Medical Necessity:

The service or procedure provided by the physician will be considered for payment when it is appropriate and needed for the patient in that particular circumstance.  This is defined as Medical Necessity.  It is believed to be the least radical treatment procedure or service technique that is needed to treat the patient’s health condition effectively.   

When a doctor provides a service or procedure to the Medicare patient, the reimbursement process is guided by NCDs and LCDs.  National policy is through National Coverage Determinations (NCDs).  Regional policy is called Local Coverage Determinations (LCDs).  For the given CPT codes to be paid, corresponding ICD-10CM codes which support Medical Necessity should be documented and must be listed in LCDs.

Private insurance companies develop and follow their own medical policies for reimbursement purpose.