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In HealthChoices, voluntary HMOs, and Fee-For-Service
The definition of medical necessity is spelled out in Pennsylvania regulations (55 Pa. Code §1101.21a), and in the contracts between the Pennsylvania Department of Public Welfare and the HMOs.
The determination can be made either by prior
authorization, concurrent review, or post-utilization. For a service to be medically necessary, it must be compensable under the Medicaid program. Determinations of medical necessity and denials of medical necessity must be in writing.
To meet the Medicaid standard for Medical Necessity , any one of the three standards below can be met:
- The service or benefit will, or is reasonably
expected to, prevent the onset of an illness condition, or disability
- The service or benefit will, or is reasonably
expected to, reduce or ameliorate the physical, mental, or developmental
effects of an illness, condition or disability.
- The service or benefit will assist the individual to achieve or maintain maximum functional capacity in performing daily activities taking into account both the functional capacity of the individual and those functional capacities that are appropriate for individuals of the same age.
(Note: The Fee-For-Service medical necessity definition was recently changed to match the HealthChoices and voluntary HMO definition. Therefore, all Medicaid programs use the same definition for medical necessity. Details are available at 55 Pa. Code §1101.21a, and see DPW "Clarification Regarding the Definition of 'Medical Necessity'" at 37 Pa.B. 1880 (April 27, 2007).
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