Medical Necessity

Definition: Medical necessity is actually a legal concept, defined in different ways by different payors to contain costs and limit the abuse of health care resources. Insurers will not pay for treatment unless they consider it to be medically necessary.

Under the Medicare program, a service is medically necessary if it is "needed for the diagnosis or treatment of your medical condition, meet[s] the standards of good medical practice in the local area, and [is]n’t mainly for the convenience of you or your doctor." Your insurer may use a slightly different definition of medical necessity. For example, it may require that the treatment be based on evidence-based medical standards, or that the treatment is considered by most physicians in your community to be clinically appropriate.