Medical Necessity in Private Health Plans

Sara Rosenbaum
Brian Kamoie
D. Richard Mauery
Brian Walitt
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Services Administration
Center for Mental Health Services

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	Acknowledgments
I.	Executive Summary
II.	Introduction
	Research Methods
	Structure and Organization of the Review
III.	Medical Necessity and the Published Literature
IV.	Industry Practices in the Managed Care Industry
	Analysis of the Structure of Medical Necessity Definitions
	Interviews With Managed Care Officials on the Processes of Medical Necessity Determinations
	Managed Care Accreditation Organizations
	Judicial Case Law, Official Investigations, and Legal Actions
	Judicial Case Law
	Investigations and Official Legal Actions
	New York
	Maine
	Connecticut
V.	State Law Regulation of Medical Necessity
	Laws That Regulate the Content of Insurance Contracts
	Independent Review Statutes
VI.	Relevant Federal Laws Pertaining to Medical Necessity Reviews
	ERISA
	Office of Personnel Management Standards: FEHBP
VII.	Synthesis and Implications
VIII.	References
IX.	Endnotes

Figures
Figure 1:	The Five Dimensions of the Medical Necessity Definition: Industry Practice
Figure 2:	NCQA and JCAHO Utilization Management Standards
Figure 3:	NCQA and JCAHO External Appeals Standards
Figure 4:	Common Procedural Problems in Medical Necessity Determination Processes Noted in Investigations, Litigation, and Case Law
Figure 5:	Medical Necessity Utilization Review and Appeals Procedures
Tables
Table 1.	Medical Necessity Definitions in Published Literature (See Also Appendix C)
Table 2.	Medical Necessity Definitions: Managed Care Industry
Table 3.	Medical Necessity Definitions Identified in Case Law (Sorted by Case Name)
Table 4.	Medical Necessity Definitions Contained in State Statutes and Regulations
Table 5.	State Independent Review Statutes and Regulations
Table 6.	Medical Necessity Definitions: State Insurance Laws and IRO Statutes
Table 7.	State Independent Review Statutes With Specific Behavioral Health Provisions
Table 8.	Qualifications of External Reviewer in State IRO Statutes
Table 9.	Independent Reviews: Standard of Review for Medical Necessity Determinations
Appendixes
Appendix A.	Selected Published Literature on Medical Necessity (Sorted by Year)
Appendix B.	NCQA and JCAHO Utilization Management and External Appeals Standards
Appendix C.	Litigation Regarding Medical Necessity Definitions and Procedures (Sorted by Case Name)
Appendix D.	State Investigations and Legal Actions Regarding Medical Necessity Issues

SMA03-3790
07/2003

Medical Necessity in Private Health Plans

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