embe

r’s in

jury

or s

ickn

ess;

(c) p

rovi

ded

in a

ccor

d w

ith g

ener

ally

acc

epte

d m

edic

al p

ract

ice

on a

nat

iona

lba

sis;

and

(d) t

he m

ost a

ppro

pria

te s

uppl

y or

leve

l of s

ervi

ce w

hich

can

be

prov

ided

on

a co

st-e

ffect

ive

basi

s (in

clud

ing,

but

not

lim

ited

to, i

npat

ient

vs. o

utpa

tient

car

e, e

lect

ric v

s. m

anua

l whe

elch

air,

surg

ical

vs.

med

ical

or o

ther

type

s of

car

e). T

he fa

ct th

at th

e m

embe

r’s p

hysi

cian

pre

scrib

esse

rvic

es o

r sup

plie

s do

es n

ot a

utom

atic

ally

mea

n su

ch s

ervi

ces

or s

uppl

ies

are

med

ical

ly n

eces

sary

and

cov

ered

by

the

Cont

ract

.

1 Defin

ition

s ha

ve b

een

take

n ve

rbat

im fr

om th

e re

leva

nt d

ocum

ent;

quot

atio

n m

arks

hav

e be

en o

mitt

ed.

Special Report54

1994

Nor

thw

est

Laun

dry

and

Dry

Clea

ners

Hea

lthan

d W

elfa

re T

rust

Fund

v. B

urzy

nski

To b

e “m

edic

ally

nec

essa

ry”

unde

r the

Pla

n, a

trea

tmen

t mus

t mee

t tw

o re

quire

men

ts, m

easu

red

unde

r Ore

gon

law

. Firs

t, th

e tre

atm

ent m

ust

be“a

ppro

pria

te a

nd c

onsi

sten

t with

the

diag

nosi

s (in

acc

ord

with

acc

epte

d st

anda

rds

of c

omm

unity

pra

ctic

e).”

Sec

ond,

“m

edic

ally

nec

essa

ry”

treat

men

ts “

coul

d no

t be

omitt

ed w

ithou

t adv

erse

ly a

ffect

ing

the

cove

red

pers

on’s

cond

ition

or t

he q

ualit

y of

med

ical

car

e.”

2002

Rush

Pru

dent

ial

HMO,

Inc.

,Pe

titio

ner v

.De

bra

C. M

oran

et a

l.

A se

rvic

e is

cov

ered

as

“med

ical

ly n

eces

sary

” if

Rush

find

s:(a

) [Th

e se

rvic

e] is

furn

ishe

d or

aut

horiz

ed b

y a

Parti

cipa

ting

Doct

or fo

r the

dia

gnos

is o

r the

trea

tmen

t of a

Sic

knes

s or

Inju

ry o

r for

the

mai

nte-

nanc

e of

a p

erso

n’s

good

hea

lth.

(b) T

he p

reva

iling

opi

nion

with

in th

e ap

prop

riate

spe

cial

ty o

f the

Uni

ted

Stat

es m

edic

al p

rofe

ssio

n is

that

[the

ser

vice

] is

safe

and

effe

ctiv

e fo

rits

inte

nded

use

, and

that

its

omis

sion

wou

ld a

dver

sely

affe

ct th

e pe

rson

’s m

edic

al c

ondi

tion.

(c) I

t is

furn

ishe

d by

a p

rovi

der w

ith a

ppro

pria

te tr

aini

ng, e

xper

ienc

e, s

taff

and

faci

litie

s to

furn

ish

that

par

ticul

ar s

ervi

ce o

r sup

ply.

1997

Nic

hols

v.

Trus

tmar

kIn

sura

nce

Com

pany

Bene

fits

will

be

paid

onl

y fo

r “m

edic

ally

nec

essa

ry”

care

and

trea

tmen

t of s

ickn

ess

and

inju

ry. A

s us

ed a

bove

, ‘m

edic

ally

nec

essa

ry’ m

eans

:dr

ugs,

ther

apie

s, o

r oth

er tr

eatm

ents

that

are

requ

ired

and

appr

opria

te fo

r car

e of

the

sick

ness

or t

he in

jury

; and

that

are

giv

en in

acc

orda

nce

with

gene

rally

acc

epte

d pr

inci

ples

of m

edic

al p

ract

ice

in th

e U.

S. a

t the

tim

e fu

rnis

hed;

and

that

are

app

rove

d fo

r rei

mbu

rsem

ent b

y th

e He

alth

Car

eFi

nanc

ing

Adm

inis

tratio

n; a

nd th

at a

re n

ot e

xper

imen

tal,

educ

atio

nal,

or in

vest

igat

iona

l; an

d th

at a

re n

ot fu

rnis

hed

in c

onne

ctio

n w

ith m

edic

al o

rot

her r

esea

rch.

Year

Case

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 3

. Co

nti

nu

ed

1993

Scal

aman

dre

v.Ox

ford

Hea

lthPl

ans,

Inc.

Med

ical

ly n

eces

sary

ser

vice

s an

d/or

sup

plie

s ar

e de

fined

as:

the

use

of s

ervi

ces

or s

uppl

ies

as p

rovi

ded

by a

hos

pita

l, sk

illed

nur

sing

faci

lity,

phys

icia

n, o

r oth

er p

rovi

der r

equi

red

to id

entif

y or

trea

t a M

embe

r’s il

lnes

s or

inju

ry a

nd w

hich

, as

dete

rmin

ed b

y th

e M

edic

al D

irect

or, a

re:

(1)C

onsi

sten

t with

the

sym

ptom

s or

dia

gnos

is a

nd tr

eatm

ent o

f the

Cov

ered

Per

son’

s co

nditi

on, d

isea

se, a

ilmen

t or i

njur

y; (2

) App

ropr

iate

with

rega

rd to

sta

ndar

ds o

f goo

d m

edic

al p

ract

ice;

(3) N

ot s

olel

y fo

r the

con

veni

ence

of t

he C

over

ed P

erso

n, h

is o

r her

phy

sici

an, h

ospi

tal,

or o

ther

heal

th c

are

prov

ider

; and

(4) T

he m

ost a

ppro

pria

te s

uppl

y or

leve

l of s

ervi

ce w

hich

can

be

safe

ly p

rovi

ded

to th

e Co

vere

d Pe

rson

. Whe

n sp

ecifi

-ca

lly a

pplie

d to

an

inpa

tient

, it f

urth

er m

eans

that

the

Cove

red

Pers

on’s

med

ical

sym

ptom

s or

con

ditio

n re

quire

s th

at th

e di

agno

sis

or tr

eatm

ent

cann

ot b

e sa

fely

pro

vide

d to

the

Cove

red

Pers

on a

s an

out

patie

nt.

1997

Soph

ie v

. Lin

coln

Nat

iona

l Life

Insu

ranc

eCo

mpa

ny

Med

ical

ly n

eces

sary

is d

efin

ed a

s: T

he e

xten

t of s

ervi

ces

requ

ired

to d

iagn

ose

or tr

eat a

Bod

ily In

jury

or S

ickn

ess

whi

ch is

kno

wn

to b

e sa

fe a

ndef

fect

ive

by m

ost Q

ualif

ied

Prac

titio

ners

who

are

lice

nsed

to d

iagn

ose

or tr

eat t

hat B

odily

Inju

ry o

r Sic

knes

s. S

uch

serv

ices

mus

t be

perfo

rmed

inth

e le

ast c

ostly

set

ting

requ

ired

by th

e pa

tient

’s co

nditi

on, a

nd m

ust n

ot b

e pr

ovid

ed p

rimar

ily fo

r the

con

veni

ence

of t

he p

atie

nt o

f the

Qua

lifie

dPr

actit

ione

r.

2001

Smith

v. N

ewpo

rtN

ews

Ship

build

ing

Heal

th P

lan

The

Plan

def

ines

‘nec

essa

ry’ a

s fo

llow

s: A

ser

vice

or s

uppl

y is

nec

essa

ry if

it is

for t

he d

iagn

osis

, car

e, o

r tre

atm

ent o

f a p

hysi

cal o

r men

tal c

ondi

-tio

n an

d w

idel

y ac

cept

ed p

rofe

ssio

nally

in th

e U.

S. a

s ef

fect

ive,

app

ropr

iate

, and

ess

entia

l, ba

sed

upon

reco

gnize

d st

anda

rds

of th

e he

alth

car

esp

ecia

lty in

volv

ed.


Tab

le 3

. Co

nti

nu

ed

Year

Case

Med

ical

Nec

essi

ty D

efin

ition

1

1994

Whi

tehe

ad v

.Fe

dera

l Exp

ress

Corp

orat

ion

Elig

ible

exp

ense

s fo

r tre

atm

ent o

f an

illne

ss o

r inj

ury

mus

t be

med

ical

ly n

eces

sary

und

er a

ll pl

an o

ptio

ns. M

edic

al n

eces

sity

is d

eter

min

ed b

y th

ecl

aim

s pa

ying

adm

inis

trato

r. Ca

re th

at is

med

ical

ly n

eces

sary

may

incl

ude,

but

is n

ot li

mite

d to

, car

e th

at is

: *co

mm

only

and

cus

tom

arily

reco

gnize

das

sta

ndar

ds o

f goo

d pr

actic

e; *

appr

opria

te a

nd c

onsi

sten

t with

the

diag

nosi

s or

trea

tmen

t of a

n ill

ness

or i

njur

y; *

appr

opria

te s

uppl

y or

leve

l of

serv

ice

that

can

be

safe

ly p

rovi

ded.

1998

Win

nega

v. N

orth

Cent

ral H

ealth

Prot

ectio

n Pl

an

Med

ical

ly n

eces

sary

ser

vice

s or

sup

plie

s ar

e de

fined

as:

(a) R

equi

red

for d

iagn

osis

or t

reat

men

t of t

he il

lnes

s or

sym

ptom

s; (b

) pro

vide

d fo

r the

diag

nosi

s or

dire

ct c

are

and

treat

men

t of t

he il

lnes

s; (c

) With

in th

e st

anda

rds

of n

orm

al m

edic

al p

ract

ice;

(d) N

ot p

rimar

ily fo

r the

con

veni

ence

of

the

Parti

cipa

nt o

r any

pro

vide

r; an

d (e

) a s

uppl

y or

leve

l of s

ervi

ces

requ

ired

to p

rovi

de s

afe

and

adeq

uate

car

e.

1996

Sven

v. P

rinci

pal

Mut

ual L

ifeIn

sura

nce

Com

pany

“Med

ical

ly N

eces

sary

Car

e” is

def

ined

as:

any

con

finem

ent,

treat

men

t, or

ser

vice

that

is p

resc

ribed

by

a ph

ysic

ian

and

dete

rmin

ed b

y th

eCo

mpa

ny [P

rinci

pal]

to b

e: (a

) nec

essa

ry a

nd a

ppro

pria

te; a

nd (b

) non

-exp

erim

enta

l and

non

-inve

stig

atio

nal a

nd n

ot in

con

flict

with

acc

epte

dm

edic

al s

tand

ards

.

1997

Squi

llace

v.

Wyo

min

g St

ate

Empl

oyee

and

Offic

ials

Gro

upIn

sura

nce

Boar

dof

Adm

inis

tratio

n

“Med

ical

ly N

eces

sary

” m

eans

any

ser

vice

s an

d su

pplie

s pr

ovid

ed fo

r the

dia

gnos

is a

nd tr

eatm

ent o

f a s

peci

fic il

lnes

s, in

jury

, or c

ondi

tion.

Suc

hse

rvic

es a

nd s

uppl

ies

mus

t be:

ord

ered

by

a do

ctor

; req

uire

d fo

r the

trea

tmen

t or m

anag

emen

t of a

med

ical

sym

ptom

or c

ondi

tion;

the

mos

t effi

-ci

ent a

nd e

cono

mic

al s

ervi

ce w

hich

can

saf

ely

be p

rovi

ded

to s

uch

pers

on; a

nd p

rovi

ded

in a

ccor

danc

e w

ith a

ppro

ved

and

gene

rally

acc

epte

dm

edic

al o

r sur

gica

l pra

ctic

e. W

e m

ay re

quire

pro

of in

writ

ing

satis

fact

orily

to u

s th

at a

ny ty

pe o

f tre

atm

ent,

serv

ice,

or s

uppy

rece

ived

is m

edic

ally

nece

ssar

y. M

edic

al n

eces

sity

will

be

dete

rmin

ed s

olel

y by

us.

The

fact

that

a d

octo

r may

pre

scrib

e, o

rder

, rec

omm

end,

or a

ppro

ve a

ser

vice

doe

sno

t, in

itse

lf, m

ake

such

ser

vice

or s

uppl

y m

edic

ally

nec

essa

ry.

1 Defin

ition

s ha

ve b

een

take

n ve

rbat

im fr

om th

e re

leva

nt d

ocum

ent;

quot

atio

n m

arks

hav

e be

en o

mitt

ed.

Special Report56

Tab

le 4

. Med

ical

Nec

essi

ty D

efin

itio

ns

Co

nta

ined

in S

tate

Sta

tute

s an

d R

egu

lati

on

s

Alab

ama

Non

eN

one

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Calif

orni

aCa

l. W

el. &

Inst

.Co

de§

1405

9.5

(200

1)

“Med

ical

ly n

eces

sary

” or

“m

edic

al n

eces

sity

”: A

ser

vice

is “

med

ical

ly n

eces

sary

” or

a “

med

ical

nec

essi

ty”

whe

n it

is re

ason

able

and

nece

ssar

yto

pro

tect

life

, to

prev

ent s

igni

fican

t illn

ess

or s

igni

fican

t dis

abili

ty, o

r to

alle

viat

e se

vere

pai

n.

Dela

war

e16

Del

. Cod

e §

9119

(200

0)

(IRO

Stat

ute)

For t

he p

urpo

se o

f thi

s ac

t, “m

edic

al n

eces

sity

” m

eans

the

prov

idin

g of

cov

ered

hea

lth s

ervi

ces

or p

rodu

cts

that

a p

rude

nt p

hysi

cian

wou

ldpr

ovid

e to

a p

atie

nt fo

r the

pur

pose

of d

iagn

osin

g or

trea

ting

an il

lnes

s, in

jury

, or d

isea

se o

r its

sym

ptom

s, in

a m

anne

r tha

t is:

(1

) In

acco

rdan

ce w

ith th

e ge

nera

lly a

ccep

ted

stan

dard

s of

med

ical

pra

ctic

e; (2

) Con

sist

ent w

ith th

e sy

mpt

oms

or tr

eatm

ent o

f the

con

ditio

n;an

d (3

) Not

sol

ely

for a

nyon

e’s

conv

enie

nce.

Arka

nsas

Ark.

Cod

e §

23-9

9-50

7 (2

001)

(b

) The

term

“m

edic

al n

eces

sity

” as

app

lied

to b

enef

its fo

r men

tal i

llnes

s an

d de

velo

pmen

tal d

isor

ders

mea

ns: (

1) R

easo

nabl

e an

d ne

cess

ary

for t

he d

iagn

osis

or t

reat

men

t of a

men

tal i

llnes

s, o

r to

impr

ove

or to

mai

ntai

n or

to p

reve

nt d

eter

iora

tion

of fu

nctio

ning

resu

lting

from

the

illne

ss o

r dev

elop

men

tal d

isor

der;

(2) F

urni

shed

in th

e m

ost a

ppro

pria

te a

nd le

ast r

estri

ctiv

e se

tting

in w

hich

ser

vice

s ca

n be

saf

ely

prov

ided

;(3

) The

mos

t app

ropr

iate

leve

l or s

uppl

y of

ser

vice

whi

ch c

an s

afel

y be

pro

vide

d; a

nd (4

) Cou

ld n

ot h

ave

been

om

itted

with

out a

dver

sely

affe

ctin

g th

e in

divi

dual

’s m

enta

l or p

hysi

cal h

ealth

, or b

oth,

or t

he q

ualit

y of

car

e re

nder

ed.

Alas

kaN

one

Non

e

Arizo

naN

one

Non

e

Colo

rado

Non

eN

one

Conn

ectic

utN

one

Non

e

Dist

rict o

fCo

lum

bia

Non

eN

one

Flor

ida

Fla.

Sta

t. §

627.

732

(200

1)“M

edic

ally

nec

essa

ry”

refe

rs to

a m

edic

al s

ervi

ce o

r sup

ply

that

a p

rude

nt p

hysi

cian

wou

ld p

rovi

de fo

r the

pur

pose

of p

reve

ntin

g, d

iagn

osin

g,or

trea

ting

an il

lnes

s, in

jury

, dis

ease

, or s

ympt

om in

a m

anne

r tha

t is:

(a) I

n ac

cord

ance

with

gen

eral

ly a

ccep

ted

stan

dard

s of

med

ical

pra

ctic

e;(b

) Clin

ical

ly a

ppro

pria

te in

term

s of

type

, fre

quen

cy, e

xten

t, si

te, a

nd d

urat

ion;

and

(c) N

ot p

rimar

ily fo

r the

con

veni

ence

of t

he p

atie

nt, p

hysi

-ci

an, o

r oth

er h

ealth

car

e pr

ovid

er.

Geor

gia

O.C.

G.A.

§

33-2

0A-3

1(2

000)

(IRO

Stat

ute)

(5) “

Med

ical

nec

essi

ty,”

“m

edic

ally

nec

essa

ry c

are,

” or

“m

edic

ally

nec

essa

ry a

nd a

ppro

pria

te”

mea

ns c

are

base

d up

on g

ener

ally

acc

epte

dm

edic

al p

ract

ices

in li

ght o

f con

ditio

ns a

t the

tim

e of

trea

tmen

t whi

ch is

: (A)

App

ropr

iate

and

con

sist

ent w

ith th

e di

agno

sis

and

the

omis

sion

ofw

hich

cou

ld a

dver

sely

affe

ct o

r fai

l to

impr

ove

the

elig

ible

enr

olle

e’s

cond

ition

; (B)

Com

patib

le w

ith th

e st

anda

rds

of a

ccep

tabl

e m

edic

alpr

actic

e in

the

Unite

d St

ates

; (C)

Pro

vide

d in

a s

afe

and

appr

opria

te s

ettin

g gi

ven

the

natu

re o

f the

dia

gnos

is a

nd th

e se

verit

y of

the

sym

ptom

s;(D

) Not

pro

vide

d so

lely

for t

he c

onve

nien

ce o

f the

elig

ible

enr

olle

e or

the

conv

enie

nce

of th

e he

alth

car

e pr

ovid

er o

r hos

pita

l; an

d (E

) Not

prim

arily

cus

todi

al c

are,

unl

ess

cust

odia

l car

e is

a c

over

ed b

enef

it un

der t

he e

ligib

le e

nrol

lee’

s ev

iden

ce o

f cov

erag

e.


1De

finiti

ons

have

bee

n ta

ken

verb

atim

from

the

rele

vant

doc

umen

t; qu

otat

ion

mar

ks h

ave

been

om

itted

.

Haw

aii

HRS

§ 43

2E-1

.4(2

000)

(IRO

Stat

ute)

Med

ical

nec

essi

ty (b

) A h

ealth

inte

rven

tion

is m

edic

ally

nec

essa

ry if

it is

reco

mm

ende

d by

the

treat

ing

phys

icia

n or

trea

ting

licen

sed

heal

thca

re p

rovi

der,

is a

ppro

ved

by th

e he

alth

pla

n’s

med

ical

dire

ctor

or p

hysi

cian

des

igne

e, a

nd is

: (1)

For

the

purp

ose

of tr

eatin

g a

med

ical

con

di-

tion;

(2) T

he m

ost a

ppro

pria

te d

eliv

ery

or le

vel o

f ser

vice

, con

side

ring

pote

ntia

l ben

efits

and

har

ms

to th

e pa

tient

; (3)

Kno

wn

to b

e ef

fect

ive

inim

prov

ing

heal

th o

utco

mes

; pro

vide

d th

at: (

A) E

ffect

iven

ess

is d

eter

min

ed fi

rst b

y sc

ient

ific

evid

ence

; (B)

If n

o sc

ient

ific

evid

ence

exi

sts,

then

by p

rofe

ssio

nal s

tand

ards

of c

are;

and

(C) I

f no

prof

essi

onal

sta

ndar

ds o

f car

e ex

ist o

r if t

hey

exis

t but

are

out

date

d or

con

tradi

ctor

y, th

en b

yex

pert

opin

ion;

and

(4) C

ost-e

ffect

ive

for t

he m

edic

al c

ondi

tion

bein

g tre

ated

com

pare

d to

alte

rnat

ive

heal

th in

terv

entio

ns, i

nclu

ding

no

inte

r-ve

ntio

n. F

or th

e pu

rpos

es o

f thi

s pa

ragr

aph,

cos

t-effe

ctiv

e sh

all n

ot n

eces

saril

y m

ean

low

est p

rice.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Illin

ois

215

ILCS

105

/2(2

001)

“Med

ical

ly n

eces

sary

” m

eans

that

a s

ervi

ce, d

rug,

or s

uppl

y is

nec

essa

ry a

nd a

ppro

pria

te fo

r the

dia

gnos

is o

r tre

atm

ent o

f an

illne

ss o

r inj

ury

in a

ccor

d w

ith g

ener

ally

acc

epte

d st

anda

rds

of m

edic

al p

ract

ice

at th

e tim

e th

e se

rvic

e, d

rug,

or s

uppl

y is

pro

vide

d. W

hen

spec

ifica

lly a

pplie

dto

a c

onfin

emen

t it f

urth

er m

eans

that

the

diag

nosi

s or

trea

tmen

t of t

he c

over

ed p

erso

n’s

med

ical

sym

ptom

s or

con

ditio

n ca

nnot

be

safe

lypr

ovid

ed to

that

per

son

as a

n ou

tpat

ient

. A s

ervi

ce, d

rug,

or s

uppl

y sh

all n

ot b

e m

edic

ally

nec

essa

ry if

it: (

i) is

inve

stig

atio

nal,

expe

rimen

tal,

orfo

r res

earc

h pu

rpos

es; o

r (ii)

is p

rovi

ded

sole

ly fo

r the

con

veni

ence

of t

he p

atie

nt, t

he p

atie

nt’s

fam

ily, p

hysi

cian

, hos

pita

l, or

any

oth

er p

rovi

der;

or (i

ii) e

xcee

ds in

sco

pe, d

urat

ion,

or i

nten

sity

that

leve

l of c

are

that

is n

eede

d to

pro

vide

saf

e, a

dequ

ate,

and

app

ropr

iate

dia

gnos

is o

r tre

at-

men

t; or

(iv)

cou

ld h

ave

been

om

itted

with

out a

dver

sely

affe

ctin

g th

e co

vere

d pe

rson

’s co

nditi

on o

r the

qua

lity

of m

edic

al c

are;

or (

v) in

volv

esth

e us

e of

a m

edic

al d

evic

e, d

rug,

or s

ubst

ance

not

form

ally

app

rove

d by

the

Unite

d St

ates

Foo

d an

d Dr

ug A

dmin

istra

tion.

Indi

ana

Non

eN

one

Idah

oN

one

Non

e

Tab

le 4

. Co

nti

nu

ed

Iow

aIo

wa

Code

514

J.5

Med

ical

nec

essi

ty is

def

ined

as

the

insu

rer’s

pla

n de

fines

it.

Kans

asN

one

Non

e

Kent

ucky

Non

eN

one

Loui

sian

aN

one

Non

e

Mai

ne24

-A M

.R.S

. §

4301

-A (1

1)(2

000)

Med

ical

Nec

essi

ty. “

Med

ical

nec

essi

ty”

mea

ns h

ealth

car

e se

rvic

es o

r pro

duct

s th

at a

pru

dent

phy

sici

an o

r oth

er h

ealth

car

e pr

actit

ione

rw

ould

pro

vide

to a

n en

rolle

e fo

r the

pur

pose

of p

reve

ntin

g, d

iagn

osin

g, o

r tre

atin

g an

illn

ess,

inju

ry, d

isea

se, o

r the

sym

ptom

s of

an

illne

ss,

inju

ry, o

r dis

ease

in a

man

ner t

hat i

s: (A

) In

acco

rdan

ce w

ith g

ener

ally

acc

epte

d st

anda

rds

of m

edic

al p

ract

ice;

(B) C

linic

ally

app

ropr

iate

inte

rms

of ty

pe, f

requ

ency

, ext

ent,

site

, and

dur

atio

n; a

nd (C

) Not

prim

arily

for t

he c

onve

nien

ce o

f the

enr

olle

e or

phy

sici

an o

r oth

er h

ealth

car

epr

actit

ione

r.

Mar

ylan

dCO

MAR

§ 10

.09.

62.0

1(2

001)

(Med

icai

dM

anag

ed C

are

Regu

latio

ns)

“Med

ical

nec

essi

ty”

mea

ns w

hat i

s m

edic

ally

nec

essa

ry a

nd a

ppro

pria

te.

Special Report58

Tab

le 4

. Co

nti

nu

ed

Mas

sach

uset

tsM

ass.

Ann

. Law

sch

. 176

O (1

) (20

01)

(IRO

Stat

ute)

“Med

ical

nec

essi

ty”

or “

med

ical

ly n

eces

sary

.” h

ealth

car

e se

rvic

es th

at a

re c

onsi

sten

t with

gen

eral

ly a

ccep

ted

prin

cipl

es o

f pro

fess

iona

lm

edic

al p

ract

ice.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Min

neso

taM

inn.

Sta

t. §

62Q.

53(2

000)

(IRO

Sta

tute

)“M

edic

ally

nec

essa

ry c

are”

mea

ns h

ealth

car

e se

rvic

es a

ppro

pria

te, i

n te

rms

of ty

pe, f

requ

ency

, lev

el, s

ettin

g, a

nd d

urat

ion,

to th

e en

rolle

e’s

diag

nosi

s or

con

ditio

n, a

nd d

iagn

ostic

test

ing

and

prev

entiv

e se

rvic

es. M

edic

ally

nec

essa

ry c

are

mus

t be

cons

iste

nt w

ith g

ener

ally

acc

epte

dpr

actic

e pa

ram

eter

s as

det

erm

ined

by

heal

th c

are

prov

ider

s in

the

sam

e or

sim

ilar g

ener

al s

peci

alty

as

typi

cally

man

ages

the

cond

ition

, pro

ce-

dure

, or t

reat

men

t at i

ssue

and

mus

t: (1

) hel

p re

stor

e or

mai

ntai

n th

e en

rolle

e’s

heal

th; o

r (2)

pre

vent

det

erio

ratio

n of

the

enro

llee’

s co

nditi

on.

Mis

siss

ippi

Non

eN

one

Mic

higa

nN

one

Non

e

Mis

sour

iN

one

Non

e

Mon

tana

Non

eN

one

Neb

rask

aN

one

Non

e

Nev

ada

Non

eN

one

New

Ham

pshi

reN

one

Non

e

New

Jer

sey

Non

eN

one

New

Mex

ico

Non

eN

one

New

Yor

kPr

opos

edLe

gisl

atio

n

A.50

48a

(200

1)(In

Ass

embl

yCo

mm

ittee

on

Rule

s as

of

Janu

ary

9, 2

002)

PROP

OSED

DEF

INIT

ION

:“m

edic

ally

nec

essa

ry”

mea

ns, w

ith re

spec

t to

a he

alth

car

e se

rvic

e, th

at it

has

bee

n re

ason

ably

det

erm

ined

, and

coul

d be

sho

wn,

by

the

enro

llee’

s he

alth

car

e pr

ofes

sion

al in

con

sulta

tion

with

the

patie

nt, o

r cou

ld b

e re

ason

ably

det

erm

ined

and

sho

wn

by a

hea

lth c

are

prof

essi

onal

in c

onsu

ltatio

n w

ith th

e pa

tient

, to

be c

onsi

sten

t with

the

enro

llee’

s co

nditi

on, c

ircum

stan

ces

and

best

inte

r-es

ts in

rela

tion

to ty

pe, f

requ

ency

, site

and

dur

atio

n, a

nd w

ith p

rofe

ssio

nal h

ealth

car

e pr

actic

e, u

nles

s it

is re

ason

ably

sho

wn

by m

eans

of

subs

tant

ial m

edic

al a

nd s

cien

tific

lite

ratu

re, a

nd c

onsi

derin

g th

e en

rolle

e’s

cond

ition

, circ

umst

ance

s an

d be

st in

tere

sts,

that

eith

er (a

) tha

tth

e he

alth

car

e se

rvic

e w

ould

be

unsa

fe o

r ine

ffect

ive,

or (

b) th

at th

e he

alth

car

e pl

an’s

pref

erre

d he

alth

car

e se

rvic

e or

no

serv

ice

wou

ldle

ad to

an

equa

lly g

ood

outc

ome.

“M

edic

al n

eces

sity

” is

the

qual

ity o

f bei

ng m

edic

ally

nec

essa

ry. A

ll de

finiti

ons

in s

ectio

n fo

rty-n

ine

hund

red

of th

is c

hapt

er s

hall

appl

y to

this

sub

divi

sion

.


Nor

thCa

rolin

aG.

S. §

58-

3-20

0(b)

M

edic

al N

eces

sity

—An

insu

rer t

hat l

imits

its

heal

th b

enef

it pl

an c

over

age

to m

edic

ally

nec

essa

ry s

ervi

ces

and

supp

lies

shal

l def

ine

“med

ical

lyne

cess

ary

serv

ices

or s

uppl

ies”

in it

s he

alth

ben

efit

plan

as

thos

e co

vere

d se

rvic

es o

r sup

plie

s th

at a

re: (

1) P

rovi

ded

for t

he d

iagn

osis

, tre

at-

men

t, cu

re, o

r rel

ief o

f a c

ondi

tion,

illn

ess,

inju

ry, o

r dis

ease

; and

, exc

ept a

s al

low

ed u

nder

G.S

.58-

3-25

5, n

ot fo

r exp

erim

enta

l, in

vest

igat

iona

l,or

cos

met

ic p

urpo

ses.

(2) N

eces

sary

for a

nd a

ppro

pria

te to

the

diag

nosi

s, tr

eatm

ent,

cure

, or r

elie

f of a

hea

lth c

ondi

tion,

illn

ess,

inju

ry,

dise

ase,

or i

ts s

ympt

oms.

(3) W

ithin

gen

eral

ly a

ccep

ted

stan

dard

s of

med

ical

car

e in

the

com

mun

ity. (

4) N

ot s

olel

y fo

r the

con

veni

ence

ofth

ein

sure

d, th

e in

sure

d’s

fam

ily, o

r the

pro

vide

r. Fo

r med

ical

ly n

eces

sary

ser

vice

s, n

othi

ng in

this

sub

sect

ion

prec

lude

s an

insu

rer f

rom

com

parin

g th

e co

st-e

ffect

iven

ess

of a

ltern

ativ

e se

rvic

es o

r sup

plie

s w

hen

dete

rmin

ing

whi

ch o

f the

ser

vice

s or

sup

plie

s w

ill b

e co

vere

d.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Ohio

Non

eN

one

Okla

hom

aO.

A.C.

§ 31

7:30

-5-4

6(2

000)

(S

tatu

te

rega

rdin

g in

patie

nt

psyc

hiat

ric

faci

litie

s)

(B) M

edic

al n

eces

sity

crit

eria

for a

cute

psy

chia

tric

adm

issi

ons.

Acu

te p

sych

iatri

c ad

mis

sion

s fo

r chi

ldre

n 13

or o

lder

mus

t mee

t the

term

s an

dco

nditi

ons

cont

aine

d in

(i),

(ii),

(iii)

and

two

of th

e (iv

)(I) t

o (v

)(III)

of t

his

subp

arag

raph

. Chi

ldre

n 12

or y

oung

er m

ust m

eet t

he te

rms

or c

ondi

tions

cont

aine

d in

(i),

(ii),

(iii)

and

one

of (i

v)(I)

to (i

v)(IV

), an

d on

e of

(v)(I

) to

(v)(I

II) o

f thi

s su

bpar

agra

ph.

(i) A

ny D

SM-IV

-R A

xis

1 pr

imar

y di

agno

sis

with

the

exce

ptio

n of

V-c

odes

, adj

ustm

ent d

isor

ders

, and

sub

stan

ce re

late

d di

sord

ers,

acc

ompa

nied

by a

det

aile

d de

scrip

tion

of th

e sy

mpt

oms

supp

ortin

g th

e di

agno

sis.

In li

eu o

f a q

ualif

ying

Axi

s I d

iagn

osis

, chi

ldre

n 18

-21

year

s of

age

may

have

an

Axis

II d

iagn

osis

of a

ny p

erso

nalit

y di

sord

er.

(ii) C

ondi

tions

are

dire

ctly

attr

ibut

able

to a

men

tal d

isor

der a

s th

e pr

imar

y ne

ed fo

r pro

fess

iona

l atte

ntio

n (th

is d

oes

not i

nclu

de p

lace

men

tis

sues

, crim

inal

beh

avio

r, st

atus

offe

nses

). Ad

just

men

t or s

ubst

ance

rela

ted

diso

rder

may

be

a se

cond

ary

Axis

I di

agno

sis.

(iii)

It ha

s be

en d

eter

min

ed b

y th

e Ga

teke

eper

that

the

curr

ent d

isab

ling

sym

ptom

s co

uld

not h

ave

been

man

aged

or h

ave

not b

een

man

age-

able

in a

less

er in

tens

ive

treat

men

t pro

gram

.

(iv) W

ithin

the

past

48

hour

s th

e be

havi

ors

pres

ent a

n im

min

ent l

ife th

reat

enin

g em

erge

ncy

such

as

evid

ence

d by

:

(I) S

peci

fical

ly d

escr

ibed

sui

cide

atte

mpt

s, s

uici

de in

tent

, or s

erio

us th

reat

by

the

patie

nt.

(II) S

peci

fical

ly d

escr

ibed

pat

tern

s of

esc

alat

ing

inci

dent

s of

sel

f-mut

ilatin

g be

havi

ors.

(III)

Spec

ifica

lly d

escr

ibed

epi

sode

s of

unp

rovo

ked

sign

ifica

nt p

hysi

cal a

ggre

ssio

n an

d pa

ttern

s of

esc

alat

ing

phys

ical

agg

ress

ion

in in

tens

ityan

d du

ratio

n.

(IV) S

peci

fical

ly d

escr

ibed

epi

sode

s of

inca

paci

tatin

g de

pres

sion

or p

sych

osis

that

resu

lt in

an

inab

ility

to fu

nctio

n or

car

e fo

r bas

ic n

eeds

.

(v) R

equi

res

secu

re 2

4-ho

ur n

ursi

ng/m

edic

al s

uper

visi

on a

s ev

iden

ced

by:

(I) S

tabi

lizat

ion

of a

cute

psy

chia

tric

sym

ptom

s.

(II) N

eeds

ext

ensi

ve tr

eatm

ent u

nder

phy

sici

an d

irect

ion.

(III)

Phys

iolo

gica

l evi

denc

e or

exp

ecta

tion

of w

ithdr

awal

sym

ptom

s w

hich

requ

ire 2

4-ho

ur m

edic

al s

uper

visi

on.

(C) M

edic

al n

eces

sity

crit

eria

for c

ontin

ued

stay

—ac

ute

psyc

hiat

ric a

dmis

sion

. Con

tinue

d st

ay—

acut

e ps

ychi

atric

adm

issi

ons

mus

t mee

t all

ofth

e co

nditi

ons

set f

orth

in (i

) to

(iv) o

f thi

s su

bpar

agra

ph.

Nor

th D

akot

aN

one

Non

e

Tab

le 4

. Co

nti

nu

ed

1De

finiti

ons

have

bee

n ta

ken

verb

atim

from

the

rele

vant

doc

umen

t; qu

otat

ion

mar

ks h

ave

been

om

itted

.

Special Report60

Tab

le 4

. Co

nti

nu

ed

Okla

hom

aO.

A.C.

§ 31

7:30

-5-4

6(2

000)

(Sta

tute

rega

rdin

g in

pa-

tient

psy

chia

tric

faci

litie

s)

(i) A

ny D

SM-IV

-Rax

is 1

prim

ary

diag

nosi

s w

ith th

e ex

cept

ion

of V

-Cod

es, a

djus

tmen

t dis

orde

rs, a

nd s

ubst

ance

abu

se re

late

d di

sord

ers,

acco

mpa

nied

by

a de

taile

d de

scrip

tion

of th

e sy

mpt

oms

supp

ortin

g th

e di

agno

sis.

In li

eu o

f a q

ualif

ying

Axi

s I d

iagn

osis

, chi

ldre

n 18

–20

year

sof

age

may

hav

e an

Axi

s II

diag

nosi

s or

any

per

sona

lity

diso

rder

. Adj

ustm

ent o

r sub

stan

ce re

late

d di

sord

ers

may

be

a se

cond

ary

Axis

Idi

agno

sis.

(ii) P

atie

nt c

ontin

ues

to m

anife

st a

sev

erity

of i

llnes

s th

at re

quire

s an

acu

te le

vel o

f car

e as

def

ined

in th

e ad

mis

sion

crit

eria

and

whi

ch c

ould

not b

e pr

ovid

ed in

a le

ss re

stric

tive

setti

ng.

(I) D

ocum

enta

tion

of re

gres

sion

is m

easu

red

in b

ehav

iora

l ter

ms.

(II) I

f con

ditio

n is

unc

hang

ed, e

vide

nce

of re

-eva

luat

ion

of tr

eatm

ent o

bjec

tives

and

ther

apeu

tic in

terv

entio

ns.

(iii)

Cond

ition

s ar

e di

rect

ly a

ttrib

utab

le to

a m

enta

l dis

orde

r as

the

prim

ary

need

for p

rofe

ssio

nal a

ttent

ion

(this

doe

s no

t inc

lude

pla

cem

ent

issu

es, c

rimin

al b

ehav

ior,

stat

us o

ffens

es).

(iv) D

ocum

ente

d ef

forts

of w

orki

ng w

ith c

hild

’s fa

mily

, leg

al g

uard

ians

and

/or c

usto

dian

s an

d ot

her h

uman

ser

vice

age

ncie

s to

war

d a

tent

ativ

edi

scha

rge

date

.

(D) M

edic

al n

eces

sity

crit

eria

for a

dmis

sion

—in

patie

nt c

hem

ical

dep

ende

ncy

deto

xific

atio

n. In

patie

nt c

hem

ical

dep

ende

ncy

deto

xific

atio

nad

mis

sion

s m

ust m

eet t

he te

rms

and

cond

ition

s co

ntai

ned

in (i

), (ii

), (ii

i), a

nd o

ne o

f (iv

)(I)-(

v)(IV

).

(i) A

ny p

sych

oact

ive

subs

tanc

e de

pend

ency

dis

orde

r des

crib

ed in

DSM

-IV-R

with

det

aile

d sy

mpt

oms

supp

ortin

g th

e di

agno

sis

and

need

for

med

ical

det

oxifi

catio

n, e

xcep

t for

can

nabi

s, n

icot

ine,

or c

affe

ine

depe

nden

cies

.

(ii) C

ondi

tions

are

dire

ctly

attr

ibut

able

to a

sub

stan

ce d

epen

denc

y di

sord

er a

s th

e pr

imar

y ne

ed fo

r pro

fess

iona

l atte

ntio

n (th

is d

oes

not i

nclu

depl

acem

ent i

ssue

s, c

rimin

al b

ehav

ior,

stat

us o

ffens

es).

(iii)

It ha

s be

en d

eter

min

ed b

y th

e ga

teke

eper

that

the

curr

ent d

isab

ling

sym

ptom

s co

uld

not b

e m

anag

ed o

r hav

e no

t bee

n m

anag

eabl

e in

ale

sser

inte

nsiv

e tre

atm

ent p

rogr

am.

(iv) R

equi

res

secu

re 2

4-ho

ur n

ursi

ng/m

edic

al s

uper

visi

on a

s ev

iden

ced

by:

(I) N

eed

for a

ctiv

e an

d ag

gres

sive

pha

rmac

olog

ical

inte

rven

tions

.

(II) N

eed

for s

tabi

lizat

ion

of a

cute

psy

chia

tric

sym

ptom

s.

(III)

Nee

d ex

tens

ive

treat

men

t und

er p

hysi

cian

dire

ctio

n.

(IV) P

hysi

olog

ical

evi

denc

e or

exp

ecta

tion

of w

ithdr

awal

sym

ptom

s w

hich

requ

ire 2

4-ho

ur m

edic

al s

uper

visi

on.

(E)M

edic

al n

eces

sity

crit

eria

for c

ontin

ued

stay

—in

patie

nt c

hem

ical

dep

ende

ncy

prog

ram

. No

cont

inue

d st

ay in

inpa

tient

che

mic

al d

epen

denc

ypr

ogra

m is

allo

wed

. Ini

tial c

ertif

icat

ion

for a

dmis

sion

is li

mite

d to

up

to fi

ve d

ays;

exc

eptio

ns m

ay b

e m

ade

up to

sev

en to

eig

ht d

ays

base

d on

aca

se-b

y-ca

se re

view

.

(F) M

edic

al n

eces

sity

crit

eria

for a

dmis

sion

—re

side

ntia

l tre

atm

ent (

psyc

hiat

ric a

nd c

hem

ical

dep

ende

ncy)

. Res

iden

tial T

reat

men

t Cen

ter

adm

issi

ons

mus

t mee

t the

term

s an

d co

nditi

ons

in (i

) to

(iv) a

nd o

ne o

f (v)

(I)-(v

)(IV)

, and

one

of (

vi)(I

)-(vi

)(III)

of t

his

subp

arag

raph

.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1


Okla

hom

aO.

A.C.

§ 31

7:30

-5-4

6(2

000)

(Sta

tute

rega

rdin

g in

pa-

tient

psy

chia

tric

faci

litie

s)

(i) A

ny D

SM-IV

-RAx

is 1

prim

ary

diag

nosi

s w

ith th

e ex

cept

ion

of V

-cod

es, a

djus

tmen

t dis

orde

rs, a

nd s

ubst

ance

rela

ted

diso

rder

s, a

ccom

pani

edby

det

aile

d sy

mpt

oms

supp

ortin

g th

e di

agno

sis.

In li

eu o

f a q

ualif

ying

Axi

s I d

iagn

osis

, chi

ldre

n 18

–20

year

s of

age

may

hav

e an

Axi

s II

diag

nosi

sor

any

per

sona

lity

diso

rder

. Adj

ustm

ent o

r sub

stan

ce re

late

d di

sord

ers

may

be

a se

cond

ary

Axis

I di

agno

sis.

(ii) C

ondi

tions

are

dire

ctly

attr

ibut

ed to

a m

enta

l dis

orde

r as

the

prim

ary

reas

on fo

r pro

fess

iona

l atte

ntio

n (th

is d

oes

not i

nclu

de p

lace

men

tis

sues

, crim

inal

beh

avio

r, st

atus

offe

nses

).

(iii)

Patie

nt h

as e

ither

rece

ived

trea

tmen

t in

an a

cute

car

e se

tting

or i

t has

bee

n de

term

ined

by

the

gate

keep

er th

at th

e cu

rren

t dis

ablin

gsy

mpt

oms

coul

d no

t or h

ave

not b

een

man

agea

ble

in a

less

inte

nsiv

e tre

atm

ent p

rogr

am.

(iv) C

hild

mus

t be

med

ical

ly s

tabl

e.

(v) P

atie

nt d

emon

stra

tes

esca

latin

g pa

ttern

of s

elf i

njur

ious

or a

ssau

ltive

beh

avio

rs a

s ev

iden

ced

by:

(I) S

uici

dal i

deat

ion

and/

or th

reat

.

(II) H

isto

ry o

f or c

urre

nt s

elf-i

njur

ious

beh

avio

r.

(III)

Serio

us th

reat

s or

evi

denc

e of

phy

sica

l agg

ress

ion.

(IV) C

urre

nt in

capa

cita

ting

psyc

hosi

s or

dep

ress

ion.

(vi)

Requ

ires

24-h

our o

bser

vatio

n an

d tre

atm

ent a

s ev

iden

ced

by:

(I) In

tens

ive

beha

vior

al m

anag

emen

t.

(II) I

nten

sive

trea

tmen

t with

the

fam

ily/g

uard

ian

and

child

in a

stru

ctur

ed m

ilieu

.

(III)

Inte

nsiv

e tre

atm

ent i

n pr

epar

atio

n fo

r re-

entry

into

com

mun

ity.

(G) M

edic

al n

eces

sity

crit

eria

for c

ontin

ued

stay

—re

side

ntia

l tre

atm

ent c

ente

r. Co

ntin

ued

stay

resi

dent

ial t

reat

men

t cen

ter a

dmis

sion

s m

ust

mee

t the

term

s an

d co

nditi

ons

cont

aine

d in

(i);

(ii);

and

eith

er (i

ii) o

r (iv

); an

d (v

); an

d (v

i) of

this

sub

para

grap

h.

(i) A

ny D

SM-IV

-RAx

is 1

prim

ary

diag

nosi

s w

ith th

e ex

cept

ion

of V

cod

es, a

djus

tmen

t dis

orde

rs, a

nd s

ubst

ance

abu

se re

late

d di

sord

ers,

acco

mpa

nied

by

deta

iled

sym

ptom

s su

ppor

ting

the

diag

nosi

s. In

lieu

of a

qua

lifyi

ng A

xis

I dia

gnos

is, c

hild

ren

18–2

0 ye

ars

of a

ge m

ay h

ave

anAx

is II

dia

gnos

is o

f any

per

sona

lity

diso

rder

.

(ii) C

ondi

tions

are

dire

ctly

attr

ibut

ed to

a m

enta

l dis

orde

r as

the

prim

ary

reas

on fo

r con

tinue

d st

ay (t

his

does

not

incl

ude

plac

emen

t iss

ues,

crim

inal

beh

avio

r, st

atus

offe

nses

).

(iii)

Patie

nt is

mak

ing

mea

sura

ble

prog

ress

tow

ard

the

treat

men

t obj

ectiv

es s

peci

fied

in th

e tre

atm

ent p

lan.

(I) P

rogr

ess

is m

easu

red

in b

ehav

iora

l ter

ms

and

refle

cted

in th

e pa

tient

’s tre

atm

ent a

nd d

isch

arge

pla

ns.

(II) P

atie

nt h

as m

ade

gain

s to

war

d so

cial

resp

onsi

bilit

y an

d in

depe

nden

ce.

(III)

Ther

e is

act

ive,

ong

oing

psy

chia

tric

treat

men

t and

doc

umen

ted

prog

ress

tow

ard

the

treat

men

t obj

ectiv

e an

d di

scha

rge.

(IV) T

here

are

doc

umen

ted

effo

rts a

nd e

vide

nce

of a

ctiv

e in

volv

emen

t with

the

fam

ily, g

uard

ian,

chi

ld w

elfa

re w

orke

r, ex

tend

ed fa

mily

, etc

.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Tab

le 4

. Co

nti

nu

ed

1De

finiti

ons

have

bee

n ta

ken

verb

atim

from

the

rele

vant

doc

umen

t; qu

otat

ion

mar

ks h

ave

been

om

itted

.

Special Report62

Tab

le 4

. Co

nti

nu

ed

Okla

hom

aO.

A.C.

§ 31

7:30

-5-4

6(2

000)

(Sta

tute

rega

rdin

g in

pa-

tient

psy

chia

tric

faci

litie

s)

(iv) C

hild

’s co

nditi

on h

as re

mai

ned

unch

ange

d or

wor

sene

d.

(I) D

ocum

enta

tion

of re

gres

sion

is m

easu

red

in b

ehav

iora

l ter

ms.

(II) I

f con

ditio

n is

unc

hang

ed, t

here

is e

vide

nce

of re

-eva

luat

ion

of th

e tre

atm

ent o

bjec

tives

and

ther

apeu

tic in

terv

entio

ns.

(v) T

here

is d

ocum

ente

d co

ntin

uing

nee

d fo

r 24-

hour

obs

erva

tion

and

treat

men

t as

evid

ence

d by

:

(I) In

tens

ive

beha

vior

al m

anag

emen

t.

(II) I

nten

sive

trea

tmen

t with

the

fam

ily/g

uard

ian

and

child

in a

stru

ctur

ed m

ilieu

.

(III)

Inte

nsiv

e tre

atm

ent i

n pr

epar

atio

n fo

r re-

entry

into

com

mun

ity.

(vi)

Docu

men

ted

effo

rts o

f wor

king

with

chi

ld’s

fam

ily, l

egal

gua

rdia

n an

d/or

cus

todi

an a

nd o

ther

hum

an s

ervi

ce a

genc

ies

tow

ard

a te

ntat

ive

disc

harg

e da

te.

(A) P

re-a

utho

rizat

ion

and

exte

nsio

n pr

oced

ures

. Pre

-adm

issi

on a

utho

rizat

ion

for i

npat

ient

psy

chia

tric

serv

ices

mus

t be

requ

este

d fro

mth

eOH

CA d

esig

nate

d ag

ent.

The

OHCA

or d

esig

nate

d ag

ent w

ill e

valu

ate

and

rend

er a

dec

isio

n w

ithin

24

hour

s of

rece

ivin

g th

e re

ques

t.A

Certi

ficat

e of

Nee

d w

ill b

e is

sued

by

the

OHCA

or i

ts d

esig

nate

d ag

ent,

if th

e re

cipi

ent m

eets

med

ical

nec

essi

ty c

riter

ia.

(B) E

xten

sion

requ

ests

(psy

chia

tric)

mus

t be

mad

e th

roug

h th

e OH

CA d

esig

nate

d ag

ent.

All r

eque

sts

shal

l be

mad

e pr

ior t

o th

e ex

pira

tion

ofth

eap

prov

ed e

xten

sion

follo

win

g th

e gu

idel

ines

in th

e Ga

teke

epin

g M

anua

l. Ex

tens

ion

requ

ests

for t

he c

ontin

ued

stay

of a

chi

ld w

ho h

asbe

enin

an

acut

e ps

ychi

atric

pro

gram

for a

per

iod

of th

irty

(30)

day

s w

ill re

quire

a fa

ce to

face

eva

luat

ion

by th

e ga

teke

eper

. Req

uest

s fo

rth

eco

ntin

ued

stay

of a

chi

ld w

ho h

as b

een

in a

n ac

ute

psyc

hiat

ric p

rogr

am fo

r a p

erio

d of

six

ty (6

0) d

ays

will

requ

ire a

revi

ew o

f all

treat

men

tdo

cum

enta

tion

com

plet

ed b

y th

e OH

CA d

esig

nate

d ag

ent.

(C) I

f a d

enia

l dec

isio

n is

mad

e, a

reco

nsid

erat

ion

requ

est m

ay b

e m

ade

dire

ctly

to th

e OH

CA d

esig

nate

d ag

ent w

ithin

ten

(10)

wor

king

days

ofno

tific

atio

n of

the

deni

al. T

he a

gent

will

retu

rn a

dec

isio

n w

ithin

ten

(10)

wor

king

day

s fro

m th

e tim

e of

rece

ivin

g th

e re

cons

ider

atio

nre

ques

t.If

the

deni

al d

ecis

ion

is u

phel

d, th

e de

nial

can

be

appe

aled

to th

e Ok

laho

ma

Heal

th C

are

Auth

ority

with

in 2

0 w

orki

ng d

ays

ofno

tific

atio

n of

the

deni

al b

y th

e OH

CA d

esig

nate

d ag

ent.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Oreg

onN

one

Non

e

Penn

sylv

ania

Non

eN

one

Rhod

e Is

land

Non

eN

one

Sout

hCa

rolin

aN

one

Non

e


Sout

h Da

kota

S.D.

Cod

ified

Law

s 28

-13-

27.1

(200

1)

Med

ical

ly n

eces

sary

hos

pita

l ser

vice

s ar

e se

rvic

es p

rovi

ded

in a

hos

pita

l whi

ch m

eet t

he fo

llow

ing

crite

ria: (

1) A

re c

onsi

sten

t with

the

pers

on’s

sym

ptom

s, d

iagn

osis

, con

ditio

n, o

r inj

ury;

(2) A

re re

cogn

ized

as th

e pr

evai

ling

stan

dard

and

are

con

sist

ent w

ith g

ener

ally

acc

epte

dpr

ofes

sion

al m

edic

al s

tand

ards

of t

he p

rovi

der’s

pee

r gro

up; (

3) A

re p

rovi

ded

in re

spon

se to

a li

fe-th

reat

enin

g co

nditi

on; t

o tre

at p

ain,

inju

ry,

illne

ss, o

r inf

ectio

n; to

trea

t a c

ondi

tion

whi

ch w

ould

resu

lt in

phy

sica

l or m

enta

l dis

abili

ty; o

r to

achi

eve

a le

vel o

f phy

sica

l or m

enta

l fun

ctio

nco

nsis

tent

with

pre

vaili

ng s

tand

ards

for t

he d

iagn

osis

or c

ondi

tion;

(4) A

re n

ot fu

rnis

hed

prim

arily

for t

he c

onve

nien

ce o

f the

per

son

or th

epr

ovid

er; a

nd (5

) The

re is

no

othe

r equ

ally

effe

ctiv

e co

urse

of t

reat

men

t ava

ilabl

e or

sui

tabl

e fo

r the

per

son

need

ing

the

serv

ices

whi

ch is

mor

eco

nser

vativ

e or

sub

stan

tially

less

cos

tly. A

cou

rt sh

all r

ely

on th

e at

tend

ing

phys

icia

n’s

dete

rmin

atio

n as

to m

edic

al n

eces

sity

of h

ospi

tal

serv

ices

unl

ess

evid

ence

exi

sts

to th

e co

ntra

ry.

Stat

eSt

atut

e/Re

gula

tion

Med

ical

Nec

essi

ty D

efin

ition

1

Texa

sN

one

Non

e

Utah

Non

eN

one

Tenn

esse

eN

one

Non

e

Tab

le 4

. Co

nti

nu

ed

Verm

ont

Non

eN

one

Virg

inia

Va. C

ode

Ann.

§38

.2-5

800

(200

1)(IR

O St

atut

e)

“Med

ical

nec

essi

ty”

or “

med

ical

ly n

eces

sary

” m

eans

app

ropr

iate

and

nec

essa

ry h

ealth

car

e se

rvic

es w

hich

are

rend

ered

for a

ny c

ondi

tion

whi

ch, a

ccor

ding

to g

ener

ally

acc

epte

d pr

inci

ples

of g

ood

med

ical

pra

ctic

e, re

quire

s th

e di

agno

sis

or d

irect

car

e an

d tre

atm

ent o

f an

illne

ss,

inju

ry, o

r pre

gnan

cy-r

elat

ed c

ondi

tion,

and

are

not

pro

vide

d on

ly a

s a

conv

enie

nce.

Was

hing

ton

Rev.

Cod

e W

ash.

§ 71

.34.

020

(200

1)(m

enta

l hea

lthse

rvic

es fo

rm

inor

s)

Med

ical

nec

essi

ty fo

r inp

atie

nt c

are

mea

ns a

requ

este

d se

rvic

e w

hich

is re

ason

ably

cal

cula

ted

to: (

a) D

iagn

ose,

cor

rect

, cur

e or

alle

viat

e a

men

tal d

isor

der;

or (b

) pre

vent

the

wor

seni

ng o

f men

tal c

ondi

tions

that

end

ange

r life

or c

ause

suf

ferin

g an

d pa

in, o

r res

ult i

n ill

ness

or i

nfirm

ityor

thre

aten

to c

ause

or a

ggra

vate

a h

andi

cap,

or c

ause

phy

sica

l def

orm

ity o

r mal

func

tion,

and

ther

e is

no

adeq

uate

less

rest

rictiv

e al

tern

ativ

eav

aila

ble.

Wes

t Virg

inia

Non

eN

one

Wis

cons

inN

one

Non

e

Wyo

min

gN

one

Non

e

1De

finiti

ons

have

bee

n ta

ken

verb

atim

from

the

rele

vant

doc

umen

t; qu

otat

ion

mar

ks h

ave

been

om

itted

.

Special Report64

Alab

ama

Tab

le 5

. Sta

te In

dep

end

ent

Rev

iew

Sta

tute

s an

d R

egu

lati

on

s

Alas

ka√

Alas

ka S

tat.

§ 21

.07.

050

(200

1)Ar

izona

√Ar

izona

Rev

. Sta

t. §

20-2

537

(200

1)Ar

kans

asCa

lifor

nia

√√

Cal.

Ins.

Cod

e §

1016

9 (2

001)

Pro

pose

d Re

gula

tion

at C

al. R

eg. L

aw B

ulle

tin 2

001-

39 C

RLB

500

(Sep

t. 28

, 200

1)Co

lora

do√

√Co

lo. R

ev. S

tat.

§ 10

-16-

113.

5 Co

lo. I

ns. R

eg. 4

-2-2

1 (2

000)

Conn

ectic

ut√

√Co

nn. G

en. S

tat.

§ 38

a-47

8n (2

001)

Conn

. Age

ncie

s Re

gs. §

§ 38

a-47

8n-1

to 5

(200

1)De

law

are

√De

l Cod

e tit

. 16

§ 91

19 (2

001)

Dist

rict o

fCo

lum

bia

√D.

C. C

ode

§ 44

-301

.07

(200

1)

Flor

ida

√Fl

. Sta

t. §§

408

.705

6 (2

001)

Geor

gia

√Ga

. Cod

e §

33-2

0A-3

2 (2

001)

Haw

aii

√Hi

. Rev

. Sta

t. §

432E

-6 (2

001)

Idah

oIll

inoi

s√

215

Ill. C

omp.

Sta

t. 12

5, §

4-1

0 (2

001)

Indi

ana

√In

d. C

ode

§ 27

-13-

10.1

-1 (2

001)

Iow

a√

Iow

a Co

de §

§ 51

4J.1

to .1

4 (2

001)

Kans

as√

Kan.

Sta

t. §§

40-

22a1

3-16

(200

0)Ke

ntuc

ky√

Ky. S

tat.

§ 30

4.17

A-62

3 (2

001)

Loui

sian

a√

La. R

ev. S

tat.

§ 22

:308

1 (2

001)

Mai

ne√

Me.

Rev

. Sta

t. tit

. 24-

A §

4323

(200

1)M

aryl

and

√√

Md.

Ins.

Cod

e §

15-1

0A-0

3 (2

001)

Mas

sach

uset

ts√

√M

ass.

Gen

. Law

s ch

. 176

0, §

14

(200

1) 1

05 C

.M.R

. 128

.00

(200

1)

Mic

higa

n√

Mic

h. C

omp.

Law

s §§

550

.190

1-19

29 (2

001)

Min

neso

ta√

Min

n. S

tat.

§ 62

Q.73

(200

0)

Mis

siss

ippi

Mis

sour

i√

√M

o. R

ev. S

tat.

§ 37

6.13

85 (2

000)

20

C.S.

R. 1

00-5

.020

(200

1)

Mon

tana

√√

Mon

t. Co

de §

33-

37-1

02 (2

001)

Mon

t. Ad

min

. R. §

37.

108.

315

(200

1)

IRO

Stat

ute

IRO

Regu

latio

ns

Juris

dict

ion

(√if

yes)

(√if

yes)

Cita

tions


Tab

le 5

. Co

nti

nu

ed

IRO

Stat

ute

IRO

Regu

latio

ns

Juris

dict

ion

(√if

yes)

(√if

yes)

Cita

tions

Neb

rask

aN

evad

aN

ewHa

mps

hire

√N

.H. R

ev. S

tat.

420-

J:5

(200

0)

New

Jer

sey

√√

N.J

. Sta

t. §§

26:

2S-1

1 to

26:

2S-1

2 (2

001)

N.J

. Adm

. Cod

e §

8:38

A-3.

6

New

Mex

ico

√√

N.M

. Sta

t. An

n. §

59-

A-57

-1 (2

001)

N.M

. Adm

. Cod

e tit

. 13,

§ 1

0.17

.24

(200

1)

New

Yor

k√

√N

.Y. I

ns. L

aw §

491

0 (2

001)

11

N.Y

.C.R

.R. §

410

.1 (2

001)

Nor

th C

arol

ina

√20

01 N

.C. S

ess.

Law

s 44

6 (S

.B. 1

99) (

2001

)

Nor

th D

akot

a

Ohio

√Oh

io R

ev. C

ode

§ 17

51.8

4 (2

001)

Okla

hom

a√

Okla

. Sta

t. tit

. 63,

§ 2

528.

3 (2

001)

Oreg

on√

Or. L

egis

. ch.

266

(effe

ctiv

e da

te J

uly

1, 2

002)

Penn

sylv

ania

√√

40 P

a. S

tat.

§ 99

1.21

62 (2

001)

28

Pa. C

ode

§ 9.

501

(200

1)Rh

ode

Isla

nd√

√R.

I. Ge

n. L

aws

§ 23

-17.

12-1

0 (2

001)

R23

-17.

12-I-

UR (2

001)

Sout

hCa

rolin

a√

S.C.

Cod

e §§

38-

71-1

910-

2060

Sout

h Da

kota

Tenn

esse

e√

Tenn

. Cod

e §

56-3

2-22

7 (2

001)

Texa

s√

√Te

x. In

s. C

ode

art.

21.5

8A 2

8 Te

x. A

dm. C

ode

12.5

(200

1)Ut

ah√

√Ut

ah C

ode

§ 31

A-22

-629

(200

1) P

ropo

sed

Regu

latio

n at

200

1-23

Uta

h Bu

ll. 1

26 (D

ec. 1

, 200

1)Ve

rmon

t√

√Fo

r Phy

sica

l Hea

lth S

ervi

ces:

Fo

r Men

tal H

ealth

Ser

vice

s:

VT. S

tat.

tit. 8

, § 4

089f

(200

1)VT

. Sta

t. Ti

t. 8,

§ 4

089a

(200

1)Re

gula

tion

H-99

-1 (2

001)

Re

gula

tion

95-2

(200

1)

Virg

inia

√√

Va. C

ode

§§ 3

8.2-

5900

– 5

905

(200

1) 1

4 VA

C 5-

215-

10 (2

001)

Was

hing

ton

√√

Was

h. R

ev. C

ode

§ 48

.43.

535

(200

1) W

AC §

246

-305

-050

(200

1)W

est V

irgin

ia√

W.V

a. C

ode

§ 33

-25C

-6 (e

ffect

ive

July

1, 2

002)

Wis

cons

in

Wyo

min

g

Special Report66

Tab

le 6

. Med

ical

Nec

essi

ty D

efin

itio

ns:

Sta

te In

sura

nce

Law

s an

d IR

O S

tatu

tes

Med

ical

Nec

essi

ty

Defin

ition

inM

edic

al N

eces

sity

Insu

ranc

e Co

nten

t IR

O St

atut

eDe

finiti

on in

IRO

Stat

eSt

atut

es (Y

/N)

(Y/N

)St

atut

eIR

O St

atut

e De

finiti

on

Alab

ama

NN

Alas

kaN

YN

Arizo

naN

YN

Arka

nsas

YN

Calif

orni

aY

YN

Colo

rado

NY

N

Conn

ectic

utN

YN

For t

he p

urpo

se o

f thi

s ac

t, “m

edic

al n

eces

sity

” m

eans

the

prov

idin

g of

cov

ered

heal

th s

ervi

ces

or p

rodu

cts

that

a p

rude

nt p

hysi

cian

wou

ld p

rovi

de to

a p

atie

nt fo

rth

e pu

rpos

e of

dia

gnos

ing

or tr

eatin

g an

illn

ess,

inju

ry, o

r dis

ease

or i

ts s

ympt

oms,

ina

man

ner t

hat i

s: (1

) In

acco

rdan

ce w

ith th

e ge

nera

lly a

ccep

ted

stan

dard

s of

med

ical

pra

ctic

e; (2

) Con

sist

ent w

ith th

e sy

mpt

oms

or tr

eatm

ent o

f the

con

ditio

n;an

d(3

) Not

sol

ely

for a

nyon

e’s

conv

enie

nce.

16

Del.

Code

§ 9

119

(200

0)

Dela

war

eN

YY

Dist

rict o

fCo

lum

bia

NY

N

Flor

ida

YY

N

Geor

gia

NY

Y(5

) “M

edic

al n

eces

sity

,” “

med

ical

ly n

eces

sary

car

e,”

or “

med

ical

ly n

eces

sary

and

appr

opria

te”

mea

ns c

are

base

d up

on g

ener

ally

acc

epte

d m

edic

al p

ract

ices

in li

ght

of c

ondi

tions

at t

he ti

me

of tr

eatm

ent w

hich

is: (

A) A

ppro

pria

te a

nd c

onsi

sten

t with

the

diag

nosi

s an

d th

e om

issi

on o

f whi

ch c

ould

adv

erse

ly a

ffect

or f

ail t

o im

prov

eth

eel

igib

le e

nrol

lee’

s co

nditi

on; (

B) C

ompa

tible

with

the

stan

dard

s of

acc

epta

ble

med

ical

pra

ctic

e in

the

Unite

d St

ates

; (C)

Pro

vide

d in

a s

afe

and

appr

opria

te s

ettin

ggi

ven

the

natu

re o

f the

dia

gnos

is a

nd th

e se

verit

y of

the

sym

ptom

s; (D

) Not

pro

vide

dso

lely

for t

he c

onve

nien

ce o

f the

elig

ible

enr

olle

e or

the

conv

enie

nce

of th

e he

alth

care

pro

vide

r or h

ospi

tal;

and

(E) N

ot p

rimar

ily c

usto

dial

car

e, u

nles

s cu

stod

ial c

are

is a

cov

ered

ben

efit

unde

r the

elig

ible

enr

olle

e’s

evid

ence

of c

over

age.

O.

C.G.

A. §

33-

20A-

31 (2

000)


Tab

le 6

. Co

nti

nu

ed

Med

ical

Nec

essi

ty

Defin

ition

inM

edic

al N

eces

sity

Insu

ranc

e Co

nten

t IR

O St

atut

eDe

finiti

on in

IRO

Stat

eSt

atut

es (Y

/N)

(Y/N

)St

atut

eIR

O St

atut

e De

finiti

onHa

wai

iN

YM

edic

al n

eces

sity

(b) A

hea

lth in

terv

entio

n is

med

ical

ly n

eces

sary

if it

is re

com

-m

ende

d by

the

treat

ing

phys

icia

n or

trea

ting

licen

sed

heal

th c

are

prov

ider

, is

appr

oved

by

the

heal

th p

lan’

s m

edic

al d

irect

or o

r phy

sici

an d

esig

nee,

and

is: (

1) F

orth

e pu

rpos

e of

trea

ting

a m

edic

al c

ondi

tion;

(2) T

he m

ost a

ppro

pria

te d

eliv

ery

or le

vel

of s

ervi

ce, c

onsi

derin

g po

tent

ial b

enef

its a

nd h

arm

s to

the

patie

nt; (

3) K

now

n to

be

effe

ctiv

e in

impr

ovin

g he

alth

out

com

es; p

rovi

ded

that

: (A)

Effe

ctiv

enes

s is

det

erm

ined

first

by

scie

ntifi

c ev

iden

ce; (

B) If

no

scie

ntifi

c ev

iden

ce e

xist

s, th

en b

y pr

ofes

sion

alst

anda

rds

of c

are;

and

(C) I

f no

prof

essi

onal

sta

ndar

ds o

f car

e ex

ist o

r if t

hey

exis

tbu

t are

out

date

d or

con

tradi

ctor

y, th

en b

y ex

pert

opin

ion;

and

(4) C

ost-e

ffect

ive

for

the

med

ical

con

ditio

n be

ing

treat

ed c

ompa

red

to a

ltern

ativ

e he

alth

inte

rven

tions

,in

clud

ing

no in

terv

entio

n. F

or th

e pu

rpos

es o

f thi

s pa

ragr

aph,

cos

t-effe

ctiv

e sh

all n

otne

cess

arily

mea

n lo

wes

t pric

e. H

RS §

432

E-1.

4 (2

000)

Y

Idah

oN

N

Illin

ois

YY

N

Indi

ana

YY

N

Med

ical

nec

essi

ty is

def

ined

as

the

insu

rer’s

pla

n de

fines

it. I

owa

Code

514

J.5

Iow

aN

YY

Kans

asN

YN

Kent

ucky

NY

N

Loui

sian

aN

YN

“Med

ical

ly n

eces

sary

hea

lth c

are”

mea

ns h

ealth

car

e se

rvic

es o

r pro

duct

s pr

ovid

edto

an

enro

llee

for t

he p

urpo

se o

f pre

vent

ing,

dia

gnos

ing

or tr

eatin

g an

illn

ess,

inju

ryor

dis

ease

or t

he s

ympt

oms

of a

n ill

ness

, inj

ury

or d

isea

se in

a m

anne

r tha

t is

(A)c

onsi

sten

t with

gen

eral

ly a

ccep

ted

stan

dard

s of

med

ical

pra

ctic

e; (B

) clin

ical

lyap

prop

riate

in te

rms

of ty

pe, f

requ

ency

, ext

ent,

site

and

dur

atio

n; (C

) dem

onst

rate

dth

roug

h sc

ient

ific

evid

ence

to b

e ef

fect

ive

in im

prov

ing

heal

th o

utco

mes

; (D)

repr

e-se

ntat

ive

of “

best

pra

ctic

es”

in th

e m

edic

al p

rofe

ssio

n; a

nd (E

) not

prim

arily

for t

heco

nven

ienc

e of

the

enro

llee

or p

hysi

cian

or o

ther

hea

lth c

are

prac

titio

ner.

24-A

MRS

A §

4301

-A(1

0-A)

.

Mai

neN

YY

Mar

ylan

dY

YN

Mas

sach

uset

tsN

YY

“Med

ical

nec

essi

ty”

or “

med

ical

ly n

eces

sary

,” h

ealth

car

e se

rvic

es th

at a

re c

onsi

s-te

nt w

ith g

ener

ally

acc

epte

d pr

inci

ples

of p

rofe

ssio

nal m

edic

al p

ract

ice.

Mas

s. A

nn.

Law

s ch

. 176

O (1

) (20

01)

Mic

higa

nN

YN

Special Report68

Tab

le 6

. Co

nti

nu

ed

Med

ical

Nec

essi

ty

Defin

ition

inM

edic

al N

eces

sity

Insu

ranc

e Co

nten

t IR

O St

atut

eDe

finiti

on in

IRO

Stat

eSt

atut

es (Y

/N)

(Y/N

)St

atut

eIR

O St

atut

e De

finiti

on

Min

neso

taY

YN

Mis

siss

ippi

NN

Mis

sour

iN

YN

Mon

tana

NY

N

Neb

rask

aN

N

Nev

ada

NN

New

Ham

pshi

reN

YN

New

Jer

sey

NY

N

New

Mex

ico

NY

N

New

Yor

kN

YN

Nor

th C

arol

ina

YY

N

Nor

th D

akot

aN

N

Ohio

NY

N

Okla

hom

aN

YN

Oreg

onN

YN

Penn

sylv

ania

NY

N

Rhod

e Is

land

NY

N

Sout

h Ca

rolin

aN

YN

Sout

h Da

kota

NN

Tenn

esse

eN

YN

Texa

sN

YN

Utah

NY

N

Verm

ont

NY

N


Tab

le 6

. Co

nti

nu

ed

Med

ical

Nec

essi

ty

Defin

ition

inM

edic

al N

eces

sity

Insu

ranc

e Co

nten

t IR

O St

atut

eDe

finiti

on in

IRO

Stat

eSt

atut

es (Y

/N)

(Y/N

)St

atut

eIR

O St

atut

e De

finiti

on

Virg

inia

NY

Y“M

edic

al n

eces

sity

” or

“m

edic

ally

nec

essa

ry”

mea

ns a

ppro

pria

te a

nd n

eces

sary

heal

th c

are

serv

ices

whi

ch a

re re

nder

ed fo

r any

con

ditio

n w

hich

, acc

ordi

ng to

gene

rally

acc

epte

d pr

inci

ples

of g

ood

med

ical

pra

ctic

e, re

quire

s th

e di

agno

sis

ordi

rect

car

e an

d tre

atm

ent o

f an

illne

ss, i

njur

y, o

r pre

gnan

cy-r

elat

ed c

ondi

tion,

and

are

not p

rovi

ded

only

as

a co

nven

ienc

e. V

a. C

ode

Ann.

§ 3

8.2-

5800

(200

1)

Was

hing

ton

NY

N

Wes

t Virg

inia

NY

N

Wis

cons

inN

N

Wyo

min

gN

N

Special Report70

Penn

sylv

ania

Spec

ifies

that

lice

nsed

psy

chol

ogis

ts m

ay b

e re

view

ers

for I

ROs,

with

Insu

ranc

e De

partm

ent a

ppro

val.

Lice

nsed

psy

chol

ogis

ts m

ay n

ot re

view

deni

als

rega

rdin

g in

patie

nt c

are

or p

resc

riptio

n dr

ugs.

28

Pa. C

ode

§ 9.

504

(200

1).

Juris

dict

ion

Cont

ent o

f Beh

avio

ral H

ealth

Pro

visi

on

Verm

ont

Esta

blis

hes

a se

para

te in

depe

nden

t rev

iew

sys

tem

for m

enta

l hea

lth s

ervi

ces,

incl

udin

g su

bsta

nce

abus

e tre

atm

ent.

8 Vt

. Sta

t. §

4089

a (2

001)

.Pr

ovid

es fo

r a s

even

-mem

ber I

ndep

ende

nt P

anel

of M

enta

l Hea

lth C

are

Prov

ider

s ap

poin

ted

by In

sura

nce

Com

mis

sion

er to

revi

ew m

enta

l hea

lthse

rvic

e de

cisi

ons.

The

Pan

el m

ust i

nclu

de a

t lea

st o

ne p

sych

iatri

st, p

sych

olog

ist,

men

tal h

ealth

soc

ial w

orke

r, ps

ychi

atric

nur

se, m

enta

l hea

lthco

unse

lor,

and

drug

and

alc

ohol

cou

nsel

or.

Tab

le 7

. Sta

te In

dep

end

ent

Rev

iew

Sta

tute

s W

ith

Sp

ecif

ic B

ehav

iora

l Hea

lth

Pro

visi

on

s


Tab

le 8

. Qu

alif

icat

ion

s o

f E

xter

nal

Rev

iew

er in

Sta

te IR

O S

tatu

tes

Requ

irem

ent

that

Rev

iew

er H

ave

Conf

lict o

fEn

tity

that

Re

leva

nt E

xper

tise

Inte

rest

Sele

cts

or P

artic

ular

Cas

e?Pr

ohib

ition

Ju

risdi

ctio

nRe

view

erRe

view

er(√

if ye

s)(√

if ye

s)

Certi

fied

appe

alag

ency

usin

gpa

nels

of“t

wo

clin

ical

peer

s.”

Agen

cym

ustb

ece

rtifie

dby

a p

rivat

e st

anda

rd-s

ettin

g or

gani

zatio

n ap

prov

ed b

y De

partm

ent o

f Hea

lth o

r ahe

alth

insu

rer o

pera

ting

in s

tate

.

Alas

ka√

Arizo

na√

√IR

O us

ing

phys

icia

ns a

nd o

ther

hea

lth p

rofe

ssio

nals

lice

nsed

in A

rizon

a or

ano

ther

stat

e (if

boa

rd-c

ertif

ied

or e

ligib

le).

IRO

certi

fied

by In

sura

nce

Com

mis

sion

er a

nd u

sing

hea

lth c

are

prov

ider

s lic

ense

d in

Calif

orni

a an

d bo

ard-

certi

fied.

Calif

orni

a√

√

IRO

certi

fied

by In

sura

nce

Com

mis

sion

er a

nd u

sing

phy

sici

ans

or o

ther

hea

lth c

are

prof

essi

onal

s.Co

lora

do√

√

IRO

may

incl

ude

med

ical

pee

r rev

iew

org

aniza

tions

, ind

epen

dent

util

izatio

n re

view

com

pani

es, o

r nat

iona

lly re

cogn

ized

heal

th e

xper

ts o

r ins

titut

ions

app

rove

d by

the

Insu

ranc

e Co

mm

issi

oner

.

Conn

ectic

ut√

√

IRO

certi

fied

by S

ecre

tary

of H

ealth

or a

ccre

dite

d by

an

inde

pend

ent n

atio

nal

accr

editi

ng o

rgan

izatio

n an

d in

clud

es li

cens

ed a

nd b

oard

-cer

tifie

d ph

ysic

ians

or

othe

r app

ropr

iate

hea

lth c

are

prov

ider

s.

Dela

war

e√

√

IRO

cons

istin

g of

at l

east

two

phys

icia

ns li

cens

ed in

D.C

., M

aryl

and,

or V

irgin

ia(e

xcep

tions

whe

nne

cess

ary

due

toth

eco

nditi

onun

derr

evie

w)w

hoha

vem

eani

ngfu

lex

perie

nce

in p

rior u

tiliza

tion

revi

ew.

Dist

rict o

fCo

lum

bia

√√

(not

ed “

whe

nne

cess

ary”

)

IRO

pane

l con

sist

ing

of in

divi

dual

s fro

m th

e Ag

ency

for H

ealth

Car

e Ad

min

istra

tion,

the

Depa

rtmen

t of I

nsur

ance

, a c

onsu

mer

, a p

hysi

cian

app

oint

ed b

y th

e Go

vern

or,

phys

icia

ns w

ith re

leva

nt e

xper

tise

to c

ase

at is

sue

(rota

ting

pool

), an

d a

med

ical

dire

ctor

from

an

MCO

(not

a p

arty

) and

a p

rimar

y ca

re p

hysi

cian

.

Flor

ida

√

IRO

with

lice

nsed

and

boa

rd-c

ertif

ied

heal

th c

are

prov

ider

s ce

rtifie

d by

the

Depa

rtmen

t of H

ealth

Pla

nnin

g Di

visi

on.

Geor

gia

√√

Thre

e-m

embe

r pan

el a

ppoi

nted

by

the

Insu

ranc

e Co

mm

issi

oner

and

com

pose

dof

are

pres

enta

tive

from

the

man

aged

car

e pl

an n

ot in

volv

ed in

the

com

plai

nt, a

prov

ider

lice

nsed

in H

awai

i not

invo

lved

in th

e co

mpl

aint

, and

the

Com

mis

sion

eror

Com

mis

sion

er’s

desi

gnee

. Th

e Co

mm

issi

oner

may

als

o re

tain

an

IRO

to a

ssis

tin

the

revi

ew.

Haw

aii

√

MCO

Depa

rtmen

t of

Heal

th

Depa

rtmen

t of

Insu

ranc

e

Depa

rtmen

t of

Insu

ranc

e

Depa

rtmen

t of

Insu

ranc

e

Depa

rtmen

t of

Heal

th

Depa

rtmen

t of

Insu

ranc

e

Agen

cy fo

r Hea

lthCa

re A

dmin

istra

tion

Depa

rtmen

t of

Heal

th P

lann

ing

Divi

sion

Com

mis

sion

er o

fIn

sura

nce

Special Report72

Tab

le 8

. Co

nti

nu

ed

Requ

irem

ent

that

Rev

iew

er H

ave

Conf

lict o

fEn

tity

that

Re

leva

nt E

xper

tise

Inte

rest

Sele

cts

or P

artic

ular

Cas

e?Pr

ohib

ition

Ju

risdi

ctio

nRe

view

erRe

view

er(√

if ye

s)(√

if ye

s)

A ph

ysic

ian

who

hol

ds th

e sa

me

clas

s of

lice

nse

as th

e pa

tient

’s pr

imar

y ca

re p

hysi

-ci

an a

nd w

ho is

app

oint

ed b

y th

e pa

tient

, the

prim

ary

care

phy

sici

an, a

nd th

e M

CO.

Illin

ois

MCO

IRO

certi

fied

by th

e De

partm

ent o

f Ins

uran

ce a

ssig

ns a

med

ical

revi

ew p

rofe

ssio

nal

who

is li

cens

ed a

nd b

oard

cer

tifie

d in

app

licab

le s

peci

alty

for t

he a

ppea

l and

who

has

know

ledg

e ab

out t

he p

ropo

sed

serv

ice

at is

sue.

Indi

ana

MCO

(but

mus

t go

thro

ugh

the

entir

elis

t of c

ertif

ied

IROs

befo

re s

elec

ting

the

sam

e on

e ag

ain)

√√

IROs

cer

tifie

d by

the

Insu

ranc

e Co

mm

issi

oner

may

incl

ude

(but

are

not

lim

ited

to)

med

ical

pee

r rev

iew

org

aniza

tions

and

nat

iona

lly re

cogn

ized

heal

th e

xper

ts o

rin

stitu

tion.

Ind

ivid

ual r

evie

wer

mus

t hol

d ap

plic

able

hea

lth c

are

licen

se a

nd b

ebo

ard-

certi

fied.

Iow

aM

CO s

elec

ts fr

omlis

t of c

ertif

ied

IROs

√√

IRO

unde

r con

tract

with

Com

mis

sion

er o

f Ins

uran

ce.

IRO

mus

t hav

e ex

perie

nce

inad

min

iste

ring

Kans

as h

ealth

pro

gram

s or

be

a na

tiona

lly a

ccre

dite

d ex

tern

al re

view

orga

niza

tion

that

use

s Ka

nsas

hea

lth c

are

prov

ider

s to

con

duct

the

revi

ew (u

nles

s no

Kans

as p

rovi

ders

are

qua

lifie

d an

d cr

eden

tiale

d in

the

spec

ialty

at i

ssue

in th

e ca

se)

Kans

asCo

mm

issi

oner

of

Insu

ranc

e√

√

IROs

mus

t use

a re

view

er(s

) with

the

appr

opria

te li

cens

e, b

oard

cer

tific

atio

n, a

ndcl

inic

al e

xper

ienc

e ap

plic

able

to th

e m

edic

al c

ondi

tion

unde

r rev

iew

.Ke

ntuc

ky1

Depa

rtmen

t of

Insu

ranc

e √

√

IRO

mus

t be

licen

sed

by th

e In

sura

nce

Com

mis

sion

er a

nd h

ave

qual

ified

and

impa

r-tia

l clin

ical

pee

r rev

iew

ers

who

hol

d ap

prop

riate

lice

nses

and

boa

rd c

ertif

icat

ion

inth

e sp

ecia

lty a

t iss

ue a

nd h

ave

clin

ical

exp

ertis

e in

the

rele

vant

med

ical

con

ditio

n.

Loui

sian

aM

CO√

√

IRO

mus

t hav

e qu

alifi

ed a

nd im

parti

al re

view

ers

who

hol

d ap

plic

able

lice

nses

and

boar

d ce

rtific

atio

n w

ith re

spec

t to

the

adve

rse

heal

th c

are

treat

men

t und

er re

view

.M

aine

Insu

ranc

e Bu

reau

√√

The

Com

mis

sion

er m

ay m

ake

a de

term

inat

ion

on a

pat

ient

’s ap

peal

or d

esig

nate

anIR

O to

do

so.

An IR

O m

ust h

ave

qual

ified

and

impa

rtial

revi

ewer

s w

ho h

old

appl

icab

le li

cens

es a

nd b

oard

cer

tific

atio

n w

ith re

spec

t to

the

adve

rse

heal

th c

are

treat

men

t und

er re

view

.

Mar

ylan

dCo

mm

issi

oner

of

Insu

ranc

e√

√

Depa

rtmen

t of P

ublic

Hea

lth’s

Offic

e of

Pat

ient

Pro

tect

ion

cont

ract

s w

ith “

unre

late

dan

d ob

ject

ive”

revi

ew a

genc

ies

and

refe

rs a

ppea

ls to

them

on

a ra

ndom

bas

is.

Revi

ewer

s ar

e to

be

activ

ely

prac

ticin

g he

alth

car

e pr

ofes

sion

als

in th

e sa

me

orsi

mila

r spe

cial

ty w

ho ty

pica

lly tr

eat t

he m

edic

al c

ondi

tion,

per

form

the

proc

edur

eor

prov

ide

the

treat

men

t und

er re

view

.

Mas

sach

uset

tsDe

partm

ent o

fPu

blic

Hea

lth,

Offic

e of

Pat

ient

Prot

ectio

n

√√

1A

patie

nt c

anno

t obt

ain

an e

xter

nal r

evie

w if

the

subj

ect o

f the

pat

ient

’s ad

vers

e de

term

inat

ion

has

prev

ious

ly g

one

thro

ugh

the

exte

rnal

revi

ew p

roce

ss a

nd th

e in

depe

nden

tre

view

ent

ity fo

und

in fa

vor o

f the

insu

rer a

nd n

o ne

w c

linic

al e

vide

nce

is a

vaila

ble.

Ken

. Rev

. Sta

t. ß

304.

17A-

623(

6).


Tab

le 8

. Co

nti

nu

ed

Requ

irem

ent

that

Rev

iew

er H

ave

Conf

lict o

fEn

tity

that

Re

leva

nt E

xper

tise

Inte

rest

Sele

cts

or P

artic

ular

Cas

e?Pr

ohib

ition

Ju

risdi

ctio

nRe

view

erRe

view

er(√

if ye

s)(√

if ye

s)

IROs

app

rove

d by

Com

mis

sion

er o

f Ins

uran

ce.

IROs

mus

t use

revi

ewer

s lic

ense

dan

d bo

ard-

certi

fied

in th

e ap

plic

able

spe

cial

ty a

nd w

ho h

ave

had

an a

ctiv

e cl

inic

alpr

actic

e in

the

last

yea

r in

whi

ch th

e re

view

er “

devo

ted

a m

ajor

ity o

f his

or h

er ti

me

in .

. . th

e sp

ecia

lty m

ost r

elev

ant t

o th

e su

bjec

t of t

he re

view

.”

Mic

higa

nCo

mm

issi

oner

of

Insu

ranc

e√

√

IRO

unde

r con

tract

to C

omm

issi

oner

of H

ealth

and

usi

ng q

ualif

ied

revi

ewer

s.M

inne

sota

Com

mis

sion

ers

ofHe

alth

,Ad

min

istra

tion

√√

IRO

unde

r con

tract

to th

e De

partm

ent o

f Ins

uran

ce.

Mis

sour

i2Di

rect

or o

fIn

sura

nce

Party

see

king

revi

ew a

nd th

e M

CO m

ay a

gree

upo

n a

peer

to c

ondu

ct th

e re

view

(ape

er is

def

ined

as

“a h

ealth

car

e pr

ovid

er a

ctiv

ely

prac

ticin

g in

this

sta

te w

hoha

ssu

bsta

ntia

lly th

e sa

me

educ

atio

n an

d tra

inin

g...w

ho p

rovi

des

subs

tant

ially

the

sam

e se

rvic

e...w

ho h

as th

e sa

me

licen

se o

r cer

tific

atio

n...a

s th

e pr

ovid

er w

hose

prac

tice.

..[is

] bei

ng c

onsi

dere

d, re

view

ed, e

valu

ated

or j

udge

d.”

If th

e pa

rties

can

not a

gree

on

a pe

er, t

hen

the

Insu

ranc

e De

partm

ent d

esig

nate

san

IRO.

Mon

tana

Insu

ranc

eDe

partm

ent

√√

Com

mis

sion

er o

f Ins

uran

ce c

ertif

ies

IROs

. Re

view

ers

mus

t hol

d ap

prop

riate

lice

nses

and

boar

d ce

rtific

atio

n in

the

spec

ialty

at i

ssue

and

hav

e cl

inic

al e

xper

tise

in th

ere

leva

nt m

edic

al c

ondi

tion.

New

Ham

pshi

reCo

mm

issi

oner

of

Insu

ranc

e√

√

IROs

con

duct

an

initi

al re

view

thro

ugh

a re

gist

ered

pro

fess

iona

l nur

se o

r phy

sici

anlic

ense

d in

New

Jer

sey,

and

, whe

n ne

cess

ary,

refe

r all

case

s to

a c

onsu

ltant

phy

si-

cian

in th

e sp

ecia

lty o

r are

a of

pra

ctic

e th

at g

ener

ally

wou

ld m

anag

e th

e ty

pe o

ftre

atm

ent t

hat i

s th

e su

bjec

t of t

he a

ppea

l.

New

Jer

sey

Com

mis

sion

er o

fHe

alth

Prov

ides

“w

hen

nece

s-sa

ry”

but d

oes

not

requ

ire (a

nd d

oes

not

defin

e “w

hen

nece

s-sa

ry”

but i

mpl

ies

this

dete

rmin

atio

n is

in th

edi

scre

tion

of th

e IR

O).

The

Supe

rinte

nden

t of I

nsur

ance

des

igna

tes

a he

arin

g of

ficer

(an

atto

rney

lice

nsed

in N

ew M

exic

o) a

nd tw

o m

edic

al c

o-he

arin

g of

ficer

s (a

t lea

st o

ne o

f who

m p

ract

ices

in a

spe

cial

ty th

at w

ould

typi

cally

man

age

the

case

that

is th

e su

bjec

t of t

he re

view

).

New

Mex

ico

Supe

rinte

nden

t of

Insu

ranc

eRe

quire

s di

sclo

-su

re o

f pot

entia

lco

nflic

ts to

Supe

rinte

nden

tbu

t doe

s no

tpr

ohib

itco

nflic

ts

√

2M

isso

uri h

as th

ree

leve

ls o

f rev

iew

for a

dver

se m

edic

al d

eter

min

atio

ns. T

he fi

rst l

evel

is in

tern

al to

the

heal

th p

lan,

and

the

seco

nd le

vel i

s ex

tern

al b

ut a

rran

ged

by th

e he

alth

plan

(inv

olvi

ng o

ther

enr

olle

es, r

epre

sent

ativ

es o

f the

pla

n no

t inv

olve

d in

the

case

, and

clin

icia

ns n

ot in

volv

ed in

the

case

). Th

e th

ird le

vel i

s in

depe

nden

t rev

iew

and

is th

e le

vel

addr

esse

d in

this

ana

lysi

s. S

ee R

ev. S

tat.

Mo.

ß 3

76.1

385

(200

0).

Special Report74

Requ

irem

ent

that

Rev

iew

er H

ave

Conf

lict o

fEn

tity

that

Re

leva

nt E

xper

tise

Inte

rest

Sele

cts

or P

artic

ular

Cas

e?Pr

ohib

ition

Ju

risdi

ctio

nRe

view

erRe

view

er(√

if ye

s)(√

if ye

s)

The

Supe

rinte

nden

t of I

nsur

ance

and

the

Com

mis

sion

er o

f Hea

lth c

ertif

y IR

Os a

ndra

ndom

ly a

ssig

n ap

peal

s to

them

. IR

O re

view

ers

mus

t hav

e th

e ap

prop

riate

lice

nse,

boar

d ce

rtific

atio

n, a

nd c

linic

al e

xper

ienc

e ap

plic

able

to th

e m

edic

al c

ondi

tion

unde

rre

view

.

New

Yor

kSu

perin

tend

ent

ofIn

sura

nce

and

Com

mis

sion

er o

fHe

alth

√√

Insu

ranc

e Co

mm

issi

oner

ass

igns

IRO

on a

rota

ting

basi

s fro

m li

st o

f app

rove

dor

gani

zatio

ns. I

RO re

view

ers

mus

t hav

e th

e ap

prop

riate

lice

nse,

boa

rd c

ertif

icat

ion,

and

clin

ical

exp

erie

nce

appl

icab

le to

the

med

ical

con

ditio

n un

der r

evie

w.

Nor

th C

arol

ina

Insu

ranc

eCo

mm

issi

oner

√√

Insu

ranc

e Su

perin

tend

ent a

ccre

dits

IROs

and

mai

ntai

ns a

list

of a

ppro

ved

orga

niza

-tio

ns.

Upon

a re

ques

t for

ext

erna

l app

eal,

Supe

rinte

nden

t pro

vide

s tw

o IR

Os c

hose

nat

rand

om fr

om th

e lis

t, an

d th

e M

CO c

hoos

es o

ne o

f the

m.

One

revi

ewer

con

duct

sth

e re

view

(unl

ess

the

MCO

or I

RO d

eter

min

es th

at m

ore

than

one

is n

eces

sary

),an

dth

e re

view

er(s

) mus

t hav

e th

e ap

prop

riate

lice

nse,

boa

rd c

ertif

icat

ion,

and

clin

ical

exp

erie

nce

appl

icab

le to

the

med

ical

con

ditio

n un

der r

evie

w.

Ohio

Insu

ranc

eSu

perin

tend

ent

(MCO

cho

oses

amon

g tw

o IR

Osse

lect

ed a

tra

ndom

)

√√

MCO

sel

ects

IRO

from

a li

st o

f org

aniza

tions

cer

tifie

d by

the

Depa

rtmen

t of H

ealth

.Re

view

ers

have

the

appr

opria

te li

cens

e, b

oard

cer

tific

atio

n, a

nd c

linic

al e

xper

ienc

eap

plic

able

to th

e m

edic

al c

ondi

tion

unde

r rev

iew

.

Okla

hom

aM

CO c

hoos

es fr

omDe

partm

ent o

fHe

alth

-cer

tifie

dor

gani

zatio

ns.

√√

Whe

n le

gisl

atio

n be

com

es e

ffect

ive

(Jul

y 1,

200

2), D

irect

or o

f Bus

ines

s an

dCo

nsum

er A

ffairs

Dep

artm

ent w

ill c

ontra

ct w

ith IR

Os q

ualif

ied

unde

r reg

ulat

ions

tobe

dev

elop

ed p

rior t

o Ju

ly 1

, 200

2.

Oreg

onDi

rect

or o

fBu

sine

ss a

ndCo

nsum

er A

ffairs

Depa

rtmen

t

To B

eDe

term

ined

To B

e De

term

ined

Insu

ranc

e Co

mm

issi

oner

ass

igns

IRO

on a

rota

ting

basi

s fro

m li

st o

f app

rove

d or

gani

-za

tions

. IRO

revi

ewer

s m

ust h

ave

the

appr

opria

te li

cens

e, b

oard

cer

tific

atio

n, a

ndcl

inic

al e

xper

ienc

e ap

plic

able

to th

e m

edic

al c

ondi

tion

unde

r rev

iew

. Re

view

ers

may

incl

ude

licen

sed

psyc

holo

gist

s (a

lthou

gh th

ey c

anno

t rev

iew

den

ials

of i

npat

ient

care

or p

resc

riptio

n dr

ugs)

.

If In

sura

nce

Com

mis

sion

er fa

ils to

ass

ign

an IR

O w

ithin

2 b

usin

ess

days

of t

here

ques

t for

revi

ew, t

he M

CO m

ay a

ssig

n an

IRO

from

list

of o

rgan

izatio

ns a

ppro

ved

byIn

sura

nce

Depa

rtmen

t.

Penn

sylv

ania

3In

sura

nce

Com

mis

sion

er (o

rM

CO if

Insu

ranc

eCo

mm

issi

oner

fails

to a

ssig

n IR

O w

ithin

2 bu

sine

ss d

ays

ofre

ques

t for

ext

erna

lre

view

)

√√

Insu

ranc

e De

partm

ent c

ertif

ies

IROs

. Re

view

er m

ust b

e a

phys

icia

n, d

entis

t, or

oth

erhe

alth

car

e pr

ofes

sion

al o

f the

spe

cial

ty re

leva

nt to

the

care

or s

ervi

ce u

nder

revi

ew.

Rhod

e Is

land

Desi

gnat

ed b

yIn

sura

nce

Dire

ctor

√√

Tab

le 8

. Co

nti

nu

ed

3Pe

nnsy

lvan

ia a

llow

s an

MCO

and

pro

vide

r to

agre

e to

an

alte

rnat

e di

sput

e re

solu

tion

syst

em in

a w

ritte

n co

ntra

ct if

the

Insu

ranc

e De

partm

ent a

ppro

ves

of th

e al

tern

ate

syst

em.

40Pa

. Sta

t. ß

991.

2162

.


Tab

le 8

. Co

nti

nu

ed

Requ

irem

ent

that

Rev

iew

er H

ave

Conf

lict o

fEn

tity

that

Re

leva

nt E

xper

tise

Inte

rest

Sele

cts

or P

artic

ular

Cas

e?Pr

ohib

ition

Ju

risdi

ctio

nRe

view

erRe

view

er(√

if ye

s)(√

if ye

s)

Insu

ranc

e De

partm

ent m

aint

ains

list

of a

ppro

ved

IROs

and

des

igna

tes

IRO

upon

requ

est f

or e

xter

nal r

evie

w.

IRO

revi

ewer

s m

ust h

ave

the

appr

opria

te li

cens

e,bo

ard

certi

ficat

ion,

and

clin

ical

exp

erie

nce

(with

in th

e pa

st th

ree

year

s) a

pplic

able

toth

e m

edic

al c

ondi

tion

unde

r rev

iew

.

Sout

h Ca

rolin

aIn

sura

nce

Depa

rtmen

t√

√

MCO

des

igna

tes

IRO,

whi

ch m

ust b

e im

parti

al a

nd u

se re

view

ers

that

hav

e th

eap

prop

riate

lice

nse

and

boar

d ce

rtific

atio

n ap

plic

able

to th

e m

edic

al c

ondi

tion

unde

rre

view

.

Tenn

esse

eM

CO√

√

Depa

rtmen

t of I

nsur

ance

ass

igns

IROs

rand

omly

from

an

appr

oved

list

. Re

view

ers

mus

t be

in a

ctiv

e pr

actic

e an

d ha

ve th

e ap

prop

riate

lice

nse

and

boar

d ce

rtific

atio

nap

plic

able

to th

e m

edic

al c

ondi

tion

unde

r rev

iew

.

Texa

sDe

partm

ent o

fIn

sura

nce

√√

MCO

des

igna

tes

IRO,

whi

ch m

ust b

e im

parti

al.

Utah

MCO

Com

mis

sion

er o

f Dep

artm

ent o

f Ban

king

, Ins

uran

ce, S

ecur

ities

, and

Hea

lth C

are

Adm

inis

tratio

n (B

ISHC

A) d

esig

nate

s IR

Os.

Revi

ewer

s m

ust b

e in

act

ive

prac

tice

and

have

the

appr

opria

te li

cens

e an

d bo

ard

certi

ficat

ion

appl

icab

le to

the

med

ical

cond

ition

und

er re

view

.

An In

depe

nden

t Pan

el o

f Men

tal H

ealth

Car

e Pr

ovid

ers

revi

ews

deci

sion

sin

volv

ing

men

tal h

ealth

ser

vice

s, in

clud

ing

drug

and

alc

ohol

trea

tmen

t.

Verm

ont

Com

mis

sion

er o

fBI

SHCA

√√

IROs

con

tract

with

the

Bure

au o

f Ins

uran

ce.

Revi

ewer

s m

ust h

ave

the

appr

opria

telic

ense

and

boa

rd c

ertif

icat

ion

appl

icab

le to

the

med

ical

con

ditio

n un

der r

evie

w.

Virg

inia

Bure

au o

fIn

sura

nce

√√

Depa

rtmen

t of H

ealth

cer

tifie

s IR

Os a

nd m

aint

ains

regi

stry

for a

ssig

nmen

t.Re

view

ers

mus

t hav

e fiv

e ye

ars

of c

linic

al e

xper

ienc

e an

d ha

ve th

e ap

prop

riate

licen

se a

nd b

oard

cer

tific

atio

n ap

plic

able

to th

e m

edic

al c

ondi

tion.

Und

er re

view

.

Was

hing

ton

Depa

rtmen

t of

Heal

th√

√

The

Depa

rtmen

t of I

nsur

ance

cer

tifie

s IR

Os, w

hich

mus

t use

at l

east

one

phy

sici

anor

othe

r hea

lth c

are

prov

ider

kno

wle

dgea

ble

abou

t the

hea

lth c

are

serv

ice

unde

rre

view

.

Wes

t Virg

inia

4De

partm

ent o

fIn

sura

nce

√√

4W

est V

irgin

ia a

llow

s M

COs

an e

xem

ptio

n fro

m th

e IR

O st

atut

e if

the

MCO

has

an

exte

rnal

revi

ew p

lan

appr

oved

by

the

Depa

rtmen

t of I

nsur

ance

. W

. Va.

Cod

e ß

33-2

5C-6

.

Special Report76

If St

anda

rd is

De

Nov

o or

Not

Spe

cifie

d,

Juris

dict

ion

De N

ovo

Othe

rCa

n In

sure

d Su

bmit

Addi

tiona

l Evi

denc

e? (√

if ye

s)

√Al

aska

√Ar

izona

Calif

orni

a√ √

√Co

lora

do

Conn

ectic

ut√ √

Dela

war

e

Dist

rict o

f Col

umbi

a√

(Insu

red

can

also

requ

est a

hea

ring

befo

re IR

O.)

Flor

ida

Geor

gia

√

Haw

aii

Illin

ois

√In

dian

a

√Io

wa

√ √Ka

nsas

Kent

ucky

√

Loui

sian

a

Mai

ne√

(Pat

ient

may

atte

nd th

e ex

tern

al re

view

, ask

que

stio

ns o

f the

insu

ranc

e co

mpa

ny re

pres

enta

tive,

and

use

outs

ide

assi

stan

ce s

uch

as c

ouns

el [a

t the

pat

ient

’s ex

pens

e].)

Mas

sach

uset

ts

√M

ichi

gan

√ √M

inne

sota

Mis

sour

i√

Mon

tana

√√

New

Ham

pshi

re

Tab

le 9

. In

dep

end

ent

Rev

iew

s: S

tan

dar

d o

f R

evie

w f

or

Med

ical

Nec

essi

ty D

eter

min

atio

ns

√M

aryl

and1

1M

aryl

and’

s IR

O st

atut

e pl

aces

the

burd

en o

f pro

of o

n th

e M

CO to

dem

onst

rate

that

its

initi

al a

dver

se d

ecis

ion

was

cor

rect

. M

d. In

s. C

ode

Ann.

ß 1

5-10

A-03

(e) (

2001

).


Tab

le 9

. Co

nti

nu

ed

If St

anda

rd is

De

Nov

o or

Not

Spe

cifie

d,

Juris

dict

ion

De N

ovo

Othe

rCa

n In

sure

d Su

bmit

Addi

tiona

l Evi

denc

e? (√

if ye

s)

New

Jer

sey

√(H

earin

g of

ficer

and

co-

med

ical

hea

ring

offic

ers

cond

uct h

earin

g w

ith w

itnes

ses

and

pres

enta

tion

of e

vide

nce.

)N

ew M

exic

o

√N

ew Y

ork

Nor

th C

arol

ina

√ √Oh

io

Okla

hom

a√ To

Be

Dete

rmin

edOr

egon

Penn

sylv

ania

√

Rhod

e Is

land

√So

uth

Caro

lina

√

Tenn

esse

e

Texa

s√

Utah

Verm

ont

√

Virg

inia

Was

hing

ton

√

Wes

t Virg

inia


1992

Eddy

, Dav

id

An a

ccou

nt o

f how

ana

lysi

s of

cos

t-effe

ctiv

enes

s w

as u

sed

to c

hang

e pr

actic

e gu

idel

ines

on

high

and

low

osm

olar

radi

ogra

phic

con

trast

age

nts

at K

aise

r. Di

fficu

lties

with

ana

lysi

s an

d bu

y-in

are

disc

usse

d. T

he g

ener

al lo

gist

ics

of th

e an

alys

is it

self

are

desc

ribed

, as

are

the

lines

of t

houg

htbe

hind

eac

h st

ep o

f the

ana

lysi

s.

JAM

A 26

8(18

): 25

75–2

582

Clin

ical

Dec

isio

nM

akin

g: F

rom

Theo

ry to

Prac

tice.

Appl

ying

Cos

tEf

fect

iven

ess

Anal

ysis

, the

Insi

de S

tory

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

1993

Ande

rson

, G. F

.,an

d M

. A. H

all

Ther

e is

the

expe

ctat

ion

that

out

com

es re

sear

ch a

nd th

e pr

omul

gatio

n of

med

ical

pra

ctic

e gu

ide-

lines

will

be

able

to id

entif

y an

d ho

pefu

lly re

duce

the

amou

nt o

f unn

eces

sary

or i

napp

ropr

iate

med

ical

car

e th

roug

h a

varie

ty o

f met

hods

, inc

ludi

ng u

tiliza

tion

revi

ew. H

owev

er, t

he c

ourts

for

mul

tifar

ious

reas

ons

have

freq

uent

ly o

vertu

rned

pas

t effo

rts b

y pu

blic

and

priv

ate

insu

rers

to d

eny

clai

ms

on th

e ba

sis

of fo

rmal

tech

nolo

gy a

sses

smen

ts o

r pra

ctic

e gu

idel

ines

. Thi

s pa

per e

xam

ines

the

cour

t’s re

luct

ance

to a

ccep

t a v

arie

ty o

f tec

hnol

ogy

asse

ssm

ent m

etho

ds in

cov

erag

e po

licy

deci

sion

s. T

he p

aper

revi

ews

the

optio

ns th

at h

ave

been

pro

pose

d to

rest

rict j

udic

ial i

nvol

vem

ent

in th

e fo

rmul

atio

n of

cov

erag

e po

licy

and

then

pro

pose

s a

new

opt

ion

that

em

ploy

s a

mor

e pr

ecis

eta

xono

my

of m

edic

al p

ract

ice

asse

ssm

ent.

Amer

ican

Jou

rnal

ofPu

blic

Hea

lth83

:163

5–16

39

Med

ical

Tech

nolo

gyAs

sess

men

t and

Prac

tice

Guid

elin

es: T

heir

Day

in C

ourt

1992

Hall,

Mar

k, a

ndGe

rard

And

erso

n EX

CERP

TS:

... T

ishn

a, I

was

told

, had

virt

ually

no

chan

ce o

f sur

vivi

ng th

e re

laps

ed W

ilms’

tum

or [o

f the

kid

ney]

from

whi

ch s

he is

suf

ferin

g an

d Bl

ue C

ross

/Blu

e Sh

ield

had

den

ied

cove

rage

for a

utol

ogou

s bo

nem

arro

w tr

ansp

lant

(“AB

MT”

) with

acc

ompa

nyin

g hi

gh d

ose

chem

othe

rapy

, a tr

eatm

ent w

hich

coul

d w

ell p

rolo

ng a

nd q

uite

pos

sibl

y sa

ve h

er li

fe a

nd w

hich

, con

cede

dly,

pro

vide

d he

r onl

y re

al-

istic

hop

e of

eith

er. .

.. In

abo

ut a

doz

en s

imila

r cas

es, h

owev

er, j

udge

s ha

ve ru

led

that

the

use

ofAB

MT

is s

till e

xper

imen

tal a

nd d

enie

d co

vera

ge. .

.. Fr

om a

lega

l per

spec

tive,

how

ever

, the

seru

lings

are

mer

ely

the

late

st in

a lo

ng s

erie

s of

ord

inar

y co

ntra

ct d

ispu

tes

over

the

inte

rpre

tatio

nof

term

s su

ch a

s “m

edic

al n

eces

sity

” or

“ex

perim

enta

l,” w

hich

det

erm

ine

the

cove

rage

of h

ealth

insu

ranc

e po

licie

s. ..

. In

addi

tion

to th

is h

uman

itaria

n ob

ject

ive,

the

cour

ts h

ave

been

con

cern

edab

out t

he p

erce

ived

unf

airn

ess

of a

retro

activ

e de

nial

of c

over

age

afte

r a p

atie

nt h

as re

lied

on h

isph

ysic

ian’

s ad

vice

and

incu

rred

a b

ill fo

r tre

atm

ent l

ater

foun

d by

the

insu

rer t

o be

inap

prop

riate

....

An

asse

ssm

ent t

hat a

tech

nolo

gy is

“ex

perim

enta

l” a

t one

tim

e m

ust b

e m

odifi

ed if

add

ition

alre

sear

ch o

r clin

ical

find

ings

val

idat

e (o

r rep

udia

te) i

ts e

ffect

iven

ess.

...

Univ

ersi

ty o

fPe

nnsy

lvan

ia L

awRe

view

140

U P

a.L.

Rev.

1637

Mod

els

ofRa

tioni

ng: H

ealth

Insu

rers

’As

sess

men

t of

Med

ical

Nec

essi

ty

Ap

pen

dix

A. S

elec

ted

Pu

blis

hed

Lit

erat

ure

on

Med

ical

Nec

essi

ty (

So

rted

by

Year

)

Special Report80

1994

Sabi

n, J

ames

E.,

and

Nor

man

Dani

els

The

auth

ors

pose

d th

e qu

estio

n, “

Shou

ld m

enta

l hea

lth in

sura

nce

cove

r onl

y di

sord

ers

foun

din

DSM

-IV, o

r sho

uld

it be

ext

ende

d to

trea

tmen

t for

ord

inar

y sh

ynes

s, u

nhap

pine

ss, a

nd o

ther

resp

onse

s to

life

’s ha

rd k

nock

s?”

Thro

ugh

the

use

of s

ix il

lust

rativ

e ca

se s

tudi

es, t

he a

utho

rsex

amin

ed th

e re

ason

ing

behi

nd th

e de

term

inat

ions

of m

edic

al n

eces

sity

. The

arti

cle

incl

udes

adi

scus

sion

of a

recu

rren

t con

flict

bet

wee

n “h

ard-

line”

and

“ex

pans

ive”

vie

ws

of m

edic

al n

eces

-si

ty, n

otin

g th

at it

freq

uent

ly re

flect

s un

reco

gnize

d m

oral

dis

agre

emen

t abo

ut th

e ta

rget

s of

clin

ical

inte

rven

tion

and

the

ultim

ate

goal

s of

psy

chia

tric

treat

men

t. Th

e au

thor

s pr

esen

t thr

ee m

odel

sfo

rdef

inin

g m

edic

al n

eces

sity

and

arg

ue a

def

ensi

ble

ratio

nale

for t

he “

norm

al”

mod

el, w

hich

com

pris

es a

targ

et o

f a m

edic

ally

def

ined

dev

iatio

n in

tend

ed to

dec

reas

e th

e im

pact

of d

isea

seor

disa

bilit

y. T

hree

test

s of

med

ical

nec

essi

ty a

re o

ffere

d: (1

) Doe

s it

mak

e di

stin

ctio

ns th

e pu

blic

and

clin

icia

ns re

gard

as

fair?

(2) C

an it

be

adm

inis

tere

d in

the

real

wor

ld?

(3) D

oes

it le

ad to

resu

ltsth

at s

ocie

ty c

an a

fford

? In

the

auth

ors’

vie

w, a

typi

cal m

edic

al n

eces

sity

def

initi

on in

the

“nor

mal

” m

odel

wou

ld b

e “t

hose

men

tal h

ealth

ser

vice

s w

hich

are

ess

entia

l for

the

treat

men

tof

a M

embe

r’s m

enta

l hea

lth d

isor

der a

s de

fined

by

the

DSM

-IVin

acc

orda

nce

with

gen

eral

lyac

cept

ed m

enta

l hea

lth p

ract

ice.

” Th

e au

thor

s co

nclu

de th

at th

e DS

M-IV

stan

dard

pro

vide

sw

orka

ble

boun

darie

s fo

r med

ical

nec

essi

ty d

efin

ition

s to

the

exte

nt th

at th

ey a

re th

e re

sult

of a

high

ly p

ublic

pro

cess

ope

n to

sci

entif

ic s

crut

iny,

fiel

d te

stin

g, a

nd re

petit

ive

criti

cism

ove

r tim

e.

Hast

ings

Cen

ter R

epor

t24

(6):5

–13

Dete

rmin

ing

“Med

ical

Nec

essi

ty”

inM

enta

l Hea

lthPr

actic

e

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

Ap

pen

dix

A. C

on

tin

ued


1994

Eddy

, Dav

id M

. EX

CERP

T: “

[...]

whe

n de

term

inin

g th

e ap

prop

riate

use

of a

n in

terv

entio

n, w

e w

ill n

eed

to c

hang

eou

r way

of t

hink

ing

from

qua

litat

ive

reas

onin

g to

qua

ntita

tive

reas

onin

g. T

o a

grea

t ext

ent,

the

pred

icam

ent w

e fa

ce to

day

is th

e re

sult

of q

ualit

ativ

e re

ason

ing

that

ass

umes

that

if a

pra

ctic

em

ight

hav

e an

y be

nefit

it s

houl

d be

don

e—th

e “c

riter

ion

of p

oten

tial b

enef

it.”

Beca

use

this

type

ofre

ason

ing

does

not

try

to d

eter

min

e th

e am

ount

of v

alue

a p

ract

ice

prov

ides

—se

para

ting

thos

ew

ith h

igh

valu

e fro

m th

ose

with

sm

all v

alue

—it

has

left

us w

ith th

e la

rge

inef

ficie

ncie

s th

at w

ese

ein

our

pra

ctic

es to

day.

To

take

adv

anta

ge o

f the

se in

effic

ienc

ies,

we

will

hav

e to

dev

elop

bette

r ski

lls fo

r qua

ntita

tive

reas

onin

g. It

is n

o co

inci

denc

e th

at e

very

exa

mpl

e in

this

arti

cle

was

stud

ded

with

num

bers

; it i

s no

t pos

sibl

e to

det

erm

ine

how

muc

h be

nefit

will

be

gain

ed o

r how

muc

h co

st w

ill b

e sa

ved

by a

tran

sfer

with

out e

stim

atin

g th

e be

nefit

s or

the

cost

s.

“[...

] we

will

nee

d to

cha

nge

from

focu

sing

on

indi

vidu

als

to fo

cusi

ng o

n po

pula

tions

—fro

m “

indi

-vi

dual

-bas

ed”

deci

sion

mak

ing

to “

popu

latio

n-ba

sed”

dec

isio

n m

akin

g. In

par

ticul

ar, p

ract

ition

ers

need

to d

evel

op a

n al

legi

ance

to th

e en

tire

mem

bers

hip

of th

e he

alth

pla

n. T

his

will

be

diffi

cult

fort

hose

who

see

them

selv

es a

s se

rvin

g as

thei

r pat

ient

s’ a

dvoc

ate

in a

stru

ggle

with

adm

inis

-tra

tors

and

insu

rers

. Tha

t per

cept

ion

is in

corr

ect.

Whe

n ph

ysic

ians

hoa

rd re

sour

ces

for t

heir

own

patie

nts,

they

are

not

taki

ng fr

om a

dmin

istra

tors

or i

nsur

ers;

they

are

taki

ng fr

om o

ther

pat

ient

s.If

each

pra

ctiti

oner

is c

once

rned

onl

y ab

out h

is o

r her

indi

vidu

al p

atie

nt, w

ithou

t con

cern

for t

heim

pact

of h

is o

r her

dec

isio

ns o

n ot

her p

atie

nts,

the

resu

lt w

ill n

ot b

e lo

wer

cos

ts a

nd h

ighe

rqu

ality

, but

hig

her c

osts

and

low

er q

ualit

y.

“If h

ealth

pla

ns a

nd in

divi

dual

pra

ctiti

oner

s ar

e to

suc

ceed

in m

akin

g tra

nsfe

rs th

at in

crea

sequ

ality

whi

le re

duci

ng c

osts

, the

y w

ill n

eed

both

gui

danc

e an

d pr

otec

tion.

Gui

danc

e w

ill b

ene

eded

toen

sure

that

dec

isio

ns a

re c

onsi

sten

t and

hav

e th

e de

sire

d ef

fect

s. P

rote

ctio

n w

ill b

ene

eded

tode

fend

bot

h pl

ans

and

prac

titio

ners

whe

n th

ey m

ake

and

impl

emen

t con

trove

rsia

lde

cisi

ons.

The

bes

t way

to a

ddre

ss b

oth

thos

e ne

eds

is to

dev

elop

exp

licit

crite

ria th

at w

ill s

ort

out h

igh-

valu

e pr

actic

es fr

om th

ose

that

hav

e lit

tle o

r no

valu

e an

d w

ill s

uppo

rt tra

nsfe

rs fr

omon

e to

the

othe

r. Cu

rren

tly, t

he c

lose

st w

e ge

t to

such

crit

eria

are

thro

ugh

vagu

e an

d va

riabl

ete

rms

such

as

“med

ical

ly n

eces

sary

” an

d “m

edic

ally

app

ropr

iate

.” B

ut th

ese

are

far t

oo v

ague

and

varia

bly

inte

rpre

ted.

If w

e ar

e to

con

trol c

osts

whi

le p

rese

rvin

g qu

ality

, the

firs

t nee

d is

tode

velo

p be

tter c

riter

ia fo

r ben

efit

lang

uage

.”

JAM

A 27

2(10

) Fr

om T

heor

yto

Prac

tice:

Ratio

ning

Reso

urce

s W

hile

Impr

ovin

g Qu

ality

:Ho

w to

Get

Mor

efo

r Les

s

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

Ap

pen

dix

A. C

on

tin

ued

Special Report82

1997

Hest

er, T

hom

asW

.Th

e go

als

of th

is p

aper

are

to p

rovi

de th

e re

ader

with

an

unde

rsta

ndin

g an

d ra

tiona

le fo

r the

appr

opria

te u

se o

f tre

atm

ent a

lgor

ithm

s fo

r peo

ple

with

ser

ious

men

tal i

llnes

s. It

sug

gest

s ef

fec-

tive

stra

tegi

es fo

r usi

ng tr

eatm

ent a

lgor

ithm

s to

impr

ove

the

qual

ity o

f tre

atm

ent a

nd to

incr

ease

the

acco

unta

bilit

y of

med

icat

ion

treat

men

t. Th

e pa

per a

lso

addr

esse

s po

tent

ial d

ange

rs in

dev

el-

opin

g pr

actic

e gu

idel

ines

and

pro

vide

s ad

vice

for a

void

ing

thes

e pi

tfalls

. Iss

ues

rela

ted

to le

gal

mat

ters

and

man

aged

car

e co

ntra

ctin

g ar

e di

scus

sed

brie

fly.

MAS

MHP

D Re

sear

chIn

stitu

te R

epor

tAl

gorit

hms

and

the

Med

icat

ion

Trea

tmen

t of

Peop

le w

ithSe

rious

Men

tal

Illne

ss

1995

Berg

thol

d,Li

nda

A.Th

e te

rm m

edic

al n

eces

sity

has

bee

n m

ainl

y a

plac

ehol

der i

n in

sura

nce

plan

s fo

r ove

r thi

rty y

ears

.M

ore

rece

ntly

, the

nat

iona

l hea

lth c

are

refo

rm d

ebat

e an

d lit

igat

ion

over

den

ials

of c

ostly

exp

eri-

men

tal t

reat

men

ts h

ave

brok

en th

e te

rm o

ut in

to o

pen

disc

ussi

on a

bout

wha

t a n

eces

sary

ser

vice

is a

nd w

ho s

houl

d de

cide

if it

is c

over

ed. T

his

pape

r sum

mar

izes

the

hist

ory

of th

e te

rm a

nd it

sev

olut

ion

from

an

insu

ranc

e co

ncep

t con

trolle

d by

pra

ctic

ing

phys

icia

ns to

a ra

tioni

ng to

ol u

sed

by in

sura

nce

adm

inis

trato

rs. H

ow d

id n

atio

nal r

efor

m e

fforts

add

ress

this

term

inol

ogy,

and

how

shou

ld w

e de

fine

med

ical

nec

essi

ty in

a c

hang

ing

deliv

ery

syst

em?

Heal

th A

ffairs

14(

4):

180–

190

Med

ical

Nec

essi

ty:

DoW

eN

eed

It?

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

1997

Gros

s, J

oshu

a M

.Kn

owle

dge

of th

e ba

sic

econ

omic

fact

ors

unde

rlyin

g m

anag

ed m

enta

l hea

lth c

are

dire

ctly

impa

cts

the

clin

ical

pra

ctiti

oner

s’ a

bilit

y to

mak

e co

nstru

ctiv

e ch

ange

s in

the

syst

em. T

o ai

d un

ders

tand

ing

this

arti

cle

intro

duce

s th

e m

anag

ed c

are

mar

ketp

lace

mod

el, t

he in

tera

ctiv

e re

latio

nshi

p be

twee

nm

edic

al n

eces

sity

and

pat

ient

co-

paym

ent,

and

dem

and

man

agem

ent e

cono

mic

s. T

he a

utho

ren

cour

ages

pra

ctiti

oner

s to

dev

elop

stra

tegi

es to

ove

rcom

e sp

ecifi

c ec

onom

ic o

bsta

cles

that

prev

ent t

he p

rom

otio

n of

gro

up p

sych

othe

rapy

.

Inte

rnat

iona

l Jou

rnal

ofGr

oup

Psyc

hoth

erap

y47

(4):4

99–5

07

Prom

otin

g Gr

oup

Psyc

hoth

erap

y in

Man

aged

Car

e:Ba

sic

Econ

omic

Prin

cipl

es fo

rth

eCl

inic

alPr

actit

ione

r

1996

Eddy

, Dav

id

The

idea

that

ben

efit

lang

uage

is o

ne o

f the

mos

t im

porta

nt d

eter

min

ants

of t

he q

ualit

y an

d co

stof

care

is a

t the

cor

e of

this

pap

er. S

ampl

e la

ngua

ge is

sup

plie

d de

scrib

ing

heal

th in

terv

entio

n,m

edic

al c

ondi

tion,

hea

lth o

utco

mes

, suf

ficie

nt e

vide

nce,

and

cos

t effe

ctiv

enes

s. It

is n

oted

that

the

crite

ria a

re in

terc

onne

cted

and

poi

nts

to s

ome

of th

e sh

ortc

omin

gs o

f the

pro

pose

d la

ngua

ge.

JAM

ACl

inic

al D

ecis

ion

Mak

ing:

Fro

mTh

eory

toPr

actic

e. B

enef

itLa

ngua

ge:

Crite

ria T

hat W

illIm

prov

e Qu

ality

Whi

le R

educ

ing

Cost

s

Ap

pen

dix

A. C

on

tin

ued


Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

1997

Mor

an, D

onal

dW

.Al

thou

gh th

ere

is g

row

ing

dem

and

for r

egul

atio

n of

the

man

aged

car

e in

dust

ry, r

egul

ator

y pr

opo-

nent

s ha

ve y

et to

arti

cula

te a

cle

ar th

eory

of r

egul

atio

n. M

ost o

bser

vers

ack

now

ledg

e co

nsum

erin

form

atio

n pr

oble

ms

that

regu

latio

n co

uld

addr

ess,

but

ther

e is

no

cons

ensu

s re

gard

ing

regu

la-

tion

of th

e br

oade

r pub

lic c

once

rn a

bout

rest

rictiv

e m

edic

al-n

eces

sity

det

erm

inat

ions

by

heal

thpl

ans.

Con

cern

s ab

out t

hese

issu

es—

whi

ch fa

ll w

ithin

the

gray

are

as o

f div

erge

nt c

linic

al o

pin-

ion—

may

be

diffi

cult

or im

poss

ible

to a

ddre

ss b

y ex

plic

it re

gula

tion.

If p

olic

ymak

ers

forb

ear o

nre

gula

tion

of m

edic

al n

eces

sity

det

erm

inat

ions

, priv

ate

mar

ket i

nnov

atio

n m

ay u

ltim

atel

y re

med

yth

is p

robl

em.

Heal

th A

ffairs

16(

6):7

–21

Fede

ral

Regu

latio

n of

Man

aged

Car

e:An

Impu

lse

inSe

arch

of a

Theo

ry?

1997

Jaco

bson

,Pe

terD

.,St

even

Asch

,Pe

ter A

.Gl

assm

an,

Kary

nE.

Mod

el,

and

John

B.

Hern

ande

z

This

pap

er re

ports

on

a qu

alita

tive

stud

y of

how

hea

lth c

are

prov

ider

s in

the

stat

es o

f Was

hing

ton

and

Oreg

on d

efin

e an

d im

plem

ent m

edic

al n

eces

sity

. Bas

ed o

n a

serie

s of

sem

i-stru

ctur

ed in

ter-

view

s, w

e fo

und

that

few

insu

rers

or h

ealth

car

e pl

ans

in o

ur s

ampl

e at

tem

pted

to re

solv

e th

eam

bigu

ities

inhe

rent

in d

efin

ing

med

ical

nec

essi

ty. M

ore

impo

rtant

ly, o

ur re

sults

sug

gest

that

phys

icia

ns in

man

aged

car

e pl

ans

wer

e no

t usi

ng g

ener

al d

efin

ition

s of

med

ical

nec

essi

ty to

mak

ecl

inic

al d

ecis

ions

, but

inst

ead

relie

d on

util

izatio

n m

anag

emen

t tec

hniq

ues

to g

uide

the

use

of m

edic

al re

sour

ces.

We

conc

lude

that

med

ical

nec

essi

ty a

s an

org

anizi

ng p

rinci

ple

for

clin

ical

pra

ctic

e de

cisi

on-m

akin

g is

like

ly to

con

tinue

to e

rode

in a

man

aged

car

e en

viro

nmen

t.

Inqu

iry 3

4:14

3–15

4De

finin

g an

dIm

plem

entin

gM

edic

alN

eces

sity

inW

ashi

ngto

n St

ate

and

Oreg

on

Ap

pen

dix

A. C

on

tin

ued

1998

Ande

rson

, G. F

.,an

d M

. A. H

all

OBJE

CTIV

ES: T

he a

utho

rs e

xam

ined

how

the

cour

ts h

ave

resp

onde

d to

pub

lic a

nd p

rivat

ein

sure

rs’ u

se o

f med

ical

app

ropr

iate

ness

crit

eria

to e

stab

lish

cove

rage

and

pay

men

t pol

icie

s.

MET

HODS

: A s

truct

ured

revi

ew o

f all

fede

ral a

nd s

tate

cou

rt he

alth

insu

ranc

e ca

ses

deci

ded

betw

een

1960

and

Jun

e 19

94 th

at in

volv

ed a

dis

pute

invo

lvin

g m

edic

al a

ppro

pria

tene

ss w

aspe

rform

ed. A

tota

l of 3

,215

pub

lishe

d co

urt d

ecis

ions

wer

e an

alyz

ed, o

f whi

ch 2

03 m

et th

ecr

iteria

of re

leva

nce

and

124

expl

icitl

y m

entio

ned

med

ical

app

ropr

iate

ness

crit

eria

. The

mai

nou

tcom

e va

riabl

e w

as w

heth

er th

e co

urt o

rder

ed th

e in

sure

r to

prov

ide

cove

rage

.

RESU

LTS:

In 1

85 c

ases

, ade

finiti

ve d

ecis

ion

was

rend

ered

, and

the

insu

rer w

as re

quire

dto

pay

in57

% o

f the

dec

isio

ns. W

heth

er th

e in

sure

r rel

ied

on a

n as

sess

men

t or n

ot, w

heth

erth

eas

sess

men

t pro

cess

was

form

al o

r inf

orm

al, a

nd w

ho c

ondu

cted

the

asse

ssm

ent d

idno

tapp

ear t

o in

fluen

ce c

ourts

’ dec

isio

ns, n

or d

id th

e sp

ecifi

city

of t

he c

over

age

excl

usio

n.Si

gnifi

cant

pre

dict

ors

of c

ourts

ord

erin

g co

vera

ge w

ere

cour

t jur

isdi

ctio

n, c

ontra

ct la

ngua

geas

sign

ing

disc

retio

n to

the

insu

rer,

seve

rity

of p

atie

nt’s

cond

ition

, and

whe

ther

the

treat

men

tap

pear

ed to

wor

k fo

r the

par

ticul

ar p

atie

nt.

CON

CLUS

ION

S:Fo

r pra

ctic

e gu

idel

ines

to b

e ac

cept

ed b

y th

e co

urts

, it i

s m

ore

impo

rtant

tofo

cus

on h

ow in

sura

nce

cont

ract

s ar

e w

ritte

n th

an o

n ho

w m

edic

al a

sses

smen

ts a

re p

erfo

rmed

.

Med

ical

Car

e36

(8):1

295–

1302

Whe

n Co

urts

Revi

ew M

edic

alAp

prop

riate

ness

Special Report84

1998

Mill

er, M

onic

aTh

e re

port

revi

ews

the

term

s ‘m

edic

al n

eces

sity

’ and

‘med

ical

ly n

eces

sary

car

e’ a

s th

ey a

redi

scus

sed

in N

ew Y

ork

case

law

. The

y co

nten

d th

at th

e ju

dici

al, c

ontra

ctua

l, an

d st

atut

ory

deve

lopm

ents

in N

ew Y

ork

crea

ted

a st

anda

rd o

f car

e th

at w

as lo

wer

than

the

negl

igen

cest

anda

rd.

Foun

datio

n fo

r the

Adva

ncem

ent o

fIn

nova

tive

Med

icin

eRe

port

Rese

arch

:Th

eDe

bate

Over

Med

ical

Nec

essi

ty in

Case

Law

and

Gove

rnm

ent/

Indu

stry

For

ums

1998

The

Nat

iona

lHe

alth

Law

Prog

ram

Prov

ides

NHe

LP’s

mod

el m

edic

al n

eces

sity

lang

uage

.Th

e N

atio

nal H

ealth

Law

Prog

ram

Rep

ort

Med

ical

Nec

essi

tyDe

finiti

onM

odel

Med

icai

dM

anag

ed C

are

Cont

ract

Prov

isio

ns

1998

Moh

l, Pa

ul C

. Le

tter f

rom

the

edito

r dis

cuss

ing

phys

icia

n cu

lpab

ility

in e

ngen

derin

g HM

Os a

nd m

edic

alne

cess

ity d

efin

ition

s.Ps

ychi

atric

Ser

vice

s49

(11)

:139

1M

edic

alN

eces

sity

:A

Mov

ing

Targ

et

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

1998

Ford

, Will

iam

Di

scus

ses

the

impa

ct o

f man

aged

car

e m

edic

al n

eces

sity

def

initi

ons

on p

sych

iatri

c ca

re.

Poin

tsto

som

e po

ssib

le re

ason

s w

hy B

HMOs

focu

s on

cut

ting

shor

t-ter

m c

osts

rath

er th

anm

anag

ing

long

-term

cos

ts, i

nclu

ding

sho

rt co

ntra

ct te

rms

and

labo

r-in

tens

ive

revi

ews.

Psyc

hiat

ric S

ervi

ces

49(2

):183

–184

Med

ical

Nec

essi

ty:

ItsIm

pact

inM

anag

ed M

enta

lHe

alth

Car

e

1998

Chod

off,

Paul

Man

aged

car

e an

d, s

peci

fical

ly, t

he n

eed

to c

onfo

rm to

med

ical

nec

essi

ty re

quire

men

ts h

ave

had

a dr

amat

ic e

ffect

on

the

med

ical

and

psy

chia

tric

prac

tice,

esp

ecia

lly o

n ps

ycho

ther

apy.

The

auth

or d

escr

ibes

the

prog

ress

ion

of th

e co

ncep

t of m

edic

al n

eces

sity

from

a s

impl

e ac

coun

ting

ofse

rvic

es re

imbu

rsab

le b

y in

sura

nce

com

pani

es to

an

ambi

guou

s te

rm w

ithou

t def

initi

onal

cons

ensu

s. H

e de

scrib

es it

s re

latio

nshi

p to

the

med

ical

mod

el a

nd d

iscu

sses

the

inco

ngru

itybe

twee

n m

edic

al n

eces

sity

and

cer

tain

asp

ects

of p

sych

othe

rapy

. He

prop

oses

a b

road

erco

ncep

t—he

alth

nec

essi

ty—

base

d on

an

eval

uatio

n of

the

adva

ntag

es, d

isad

vant

ages

, and

cost

sof

med

ical

and

psy

chia

tric

serv

ices

.

Psyc

hiat

ric S

ervi

ces

49(1

1):1

481–

1483

Med

ical

Nec

essi

ty a

ndPs

ycho

ther

apy

Ap

pen

dix

A. C

on

tin

ued

1998

Olso

n, K

risti

Disc

usse

s po

ssib

le c

onse

quen

ces

of u

sing

an

evid

ence

-bas

ed s

tand

ard

for d

eter

min

ing

med

ical

nece

ssity

. It p

oint

s to

the

fact

that

man

y co

mm

only

use

d pr

actic

es w

ill fa

il to

mee

t evi

denc

e-ba

sed

crite

ria. I

t als

o is

con

cern

ed th

at m

inor

ity g

roup

s, c

hild

ren,

and

wom

en, w

ho a

re h

isto

rical

lylim

ited

in a

cces

s to

car

e an

d tri

als,

will

suf

fer d

ispr

opor

tiona

tely

und

er e

vide

nce-

base

d cr

iteria

.

The

Nat

iona

l Hea

lthLa

wPr

ogra

m R

epor

tTh

e Th

reat

of

Evid

ence

-Bas

edDe

finiti

ons

ofM

edic

alN

eces

sity


Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

Ap

pen

dix

A. C

on

tin

ued

1999

Berg

thol

d,Li

nda

A.Po

licy

pape

r dis

cuss

ing

the

prob

lem

s in

here

nt in

def

inin

g th

e te

rm “

med

ical

nec

essi

ty.”

She

poin

ts o

ut th

at th

e pr

oces

s by

whi

ch d

ecis

ions

are

mad

e is

far m

ore

impo

rtant

to u

nder

stan

dan

dim

prov

e th

an th

e te

rmin

olog

y us

ed to

des

crib

e th

ose

deci

sion

s, th

at th

ere

is s

ubst

antia

lva

riatio

n in

the

way

med

ical

nec

essi

ty is

def

ined

and

use

d in

priv

ate

cont

ract

, and

that

ther

eis

cons

ider

able

dis

crep

ancy

bet

wee

n co

ntra

ctua

l def

initi

ons

and

the

way

thos

e de

finiti

ons

are

appl

ied

in p

ract

ice.

Her

fina

l rec

omm

enda

tion

is th

at th

e Se

nate

not

def

ine

the

term

s in

sta

tute

.Ra

ther

they

sho

uld

appo

int a

bro

ader

gro

up o

f sta

keho

lder

s to

take

on

the

task

.

US S

enat

e Co

mm

ittee

onHe

alth

, Edu

catio

n,La

bor,

and

Pens

ions

Repo

rt

Test

imon

y to

the

US S

enat

eCo

mm

ittee

onHe

alth

,Ed

ucat

ion,

Lab

or,

and

Pens

ions

:M

edic

alN

eces

sity

:Fr

omTh

eory

toPr

actic

e

1998

Rose

nbau

m,

Sara

, et a

l.Co

ntai

ns c

ompi

led

list a

nd a

naly

sis

of m

edic

al n

eces

sity

def

initi

ons

cont

aine

d in

sta

te M

edic

aid

man

aged

car

e co

ntra

cts.

Cent

er fo

r Hea

lthSe

rvic

es R

esea

rch

and

Polic

y

Neg

otia

ting

the

New

Hea

lthCa

reSy

stem

: AN

atio

nwid

e St

udy

of M

edic

aid

Man

aged

Car

eCo

ntra

cts

1999

Berm

an, S

teve

BACK

GROU

ND:

Mor

e th

an 2

00 h

ealth

car

e po

licym

aker

s an

d re

sear

cher

s, c

linic

ians

, qua

lity

prof

essi

onal

s, a

nd o

ther

repr

esen

tativ

es o

f man

aged

car

e or

gani

zatio

ns, g

over

nmen

t, an

dac

adem

ia a

ttend

ed th

e fif

th a

nnua

l Bui

ldin

g Br

idge

s co

nfer

ence

, “Th

e He

alth

Car

e Pu

zzle

: Usi

ngRe

sear

ch to

Brid

ge th

e Ga

p Be

twee

n Pe

rcep

tion

and

Real

ity,”

in C

hica

go, A

pril

11–1

3, 1

999.

Spon

sore

d by

the

Amer

ican

Ass

ocia

tion

of H

ealth

Pla

ns a

nd th

e Ag

ency

for H

ealth

Car

e Po

licy

and

Rese

arch

—an

d no

w, t

he C

ente

rs fo

r Dis

ease

Con

trol a

nd P

reve

ntio

n—th

ese

annu

al c

onfe

r-en

ces

are

inte

nded

to p

rom

ote

rese

arch

in m

easu

ring

the

qual

ity a

nd e

ffect

iven

ess

of th

e se

rvic

eshe

alth

pla

ns p

rovi

de. S

elec

ted

plen

ary

sess

ions

from

the

conf

eren

ce a

re re

pres

ente

d in

this

repo

rt. K

EYN

OTE

ADDR

ESS:

“Th

ree

wor

thy

obje

ctiv

es”

for m

anag

ed c

are—

harm

onize

pra

ctic

egu

idel

ines

, dev

elop

evi

denc

e-ba

sed

co-p

ays

or p

rice

stru

ctur

e fo

r dru

gs, a

nd d

emys

tify

med

ical

nece

ssity

—w

ere

disc

usse

d. P

LEN

ARY:

A P

OPUL

ATIO

N H

EALT

H PE

RSPE

CTIV

E: P

opul

atio

n-ba

sed

care

is d

esig

ned

to id

entif

y ef

fect

ive

clin

ical

and

ser

vice

inte

rven

tions

and

ens

ure

thei

r effi

cien

tde

liver

y, id

entif

y in

effe

ctiv

e in

terv

entio

ns a

nd m

inim

ize

thei

r use

, and

mon

itor o

utco

mes

and

chan

ge p

ract

ice

if ou

tcom

es a

re s

ub-o

ptim

al. Y

et c

erta

in q

uest

ions

nee

d to

be

aske

d ab

out h

owto

put t

his

stra

tegy

in p

lace

, esp

ecia

lly, “

Why

sho

uld

any

indi

vidu

al o

r pot

entia

l pat

ient

be

will

ing

to b

e tre

ated

in a

pop

ulat

ion-

base

d de

liver

y sy

stem

?” T

HE F

INAN

CIAL

AN

D SC

IEN

TIFI

C EV

IDEN

CEBE

HIN

D PR

EVEN

TION

: The

con

cept

s of

sci

entif

ic e

vide

nce

and

finan

cial

evi

denc

e fo

r pre

vent

ion

wer

e re

view

ed a

nd a

pplie

d in

sce

nario

s of

the

effe

ctiv

enes

s an

d co

st-e

ffect

iven

ess

of s

elec

ted

prev

entiv

e ca

re s

ervi

ces.

Edu

catio

n ef

forts

are

nee

ded

to p

rom

ote

the

use

of e

ffect

ive

inte

rven

-tio

ns a

nd e

ncou

rage

que

stio

ning

of i

nter

vent

ions

with

unp

rove

n or

less

impo

rtant

effe

ctiv

enes

san

d po

or c

ost-e

ffect

iven

ess.

The

Join

t Com

mis

sion

Jour

nal o

n Qu

ality

Impr

ovem

ent 2

5(8)

:43

4–44

2

Mea

surin

g an

dIm

prov

ing

the

Qual

ity o

f Car

eof

Heal

th P

lans

Special Report86

1999

Halla

m, K

.Di

scus

ses

fede

ral m

edic

al n

eces

sity

legi

slat

ion

in b

rief.

Mod

ern

Heal

thca

re (3

)La

wm

aker

sDe

fine

Med

ical

Nec

essi

ty

1999

Corli

n, R

icha

rdFo

rmal

AM

A st

atem

ent b

efor

e th

e Se

nate

add

ress

ing

the

issu

e of

med

ical

nec

essi

ty. E

mph

asize

sth

at th

e de

finiti

on o

f med

ical

nec

essi

ty w

ill b

ecom

e th

e st

anda

rd a

pplie

d to

all

revi

ew d

ecis

ions

.He

alth

pla

n de

finiti

ons

may

pla

ce b

arrie

rs b

etw

een

patie

nts

and

spec

ialty

car

e. T

hey

also

leav

em

ost o

f the

med

ical

dec

isio

n-m

akin

g di

scre

tion

with

hea

lth p

lans

as

oppo

sed

to th

e pa

tient

’sph

ysic

ian.

Rec

ount

s 19

98 A

MA

cons

ensu

s de

finiti

on o

f med

ical

nec

essi

ty, u

sing

a p

rude

ntph

ysic

ian

stan

dard

. It a

lso

men

tions

the

heal

th p

lan

prac

tice

of re

troac

tive

deni

als

for r

ende

red

care

, whi

ch th

e AM

A be

lieve

s sh

ould

als

o be

add

ress

ed.

Amer

ican

Med

ical

Asso

ciat

ion

Stat

emen

t of

the

AMA

toth

eCo

mm

ittee

onHe

alth

,Ed

ucat

ion,

Lab

oran

d Pe

nsio

ns,

Unite

d St

ates

Sena

te

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

Ap

pen

dix

A. C

on

tin

ued

1999

Ireys

, Hen

ry T

.,El

izabe

th W

ehr,

and

Robe

rt E.

Cook

e

Disc

usse

s m

edic

al n

eces

sity

det

erm

inat

ions

in re

gard

s to

per

sons

with

dev

elop

men

tal d

isab

ilitie

s.Th

e re

port

has

a flo

w c

hart

show

ing

the

dyna

mic

s of

med

ical

nec

essi

ty d

ecis

ions

with

in c

urre

ntse

rvic

e sy

stem

s. It

als

o pr

ovid

es it

s ow

n sp

ecifi

catio

ns fo

r det

erm

inin

g m

edic

al n

eces

sity

.

Nat

iona

l Cen

ter f

orEd

ucat

ion

in M

ater

nal

and

Child

Hea

lth R

epor

t

Defin

ing

Med

ical

Nec

essi

ty:

Stra

tegi

es fo

rPr

omot

ing

Acce

ss to

Qual

ityCa

re fo

rPe

rson

s w

ithDe

velo

pmen

tal

Disa

bilit

ies,

Men

tal

Reta

rdat

ion,

and

Othe

r Spe

cial

Heal

th C

are

Nee

ds

1999

Mac

iela

k, P

aul,

and

Mon

ica

Mill

er

Two

lette

rs re

gard

ing

New

Yor

k St

ate’

s m

edic

al n

eces

sity

sta

tute

. The

firs

t opp

oses

the

stat

ute

beca

use

of c

once

rns

that

it le

aves

all

med

ical

dec

isio

n-m

akin

g in

the

hand

s of

the

phys

icia

nsan

d el

imin

ates

the

plan

’s ab

ilitie

s to

con

duct

util

izatio

n re

view

s. T

he s

econ

d le

tter i

s a

rebu

ttal

that

atte

mpt

s to

deb

unk

the

first

poi

nt-b

y-po

int.

Heal

th L

obby

Let

ters

The

Atom

ic B

omb

Scar

e Ov

erDe

finin

g M

edic

alN

eces

sity


Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

Ap

pen

dix

A. C

on

tin

ued

1999

Rose

nbau

m, S

., D.

Fra

nkfo

rd,

B. M

oore

, an

d P.

Bor

zi

In th

e au

thor

s’ v

iew

, an

insu

rer s

houl

d be

abl

e to

set

asi

de th

e re

com

men

datio

ns o

f a tr

eatin

gph

ysic

ian

only

in re

stric

ted

circ

umst

ance

s. D

ecis

ions

abo

ut c

over

age

shou

ld c

ontin

ue to

be

wei

ghed

aga

inst

clin

ical

ly a

ccep

ted

stan

dard

s of

med

ical

pra

ctic

e. A

n in

sure

r’s d

ecis

ion

shou

ldbe

law

ful o

nly

if th

e in

sure

r can

pro

ve th

at th

e de

cisi

on re

sts

on v

alid

and

relia

ble

evid

ence

that

isre

leva

nt to

a p

atie

nt’s

indi

vidu

al c

ircum

stan

ces.

The

aut

hors

adv

ocat

e ne

ither

a re

turn

to to

tal

auto

nom

y fo

r tre

atin

g ph

ysic

ians

in d

eter

min

ing

insu

ranc

e co

vera

ge n

or a

sys

tem

in w

hich

insu

rers

dec

ide

on c

over

age

acco

rdin

g to

crit

eria

that

are

tota

lly in

depe

nden

t of p

rofe

ssio

nal

stan

dard

s of

clin

ical

pra

ctic

e. R

athe

r, th

ey p

ropo

se m

aint

aini

ng th

e m

iddl

e po

sitio

n re

pres

ente

dby

cur

rent

law

. Thi

s m

iddl

e po

sitio

n re

quire

s in

sure

rs to

act

reas

onab

ly a

nd w

eigh

s th

e re

ason

-ab

lene

ss o

f the

ir co

nduc

t aga

inst

pro

fess

iona

l sta

ndar

ds o

f pra

ctic

e as

refle

cted

by

valid

and

relia

ble

evid

ence

.

The

New

Eng

land

Jour

nal o

f Med

icin

e34

0(3)

:229

–232

Who

Sho

uld

Dete

rmin

e W

hen

Heal

th C

are

IsM

edic

ally

Nec

essa

ry?

1999

Rovn

er, J

ulie

Di

scus

ses

the

gene

ral b

ackg

roun

d of

the

curr

ent m

edic

al n

eces

sity

deb

ate

in b

rief.

Busi

ness

and

Hea

lth (2

6)M

edic

alN

eces

sity

Tak

esCe

nter

Sta

ge

1999

Sing

er, S

ara

J.,

Lind

a A.

Berg

thol

d,Ca

rolV

orha

us,

Alai

n En

thov

en,

etal

.

This

is a

n in

-dep

th re

port

look

ing

into

the

ques

tion

of m

edic

al n

eces

sity

. It d

eals

with

the

vari-

atio

n an

d in

cons

iste

ncie

s of

def

initi

ons

that

the

vario

us s

take

hold

ers

have

. It n

otes

a p

auci

tyof

rese

arch

rega

rdin

g he

alth

pla

n de

cisi

on-m

akin

g an

d w

heth

er m

edic

al n

eces

sity

def

initi

ons

play

are

al ro

le in

dec

isio

n-m

akin

g. It

doc

umen

ts a

num

ber o

f con

fere

nces

and

orig

inal

rese

arch

,ev

entu

ally

con

clud

ing

with

a c

onse

nsus

for a

mod

el d

ecis

ion-

mak

ing

proc

ess

and

med

ical

nece

ssity

def

initi

ons.

It c

oncl

udes

by

revi

ewin

g th

e va

rious

sta

keho

lder

s, th

eir c

once

rns,

and

wha

t act

ions

they

cou

ld ta

ke to

dec

reas

e m

edic

al n

eces

sity

var

iabi

lity.

Stan

ford

Uni

vers

ityRe

port

Decr

easi

ngVa

riatio

nin

Med

ical

Nec

essi

tyDe

cisi

on M

akin

g

2000

Alle

n, K

athr

ynTh

is re

port

exam

ines

the

impl

emen

tatio

n an

d ef

fect

s to

dat

e of

the

fede

ral p

arity

law

, and

focu

ses

on: (

1) e

mpl

oyer

s’ c

ompl

ianc

e an

d th

e ch

ange

s m

ade

to th

eir h

ealth

ben

efit

plan

s, (2

) wha

t is

know

n ab

out t

he c

osts

of c

ompl

ying

with

the

law

, and

(3) t

he o

vers

ight

role

s of

HHS

and

DOL

inen

forc

ing

the

law

. In

brie

f, th

ey fo

und

that

mos

t em

ploy

ers

com

ply

with

the

law

; how

ever

, the

yha

ve b

ecom

e m

ore

rest

rictiv

e in

the

num

ber o

f hos

pita

l day

s or

out

patie

nt v

isits

cov

ered

for

men

tal h

ealth

whe

n co

mpa

red

with

trad

ition

al m

edic

al b

enef

its. F

ew e

mpl

oyer

s re

porte

d th

at th

ela

w h

as re

sulte

d in

hig

her c

osts

. Fin

ally

, the

rece

nt la

ws

have

exp

ande

d DO

L’s ro

le in

regu

latin

ghe

alth

ben

efits

.

Unite

d St

ates

Gen

eral

Acco

untin

g Of

fice

Repo

rt

Empl

oyer

s’M

enta

l Hea

lthBe

nefit

s Re

mai

nLi

mite

d De

spite

New

Fed

eral

Stan

dard

s

Special Report88

2000

Ford

, Will

iam

Th

e co

ncep

t of m

edic

al n

eces

sity

is a

pro

visi

on o

f com

mer

cial

insu

ranc

e co

ntra

cts

and

fede

ral

gove

rnm

ent M

edic

aid

requ

irem

ents

that

lim

its th

e pa

ymen

t to

only

thos

e se

rvic

es th

at a

re e

ssen

-tia

l for

trea

ting

a pe

rson

’s si

ckne

ss, i

njur

y, o

r con

ditio

n. T

he c

once

pt o

f med

ical

nec

essi

ty is

one

tool

use

d by

third

-par

ty p

ayer

s to

con

tain

thei

r fin

anci

al ri

sk in

a s

eem

ingl

y no

n-ar

bitra

ry m

anne

r.Al

so, t

he d

efin

ition

s of

med

ical

nec

essi

ty u

sed

by c

omm

erci

al in

sure

rs o

r by

the

fede

ral g

over

n-m

ent r

efle

ct th

eir p

rodu

ct’s

or p

rogr

am’s

philo

soph

ies.

Exp

andi

ng c

omm

erci

al in

sura

nce

orM

edic

aid

psyc

hiat

ric c

over

age

wou

ld re

quire

cha

ngin

g th

ose

philo

soph

ies.

As

long

as

soci

ety

isfa

ced

with

a g

reat

er d

eman

d fo

r hea

lth-r

elat

ed s

ervi

ce th

an re

sour

ces

to m

eet t

hem

, suc

hsy

stem

s of

ratio

ning

will

be

used

. Eve

n w

ith fu

ll pa

rity

for p

sych

iatri

c be

nefit

s, m

echa

nism

s w

illbe

used

by

paye

rs to

lim

it or

con

trol d

eman

d, th

ereb

y co

ntro

lling

fina

ncia

l ris

k. T

he s

hort-

term

chal

leng

e fo

r psy

chia

tric

advo

cate

s is

to s

ecur

e th

e m

ost a

ccep

tabl

e de

finiti

ons

of m

edic

alne

cess

ity fr

om th

ird-p

arty

pay

ers.

The

long

-term

cha

lleng

e fo

r MH/

SA a

dvoc

ates

and

for a

llhe

alth

care

adv

ocat

es, i

s to

dev

elop

a s

yste

m th

at p

ays

for t

he g

reat

est n

umbe

r of q

ualit

y se

r-vi

ces

for t

he g

reat

est n

umbe

r of p

eopl

e in

nee

d, in

an

affo

rdab

le m

anne

r, re

gard

less

of d

iagn

osis

.

Psyc

hiat

ric C

linic

sof

Nor

th A

mer

ica

23(2

):309

–317

Med

ical

Nec

essi

ty a

ndPs

ychi

atric

Man

aged

Car

e

2000

Heal

th In

sura

nce

Asso

ciat

ion

ofAm

eric

a

This

pol

icy

piec

e sc

ripte

d on

beh

alf o

f the

HIA

A hi

ghlig

hts

the

prob

lem

s of

allo

win

g m

edic

alne

cess

ity to

be

defin

ed b

y ph

ysic

ians

rath

er th

an in

sure

rs. E

ssen

tially

, it a

rgue

s th

at le

gisl

atio

nch

angi

ng th

e st

atus

quo

wou

ld: (

1) u

nder

min

e ut

iliza

tion

man

agem

ent a

nd in

crea

se c

osts

,(2

)enc

oura

ge fr

aud

and

abus

e, (3

) und

erm

ine

qual

ity a

nd p

erha

ps e

ven

expo

se p

atie

nts

toda

nger

, and

(4) u

nder

min

e co

ntra

ct la

w. I

n th

e en

d th

ey c

oncl

ude

that

pla

cing

det

erm

inat

ion

pow

ers

back

squa

rely

in th

e ha

nds

of p

rovi

ders

will

sim

ply

undo

all

the

prog

ress

mad

e in

hea

lthca

re s

ince

its

depa

rture

from

wid

espr

ead

fee-

for-

serv

ice

arra

ngem

ents

.

Heal

th In

sura

nce

Asso

ciat

ion

of A

mer

ica

Repo

rt

“Med

ical

Nec

essi

ty”

and

Heal

th P

lan

Cont

ract

s

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

2000

Flei

shm

an, M

artin

This

arti

cle

revi

ews

AMA’

s de

finiti

on o

f med

ical

nec

essi

ty a

nd p

oint

s ou

t pro

blem

s of

its

appl

ica-

tion

to p

sych

iatry

. It a

lso

reco

mm

ends

its

own

defin

ition

for p

sych

iatry

afte

r a d

iscu

ssio

n of

HIPA

Ala

w a

nd p

ossi

ble

impl

icat

ions

for f

raud

in p

sych

iatry

.

Psyc

hiat

ric S

ervi

ces

51(6

): 71

1–71

2, 7

19W

hat i

sPs

ychi

atric

“Med

ical

Nec

essi

ty”?

2000

Apga

r, Kr

iste

nRe

ason

erPr

epar

ed fo

r OPM

, thi

s re

port

desc

ribed

how

larg

e co

rpor

atio

ns w

ere

stru

ctur

ing

thei

r ins

uran

cepl

ans

in o

rder

to d

eal w

ith n

ew m

enta

l hea

lth p

arity

legi

slat

ion.

It d

iscu

sses

a ‘b

ig p

ictu

re’

appr

oach

, rep

orte

dly

focu

sing

on

keep

ing

empl

oyee

s he

alth

y an

d w

ell i

n or

der t

o av

oid

late

rpr

oble

ms

with

abs

ente

eism

, dis

abili

ty, a

nd lo

st p

rodu

ctiv

ity. E

ight

em

ploy

ers

wer

e st

udie

d:Am

eric

an A

irlin

es, A

T&T,

Delta

Airl

ines

, Eas

tman

Kod

ak, I

BM, G

ener

al M

otor

s, th

e M

assa

chus

etts

Grou

p In

sura

nce

Com

mis

sion

, and

Pep

siCo

. The

y hi

ghlig

ht w

hat t

hey

belie

ve to

be

esse

ntia

lm

echa

nism

s to

pro

vidi

ng p

arity

in c

are

as w

ell a

s id

entif

y pr

oble

mat

ic a

reas

. The

aut

hor

disc

usse

sth

e us

e of

man

aged

beh

avio

ral c

are

carv

e-ou

ts. T

he d

ocum

ent e

nds

by m

akin

gre

com

men

datio

ns re

gard

ing

how

OPM

sho

uld

stru

ctur

e fu

ture

insu

ranc

e pr

ogra

ms.

Offic

e of

Per

sonn

elM

anag

emen

t Rep

ort

Larg

e Em

ploy

erEx

perie

nces

and

Best

Pra

ctic

esin

Desi

gn,

Adm

inis

tratio

n,an

d Ev

alua

tion

ofM

enta

l Hea

lthan

d Su

bsta

nce

Abus

e Be

nefit

s:A

Look

at P

arity

in E

mpl

oyer

-Sp

onso

red

Heal

thBe

nefit

Pro

gram

s

Ap

pen

dix

A. C

on

tin

ued


Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

2000

Hill,

Hug

h,An

nette

Han

son,

and

Bren

tO’

Conn

ell

This

repo

rt su

mm

arize

s a

sess

ion

that

eva

luat

ed th

e pr

oces

ses

for m

akin

g co

vera

ge d

ecis

ions

inpr

ivat

e, S

tate

, and

Fed

eral

ven

ues.

Hig

hmar

k Bl

ue C

ross

Blu

e Sh

ield

des

crib

es th

eir d

ecis

ion-

mak

ing

proc

ess,

bui

lt ar

ound

a c

ontra

ctua

l def

initi

on o

f ‘m

edic

al n

eces

sity

,’ w

hich

it p

rovi

des.

The

Mas

sach

uset

ts M

edic

aid

mod

el is

bas

ed o

n st

atut

ory

defin

ition

s of

med

ical

nec

essi

tyan

dev

iden

ce-b

ased

ass

essm

ents

of n

ew in

terv

entio

ns. H

CFA

is a

lso

desc

ribed

, dra

win

g its

auth

orita

tive

pow

ers

from

sec

tion

1862

of t

he S

ocia

l Sec

urity

Act

. Ser

vice

s or

tech

nolo

gies

that

fulfi

ll th

ecr

iteria

of t

he d

efin

ition

are

div

ided

into

55

stat

utor

ily d

efin

ed b

enef

it ca

tego

ries.

AHRQ

Use

r Lia

ison

Prog

ram

Rep

ort

Cove

rage

Deci

sion

s

2000

AMA

Priv

ate

Sect

or A

dvoc

acy

Grou

p

This

doc

umen

t con

tain

s th

e AM

A m

odel

def

initi

on o

f med

ical

nec

essi

ty a

nd d

iscu

sses

the

need

forp

rovi

ding

a d

efin

ition

that

refle

cts

a cl

inic

al d

eter

min

atio

n ra

ther

than

a b

usin

ess

dete

rmin

atio

n.

AMA

Priv

ate

Advo

cacy

Grou

p Re

port

Med

ical

Nec

essi

ty

Ap

pen

dix

A. C

on

tin

ued

2000

Land

au, M

orris

This

sho

rt br

iefin

g on

the

natu

re o

f the

cur

rent

diff

icul

ties

in d

efin

ing

med

ical

nec

essi

tyco

nclu

des

that

a c

ompr

ehen

sive

app

roac

h th

at d

iffer

s fro

m th

ird p

arty

ratio

ning

sho

uld

beus

edin

form

ing

ade

cisi

on.

Heal

th L

aw a

nd P

olic

yIn

stitu

te R

epor

tTh

e Di

fficu

lties

inDe

finin

g M

edic

alN

eces

sity

2000

Sabi

n, J

ames

,an

d N

orm

anDa

niel

s

This

arti

cle

disc

usse

s ps

ychi

atric

pro

blem

s w

ith m

edic

al n

eces

sity

def

initi

ons

and

expr

esse

sa

need

for ‘

psyc

hoso

cial

nec

essi

ty’ e

xpan

sion

. It r

evie

ws

Iow

a’s

expe

rienc

e w

ith m

anag

edbe

havi

oral

hea

lth c

are

and

prog

nost

icat

es th

at p

sych

iatri

sts

will

be

forc

ed to

opt

out

of t

heou

tpat

ient

trea

tmen

t of t

he s

ever

ely

men

tal i

ll du

e to

cur

rent

BHM

O po

licie

s.

Psyc

hiat

ric S

ervi

ces

51(4

):445

–459

Publ

ic-S

ecto

rM

anag

edBe

havi

oral

Heal

thCa

re:

V.Re

defin

ing

“Med

ical

Nec

essi

ty”—

The

Iow

a Ex

perie

nce

2000

Satc

her,

Davi

dTh

is c

ompr

ehen

sive

repo

rt gi

ves

deta

iled

back

grou

nd in

to m

any

face

ts o

f men

tal h

ealth

car

e.Ch

apte

r 6, “

Orga

nizin

g an

d Fi

nanc

ing

Men

tal H

ealth

Ser

vice

s,”

give

s an

in-d

epth

ana

lysi

s of

the

econ

omic

stru

ctur

e an

d co

sts

of m

oder

n m

enta

l hea

lth c

are

with

com

paris

ons

to tr

aditi

onal

med

ical

hea

lth c

are.

The

doc

umen

t als

o ex

amin

es th

e is

sue

of m

enta

l hea

lth p

arity

, loo

king

at

legi

slat

ive

trend

s an

d co

sts.

Thr

ough

out t

he d

ocum

ent,

how

ever

, the

re is

no

disc

ussi

on o

f men

tal

heal

th m

edic

al n

eces

sity

.

Unite

d St

ates

Publ

icHe

alth

Serv

ice

Repo

rt

Men

tal H

ealth

:A

Repo

rt of

the

Surg

eon

Gene

ral

2000

Amer

ican

Psyc

hSy

stem

sTh

is p

acke

t of m

ater

ials

sen

t to

psyc

hiat

ric p

rovi

ders

con

tain

s ne

wsl

ette

rs a

bout

rece

nt c

hang

es,

a co

mpl

ete

copy

of t

he u

pdat

ed U

tiliza

tion

Man

agem

ent c

riter

ia, a

nd a

cop

y of

pol

icie

s an

d pr

oce-

dure

s re

gard

ing

coor

dina

tion

of c

are

and

prov

ider

app

eals

. Med

ical

nec

essi

ty is

def

ined

in lo

ose

term

s fo

r eac

h co

nditi

on; h

owev

er, a

sep

arat

e se

t of a

dmis

sion

crit

eria

als

o m

ust b

e m

et p

rior t

oad

mitt

ing

a pa

tient

for a

psy

chia

tric

cond

ition

or c

ontin

uing

car

e fo

r a p

rotra

cted

per

iod

of ti

me.

Amer

ican

Psyc

hSy

stem

sPr

ovid

erPa

cket

Amer

ican

Psyc

hSy

stem

sPr

ovid

er P

acke

t

Special Report90

2001

Nat

iona

lCo

mm

ittee

forQ

ualit

yAs

sura

nce

Thes

e ar

e th

e pu

blis

hed

guid

elin

es u

sed

by N

CQA

to a

ccre

dit M

BHOs

. Def

initi

ons

of m

edic

alne

cess

ity a

re n

ot s

ugge

sted

by

NCQ

A; th

e M

BHOs

’ def

initi

ons

sim

ply

mus

t be

acce

ssib

le a

ndin

clud

e pr

oced

ures

for a

pply

ing

crite

ria b

ased

on

the

need

s of

indi

vidu

al p

atie

nts

and

char

acte

r-is

tics

of th

e lo

cal d

eliv

ery

syst

em. N

CQA

does

def

ine

med

ical

nec

essi

ty d

enia

l and

und

ersc

ores

the

need

for M

BHOs

to u

se c

linic

al p

ract

ice

guid

elin

es.

Nat

iona

l Com

mitt

eefo

rQua

lity

Assu

ranc

eM

BHO

Hand

book

Stan

dard

s an

dSu

rvey

orGu

idel

ines

for

the

Accr

edita

tion

of M

BHOs

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

2001

Eddy

, Dav

idTh

e au

thor

dis

cuss

es th

e us

e of

bal

ance

she

ets

and

evid

ence

-bas

ed m

edic

ine

for c

linic

alde

cisi

on-m

akin

g. H

e po

ints

to th

eir a

bilit

y to

sum

mar

ize in

one

pla

ce a

ll th

e cr

itica

l inf

orm

atio

nne

eded

to m

ake

deci

sion

s as

a g

reat

stre

ngth

.

Kais

er P

erm

anen

teRe

port

How

Evi

denc

e-Ba

sed

Bala

nce

Shee

ts C

an H

elp

Mak

e De

cisi

ons

2001

Clea

ry, P

atric

kLe

tter t

o Se

nato

r Gre

gg o

n be

half

of N

atio

nal A

ssoc

iatio

n of

Man

ufac

ture

s. T

he le

tter s

peak

s ou

tag

ains

t S 5

43, t

he M

enta

l Hea

lth E

quita

ble

Trea

tmen

t Act

of 2

001.

The

y ar

gue

that

the

new

bill

wou

ld g

reat

ly e

xpan

d th

e pa

rity

law

s of

199

6 an

d w

ould

hav

e m

any

draw

back

s. C

osts

wou

ldin

crea

se, w

hile

oth

er b

enef

its w

ould

be

redu

ced

to m

eet t

he b

ill’s

requ

irem

ents

. The

y ar

gue

that

ther

e ar

e no

dis

cern

able

lim

its to

the

scop

e of

pot

entia

l cov

erag

e. T

hey

also

voi

ce c

once

rn o

ver

the

bill’s

pre

empt

ion

prov

isio

ns th

at w

ould

pre

serv

e St

ate

legi

slat

ion

and

exte

nd it

to E

RISA

pla

ns.

Nat

iona

l Ass

ocia

tion

ofM

anuf

actu

rers

Let

ter

Bene

fit M

anda

tes

Ap

pen

dix

A. C

on

tin

ued

2001

Flei

shm

an, M

artin

This

arti

cle

cons

ider

s th

e di

fficu

lties

of a

pply

ing

med

ical

nec

essi

ty d

efin

ition

s, in

clud

ing

the

AMA-

APA

defin

ition

, to

the

uniq

ue n

eeds

of t

he fi

eld

of p

sych

iatry

. The

term

‘ fo

r con

veni

ence

’is

foun

d to

be

a po

tent

ial o

bsta

cle

to p

rovi

ding

psy

chia

tric

care

. The

pap

er a

lso

lam

ents

the

lack

ofa

spec

ified

role

for e

xter

nal c

ontri

butio

ns fr

om fa

mili

es, s

ocia

l wor

kers

, and

non

-pro

fess

iona

lca

reta

kers

. The

arti

cle

voic

es c

once

rn o

ver t

he H

IPAA

alte

ratio

ns th

at m

ake

pena

lizat

ion

ofpr

ovid

ers

for m

edic

al fr

aud.

It p

oint

s to

ste

eper

fine

s, u

ncle

ar d

efin

ition

s of

med

ical

nec

essi

tyas

its s

tand

ard,

and

the

fact

that

no

spec

ific

inte

nt to

def

raud

is n

eces

sary

.

Psyc

hiat

ric T

imes

XVI

II:3

Med

icat

ion

Man

agem

ent,

Med

ical

Nec

essi

ty a

ndRe

side

ntia

l Car

e

2001

CCD

Task

For

ceOf

fers

a p

ropo

sed

CCD

med

ical

nec

essi

ty d

efin

ition

and

dis

cuss

es th

e im

plic

atio

ns s

uch

defin

i-tio

ns c

an h

ave

on th

e di

sabl

ed. I

t dis

cuss

es th

e ne

ed to

fabr

icat

e pr

otec

tions

to e

nsur

e th

atpa

tient

s w

ith d

isab

ilitie

s ge

t the

car

e th

ey n

eed.

The

y po

int t

o a

need

to a

ddre

ss fu

nctio

nal a

bilit

yin

any

fina

l nec

essi

ty d

efin

ition

.

Cons

ortiu

m fo

r Citi

zens

with

Dis

abili

ties

Repo

rtA

Stro

ng a

ndCo

nsis

tent

Defin

ition

of

Med

ical

Nec

essi

ty F

orm

sth

e Co

re o

fM

eani

ngfu

lPa

tient

Prot

ectio

ns


2001

Join

t Com

mis

sion

on A

ccre

dita

tion

of H

ealth

Care

Orga

niza

tions

This

man

ual l

ays

out t

he v

ario

us ri

ghts

of t

he b

enef

icia

ries,

resp

onse

mec

hani

sms,

and

eth

ical

outlo

ok th

at J

CAHO

eva

luat

es in

det

erm

inin

g if

an o

rgan

izatio

n re

ceiv

es a

ccre

dita

tion.

The

guid

elin

es d

o no

t offe

r any

sta

ndar

ds fo

r med

ical

nec

essi

ty d

efin

ition

s, b

ut ra

ther

cle

arly

def

ine

stan

dard

s re

gard

ing

the

med

ical

dec

isio

n-m

akin

g pr

oces

s an

d in

form

atio

n di

ssem

inat

ion.

Join

t Com

mis

sion

onAc

cred

itatio

nof

Heal

thCa

reOr

gani

zatio

nsM

COHa

ndbo

ok

2001

-200

2Co

mpr

ehen

sive

Accr

edita

tion

Man

ual f

orHe

alth

Care

Net

wor

ks

Year

Auth

orTi

tleSo

urce

Sum

mar

y/Ab

stra

ct

2001

Regi

er, D

arre

lTh

is A

PA re

port

to th

e Se

nate

on

the

need

for m

enta

l hea

lth p

arity

legi

slat

ion

rein

forc

es c

urre

ntun

ders

tand

ings

of t

he s

cien

tific

bas

is u

nder

lyin

g th

e ca

usal

mec

hani

sms

of m

enta

l dis

orde

rsan

dpr

ovid

es e

vide

nce

that

par

ity in

sura

nce

cove

rage

is a

fford

able

, add

ress

es a

spe

cific

mar

ket

failu

re, a

nd c

an s

uppo

rt co

st-e

ffect

ive

treat

men

t to

redu

ce d

isab

ility

.

Amer

ican

Psy

chia

tryAs

soci

atio

n Re

port

Stat

emen

t of

APA

Exec

utiv

eDi

rect

or to

US

Sena

te H

ealth

,Ed

ucat

ion,

Lab

or,

and

Pens

ions

Com

mitt

ee o

n‘P

arity

for M

enta

lHe

alth

Tre

atm

ent’

2001

Havi

ghur

st, C

lark

The

auth

or re

view

s Ja

cobs

on’s

pres

enta

tion

entit

led

“Cos

t-Effe

ctiv

enes

s An

alys

is in

the

Cour

ts:

Rece

nt T

rend

s an

d Fu

ture

Pro

spec

ts.”

Of n

ote,

he

disc

usse

s m

akin

g co

ntra

cts

mor

e ex

plic

it w

ithre

gard

to th

e us

e of

CEA

in c

over

age

deci

sion

s. H

avig

hurs

t men

tions

the

poss

ibili

ties

of s

yste

mat

icm

isre

pres

enta

tion

of b

enef

its b

y in

sure

rs u

sing

this

tech

niqu

e.

Jour

nal o

f Hea

lthPo

litic

s, P

olic

y,an

dLa

w26

:2

Evid

ence

: Its

Mea

ning

s in

Heal

th C

are

and

in L

aw. S

umm

ary

of th

e 10

Apr

il20

00 IO

M a

ndAH

RQ W

orks

hop

Ap

pen

dix

A. C

on

tin

ued

2001

Sing

er, S

ara

J.,

and

Lind

a A.

Berg

thol

d

Prev

ious

rese

arch

has

sho

wn

cons

ider

able

var

iabi

lity

in th

e pr

oces

s an

d cr

iteria

use

d fo

r dec

isio

nm

akin

g in

bot

h pu

blic

and

priv

ate

plan

s re

gard

ing

med

ical

nec

essi

ty. T

his

pape

r see

ks to

doc

u-m

ent d

iffer

ence

s in

dec

isio

n-m

akin

g cr

iteria

and

to e

xpla

in th

e re

latio

nshi

p be

twee

n co

ntra

ctua

lde

finiti

ons

and

the

way

dec

isio

ns a

re m

ade

in p

ract

ice.

The

inve

stig

ator

s us

ed d

escr

iptio

ns o

f‘b

est p

ract

ices

’ and

‘una

ccep

tabl

e va

riatio

ns’ f

rom

hea

lth p

lan

inte

rvie

ws

to p

rovi

de in

sigh

t int

oho

w m

edic

al n

eces

sity

dec

isio

ns a

re m

ade.

The

y al

so p

rodu

ced

a m

odel

con

tract

ual d

efin

ition

and

deci

sion

-mak

ing

proc

ess

base

d on

bes

t-pra

ctic

e m

odel

s.

Heal

th A

ffairs

20(1

):200

–206

Pros

pect

s fo

rIm

prov

edDe

cisi

on M

akin

gAb

out M

edic

alN

eces

sity

2001

Stur

m, R

olan

d Re

sear

ch p

aper

del

ving

into

the

issu

e of

the

cost

for h

ealth

insu

rers

to im

plem

ent m

enta

l hea

lthpa

rity.

The

ir re

sults

sug

gest

that

par

ity in

em

ploy

er-s

pons

ored

hea

lth p

lans

is n

ot v

ery

cost

ly u

nder

com

preh

ensi

ve m

anag

ed c

are.

Als

o da

ta d

o no

t sup

port

excl

udin

g su

bsta

nce

abus

e fro

m p

arity

effo

rts d

ue to

pro

hibi

tive

cost

, bec

ause

dec

oupl

ing

men

tal h

ealth

and

sub

stan

ce a

buse

car

e in

term

s of

ben

efits

can

not s

ave

any

mea

ning

ful a

mou

nt. T

hese

resu

lts m

ay n

ot a

pply

to u

nman

aged

inde

mni

ty p

lans

, and

they

may

onl

y ho

ld fo

r lar

ge e

mpl

oyer

s bu

t not

for i

ndiv

idua

ls o

r for

sm

all

grou

ps b

uyin

g in

sura

nce.

RAN

D He

alth

Rep

ort

The

Cost

s of

Cove

ring

Men

tal

Heal

th a

ndSu

bsta

nce

Abus

eCa

re a

t the

Sam

eLe

vel a

s M

edic

alCa

re in

Priv

ate

Insu

ranc

e Pl

ans

Special Report92

UM 2

. To

mak

e ut

iliza

tion

deci

sion

s, th

e m

anag

ed h

ealth

care

org

aniza

tion

uses

writ

ten

crite

ria b

ased

on

soun

d cl

inic

al e

vide

nce

and

spec

ifies

pro

cedu

res

for a

pply

ing

thos

ecr

iteria

in a

n ap

prop

riate

man

ner:

•Th

e cr

iteria

for d

eter

min

ing

med

ical

nec

essi

ty a

re c

lear

ly d

ocum

ente

d an

din

clud

e pr

oced

ures

for a

pply

ing

crite

ria b

ased

on

the

need

s of

indi

vidu

alpa

tient

s an

d ch

arac

teris

tics

of th

e lo

cal d

eliv

ery

syst

em.

•Th

e m

anag

ed h

ealth

care

org

aniza

tion

invo

lves

app

ropr

iate

, act

ivel

ypr

actic

ing

prac

titio

ners

in it

s de

velo

pmen

t or a

dopt

ion

of c

riter

ia a

ndin

the

deve

lopm

ent a

nd re

view

of p

roce

dure

s fo

r app

lyin

g cr

iteria

.

•Th

e m

anag

ed h

ealth

care

org

aniza

tion

revi

ews

the

crite

ria a

t spe

cifie

din

terv

als

and

upda

tes

them

as

nece

ssar

y.

•Th

e m

anag

ed h

ealth

care

org

aniza

tion

stat

es in

writ

ing

how

pra

ctiti

oner

sca

nob

tain

the

UM (u

tiliza

tion

man

agem

ent)

crite

ria a

nd m

akes

the

crite

riaav

aila

ble

to it

s pr

actit

ione

rs u

pon

requ

est.

•At

leas

t ann

ually

, the

man

aged

car

e or

gani

zatio

n ev

alua

tes

the

cons

iste

ncy

with

whi

ch th

e he

alth

car

e pr

ofes

sion

als

invo

lved

in u

tiliza

tion

revi

ew a

pply

the

crite

ria in

dec

isio

n-m

akin

g.

UM 7

.5 T

he m

anag

ed b

ehav

iora

l hea

lthca

re o

rgan

izatio

n ha

s a

proc

edur

e fo

r pro

vidi

ngin

depe

nden

t, ex

tern

al re

view

of f

inal

det

erm

inat

ions

, inc

ludi

ng:

Elig

ibili

ty c

riter

ia s

tatin

g th

at th

e M

BHO

offe

rs e

nrol

lees

the

right

to a

n in

depe

nden

t,th

ird p

arty

, bin

ding

revi

ew w

hene

ver:

•Th

e en

rolle

e is

app

ealin

g an

adv

erse

det

erm

inat

ion

that

is b

ased

on

med

ical

nece

ssity

, as

defin

ed b

y M

BHO.

•Th

e M

BHO

has

com

plet

ed tw

o le

vels

of i

nter

nal r

evie

ws,

and

its

deci

sion

isun

favo

rabl

e to

the

enro

llee,

or h

as e

lect

ed to

byp

ass

one

or b

oth

leve

ls o

fin

tern

al re

view

or h

as e

xcee

ded

its ti

me

limit

for i

nter

nal r

evie

ws

with

out

good

cau

se a

nd w

ithou

t rea

chin

g a

deci

sion

.

•Th

e en

rolle

e ha

s no

t with

draw

n th

e ap

peal

requ

est,

agre

ed to

ano

ther

dis

-pu

te re

solu

tion

proc

eedi

ng, o

r sub

mitt

ed to

an

exte

rnal

dis

pute

reso

lutio

npr

ocee

ding

requ

ired

by la

w.

Not

ifica

tion

to e

nrol

lees

abo

ut th

e in

depe

nden

t app

eals

pro

gram

and

cle

ar a

ndtim

ely

expl

anat

ions

of d

enia

ls a

nd a

ppro

vals

to b

oth

enro

llees

and

thei

r phy

sici

ans.

Use

of a

n in

depe

nden

t rev

iew

org

aniza

tion

that

mee

ts th

e fo

llow

ing

crite

ria:

•Co

nduc

ts a

thor

ough

revi

ew in

whi

ch it

con

side

rs a

new

all

prev

ious

lyde

term

ined

fact

s, a

llow

s th

e in

trodu

ctio

n of

new

info

rmat

ion,

con

side

rsan

das

sess

es s

ound

med

ical

adv

ice,

and

mak

es a

dec

isio

n or

con

clus

ion

that

is n

ot b

ound

by

the

deci

sion

s or

con

clus

ions

of t

he in

tern

al a

ppea

l.

•Ha

s no

mat

eria

l pro

fess

iona

l, fa

mili

al, o

r fin

anci

al c

onfli

ct o

f int

eres

t with

the

MBH

O.

MBH

O no

n-in

terfe

renc

e w

ith th

e pr

ocee

ding

s of

the

exte

rnal

revi

ew.

Enro

llee

exem

ptio

n fro

m th

e co

st o

f ext

erna

l rev

iew

, inc

ludi

ng fi

ling

fees

, and

allo

wan

ce o

f des

igna

ting

a re

pres

enta

tive

to a

ct o

n th

e be

half

of th

e en

rolle

e.

Impl

emen

tatio

n of

inde

pend

ent r

evie

w o

rgan

izatio

n de

cisi

on w

ithin

spe

cifie

dtim

efra

me.

MBH

O da

ta tr

acki

ng o

f ext

erna

l app

eals

for u

se in

eva

luat

ing

its m

edic

al n

eces

sity

deci

sion

-mak

ing

proc

ess.

NCQ

A M

anag

ed B

ehav

iora

l Hea

lth U

tiliz

atio

n M

anag

emen

t Sta

ndar

dsN

CQA

Man

aged

Beh

avio

ral H

ealth

Ext

erna

l App

eals

Sta

ndar

ds

Ap

pen

dix

B. N

CQ

A a

nd

JC

AH

O U

tiliz

atio

n M

anag

emen

t an

d E

xter

nal

Ap

pea

ls S

tan

dar

ds

Nat

ion

al C

om

mit

tee

for

Qu

alit

y A

ssu

ran

ce (

NC

QA

)


CC 1

: Hea

lth c

are

serv

ices

pro

vide

d di

rect

ly o

r by

arra

ngem

ent a

re a

ppro

pria

te:

•In

sco

pe to

mee

t the

hea

lth c

are

need

s of

the

popu

latio

n se

rved

.

•To

the

heal

th c

are

need

s, a

s in

fluen

ced

by s

ocio

-cul

tura

l cha

ract

eris

tics,

ofth

e po

pula

tion

serv

ed.

•To

the

netw

ork’s

mis

sion

.

•To

the

netw

ork’s

con

tract

ual o

blig

atio

ns.

CC 8

: Whe

n th

e ne

twor

k or

an

exte

rnal

ent

ity c

ondu

cts

a ut

iliza

tion

revi

ew o

f a li

cens

edin

depe

nden

t pra

ctiti

oner

’s or

a n

etw

ork

com

pone

nt’s

care

that

resu

lts in

den

ial o

fpa

ymen

t, de

cisi

ons

by th

e lic

ense

d in

depe

nden

t pra

ctiti

oner

or n

etw

ork

com

pone

ntre

gard

ing

ongo

ing

care

or d

isch

arge

are

bas

ed o

n th

e ca

re re

quire

d by

the

mem

ber’s

asse

ssed

nee

ds.

CC 8

.1: W

hen

utili

zatio

n re

view

resu

lts in

an

adve

rse

utili

zatio

n m

anag

emen

t dec

isio

n,th

e ne

twor

k pr

ovid

es th

e cr

iteria

for t

he d

ecis

ion

and

info

rmat

ion

rega

rdin

g ap

peal

toth

e lic

ense

d in

depe

nden

t pra

ctiti

oner

resp

onsi

ble

for t

he m

embe

r’s c

are.

JCAH

O pr

ovid

es e

xam

ples

of i

mpl

emen

tatio

n. “

Thes

e ex

ampl

es a

re s

impl

y id

eas

for

your

net

wor

k to

con

side

r.”

Exam

ple

of im

plem

enta

tion

for C

C 8:

The

netw

ork

requ

ests

the

revi

ew c

riter

ia u

sed

byan

y ex

tern

al e

ntity

that

car

ries

out a

util

izatio

n re

view

on

the

netw

ork’s

mem

bers

.Th

e re

view

crit

eria

are

mad

e av

aila

ble

to th

ose

with

in th

e ne

twor

k re

spon

sibl

e fo

rtre

atm

ent a

nd d

isch

arge

dec

isio

ns. W

hen

the

exte

rnal

util

izatio

n re

view

org

aniza

tion’

sre

com

men

datio

n co

nflic

ts w

ith th

e m

embe

r’s m

edic

al c

are

requ

irem

ents

, jus

tific

atio

nfo

r the

cou

rse

of a

ctio

n ta

ken

is d

ocum

ente

d. In

form

atio

n fro

m th

e ex

tern

al e

ntity

isco

llect

ed a

nd in

corp

orat

ed in

to th

e ne

twor

k’s a

sses

smen

t and

impr

ovem

ent a

ctiv

ities

.

RI 2

: The

net

wor

k pr

ovid

es fo

r mem

ber i

nvol

vem

ent i

n ca

re a

nd tr

eatm

ent d

ecis

ions

.

RI 2

.1: T

he n

etw

ork

prov

ides

an

auth

oriza

tion

proc

ess

for c

are

and

treat

men

t tha

t is

timel

y, e

ffici

ent,

and

mee

ts m

embe

r hea

lth c

are

need

s.

The

netw

ork’s

pro

cess

for a

utho

rizin

g ca

re a

nd tr

eatm

ent i

nclu

des:

•Pr

ovid

ing

mem

bers

with

a d

escr

iptio

n of

the

treat

men

t aut

horiz

atio

n pr

oces

s.

•Ha

ving

initi

al d

ecis

ions

mad

e by

an

appr

opria

tely

trai

ned

heal

th c

are

prof

essi

onal

usi

ng e

vide

nce-

base

d, n

etw

ork-

appr

oved

crit

eria

to a

utho

rize

adm

issi

on, c

are,

and

tran

sitio

n to

ano

ther

car

e se

tting

.

•Ha

ving

a p

hysi

cian

, den

tist,

or b

ehav

iora

l clin

icia

n re

view

all

initi

al tr

eatm

ent

auth

oriza

tion

deni

als

prio

r to

notif

ying

the

mem

ber o

r the

ir re

pres

enta

tive(

s)of

an

adve

rse

dete

rmin

atio

n.

RI 2

.2: T

he n

etw

ork

prov

ides

a m

etho

d fo

r res

olvi

ng d

isag

reem

ents

bet

wee

n th

ene

twor

k an

d th

e m

embe

r or d

esig

nate

d de

cisi

on m

aker

(s) r

egar

ding

car

e or

trea

tmen

tau

thor

izatio

n de

cisi

ons.

The

netw

ork’s

pro

cess

incl

udes

:

•In

form

ing

mem

bers

how

to s

eek

appe

als

of a

dver

se d

eter

min

atio

ns.

•De

fined

tim

efra

mes

in w

hich

the

mem

ber c

an a

ntic

ipat

e re

spon

se to

an

appe

al.

•Ap

peal

tim

efra

mes

that

are

app

ropr

iate

to th

e ur

genc

y of

the

mem

ber’s

heal

th c

are

need

s.

•An

app

eal r

evie

w p

anel

incl

udin

g he

alth

car

e pr

ofes

sion

als

who

are

app

ro-

pria

tely

trai

ned,

exp

erie

nced

, and

com

pete

nt w

ith re

spec

t to

the

care

and

treat

men

t inv

olve

d, a

nd w

ho w

ere

not i

nvol

ved

in th

e in

itial

det

erm

inat

ion.

•In

form

ing

mem

bers

abo

ut fu

rther

ste

ps a

vaila

ble

whe

n di

sagr

eem

ents

can

-no

t be

reso

lved

thro

ugh

the

treat

men

t aut

horiz

atio

n an

d ap

peal

pro

cess

,su

ch a

s an

inte

rnal

grie

vanc

e pr

oces

s, a

rbitr

atio

n, le

gal p

roce

edin

gs, a

ndan

y ot

her e

xter

nal r

evie

w p

roce

sses

.

RI 5

: The

net

wor

k pr

ovid

es fo

r the

rece

ipt a

nd re

solu

tion

of c

ompl

aint

s an

d gr

ieva

nces

from

mem

bers

in a

tim

ely

man

ner.

The

mem

ber h

as th

e rig

ht to

voi

ce c

ompl

aint

s w

ithou

t fea

r of r

ecrim

inat

ion

abou

t the

care

rece

ived

and

to h

ave

com

plai

nts

revi

ewed

and

, whe

neve

r pos

sibl

e, re

solv

ed.

This

right

and

the

way

it is

pro

tect

ed a

re e

xpla

ined

to th

e m

embe

r. Th

e ne

twor

k ha

sa

mea

ns o

f pro

vidi

ng fo

r the

follo

win

g:

•Pr

oced

ures

for r

egis

terin

g an

d m

anag

ing

com

plai

nts

and

grie

vanc

es,

incl

udin

g id

entif

ying

the

party

rece

ivin

g co

mpl

aint

s an

d gr

ieva

nces

.

•Ag

greg

atin

g an

d re

porti

ng a

ctio

ns ta

ken

on c

ompl

aint

s an

d gr

ieva

nces

.

•A

timel

y re

spon

se to

the

mem

ber,

subs

tant

ivel

y ad

dres

sing

the

actio

n ta

ken

on th

e co

mpl

aint

or g

rieva

nce.

•In

clud

ing

the

aggr

egat

e co

mpl

aint

and

grie

vanc

e in

form

atio

n in

per

form

ance

impr

ovem

ent a

ctiv

ities

.

•An

app

eal p

roce

ss fo

r grie

vanc

e de

cisi

ons.

•M

embe

r pro

tect

ion

from

any

san

ctio

ns o

r pen

altie

s re

sulti

ng s

olel

y or

prim

arily

from

usi

ng th

e co

mpl

aint

or g

rieva

nce

proc

ess.

JCAH

O Ut

iliza

tion

Man

agem

ent S

tand

ards

JCAH

O Ex

tern

al A

ppea

ls S

tand

ards

Ap

pen

dix

B. C

on

tin

ued

Special Report94

•In

form

ing

mem

bers

in a

tim

ely

man

ner,

in w

ritin

g, w

hen

a re

ques

t to

auth

orize

treat

men

t has

bee

n de

nied

.

•In

form

ing

mem

bers

of t

he b

asis

and

reas

on(s

) for

the

adve

rse

dete

rmin

atio

ns.

•In

form

ing

mem

bers

of t

he re

view

crit

eria

use

d to

mak

e th

e de

term

inat

ion.

•Pr

ovid

ing

mem

bers

with

info

rmat

ion

as to

whe

ther

, and

und

er w

hat

circ

umst

ance

s, in

vest

igat

iona

l pro

cedu

res

are

avai

labl

e an

d ar

e co

vere

dby

the

netw

ork.

JCAH

O Ut

iliza

tion

Man

agem

ent S

tand

ards

JCAH

O Ex

tern

al A

ppea

ls S

tand

ards

Ap

pen

dix

B. C

on

tin

ued


1996

Banc

roft

and

Banc

roft

v.Te

cum

seh

Prod

ucts

Soug

ht re

imbu

rsem

ent f

or b

reas

tre

duct

ion

surg

ery;

den

ied

onm

edic

al n

eces

sity

gro

unds

.

Cour

t fou

nd th

at P

lan

adm

inis

trato

rim

prop

erly

den

ied

bene

fits

in a

nar

bitra

ry a

nd c

apric

ious

man

ner.

Reve

rsed

.Ju

dgm

ent e

nter

ed fo

rth

e pl

aint

iff.

US D

istri

ct C

ourt

for t

he E

aste

rnDi

stric

t of

Mic

higa

n,So

uthe

rn D

ivis

ion

1999

Baue

r v. C

ount

ryLi

fe In

sura

nce

Soug

ht p

relim

inar

y an

d pe

rma-

nent

inju

nctio

n fo

r hig

h do

sech

emot

hera

py w

ith a

lloge

nic

bone

mar

row

tran

spla

nt a

fter

med

ical

nec

essi

ty d

enia

l.

Proc

edur

e fo

und

to b

e ex

perim

en-

tal a

nd th

us e

xclu

ded

from

the

polic

y. T

here

was

no

evid

ence

that

the

Plan

adm

inis

trato

r act

ed in

an

arbi

trary

or c

apric

ious

man

ner.

Affir

med

.Ju

dgm

ent e

nter

ed fo

rth

e Pl

an.

US D

istri

ct C

ourt

for N

orth

ern

Dist

rict o

f Illi

nois

1996

Bedr

ick

v.Tr

avel

ers

Insu

ranc

e

Appe

al o

f sum

mar

y ju

dgm

ent i

nfa

vor o

f Pla

n re

gard

ing

the

deni

alof

phy

sica

l, oc

cupa

tiona

l, an

dsp

eech

ther

apy

bene

fits.

On a

ppea

l, th

e co

urt f

ound

the

patie

nt d

id n

ot re

ceiv

e a

“ful

lan

dfa

ir” re

view

.

Reve

rsed

in p

art,

affir

med

in p

art.

Reve

rsed

judg

men

t in

rega

rds

to p

hysi

cal a

ndoc

cupa

tiona

l the

rapy

and

rem

ande

d w

ithin

stru

ctio

ns to

gra

ntsu

mm

ary

judg

men

t for

the

plai

ntiff

. Affi

rmed

all

othe

r asp

ects

of j

udg-

men

t, in

clud

ing

deni

alof

spee

ch b

enef

itssp

ecifi

cally

exc

lude

dun

der t

he c

ontra

ct.

US C

ourt

ofAp

peal

s,4t

hCi

rcui

t

1994

Blue

Cro

ss B

lue

Shie

ld o

f Virg

inia

v. K

elle

r

Appe

al o

f sum

mar

y ju

dgm

ent

awar

ded

to P

lan

rega

rdin

g de

nial

of b

enef

its o

n m

edic

al n

eces

sity

grou

nds.

Cour

t of A

ppea

ls fo

und

that

ther

ew

as n

o ev

iden

ce p

rese

nted

tosh

ow th

at th

e Pl

an a

buse

d its

disc

retio

n.

Affir

med

.Af

firm

ed lo

wer

cou

rt’s

sum

mar

y ju

dgm

ent.

Supr

eme

Cour

tof

Virg

inia

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C.

Liti

gat

ion

Reg

ard

ing

Med

ical

Nec

essi

ty D

efin

itio

ns

and

Pro

ced

ure

s (S

ort

ed b

y C

ase

Nam

e)

2001

Burr

ell v

. Uni

ted

Heal

th C

are

Insu

ranc

e

Mad

e ba

d fa

ith c

laim

rega

rdin

gde

nial

of c

over

age

of in

patie

ntst

ay fo

r pos

t-tra

umat

ic s

tress

diso

rder

. Pla

n ar

gued

that

refu

sal

was

bas

ed o

n bo

th m

edic

alne

cess

ity g

roun

ds a

s w

ell a

sin

elig

ible

trea

tmen

t fac

ility

.

Cour

t fou

nd th

at th

ere

was

no

clea

r evi

denc

e th

at th

e Pl

anac

ted

in a

n ar

bitra

ry o

r cap

ricio

usm

anne

r.

Affir

med

.Pa

rtial

sum

mar

y ju

dg-

men

t ent

ered

for P

lan.

US D

istri

ct C

ourt

for t

he E

aste

rnDi

stric

t of

Penn

sylv

ania

Special Report96

1996

Bush

man

v. S

tate

Mut

ual L

ife

Soug

ht in

junc

tion

in re

gard

sto

med

ical

nec

essi

ty d

enia

lof

high

-dos

e ch

emot

hera

pyan

dbo

ne m

arro

w tr

ansp

lant

.

Cour

t fou

nd th

at th

e po

licy

lang

uage

cle

arly

sta

ted

that

the

plai

ntiff

’s ill

ness

was

exc

lude

dfro

mco

vera

ge a

nd th

at th

e pl

aint

ifffa

iled

to s

how

that

the

Plan

act

edin

an

arbi

trary

and

cap

ricio

usm

anne

r.

Affir

med

.Su

mm

ary

judg

men

ten

tere

d fo

r the

Pla

n.US

Dis

trict

Cou

rtfo

r the

Nor

ther

nDi

stric

t of I

llino

is,

East

ern

Divi

sion

1993

Cam

elot

Car

e v.

Plan

ters

Life

save

rs

Soug

ht re

imbu

rsem

ent f

or c

are

deliv

ered

. Pla

n de

fined

pro

vide

ras

“pr

imar

ily”

a “c

usto

dial

car

e”fa

cilit

y an

d no

t a “

hosp

ital,”

and

ther

eby

expr

essl

y ex

clud

ed it

from

reim

burs

emen

t und

er th

ePl

an’s

cont

ract

.

Cour

t fou

nd th

at th

e su

mm

ary

Plan

desc

riptio

n de

fined

nei

ther

cus

to-

dial

nor

dom

icili

ary

care

that

was

excl

uded

from

cov

erag

e. It

foun

dth

e pr

ovid

er to

be

a ho

spita

l for

the

Plan

’s pu

rpos

es.

Reve

rsed

.Ju

dgm

ent e

nter

ed in

favo

r of p

lain

tiff.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

f Illi

nois

,Ea

ster

n Di

visi

on

2000

Chem

acki

v.

Mei

jer,

Inc.

So

ught

reim

burs

emen

t for

imm

unot

hera

py a

nd a

llerg

yan

tigen

inje

ctio

ns a

fter m

edic

alne

cess

ity d

enia

l.

Clai

m fe

ll ou

tsid

e 1-

year

win

dow

follo

win

g de

nial

not

ifica

tion.

Pla

nad

min

istra

tor a

lso

was

foun

d no

tto

have

act

ed in

an

arbi

trary

and

capr

icio

us m

anne

r.

Affir

med

.Ju

dgm

ent e

nter

ed fo

rth

e Pl

an.

US D

istri

ct C

ourt,

Wes

tern

Dis

trict

of M

ichi

gan,

Sout

hern

Div

isio

n

1996

Cour

i v. G

uard

ian

Life

So

ught

den

tal b

enef

its d

enie

don

med

ical

nec

essi

ty g

roun

ds.

Plan

sou

ght s

umm

ary

judg

men

t.

Cour

t fou

nd th

at g

enui

ne is

sues

ofm

ater

ial f

act e

xist

ed re

gard

ing

whe

ther

the

insu

rer’s

act

ions

cons

titut

ed a

rbitr

ary

and

capr

i-ci

ous

cond

uct.

Reve

rsed

.Su

mm

ary

judg

men

t was

deni

ed.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

f Illi

nois

,Ea

ster

n Di

visi

on

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1998

Croc

co v

. Xer

oxan

d Am

eric

anPs

ych

Man

agem

ent,

Inc.

Appe

al o

f jud

gmen

t in

favo

r of

plai

ntiff

rega

rdin

g th

e Pl

an’s

“ful

land

fair”

revi

ew g

uara

ntee

dun

der E

RISA

whe

n m

akin

gbe

nefit

det

erm

inat

ions

.

On a

ppea

l, th

e co

urt u

phel

d th

epr

evio

us ru

ling

that

the

Plan

’sad

min

istra

tor a

cted

in a

n ar

bitra

ryan

d ca

pric

ious

man

ner a

ndre

man

ded

the

case

for a

full

and

fair

revi

ew.

It al

so fo

und

that

Xero

x w

as n

ot th

e ad

min

istra

tor

in th

is c

ase,

dis

mis

sing

Xer

ox

from

the

suit.

Reve

rsed

.Af

firm

ed in

par

t,re

vers

ed in

par

t.US

Cou

rt of

Appe

als,

2nd

Circ

uit


1998

D’An

gelo

v.

Blue

Cros

sBl

ueSh

ield

of

Cent

ral N

ew Y

ork

Appe

al o

f jud

gmen

t in

favo

r of

plai

ntiff

rega

rdin

g be

nefit

s de

nied

on m

edic

al n

eces

sity

gro

unds

.Pl

an a

rgue

d th

at v

erdi

ct w

as n

otsu

ppor

ted

by le

gally

suf

ficie

ntev

iden

ce.

On a

ppea

l, th

e co

urt f

ound

that

the

evid

ence

was

lega

lly s

uffic

ient

.Re

vers

ed.

Affir

med

.Su

prem

e Co

urt

ofN

ew Y

ork,

Appe

llate

Divi

sion

, 3rd

Depa

rtmen

t

2000

Delm

arva

Hea

lthPl

an v

. Ace

to

Plan

sou

ght d

ecla

ratio

n th

at it

had

no d

uty

to p

rovi

de c

over

age

for a

lung

tran

spla

nt.

Cour

t fou

nd th

at th

e po

licy

did

not

expr

essl

y ex

clud

e th

e pr

oced

ure

and

that

a p

olic

yhol

der c

ould

reas

onab

ly e

xpec

t tha

t ser

vice

sne

cess

ary

to li

fe w

ould

be

prov

ided

.

Reve

rsed

.Su

mm

ary

judg

men

ten

tere

d fo

r Ace

to.

Cour

t of C

hanc

ery

of D

elaw

are,

New

Cast

le

1993

Dettm

er C

linic

v.

Asso

ciat

edIn

sura

nce

Chiro

prac

tor s

ough

t rei

mbu

rse-

men

t for

rend

ered

ser

vice

sde

nied

on

med

ical

nec

essi

tygr

ound

s.

Cour

t uph

eld

the

insu

rer’s

righ

t to

dete

rmin

e m

edic

al n

eces

sity

.Af

firm

ed.

Sum

mar

y ju

dgm

ent

awar

ded

to P

lan.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

fIn

dian

a, S

outh

Bend

Div

isio

n

1992

Devi

lle N

ursi

ngSe

rvic

e v.

Met

ropo

litan

Life

Soug

ht re

imbu

rsem

ent f

or c

usto

-di

al c

are

serv

ices

den

ied

onm

edic

al n

eces

sity

gro

unds

.

Cour

t fou

nd th

at P

lan’

s co

ntra

ctua

lla

ngua

ge c

lear

ly s

tate

s th

at c

usto

-di

al c

are

is n

ot a

cov

ered

ser

vice

.Pl

an’s

deci

sion

was

not

arb

itrar

y or

capr

icio

us.

Affir

med

.Su

mm

ary

judg

men

ten

tere

d fo

r Pla

n.US

Dis

trict

Cou

rtfo

r the

Wes

tern

Dist

rict o

fLo

uisi

ana,

Lak

eCh

arle

s Di

visi

on

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1997

Dow

den

v. B

lue

Cros

s Bl

ue S

hiel

dof

Tex

as

Appe

al o

f sum

mar

y ju

dgm

ent i

nfa

vor o

f Pla

n re

gard

ing

the

deni

alof

exp

ense

s in

curr

ed in

trea

tmen

tof

sili

cone

bre

ast i

mpl

ant

com

plic

atio

ns.

On a

ppea

l, th

e co

urt a

ffirm

ed th

elo

wer

cou

rt’s

rulin

g, fi

ndin

g no

thin

gar

bitra

ry o

r cap

ricio

us in

the

deci

-si

on-m

akin

g pr

oces

s.

Affir

med

.Af

firm

ed.

US C

ourt

ofAp

peal

s,5t

hCi

rcui

t

1996

Esda

le v

.Am

eric

anCo

mm

unity

Mut

ual I

nsur

ance

Soug

ht b

enef

its fo

r hig

h-do

sech

emot

hera

py w

ith p

erip

hera

lst

em c

ell r

escu

e de

nied

on

med

ical

nec

essi

ty g

roun

dsas

expe

rimen

tal.

Plan

sou

ght

sum

mar

y ju

dgm

ent.

Cour

t fou

nd th

at e

vide

nce

pres

ente

d re

veal

ed th

at th

e ex

peri-

men

tal s

tatu

s of

the

treat

men

t was

uncl

ear i

n th

e lit

erat

ure.

Reve

rsed

.Su

mm

ary

judg

men

t was

deni

ed.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

f Illi

nois

,Ea

ster

n Di

visi

on

Special Report98

1993

Evan

s v.

Blue

Cros

sBl

ueSh

ield

of

Sout

h Ca

rolin

a

Soug

ht re

imbu

rsem

ent f

or ra

dial

kera

toto

my

deni

ed o

n m

edic

alne

cess

ity g

roun

ds.

Cour

t fou

nd th

at th

e pr

oced

ure

did

not m

eet t

he re

quire

men

tsof

med

ical

nec

essi

ty s

et fo

rthby

the

cont

ract

.

Affir

med

.Ju

dgm

ent a

nd a

ttorn

ey’s

fees

aw

arde

d to

Pla

n.US

Dis

trict

Cou

rtfo

r the

Dis

trict

of

Sout

h Ca

rolin

a

1992

Farle

y v.

Bene

fitTr

ust L

ifeIn

sura

nce

Appe

al o

f jud

gmen

t in

favo

r of

Plan

rega

rdin

g th

e de

nial

of h

igh-

dose

che

mot

hera

py a

nd a

lloge

nic

bone

mar

row

tran

spla

nt o

nm

edic

al n

eces

sity

gro

unds

.

On a

ppea

l, th

e co

urt f

ound

that

th

e bu

rden

of p

roof

was

on

the

plai

ntiff

to s

how

that

the

proc

e-du

re w

as n

ot e

xper

imen

tal.

Affir

med

.Af

firm

ed.

US C

ourt

ofAp

peal

s,8t

hCi

rcui

t

1994

Feni

o v.

Mut

ualo

fOm

aha

Soug

ht p

relim

inar

y in

junc

tion

forh

igh-

dose

che

mot

hera

pyan

dal

loge

nic

bone

mar

row

trans

plan

t den

ied

on m

edic

alne

cess

ity g

roun

ds.

Cour

t fou

nd o

n re

view

of e

vide

nce

that

pat

ient

dem

onst

rate

d a

subs

tant

ial l

ikel

ihoo

d of

suc

cess

onth

e m

erits

.

Reve

rsed

.Pr

elim

inar

y in

junc

tion

orde

red

for p

lain

tiff.

US D

istri

ct C

ourt

for t

he S

outh

ern

Dist

rict o

f Flo

rida

1993

Flor

ence

Nig

htin

gale

Nur

sing

Ser

vice

v. B

lue

Cros

sBl

ue S

hiel

d of

Alab

ama

Soug

ht re

imbu

rsem

ent f

orse

rvic

es p

rovi

ded.

Pla

n ar

gued

that

ser

vice

s ch

arge

s w

ere

unre

ason

able

and

that

nur

sing

care

afte

r IV

rem

oval

was

not

med

ical

ly n

eces

sary

.

Cour

t fou

nd th

at th

e Pl

anad

min

istra

tor h

ad a

con

flict

of

inte

rest

that

tain

ted

his

judg

men

t.N

ursi

ngch

arge

s w

ere

foun

dto

bere

ason

able

.

Reve

rsed

.Pa

ymen

t aw

arde

d to

plai

ntiff

.US

Dis

trict

Cou

rtfo

r the

Nor

ther

nDi

stric

t of

Alab

ama,

Sout

hern

Div

isio

n

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1993

Fuja

v. B

enef

itTr

ust L

ife

Appe

al o

f jud

gmen

t in

favo

r of

plai

ntiff

rega

rdin

g th

e de

nial

of

“exp

erim

enta

l” c

ance

r the

rapy

on m

edic

al n

eces

sity

gro

unds

.

On a

ppea

l, th

e co

urt r

ever

sed

the

low

er c

ourt’

s in

terp

reta

tion

ofex

perim

enta

l, fin

ding

that

the

treat

men

t in

this

cas

e w

as c

lear

lyex

perim

enta

l.

Affir

med

.Re

vers

ed.

US C

ourt

ofAp

peal

s,7t

hCi

rcui

t

1995

Gret

he v

.Tr

ustm

ark

Insu

ranc

e

Soug

ht p

relim

inar

y in

junc

tion

and

bene

fits

for h

igh-

dose

chem

othe

rapy

and

allo

geni

cbo

nem

arro

w tr

ansp

lant

den

ied

on m

edic

al n

eces

sity

gro

unds

.

The

cour

t, af

ter d

e no

vo re

view

,fo

und

that

the

plai

ntiff

had

not

met

her b

urde

n of

est

ablis

hing

that

the

prop

osed

trea

tmen

tm

etal

lthe

crit

eria

for m

edic

alne

cess

ity a

s de

fined

by

the

polic

y.

Affir

med

.Pr

elim

inar

y in

junc

tion

was

den

ied.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

f Illi

nois

,Ea

ster

n Di

visi

on


1996

Harr

ison

v.

Aetn

aLi

feSo

ught

reim

burs

emen

t for

jaw

surg

ery

deni

ed o

n m

edic

alne

cess

ity g

roun

ds.

Cour

t fou

nd th

at th

e in

sure

r act

u-al

ly e

xten

ded

cove

rage

not

onl

yth

roug

h its

cov

erag

e pr

ovis

ions

buta

lso

thro

ugh

som

e of

its

limi-

tatio

ns. T

he s

urge

ry w

as fo

und

tobe

med

ical

ly n

eces

sary

and

notd

one

for c

osm

etic

pur

pose

s.

Reve

rsed

.Da

mag

es re

war

ded

topl

aint

iff.

US D

istri

ct C

ourt

for t

he M

iddl

eDi

stric

t of F

lorid

a,Or

land

o Di

visi

on

1993

Heas

ley

and

Heas

ley

v.Be

lden

and

Blak

eCo

rpor

atio

n

Appe

al o

f jud

gmen

t in

favo

r of

plai

ntiff

rega

rdin

g th

e de

nial

of

liver

/pan

crea

s tra

nspl

ant b

enef

itson

med

ical

nec

essi

ty g

roun

ds.

On a

ppea

l, th

e co

urt f

ound

that

the

low

er c

ourt’

s an

alys

is w

assu

spec

t, as

it w

as u

nabl

e to

bede

term

ined

whe

ther

the

proc

edur

ew

as e

xper

imen

tal.

Affir

med

.Ju

dgm

ent v

acat

ed a

ndre

man

ded.

US C

ourt

ofAp

peal

s,3r

dCi

rcui

t

1993

Heil

v.N

atio

nwid

e Li

fe

Appe

al o

f sum

mar

y ju

dgm

ent

awar

ded

to P

lan

rega

rdin

g th

em

edic

al n

eces

sity

den

ial o

fpl

aint

iff’s

inpa

tient

psy

chia

tric

treat

men

t.

Cour

t of A

ppea

ls fo

und

the

low

erco

urt e

rred

by

not r

evie

win

g th

een

tire

Plan

and

mak

ing

its o

wn

dete

rmin

atio

n re

gard

ing

the

appr

o-pr

iate

sta

ndar

d of

revi

ew ra

ther

than

rely

ing

on th

e st

ipul

atio

nm

ade

by th

e pa

rties

. Sec

ondl

y,it

erre

d w

hen

it de

term

ined

that

,as

am

atte

r of l

aw, t

he tr

eatm

ent

was

not

med

ical

ly n

eces

sary

.

Reve

rsed

.Va

cate

d th

e ju

dgm

ent

and

rem

ande

d fo

rfu

rther

pro

ceed

ings

.

US C

ourt

ofAp

peal

s,6t

hCi

rcui

t

2001

Hund

ley

v.W

enze

l and

Cons

eco

Med

ical

Insu

ranc

e

Appe

al o

f jud

gmen

t in

favo

rof

Plan

rega

rdin

g de

nial

of

chiro

prac

tic c

are

on m

edic

alne

cess

itygr

ound

s.

On a

ppea

l, th

e co

urt r

ever

sed

the

trial

cou

rt’s

findi

ngs.

It fo

und

that

the

med

ical

dire

ctor

mad

e hi

sde

cisi

on in

an

arbi

trary

and

capr

icio

us m

anne

r.

Reve

rsed

.Re

vers

ed a

nd re

man

ded.

Mis

sour

i Cou

rtof

Appe

als,

Wes

tern

Dis

trict

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1999

Jone

s v.

Koda

kM

edic

alAs

sist

ance

Pla

n

Appe

al o

f jud

gmen

t in

favo

r of

Plan

rega

rdin

g de

nial

of i

npat

ient

subs

tanc

e ab

use

treat

men

t and

alle

gatio

n th

at in

sure

r act

edar

bitra

rily

and

capr

icio

usly

inits

deni

al d

eter

min

atio

n.

The

case

con

tain

ed n

o m

edic

alne

cess

ity d

efin

ition

per

se

but

inst

ead

incl

uded

a p

rovi

sion

cons

trued

by

the

cour

t as

limiti

ngtre

atm

ent t

o th

e gu

idel

ines

use

dby

the

man

aged

beh

avio

ral h

ealth

subc

ontra

ctor

.

Affir

med

.Ju

dgm

ent e

nter

ed fo

rth

e de

fend

ant.

US C

ourt

ofAp

peal

s,10

thCi

rcui

t

Special Report100

1999

Hunt

er v

. W

al-M

art S

tore

s So

ught

reim

burs

emen

t for

hyst

erec

tom

y tw

ice

deni

edby

Plan

on

med

ical

nec

essi

tygr

ound

s.

Plan

adm

inis

trato

r fou

nd to

hav

eab

used

his

dis

cret

ion

beca

use

the

invo

lved

phy

sici

ans

dete

rmin

edth

at th

e op

erat

ion

was

not

the

next

ther

apeu

tic s

tep,

rath

er th

ande

term

inin

g th

at th

e op

erat

ion

was

not m

edic

ally

nec

essa

ry.

Reve

rsed

.Ju

dgm

ent e

nter

ed fo

rpl

aint

iff.

US D

istri

ct C

ourt

for t

he E

aste

rnDi

stric

t of

Arka

nsas

,W

este

rn D

ivis

ion

2000

Julia

no v

. HM

Oof

New

Jer

sey

Appe

al o

f jud

gmen

t for

reim

-bu

rsem

ent f

or h

ome

nurs

ing

care

deni

ed o

n m

edic

al n

eces

sity

grou

nds.

Pla

n ar

gued

that

its

disc

retio

n al

low

s fo

r it t

o of

fer

care

at s

kille

d nu

rsin

g fa

cilit

ies

and

that

priv

ate

care

was

not

med

ical

ly n

eces

sary

.

Initi

al c

ourt

foun

d th

at th

e ra

tes

ofho

me

nurs

ing

wer

e ac

tual

ly le

ssth

an th

at o

f the

ski

lled

nurs

ing

faci

lity.

On

appe

al, t

he c

ourt

foun

dth

at a

dditi

onal

pro

ceed

ings

wer

ene

eded

to a

sses

s da

mag

es.

Reve

rsed

.Va

cate

d an

d re

man

ded.

US C

ourt

ofAp

peal

s,2n

dCi

rcui

t

1998

Killi

an a

nd K

illia

nv.

Hea

lthSo

urce

Ap

peal

of j

udgm

ent c

iting

arb

i-tra

ry a

nd c

apric

ious

beh

avio

rby

Plan

in re

gard

s to

den

ial o

fbr

east

can

cer t

reat

men

t on

med

ical

nec

essi

ty g

roun

ds.

On a

ppea

l, co

urt f

ound

the

Plan

tobe

arb

itrar

y an

d ca

pric

ious

inco

nsid

erin

g ad

ditio

nal e

vide

nce

afte

r dea

dlin

es, b

ut n

ot s

o in

mak

ing

its d

eter

min

atio

n.

Affir

med

.Ca

se w

as a

ffirm

ed in

part,

reve

rsed

in p

art,

and

rem

ande

d fo

rfu

rther

pro

ceed

ings

.

US C

ourt

ofAp

peal

s,6t

hCi

rcui

t

1993

Koen

ig v

.M

etro

polit

an L

ife

Soug

ht re

imbu

rsem

ent f

orsu

bsta

nce

abus

e ca

re d

enie

d by

Plan

. Pla

n ar

gued

that

pla

intif

fdi

dno

t exh

aust

inte

rnal

rem

edie

s.

The

cour

t fou

nd th

at th

e ev

iden

cesh

owed

that

con

tinue

d in

tern

alap

peal

atte

mpt

s w

ould

hav

epr

oven

futil

e an

d us

eles

s.

Reve

rsed

.Pl

an’s

mot

ion

to d

ism

iss

the

case

was

den

ied.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

f Illi

nois

,Ea

ster

n Di

visi

on

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1992

Lehm

an v

.M

utua

lof O

mah

a So

ught

reim

burs

emen

t for

hig

h-do

se c

hem

othe

rapy

and

allo

geni

cbo

ne m

arro

w tr

ansp

lant

den

ied

on m

edic

al n

eces

sity

gro

unds

.

Cour

t fou

nd a

fter d

e no

vo re

view

that

the

evid

ence

pre

sent

edsu

gges

ted

that

the

proc

edur

e w

asex

perim

enta

l and

, the

refo

re, n

otco

vere

d un

der t

he P

lan’

s co

ntra

ct.

Affir

med

.Ju

dgm

ent e

nter

ed fo

rth

e Pl

an.

US D

istri

ct C

ourt

for t

he D

istri

ct o

fAr

izona

1999

Lew

is v

.Tr

ustm

ark

Insu

ranc

e

Appe

al o

f sum

mar

y ju

dgm

ent i

nfa

vor o

f Pla

n re

gard

ing

deni

alof

bene

fits

for h

igh-

dose

chem

othe

rapy

and

allo

geni

cbo

nem

arro

w tr

ansp

lant

on

med

ical

nec

essi

ty g

roun

ds.

On a

ppea

l, th

e co

urt w

as u

nabl

eto

conc

lude

that

the

Plan

was

unre

ason

able

in th

eir i

nter

pre-

tatio

nof

the

polic

y.

Affir

med

.Af

firm

ed.

US C

ourt

ofAp

peal

s,4t

hCi

rcui

t


1992

Man

n v.

Prud

entia

lIn

sura

nce

Soug

ht b

enef

its fo

r ute

rine

mon

itorin

g se

rvic

es d

enie

don

med

ical

nec

essi

ty g

roun

dsas

spec

ifica

lly e

xclu

ded.

Cour

t fou

nd th

at th

e pl

aint

ifffa

iled

to p

rovi

de e

vide

nce

that

the

Plan

’s de

cisi

on w

as a

rbitr

ary

orca

pric

ious

.

Affir

med

.Su

mm

ary

judg

men

ten

tere

d fo

r Pla

n.US

Dis

trict

Cou

rtfo

r the

Sou

ther

nDi

stric

t of F

lorid

a

1996

Mau

ne v

.In

tern

atio

nal

Brot

herh

ood

ofEl

ectri

cal

Wor

kers

Appe

al o

f sum

mar

y ju

dgm

ent i

nfa

vor o

f Pla

n re

gard

ing

the

deni

alof

ben

efits

for b

reas

t im

plan

tre

mov

al.

On a

ppea

l, th

e co

urt u

phel

d th

efin

ding

that

the

proc

edur

e w

asno

tmed

ical

ly n

eces

sary

. The

cour

tfou

nd th

e ca

se n

ot tr

ivia

l,re

vers

ing

the

lega

l fee

rulin

gs.

Affir

med

.Af

firm

ed in

par

t,re

vers

ed in

par

t.US

Cou

rt of

Appe

als,

8th

Circ

uit

1992

McG

ee v

.Eq

uico

r-Eq

uita

ble

HCA

Appe

al o

f jud

gmen

t in

favo

rof

Plan

rega

rdin

g de

nial

of

reha

bilit

ativ

e ca

re o

n m

edic

alne

cess

ity g

roun

ds.

On a

ppea

l, th

e co

urt a

ffirm

ed th

atth

e pa

tient

’s tra

nsfe

r sev

ered

rela

-tio

ns w

ith P

lan

phys

icia

ns a

ndpr

even

ted

the

Plan

from

mak

ing

nece

ssar

y pr

edet

erm

inat

ions

of

impr

ovem

ent a

s re

quire

d by

cont

ract

.

Affir

med

.Af

firm

ed.

US C

ourt

ofAp

peal

s,10

thCi

rcui

t

1998

McG

raw

v.

Prud

entia

lIn

sura

nce

Appe

al o

f sum

mar

y ju

dgm

ent i

nfa

vor o

f Pla

n re

gard

ing

the

deni

alof

phy

sica

l the

rapy

ben

efits

on

med

ical

nec

essi

ty g

roun

ds.

On a

ppea

l, th

e co

urt a

ffirm

edth

atER

ISA

gove

rned

act

ion

and

reve

rsed

con

clus

ion

that

den

ial

ofbe

nefit

s w

as n

ot a

rbitr

ary

and

capr

icio

us.

Reve

rsed

.Ca

se w

as a

ffirm

ed in

part,

reve

rsed

in p

art,

and

rem

ande

d fo

rfu

rther

pro

ceed

ings

.

US C

ourt

ofAp

peal

s,10

thCi

rcui

t

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1999

Med

itrus

t v.

Ster

ling

Chem

ical

s

Appe

al o

f sum

mar

y ju

dgm

ent i

nfa

vor o

f Pla

n re

gard

ing

deni

al o

fre

habi

litat

ive

care

on

med

ical

nece

ssity

gro

unds

.

Cour

t of A

ppea

ls fo

und

that

the

low

er c

ourt

had

appl

ied

the

corr

ect d

iscr

etio

nary

sta

ndar

dan

dth

at th

e Pl

an d

id n

ot a

ct in

an

arbi

trary

and

cap

ricio

us m

anne

r.

Affir

med

.Af

firm

ed s

umm

ary

judg

men

t in

favo

rof

Plan

.

US C

ourt

ofAp

peal

s,5t

hCi

rcui

t

1995

Mill

er v

.Un

ited

Wel

fare

Fund

Appe

al o

f jud

gmen

t in

favo

r of

plai

ntiff

rega

rdin

g th

e de

nial

priv

ate

nurs

ing

bene

fits

onm

edic

al n

eces

sity

gro

unds

.

On a

ppea

l, th

e co

urt u

phel

d th

atth

e Pl

an a

cted

arb

itrar

ily a

ndca

pric

ious

ly. I

t als

o fo

und

that

the

low

er c

ourt

erre

d by

con

side

ring

evid

ence

out

side

of t

he a

dmin

is-

trativ

e re

cord

.

Reve

rsed

.Ca

se w

as re

man

ded

totri

al c

ourt

with

inst

ruct

ions

.

US C

ourt

ofAp

peal

s,2n

dCi

rcui

t

Special Report102

2001

Milo

ne v

.Ex

clus

ive

Heal

thca

re

Soug

ht p

re-c

ertif

icat

ion

for

brea

st re

duct

ion

surg

ery

afte

rm

edic

al n

eces

sity

den

ial.

Plan

late

r app

eale

d, a

rgui

ng th

at it

sco

ntra

ct h

ad a

dire

ct e

xclu

sion

for t

he s

urge

ry in

her

cas

e.

Plan

’s de

nial

was

foun

d to

be

inte

r-na

lly in

cons

iste

nt a

nd a

mbi

guou

s.Ot

her w

omen

had

bee

n pr

evio

usly

appr

oved

. On

appe

al, t

he c

ourt

disa

gree

d w

ith th

e Pl

an’s

inte

rpre

-ta

tion

of th

e co

ntra

ctua

l lan

guag

e.

Reve

rsed

.Ju

dgm

ent e

nter

ed fo

rth

e pl

aint

iff. L

ower

cou

rtde

cisi

on u

phel

d on

appe

al.

US C

ourt

ofAp

peal

s,8t

hCi

rcui

t

1999

Neu

roca

re a

ndW

hitm

ore

v.Pr

inci

pal L

ife

Soug

ht re

imbu

rsem

ent f

orre

habi

litat

ion

serv

ices

del

iver

edaf

ter m

edic

al n

eces

sity

den

ial.

Plan

foun

d to

rely

on

exce

rpts

of

only

one

of t

he tr

eatin

g ph

ysic

ians

in e

xclu

sion

of t

he o

ther

s, th

usab

usin

g its

dis

cret

ion.

Reve

rsed

.Ju

dgm

ent e

nter

ed fo

rth

e pl

aint

iffs.

US D

istri

ct C

ourt

for N

orth

ern

Dist

rict o

fCa

lifor

nia

1997

Nic

hols

v.

Trus

tmar

kIn

sura

nce

Soug

ht b

enef

its fo

r hig

h-do

sech

emot

hera

py a

nd a

lloge

nic

bone

mar

row

tran

spla

nt d

enie

d by

Pla

non

med

ical

nec

essi

ty g

roun

ds.

Plan

sou

ght s

umm

ary

judg

men

t.

Cour

t fou

nd th

at g

enui

ne is

sues

of

mat

eria

l fac

t exi

st a

s to

whe

ther

the

treat

men

t is

expe

rimen

tal

and

to w

heth

er th

e Pl

an h

ad‘re

ason

able

just

ifica

tion’

for i

tsde

cisi

on to

den

y be

nefit

s.

Reve

rsed

.Pl

an’s

mot

ion

for

sum

mar

y ju

dgm

ent

was

deni

ed.

US D

istri

ct C

ourt

for t

he N

orth

ern

Dist

rict o

f Ohi

o,Ea

ster

n Di

visi

on

1995

Pers

onne

l Poo

l of

Ocea

n Co

unty

v.

Trus

tees

Fun

d

Soug

ht re

imbu

rsem

ent f

or n

urs-

ing

bene

fits

deni

ed o

n m

edic

alne

cess

ity g

roun

ds.

Cour

t fou

nd th

at th

e de

cisi

on w

asre

ason

able

and

not

arb

itrar

y an

dca

pric

ious

.

Affir

med

.Ju

dgm

ent w

ith p

reju

dice

ente

red

for P

lan.

US D

istri

ct C

ourt

for t

he D

istri

ct o

fN

ew J

erse

y

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

2000

Rise

nhoo

ver v

.Ba

yer

Soug

ht p

relim

inar

y in

junc

tion

topr

even

t Pla

n fro

m d

isco

ntin

uing

IV tr

eatm

ents

for L

yme

dise

ase

afte

r med

ical

nec

essi

ty d

enia

l.

Deni

al fo

und

not t

o be

arb

itrar

y or

capr

icio

us.

Affir

med

.Ju

dgm

ent e

nter

ed fo

rth

e Pl

an.

US D

istri

ct C

ourt,

Sout

hern

Dis

trict

of N

ew Y

ork

1993

Scal

aman

dre

v.Ox

ford

Hea

lthPl

ans

Soug

ht re

imbu

rsem

ent f

or h

igh-

dose

che

mot

hera

py a

nd a

lloge

nic

bone

mar

row

tran

spla

nt re

ceiv

edou

tsid

e of

Pla

n’s

chos

en h

ospi

tals

and

deni

ed o

n m

edic

al n

eces

sity

grou

nds.

Cour

t fou

nd th

at th

e co

ntra

ctla

ngua

ge a

nd a

ctio

ns o

f the

Pla

nm

ade

it im

poss

ible

to c

ompl

y w

ithpr

e-ce

rtific

atio

n re

quire

men

ts.

Reve

rsed

.Fu

ll be

nefit

s aw

arde

d to

plai

ntiff

.US

Dis

trict

Cou

rtfo

r the

Eas

tern

Dist

rict o

fN

ewYo

rk

1997

Sem

mle

r v.

Met

ropo

litan

Life

So

ught

ben

efits

for p

atie

nt-

cont

rolle

d an

esth

esia

den

ied

byPl

an. P

lan

clai

med

that

the

serv

ice

was

cov

ered

in th

eph

ysic

ian’

s pa

ckag

e fe

e an

dre

imbu

rsem

ent w

ould

be

equi

vale

nt to

dou

ble

billi

ng.

Cour

t fou

nd n

o ab

use

of d

iscr

etio

nus

ing

an a

rbitr

ary

and

capr

icio

usst

anda

rd.

Affir

med

.On

app

eal,

the

plai

ntiff

’sm

otio

n to

vac

ate

the

judg

men

t was

den

ied.

US D

istri

ct C

ourt

for t

he S

outh

ern

Dist

rict o

fN

ewYo

rk


1994

Shep

pard

and

Enoc

h Pr

att

Hosp

ital v

.Tr

avel

ers

Insu

ranc

e

Appe

al o

f jud

gmen

t aw

arde

d to

Plan

rega

rdin

g de

nial

of p

artia

lbe

nefit

s of

16-

mon

th lo

ng h

ospi

tal

stay

on

med

ical

nec

essi

tygr

ound

s.

Cour

t of A

ppea

ls a

ffirm

ed th

atth

ePl

an a

dmin

istra

tor’s

den

ial

ofco

vera

ge w

as n

ot a

n ab

use

ofdi

scre

tion.

The

Pla

n’s

failu

reto

prov

ide

spec

ific

reas

ons

as to

why

the

hosp

italiz

atio

n w

as n

otm

edic

ally

nec

essa

ry fo

r the

full

16m

onth

s w

as n

ot n

eces

sary

.

Affir

med

.Af

firm

ed lo

wer

cou

rt’s

judg

men

t.US

Cou

rt of

Appe

als,

4th

Circ

uit

2001

Smith

v.

New

port

New

s So

ught

inju

nctio

n in

rega

rds

tom

edic

al n

eces

sity

den

ial o

fco

vera

ge fo

r hig

h-do

sech

emot

hera

py.

Ques

tione

d w

heth

er P

lan

adm

inis

trato

r abu

sed

his

disc

retio

nin

mak

ing

the

deci

sion

.

Reve

rsed

.Pr

elim

inar

y in

junc

tion

gran

ted.

US D

istri

ct C

ourt,

East

ern

Dist

rict

ofVi

rgin

ia

1993

Snel

l v. T

rave

lers

Insu

ranc

e So

ught

reim

burs

emen

t for

hig

h-do

se c

hem

othe

rapy

and

allo

geni

cbo

ne m

arro

w tr

ansp

lant

den

ied

on m

edic

al n

eces

sity

gro

unds

.

Cour

t fou

nd th

at th

e Pl

an w

as o

nly

beho

lden

to a

def

eren

tial s

tand

ard

and

the

Plan

’s de

cisi

on w

as n

otar

bitra

ry a

nd c

apric

ious

.

Affir

med

.Su

mm

ary

judg

men

taw

arde

d to

the

Plan

.US

Dis

trict

Cou

rtfo

r the

Eas

tern

Dist

rict o

fPe

nnsy

lvan

ia

1997

Soph

ie a

ndSo

phie

v. L

inco

lnN

atio

nal L

ife

Soug

ht b

enef

its fo

r arti

ficia

lin

sem

inat

ion

deni

ed o

n m

edic

alne

cess

ity g

roun

ds.

Cour

t fou

nd th

at a

rtific

ial i

nsem

ina-

tion

was

not

a c

over

ed b

enef

it an

dfu

rther

hel

d th

at th

e pl

aint

iffs

coul

dno

t sho

w th

at, i

n th

e ab

senc

e of

treat

men

t, st

ate

of h

ealth

wou

ldde

terio

rate

.

Affir

med

.Su

mm

ary

judg

men

ten

tere

d fo

r Pla

n.US

Dis

trict

Cou

rtfo

r Nor

ther

nDi

stric

t of I

llino

is,

East

ern

Divi

sion

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued

1996

Sven

v. P

rinci

pal

Mut

ual L

ife

Soug

ht re

imbu

rsem

ent f

or a

llerg

ytre

atm

ents

den

ied

on m

edic

alne

cess

ity g

roun

ds. P

lan

soug

htsu

mm

ary

judg

men

t.

Cour

t fou

nd th

at d

e no

vo s

tand

ard

was

mos

t app

ropr

iate

.Re

vers

ed.

Sum

mar

y ju

dgm

ent w

asde

nied

.US

Dis

trict

Cou

rtfo

r the

Nor

ther

nDi

stric

t of I

llino

is,

East

ern

Divi

sion

1994

Trus

tees

of

Nor

thw

est

Laun

dry

v.Bu

rzyn

ski

Appe

al o

f jud

gmen

t in

favo

rof

Plan

rega

rdin

g th

e de

nial

of

reim

burs

emen

t for

pro

vide

r’sse

rvic

es.

On a

ppea

l, th

e co

urt a

ffirm

ed th

elo

wer

cou

rt’s

rulin

g th

at th

epr

ovid

er d

efra

uded

the

Plan

by

subm

ittin

g cl

aim

s fo

r uno

rthod

oxca

ncer

trea

tmen

ts.

Affir

med

.Af

firm

ed.

US C

ourt

ofAp

peal

s,5t

hCi

rcui

t

2000

Trus

tmar

k Li

fe v

.Un

iver

sity

of

Chic

ago

Hosp

itals

Appe

al o

f jud

gmen

t for

Pla

n to

reco

ver m

oney

spe

nt o

n br

east

canc

er tr

eatm

ent l

ater

foun

d to

be m

edic

ally

unn

eces

sary

.

On a

ppea

l, th

e co

urt f

ound

that

the

prov

ider

hos

pita

l was

ent

itled

toke

ep th

e m

oney

und

er th

e th

eory

of

est

oppe

l.

Reve

rsed

.Re

vers

ed.

US C

ourt

ofAp

peal

s,7t

hCi

rcui

t

Special Report104

1999

Wel

lnes

s Ae

robi

cCl

inic

v. U

nite

dHe

alth

Care

Soug

ht re

imbu

rsem

ent f

orre

habi

litat

ion

serv

ices

del

iver

edaf

ter m

edic

al n

eces

sity

den

ial.

Deni

al o

f ben

efits

foun

d to

be

lega

lly c

orre

ct a

nd n

ot a

n ab

use

ofdi

scre

tion.

Affir

med

.Su

mm

ary

judg

men

t for

Plan

US D

istri

ct C

ourt

for E

aste

rnDi

stric

t of

Loui

sian

a

1994

Whi

tehe

ad v

.Fe

dera

l Exp

ress

So

ught

pre

limin

ary

inju

nctio

n fo

rhi

gh d

ose

chem

othe

rapy

with

perip

hera

l ste

m c

ell r

escu

ede

nied

on

med

ical

nec

essi

tygr

ound

s.

Cour

t fou

nd it

did

not

hav

e th

eau

thor

ity to

usu

rp th

e po

wer

of

Plan

to in

terp

ret c

ontra

ct te

rms.

It

did

not f

ind

that

the

Plan

act

ed

in a

n ar

bitra

ry a

nd c

apric

ious

man

ner.

Affir

med

.Pr

elim

inar

y in

junc

tion

deni

ed.

US D

istri

ct C

ourt

for t

he W

este

rnDi

stric

t of

Tenn

esse

e,W

este

rn D

ivis

ion

Year

Case

Cour

tCl

aim

Disp

uted

Sub

ject

Disp

ositi

onIn

sure

r’s D

ecis

ion

Ap

pen

dix

C. C

on

tin

ued


New

Yor

kA

sign

ifica

nt le

gal d

evel

opm

ent r

egar

ding

med

ical

nec

essi

ty w

as th

e se

ries

of O

ctob

er 2

001

settl

emen

t agr

eem

ents

reac

hed

betw

een

the

New

York

Sta

te A

ttorn

ey G

ener

al’s

Offic

e an

d si

x la

rge

MCO

s.1

Follo

win

g a

two-

year

inve

stig

atio

n in

to h

ow th

ese

MCO

s in

form

ed th

eir p

rovi

ders

and

enro

llees

of a

dver

se d

eter

min

atio

n de

cisi

ons

on th

e gr

ound

s of

med

ical

nec

essi

ty, A

ttorn

ey G

ener

al E

liot S

pitz

er fo

und

that

thes

e M

COs

wer

e no

tin

com

plia

nce

with

New

Yor

k St

ate’

s ut

iliza

tion

revi

ew la

w (d

iscu

ssed

in m

ore

deta

il in

Par

t 3 b

elow

). Th

e fo

cus

of th

e in

vest

igat

ion

was

on

the

proc

esse

s us

ed b

y th

e M

COs

in m

akin

g th

eir d

eter

min

atio

ns a

nd in

form

ing

prov

ider

s an

d en

rolle

es o

f the

m, r

athe

r tha

n th

e co

nten

t of t

he m

edic

alne

cess

ity d

efin

ition

s th

emse

lves

. Spi

tzer

’s of

fice

foun

d, fo

r exa

mpl

e, th

at M

COs

wer

e of

ten

deny

ing

auth

oriza

tion

or re

imbu

rsem

ent f

or in

patie

ntm

enta

l hea

lth a

nd s

ubst

ance

abu

se tr

eatm

ent a

nd o

fferin

g no

thin

g m

ore

than

a g

ener

ic e

xpla

natio

n th

at th

e se

rvic

e w

as “

not m

edic

ally

nec

es-

sary

.” T

here

was

ofte

n no

dis

clos

ure

of th

e un

derly

ing

reas

ons

or c

linic

al ra

tiona

le u

sed

by th

e M

COs

in m

akin

g th

eir d

ecis

ions

, whi

ch is

requ

ired

in N

ew Y

ork’s

util

izatio

n re

view

law

. An

exam

ple

of s

uch

an in

adeq

uate

dis

clos

ure,

as

cont

aine

d in

Exh

ibit

A of

the

settl

emen

t agr

eem

ents

, was

:

Deni

al o

f con

tinua

tion

of s

tay

at p

sych

iatri

c in

patie

nt fa

cilit

y: P

atie

nt w

as c

oope

rativ

e th

roug

hout

sta

y w

ith n

o ov

ert

psyc

hiat

ric s

ympt

om a

ccor

ding

to th

e at

tend

ing

Doct

or. M

edic

atio

n w

as d

isco

ntin

ued

durin

g th

e st

ay. T

his

refe

rral

doe

sno

tmee

t eith

er s

ever

ity o

f illn

ess,

or i

nten

sity

of s

ervi

ce a

nd is

ther

efor

e de

nied

.2

The

settl

emen

t agr

eem

ents

def

ined

“re

ason

s an

d cl

inic

al ra

tiona

le”

as fo

llow

s, s

tipul

atin

g co

nsid

erat

ion

of in

divi

dual

ized

med

ical

ass

essm

ents

and

disc

losu

re o

f suf

ficie

nt in

form

atio

n in

adv

erse

det

erm

inat

ion

notic

es:

“Rea

sons

and

Clin

ical

Rat

iona

le”

mea

ns th

e in

divi

dual

ized

med

ical

bas

is fo

r an

Adve

rse

Dete

rmin

atio

n. A

sta

tem

ent o

fRe

ason

s an

d Cl

inic

al R

atio

nale

mus

t dem

onst

rate

that

the

UR [U

tiliza

tion

Revi

ew] A

gent

mad

e an

indi

vidu

alize

d m

edic

alas

sess

men

t of t

he E

nrol

lee

by re

ferr

ing

to th

e sp

ecifi

c m

edic

al d

ata

rela

ting

to th

e En

rolle

e, w

hich

the

Clin

ical

Pee

r Rev

iew

erto

ok in

to c

onsi

dera

tion

whe

n m

akin

g th

e Ad

vers

e De

term

inat

ion.

Mer

ely

stat

ing

that

the

serv

ice

at is

sue

is n

ot m

edic

ally

nece

ssar

y is

not

suf

ficie

nt, n

or is

a s

tate

men

t tha

t the

pro

pose

d se

rvic

e do

es n

ot m

eet t

he U

R Ag

ent’s

crit

eria

. A s

tate

men

tof

Reas

ons

and

Clin

ical

Rat

iona

le m

ust b

e su

ffici

ently

spe

cific

to e

nabl

e th

e En

rolle

e an

d/or

the

Enro

llee’

s he

alth

car

epr

ovid

er to

mak

e an

info

rmed

dec

isio

n ab

out w

heth

er o

r not

to a

ppea

l the

Adv

erse

Det

erm

inat

ion

and

to d

eter

min

e th

eis

sue

or is

sues

to a

ddre

ss in

the

appe

al.3

Rath

er th

an ta

ke th

e ca

ses

to tr

ial,

the

Atto

rney

Gen

eral

’s Of

fice

and

the

MCO

s ag

reed

to s

ettle

out

of c

ourt.

Und

er th

e te

rms

of th

e se

ttlem

ent

agre

emen

ts, t

he M

COs

(whi

le a

dmitt

ing

no w

rong

doin

g) a

gree

d to

refo

rm th

eir n

otifi

catio

n pr

actic

es to

brin

g th

em in

to c

ompl

ianc

e w

ith s

tate

law

and

to e

ach

pay

$1 m

illio

n to

war

ds th

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unt

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sibl

e on

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xten

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he m

onito

ring

for M

COs

still

foun

d to

be

nonc

ompl

iant

.4

Stat

eDe

scrip

tion

Ap

pen

dix

D. S

tate

Inve

stig

atio

ns

and

Leg

al A

ctio

ns

Reg

ard

ing

Med

ical

Nec

essi

ty Is

sues

1Ae

tna/

U.S.

Hea

lthCa

re In

c./P

rude

ntia

l Hea

lth P

lan

of H

artfo

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T; E

xcel

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th P

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oche

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up H

ealth

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of M

anha

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Hea

lth P

lan

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eate

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k, In

c.; O

xfor

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alth

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ns o

f Tru

mbu

ll, C

T; a

nd V

ytra

Hea

lth P

lans

of L

ong

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nc. S

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Land

mar

k Ag

reem

ents

Giv

e Co

nsum

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New

Prot

ectio

ns in

HM

O Di

sput

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NY

Atto

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Gen

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’s Of

fice

Pres

s Re

leas

e. O

ctob

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6, 2

001.

Ava

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Acc

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Gen

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ork,

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Bure

au. “

In th

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corp

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ssur

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4N

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Offic

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Rele

ase.

Oct

ober

16,

200

1. o

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it.

Special Report106

Mai

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200

0, b

oth

Unite

d Be

havi

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igna

Beh

avio

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gree

men

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sura

nce.

5

Heal

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lan

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file

d co

mpl

aint

s w

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reau

con

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over

age

base

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roun

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sub

sequ

ent

dete

rmin

atio

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the

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au th

at th

e de

nial

s w

ere

not i

n co

nfor

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aine

rule

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gard

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utili

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view

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e ag

reem

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e UB

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se, t

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sepa

rate

enr

olle

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ere

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over

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enta

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atm

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he B

urea

u fo

und

that

the

deni

al n

otic

es d

id n

ot a

dequ

atel

y co

nfor

m to

the

stat

e ag

ency

rule

s6in

that

they

did

not

con

tain

the

qual

ifyin

g cr

eden

tials

of t

he re

view

er; d

id n

ot in

clud

e a

stat

emen

t of t

he re

view

er’s

unde

rsta

ndin

g of

the

cons

umer

’s re

ason

s fo

r app

eal;

did

notc

lear

ly s

tate

the

deci

sion

and

clin

ical

ratio

nale

in s

uffic

ient

det

ail t

o al

low

the

cons

umer

s to

resp

ond

furth

er; d

id n

ot in

clud

e a

refe

renc

eto

the

evid

ence

or d

ocum

enta

tion

used

for t

he a

dver

se d

eter

min

atio

n; d

id n

ot in

clud

e a

desc

riptio

n of

the

proc

edur

es, t

ime

fram

es, a

ndco

nsum

ers’

righ

ts fo

r sec

ond

leve

l grie

vanc

e re

view

; and

did

not

incl

ude

a no

tice

of th

e rig

ht o

f the

con

sum

ers

to c

onta

ct th

e Bu

reau

of

Insu

ranc

e. U

BH w

as fi

ned

$10,

000,

and

furt

her a

djud

icat

ory

proc

eedi

ngs

wer

e dr

oppe

d.

In th

e Ci

gna

case

, an

enro

llee

was

den

ied

bene

fits

for t

he la

st th

ree

days

of h

er m

inor

chi

ld’s

five-

day

inpa

tient

sta

y at

a h

ospi

tal o

n th

egr

ound

sth

at th

e ch

ild o

sten

sibl

y co

uld

have

bee

n tra

nsfe

rred

to a

psy

chia

tric

faci

lity

afte

r the

firs

t 48

hour

s. O

n th

e fif

th d

ay, t

he c

hild

, who

was

suic

idal

, was

tran

sfer

red

to a

non

-Cig

na-c

ontra

cted

faci

lity

on th

e fir

st d

ay th

at fa

cilit

y ha

d a

vaca

nt b

ed. T

here

wer

e no

oth

er c

ontra

cted

or n

on-c

ontra

cted

faci

litie

s in

Cig

na’s

netw

ork

with

in 6

0 m

inut

es tr

avel

dis

tanc

e fro

m th

e en

rolle

e’s

hom

e (re

quire

d by

Mai

ne la

w).

Follo

win

ga

serie

s of

revi

ews

and

appe

als,

Cig

na re

vers

ed it

s or

igin

al d

enia

l nea

rly a

yea

r lat

er. T

he B

urea

u of

Insu

ranc

e fo

und

that

:

By re

vers

ing

its d

enia

l of b

enef

its, C

BH a

ckno

wle

dged

the

need

for h

oldi

ng C

onsu

mer

’s ch

ild o

n an

inpa

tient

bas

is u

ntil

her

mov

e to

Aca

dia.

Par

ticip

atio

n by

CBH

in th

e un

succ

essf

ul e

ffort

on J

uly

24th

for a

n im

med

iate

tran

sfer

sho

ws

it th

en k

new

or s

houl

d ha

ve k

now

n th

at: 1

) unt

il th

e tr

ansf

er c

ould

be

effe

cted

, it w

as m

edic

ally

nec

essa

ry fo

r the

chi

ld to

con

tinue

rece

ivin

g in

patie

nt c

are

at E

MM

C; a

nd 2

) CBH

’s gu

idel

ine

for t

rans

fer t

o a

psyc

hiat

ric fa

cilit

y w

ithin

48

hour

s of

adm

issi

onto

an a

cute

car

e ho

spita

l cou

ld n

ot b

e m

et w

here

, as

here

, thr

ough

no

faul

t of C

onsu

mer

ther

e w

as n

o ps

ychi

atric

faci

lity

reas

onab

ly a

vaila

ble

to a

ccep

t her

dau

ghte

r prio

r to

July

27t

h.

The

Bure

au a

lso

foun

d th

at th

e co

nten

t of C

igna

’s de

nial

lette

rs w

as n

ot in

con

form

ance

with

Mai

ne la

w, f

or m

any

of th

e sa

me

reas

ons

as th

eUB

H ca

se. C

igna

was

fine

d $5

,000

, and

furth

er a

djud

icat

ory

proc

eedi

ngs

wer

e dr

oppe

d.

In d

istin

guis

hing

thes

e tw

o ca

ses,

it is

not

able

that

in th

e UB

H ca

se, i

ts “

sepa

rate

ther

apis

ts”

guid

elin

e w

as n

ot c

alle

d in

to q

uest

ion

on th

egr

ound

s of

reas

onab

lene

ss o

r app

ropr

iate

ness

. Rat

her,

the

com

pany

was

cite

d fo

r def

icie

ncie

s in

the

proc

esse

s it

used

to n

otify

the

enro

llees

ofth

e be

nefit

den

ials

. In

the

Cign

a ca

se, h

owev

er, t

he B

urea

u fo

und

the

appl

icat

ion

of th

e “4

8-ho

ur ru

le”

for t

rans

fer i

n m

edic

al n

eces

sity

deci

sion

s to

be

subs

tant

ivel

y in

appr

opria

te in

ligh

t of t

he in

adeq

uacy

of t

he p

rovi

der n

etw

ork,

whi

ch d

id n

ot m

eet s

tate

sta

ndar

ds.

Ap

pen

dix

D. C

on

tin

ued

5In

RE:

Uni

ted

Beha

vior

al H

ealth

, Con

sent

Agr

eem

ent w

ith M

aine

Bur

eau

of In

sura

nce,

op.

cit.

In R

E: C

igna

Beh

avio

ral H

ealth

, Inc

., Co

nsen

t Agr

eem

ent w

ithM

aine

Bure

au o

f Ins

uran

ce, D

ocke

t No.

00-

3003

. Av

aila

ble

at h

ttp://

ww

w.s

tate

.me.

us/p

fr/in

s/in

s003

003.

htm

. Ac

cess

ed A

pril

17, 2

002.

6Bu

reau

of I

nsur

ance

Rul

e Ch

apte

r 850

(8) a

nd (9

).

DHHS Publication Number (SMA 03-3790)Printed 2003 Substance Abuse and Mental

Health Services Administration

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CMHS8 01 Cover - Substance Abuse and Mental Health