What You Need to Know About Health Insurance Part 4

Note: This is Part 4 of an 8 part series that is also being published in the Chester County Press.

“The Importance of ‘Medical Necessity'”

The healthcare plans we have today have their origin in the 1930’s and the Depression. Back then, the nation’s doctors and hospitals were going broke and something had to be done. What emerged was an arrangement where doctors and hospitals banded together to offer all the healthcare an individual would need in exchange for a low monthly payment. However, by the 1970’s, the national cost of healthcare had risen to a point that Congress turned to this system of prepaid care to drive down the cost of healthcare. The thinking was that the bargaining power of this prepaid healthcare, or managed care system as we have come to know it, was up to the task. Unfortunately, no one thought to change the model for covered services in what was now being called health insurance and still offering all the healthcare an individual needed for a set monthly payment.

Once again, something had to be done. That something became the HMO excesses of the 1980’s and 1990’s  where managed care health insurance began overruling doctors for determining the care an individual could receive. The litigation that followed was long and extensive, but what came out of it was a clear and resounding message from the courts that only the attending doctor (OUR doctor) can determine the care an individual needs or expressed in the terminology that developed, the care that is “Medically Necessary.”  

One never to surrender, even when beaten, the managed care insurance industry made “Medically Necessary” the determining factor in all decisions on coverage. And, since the courts had ruled that only our doctor can determine what is needed, everyone appeared happy. However, the insurance industry wasn’t through. They simply claimed the right to deny PAYMENT for insurance purposes instead of the right to determine “Medical Necessity” for healthcare purposes.

Fortunately for us, the original requirement of providing all the healthcare an individual needs for a set monthly payment has never changed. Your plan is simply counting on us to NOT understanding the subtle difference between denying payment for insurance purposes and overruling our doctor for determining the “Medically Necessary” care we need. A difference we will fully exploit in a coming article.

See Other Articles in the Series