Medical Necessity

How Do I Know If My Insurance Will Pay?

Health insurance helps patients get the medical care they require
Medical necessity in health insurance. PhotoAlto/Frederic Cirou / Getty Images

Health insurance companies provide coverage only for health-related serves that they define or determine to be medically necessary. Medicare, for example, defines medically necessary as: “Services or supplies that are needed for the diagnosis or treatment of your medical condition and meet accepted standards of medical practice.”

Medical necessity refers to a decision by your health plan that your treatment, test, or procedure is necessary for your health or to treat a diagnosed medical problem.

Most health plans will not pay for healthcare services that they deem to be not medically necessary. The most common example is a cosmetic procedure, such as the injection of medications (such as Botox) to decrease facial wrinkles or tummy-tuck surgery. Many health insurance companies also will not cover procedures that they determine to be experimental, or not proven to work.

Medical Uses of Marijuana

The use of marijuana for medical reasons is a prominent 'medical necessity' case. Cannabis is a plant with active ingredients that are widely reported by sufferers to be effective in pain control for various conditions, usually neuropathic in nature, where common painkillers have not worked well; however as a Schedule I drug under the Controlled Substance Act, it is illegal. In some states possession of marijuana is a felony offense. In this case, the doctrine of medical necessity would be used by a patient who believed marijuana was beneficial to them if charged with use or growing/production of illegal controlled substance relating to marijuana.

In several medical marijuana cases, a patients' physician has told the court that the patient's condition requires marijuana and thus that the Court should not interfere. However, the Supreme Court of United States has outrightly rejected this defense in the landmark case United States v. Oakland Cannabis Buyers' Cooperative, in which the Court ruled that there was no medical necessity exception to drug laws, and federal government is free to raid, arrest, prosecute and imprison patients who are using medical marijuana whether the medicine is crucially necessary to them or not.

On the other hand, in Gonzales v. Raich, the Ninth Circuit Court of Appeals told a sufferer in extreme pain that they could not rely on state law allowing medical use, but if arrested they could seek to use medical necessity as a defence.

In Maryland, a bill signed by a previous governor became law in 2003 allowing patients to use medical necessity defense to marijuana possession in the state. The maximum penalty for these users cannot exceed $100. However, this law does not prevent federal prosecution of patients, as the federal law does not recognize medical necessity. 

Check with Your Health Plan

It’s important to remember that what you or your doctor defines as medically necessary may not be consistent with your health plan’s coverage rules. Before you have any procedure, especially one that is potentially expensive, review your benefit handbook to make sure it is covered. If you are not sure, call your health plan’s customer service representative.

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