10 Facts to Make Health Policy Easy in a Complex World

 
Healthcare policy and the corresponding coverage for services in the United States are incredibly complex. Coverage varies between:
  • Commercial
  • Traditional CMS based coverage with Medicaid/Medicare
  • Managed governmental plans
  • Marketplace plans
  • Self-funded versus fully funded

With nuances across employer groups, making sense of available coverage options has become increasingly challenging.

Policy Dictates Coverage


Health insurance companies play a significant role in determining the coverage of medical services. Five areas to know:

  1. The process begins with the writing and application of medical policy criteria, which serve as guidelines for coverage decisions.
  2. Each payor has its own medical coverage criteria, referred to as policies. These policies outline the conditions under which a service is considered medically necessary and therefore covered.
  3. Insurers develop policies based on a variety of factors, including clinical evidence and cost-effectiveness.
  4. Insurers review scientific literature, consult with medical experts, and consider input from patients and providers. Each payor has their own medical coverage criteria, referred to as policies.
  5. These policies are not static. They are regularly updated to reflect advancements in medical technology, changes in clinical practice standards, and patterns of utilization.

Individual Medical Necessity Matters


While policy dictates what can be covered, individual patient circumstances significantly influence whether a service will be covered. This dynamic governs why the concept of ‘medical necessity’ ultimately comes into play. Five areas to know:

  1. Medical necessity is the justification for a particular service, procedure, or treatment.
  2. Necessity is determined based on the patient’s unique medical situation and the provider’s clinical judgment.
  3. For a service to be deemed medically necessary, it must be considered reasonable, critical, and/or appropriate, based on evidence-based clinical standards of care. Maintaining a patient’s clinical documentation is crucial in this context. It provides the detailed medical information insurers need to determine whether a service meets their criteria for coverage.
  4. This documentation, often provided by healthcare providers, includes diagnosis, prognosis, treatment plans, and patient progress notes.
  5. While health policy sets the stage for what could be covered, an individual patient’s medical necessity often becomes the lead determinant of coverage. Understanding this interplay between policy and medical necessity can help patients and providers navigate the complex world of health coverage.

Key Takeaway: While the landscape appears complex, start your focus on policy and how it interacts with medical necessity.