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Medical necessity and psychiatric managed care
1Health Systems Research, Inc., Washington, DC, USA.
The Psychiatric Clinics of North America
|July 26, 2000
Summary
Medical necessity definitions by insurers and government limit essential healthcare payments. Advocates must redefine these terms to improve access to quality mental health and substance abuse services.
Area of Science:
- Health Services Research
- Health Economics
- Public Health Policy
Background:
- Medical necessity is a key insurance contract and Medicaid provision limiting payments to essential treatments.
- Third-party payers utilize medical necessity to manage financial risk and control healthcare spending.
- Current definitions reflect insurer and government program philosophies, impacting coverage.
Purpose of the Study:
- To analyze the role of medical necessity in healthcare coverage.
- To explore the implications of medical necessity definitions for psychiatric and substance abuse (SA) services.
- To identify challenges and strategies for healthcare advocates.
Main Methods:
- Conceptual analysis of insurance contracts and government regulations.
- Examination of the impact of medical necessity definitions on healthcare access.
- Review of advocacy strategies for mental health (MH) and SA services.
Main Results:
- Medical necessity definitions are tools for rationing scarce healthcare resources.
- Expanding psychiatric coverage requires shifts in payer philosophies.
- Even with parity, payers will use mechanisms to control demand and financial risk.
Conclusions:
- Short-term advocacy focuses on refining medical necessity definitions.
- Long-term advocacy aims to create affordable, accessible quality care systems for all.
- Systemic changes are needed to balance demand, resources, and financial risk in healthcare.