Medically necessary? (Health Care Technology).

One can only guess at the number of medical coverage policy decisions that are made each day, either explicitly as part of an individual case review, or more implicitly as part of global medical management strategies, such as implementing practice guidelines or disease management programs. Yet, the vast majority of all of these hundreds of millions of coverage decisions can ultimately be traced back to three words in the original health policy contract that typically define coverage eligibility: medically necessary and investigational. Investigational as a coverage exclusion applies to the minority of cases, in which there is inadequate data to validate the effectiveness of the intervention. In contrast, the majority of coverage decisions are based on concepts of medical necessity.

Are these two wards up to the task?

Over the years the concept of medical necessity has evolved to encompass a multitude of medical management strategies. Essentially, in terms of the contract language, medical necessity has become a workhorse concept to determine coverage eligibility. In the process, the interpretation of the term has taken on various guises and a variety of processes have been used to define medical necessity. The following discussion highlights the variable uses of the concept of medical necessity.

1. Determining the most appropriate intensity of service and place of service

The necessity of inpatient hospitalization was one of the original focuses of managed care management strategies. The exclusion of hospital days as not medically necessary often overlaps with the concept that services provided for the convenience of the patient or provider were similarly not medically necessary. Unlike other applications of medical necessity, length of hospital stay is typically not established on evidence-based outcomes studies in the peer reviewed literature, but on a comparison of average lengths of hospital stay in different geographic areas.

2. Determining whether the proposed therapy is medically appropriate for the patient's condition

Most definitions of medical necessity in health plan contracts include some sort of statement regarding medical appropriateness. While this term merely seems to substitute the vague term "necessary" for the equally obscure term "appropriate," in practice the concept of medical appropriateness often includes determining whether the service in question is appropriate for the individual, given the patient's unique set of circumstances. In other words, medical necessity may focus on patient selection criteria for a technology.

This can be contrasted with evaluating the investigational status of a technology. Typically, this involves a global assessment to determine whether there is evidence to validate the overall effectiveness of a technology. In contrast, the concept of medical necessity is used to determine if the technology is effective in an individual patient.

Therefore, although there is overlap between the two terms, coverage decision-making can be conceptualized as a two-tiered approach moving from the global (investigational) to the individual (medically necessary). This application of medical necessity typically involves an evidenced-based review of the available literature and may be used on a case by case basis.

3. Distinguishing between medically necessary services and those that are performance enhancing or discretionary in nature

The debate over the appropriate use of Viagra illustrates this point. According to the FDA labeling, this drug is intended for the treatment of impotence. However, many patients may have sought treatment for milder cases of erectile dysfunction, or as a potential solution to an unsatisfactory sexual relationship. Was treatment medically necessary in these situations, or was it more discretionary in nature? Another common, but less heralded example, is the use of custom-made, ultra light knee braces in order to enable high level performance in sports. Is this request based on medical necessity or on a desire for enhanced performance? This large gray zone will come into increasing focus with the introduction of more lifestyle' drugs.

4. Making a distinction between medically necessary, cosmetic, and reconstructive services

Typically, health plans exclude coverage of cosmetic services, and thus the critical determination is what is considered medically necessary, as opposed to a service designed to enhance the patient's appearance. This distinction is frequently based on the presence or absence of a functional impairment. While a functional impairment may be easy to recognize if a musculoskeletal deformity is present, cosmetic services typically involve dermatologic conditions where functional impairment is more difficult to identify. Treatment of pemphigus would certainly be considered medically necessary, based in part on the functional impairment of the skin to maintain fluid balance. But what is the functional impairment associated with acne, port wine stains, vitiligo, or rhinophyma?

In many instances the most significant functional impairment may be an associated psychosocial morbidity, but health plans have been reluctant to provide coverage for therapies designed to relieve psychosocial stress. Breast reduction surgery is a salient example. Typically breast reduction surgery is considered cosmetic, unless associated with some functional impairment such as well documented back pain, shoulder grooving, or intertrigo.

Plans may apply different standards of functional impairment based on whether the condition represents a disease or an anatomic variant. While both breast reduction surgery and surgery for gynecomastia (i.e., breast enlargement in the male) may be performed primarily to reduce psychosocial stress, large breasts in women are considered an anatomic variant, while gynecomastia may be considered a disease, such that compelling evidence of a functional impairment may not be required in men. Even then the determination boils down to what is considered a disease versus a condition. Is a port wine stain a disease? How about pectus excavatum?

These concepts have led to varying coverage policies for dermatological conditions, based on subtle nuances in the interpretation of functional impairment and medical necessity. For example, plans typically will provide coverage for active acne on the basis that it is a disease. However, coverage for treating acne scarring may be excluded on the basis that it is no longer an active disease and, thus, its treatment is cosmetic in nature.

Added to this confusing mix is the concept of reconstructive surgery. As its name implies, reconstructive services are those that return the patient to whole," after surgery, disease, trauma, accident, or injury, although the eligible categories may vary with the contract. Again the concept of functional impairment is frequently invoked to define criteria. For example, a burn scar that results in a joint contracture is associated with a functional impairment, while a burn scar in a noncritical area is not.

However, one could make the reasonable argument that if a functional impairment were present, the service could be considered medically necessary, regardless of whether it was considered reconstructive or not. Stripping away functional impairment from reconstructive services, one is left with a small subset of procedures that, ironically, are performed for cosmetic purposes. For example, breast reconstruction after a mastectomy or revision of burn scars in noncritical areas are performed primarily to improve the appearance of the patient. Along the same lines, according to some plans' contract language, the treatment of acne scarring may be considered reconstructive in nature. Therefore, in essence, the definition of reconstructive procedures can basically outline exceptions to the cosmetic exclusion.

5. Defining medical necessity in accordance with generally accepted principles of good medical practice

While the exact contract terms are variable, most definitions of medical necessity include some concept of what is considered within the realm of commonly practiced medicine. However, how and who defines these principles is a source of continuing controversy. Studies of practice pattern variations over the past decade have documented astonishing local differences in medical practice. Should medical necessity be determined by local practice patterns or should it be driven by nationally developed evidence-based practice guidelines?

In fact, practice guidelines are often developed in response to differences and gaps in the treatment of common diseases. For example, the guidelines on the treatment of congestive heart failure developed by the Agency for Health Care Policy and Research (AHCPR) focus on the use of angiotension converting enzymes (ACE) inhibitors. Surveys and analyses of claims data had shown that there was significant underutilization of ACE Inhibitors. Based on these guidelines, health plans may choose to initiate a population-based disease management program focused on both provider and patient interventions to increase compliance with the AHCPR guidelines. These efforts may be undermined if local standards of medical practice are favored over national evidence-based standards.

As the basis of disease management programs, the application of medical necessity may seem far removed from individual case considerations. Nevertheless, while disease management programs may represent a global initiative, the ultimate patient care is still delivered individually, based on concepts of medical necessity.

Conclusion

The definition of medical necessity is multifaceted and represents many different things to various participants in the health care system. Conflicting policies and coverage decisions may result if medical necessity is defined on an evidence-based approached versus local or national consensus opinion. However, the bottom line is that medical necessity is the bedrock upon which the majority of medical management strategies rest.

Note

The Blue Cross and Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Plans. The in formation presented in this column does not necessarily represent the policy or views of either the Association or any of the Plans.

Elizabeth Brown, MD, is National Medical Consultant for the Blue Cross and Blue Shield Association in Chicago, illinois. She can be reached by calling 312/297-6186 or via email at [e-mail].