Notification



Notification Issue Date:



Medical Policy Bulletin


Title:Medical Necessity

Policy #:12.01.02

This policy is applicable to the Company’s commercial products only. Policies that are applicable to the Company’s Medicare Advantage products are accessible via a separate Medicare Advantage policy database.


The Company makes decisions on coverage based on Policy Bulletins, benefit plan documents, and the member’s medical history and condition. Benefits may vary based on contract, and individual member benefits must be verified. The Company determines medical necessity only if the benefit exists and no contract exclusions are applicable.

When services can be administered in various settings, the Company reserves the right to reimburse only those services that are furnished in the most appropriate and cost-effective setting that is appropriate to the member’s medical needs and condition. This decision is based on the member’s current medical condition and any required monitoring or additional services that may coincide with the delivery of this service.

This Medical Policy Bulletin document describes the status of medical technology at the time the document was developed. Since that time, new technology may have emerged or new medical literature may have been published. This Medical Policy Bulletin will be reviewed regularly and be updated as scientific and medical literature becomes available. For more information on how Medical Policy Bulletins are developed, go to the About This Site section of this Medical Policy Web site.



Policy

Coverage is subject to the terms, conditions, and limitations of the member's contract.

The Company provides coverage for those covered services that are determined to be medically necessary consistent with benefit contracts and medical policy.

The definition of medically necessary can be found in the member's plan design. Please refer to the member's specific plan design for the definition of medically necessary.

Coverage is not available for services that do not meet the definition of medical necessary, including, but not limited to, experimental/investigational, cosmetic, and/or not medically necessary services.

FAILURE TO USE DESIGNATED PROVIDER

HEALTH MAINTENANCE ORGANIZATION (HMO)
HMO and HMO Point-of-Service (HMO-POS) products may require that the member obtain medically necessary services (e.g., Laboratory, Radiology) at the Primary Care Provider’s (PCP’s) Designated Provider. In most cases, services that that are rendered at a non-Designated Provider for members enrolled in HMO or HMO-POS products are not eligible for reimbursement consideration by the Company, with certain exceptions (e.g., medically necessary service cannot be provided at the Designated Provider).

PLACE OF SERVICE

When services can be administered in various settings, the Company reserves the right to reimburse only those services that are furnished in the most appropriate and cost-effective setting that is appropriate to the member’s medical needs and condition. This decision is based on the member’s current medical condition and any required monitoring or additional services that may coincide with the delivery of this service.
Guidelines

The following general principles are the basis for the Company's determination that a service is medically necessary:
  • The service that an appropriate provider, exercising prudent clinical judgement, provides a member is appropriate and effective for preventing, evaluating, diagnosing, or treating an illness, injury, disease or its symptoms for which it is prescribed or performed, and not for experimental/investigational or cosmetic purposes; AND
  • The service is clinically appropriate, in terms of type, frequency, extent, and site and duration, and is considered effective for the member's illness, injury, or disease; AND
  • The service is appropriate with regard to generally accepted standards of medical practice within the medical community; AND
  • The service is not primarily for the convenience of the member, the member’s family, the Professional Provider, or other health care provider; AND
  • The service is not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of the member's illness, injury, or disease.

For these purposes, "generally accepted standards of medical practice" takes into consideration:
  • Standards that are based on credible scientific evidence published in peer-reviewed, medical literature generally recognized by the relevant medical community;
  • Physician Specialty Society recommendations;
  • The views of Professional Providers practicing in the relevant clinical area; and
  • Any other relevant factors.

Designation of a code and/or fee does not imply reimbursement.

BENEFIT APPLICATION

Subject to the terms and conditions of the applicable benefit contract, medically necessary services are covered by the Company when the applicable medical necessity criteria are met.

Description

Medical Necessity is the term used in benefit plan designs to evaluate coverage for health care services, procedures, devices, and pharmaceuticals.
References


Benefit Contracts





Coding

Inclusion of a code in this table does not imply reimbursement. Eligibility, benefits, limitations, exclusions, precertification/referral requirements, provider contracts, and Company policies apply.

The codes listed below are updated on a regular basis, in accordance with nationally accepted coding guidelines. Therefore, this policy applies to any and all future applicable coding changes, revisions, or updates.

In order to ensure optimal reimbursement, all health care services, devices, and pharmaceuticals should be reported using the billing codes and modifiers that most accurately represent the services rendered, unless otherwise directed by the Company.

The Coding Table lists any CPT, ICD-9, ICD-10, and HCPCS billing codes related only to the specific policy in which they appear.

CPT Procedure Code Number(s)

N/A


Professional and outpatient claims with a date of service on or before September 30, 2015, must be billed using ICD-9 codes. Professional and outpatient claims with a date of service on or after October 1, 2015, must be billed using ICD-10 codes.

Facility/Institutional inpatient claims with a date of discharge on or before September 30, 2015, must be billed with ICD-9 codes. Facility/Institutional inpatient claims with a date of discharge on or after October 1, 2015, must be billed with ICD-10 codes.


ICD - 10 Procedure Code Number(s)

N/A


Professional and outpatient claims with a date of service on or before September 30, 2015, must be billed using ICD-9 codes. Professional and outpatient claims with a date of service on or after October 1, 2015, must be billed using ICD-10 codes.

Facility/Institutional inpatient claims with a date of discharge on or before September 30, 2015, must be billed with ICD-9 codes. Facility/Institutional inpatient claims with a date of discharge on or after October 1, 2015, must be billed with ICD-10 codes.


ICD -10 Diagnosis Code Number(s)

N/A


HCPCS Level II Code Number(s)

N/A


Revenue Code Number(s)

N/A

Coding and Billing Requirements



Policy History

Revisions from 12.01.02:
02/13/2019This policy has been reissued in accordance with the Company's annual review process.
04/25/2018The policy has been reviewed and reissued to communicate the criteria the Company utilizes to determine medical necessity.


Effective 10/05/2017 this policy has been updated to the new policy template format.


Version Effective Date: 07/01/2017
Version Issued Date: 06/30/2017
Version Reissued Date: 02/14/2019

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Independence Blue Cross is an independent licensee of the Blue Cross and Blue Shield Association, serving the health insurance needs of Philadelphia and southeastern Pennsylvania.