The Language of Health Insurance Claims & Reimbursement
Part 1: The Basic Tools, Chapter 2: Understanding the Language of Health Insurance Page 6
Continued from Previous Page
An EOBS may also contain computer-generated technical terms or phrases in the comments section, usually found in the middle or at the bottom of the form. Some of those terms may be particularly confusing at times. The phrase not medically necessary -- sometimes printed on an EOBS as an explanation for a claim denial -- is a good illustration of the problem.
Many insurance companies use the phrase "not medically necessary" in two very different ways. In some cases, the phrase may be used to mean that the company is unable to determine whether or not a treatment is medically necessary under policy rules -- and thus eligible for reimbursement under the policy -- and that additional documentation is required be fore the determination can be made. In other cases, the phrase may be used to mean that a decision has been made that the treatment or service is not considered medically nec essary under the terms of the policy and is thus not covered. Unfortunately, it's sometimes very difficult for consumers to determine how the phrase is being used in a particular EOBS.
For example, several years ago I helped a reader of my newspaper column solve a problem in which a claim for extensive surgery had apparently been denied. According to the insurance company's EOBS the surgery was considered "not medically necessary." Since the bills amounted to more than $20,000, the reader was obviously deeply concerned. I spoke with the surgeon, and he felt strongly that the surgery was not only necessary from a medical point of view, it was essential.
When I discussed the situation with a supervisor at the insurance company, I discovered that the company was using the term "not medically necessary" in this case to mean that additional documentation was needed before making a determination on the claim. The company's procedures required that an operative report and a more detailed hospital bill be filed in cases involving major surgery before the company could refer the claim to a medical consultant to make a decision on the issue of medical necessity. In that sense, the phrase "not medically necessary" referred to an administrative or procedural issue rather than to the medical need for the surgery.
Continued on Next Page
