Medical Necessity
The requirement that a service be appropriate and needed for the patient’s condition.
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Medical necessity is the principle that a service must be reasonable and appropriate for diagnosing or treating a patient’s condition to be covered. Payers publish coverage criteria — often as policies that link specific diagnoses to specific procedures.
On a claim, medical necessity is demonstrated by the match between the diagnosis codes and the procedure codes, backed by documentation in the medical record. If a payer does not see that link, it can deny the service as not medically necessary.
Why it matters for billing
Medical-necessity denials are among the most common and the most preventable. Checking payer coverage policies before a service, and making sure documentation supports the codes, keeps these claims from bouncing — and keeps the practice compliant.
Related terms
Terms that come up alongside Medical Necessity in the revenue cycle.
Billing that gets Medical Necessity right
EnVisionMD RCM handles eligibility, coding, documentation, denials and follow-up end to end — so the details behind terms like this one are managed for you, not left to chance.
Request a free billing reviewMedical Necessity — frequently asked questions
Through the pairing of diagnosis codes with procedure codes, supported by documentation in the patient’s record that matches what was billed.
It can be denied. Depending on the situation and payer rules, the patient may be billable if they were properly notified in advance, such as with an ABN for Medicare.