Defining and implementing medical necessity in Washington State and Oregon

This paper reports on a qualitative study of how health care providers in the states of Washington and Oregon define and implement medical necessity. Based on a series of semi-structured interviews, we found that few insurers or health care plans in our sample attempted to resolve the ambiguities inherent in defining medical necessity. More importantly, our results suggest that physicians in managed care plans were not using general definitions of medical necessity to make clinical decisions, but instead relied on utilization management techniques to guide the use of medical resources. We conclude that medical necessity as an organizing principle for clinical practice decision making is likely to continue to erode in a managed care environment.