What does "medical necessity" refer to in healthcare?

"Medical necessity" specifically refers to healthcare services that are considered appropriate and essential for diagnosing or treating a patient's condition. This concept emphasizes that the service must be justified based on the patient's specific medical needs, aligning with established standards of care. It ensures that interventions are evidence-based and necessary for effective treatment, rather than being optional or driven solely by patient requests.

This principle is critical in insurance coverage, as insurers will typically only reimburse services deemed medically necessary, ensuring responsible and effective allocation of healthcare resources. Thus, when a service or treatment is identified as medically necessary, it signals that it supports the patient's health outcomes and conforms to industry guidelines.