including Medicaid, may cover certain services that are not considered medical services per se, and therefore, would not be medically necessary.

When committee member Dr. Guzick asked Dr. Garber to explain the role of medical necessity in defining the EHB, Dr. Garber replied that “once one gets away from decision making about an individual case, one is no longer speaking about medical necessity; instead, we are speaking about coverage policy.” Over the past 15 or 20 years, he said, almost “everything proven effective” has been included in the defined set of benefits. This approach, he argued, ignores the cost implications of covering a particular service, resulting in a “very costly bundle of services.” Dr. Garber advised that if value is to be considered in determining what is essential, there should be a discussion about what criteria are used to define value and how those criteria should be applied. Dr. Garber suggested that cost-effectiveness analysis or other tools implemented around the world could be applied.

Court Direction on the Meaning of Medical Necessity

The Second Circuit Court of Appeals has decided numerous cases related to medical necessity and in Mario v. P & C Food Markets, Inc.,2 specifically ruled that in the absence of a medical necessity definition in the plan document, the term medical necessity refers to what is medically necessary for a particular patient and consequently is not a blanket determination of whether coverage is appropriate:

Unless the contrary is specified, the term “medical necessity” must refer to what is medically necessary for a particular patient, and hence entails an individual assessment rather than a general determination of what works in the ordinary case.2

Furthermore, a class action lawsuit filed in 2000 and consolidated in the U.S. District Court for the Southern District of Florida resulted in a generally agreed upon definition of medical necessity.3 Under the terms of the settlement agreements, the defendants (including Aetna, CIGNA, Anthem/WellPoint, Humana, and other insurers, together with state and county medical societies and 900,000 physicians, agreed to accept the following definition:

“Medically Necessary” or “Medical Necessity” shall mean health care services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient’s illness, injury or disease; and (c) not primarily for the convenience of the patient, physician or other health care provider, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient’s illness, injury or disease. For these purposes, “generally accepted standards of medical practice” means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community or otherwise consistent with the standards set forth in policy issues involving clinical judgment. (Kaminiski, 2007)4

The definition that emerged from this class action settlement was only required to apply to those insurers participating in the settlement.

In determining medical necessity, one test is whether the intervention meets generally accepted standards of medical practice. Dr. Garber stated that a “sea change has occurred over the decades in what is meant by generally accepted standards of medical practice.” In the past, he said, the phrase referred to “any kind of care that a physician deemed necessary and appropriate for a patient.” The above definitions, however, state that the generally accepted standards of medical practice have evolved to mean standards that are based on credible scientific evidence. This evolution in terminology corresponds to what Dr. Garber maintained has been an increased reliance in the provider community on the published clinical and scientific literature.


2Mario v. P & C Food Markets, Inc., 313 F. 3d 758 (2nd Cir. 2002).

3 In re Managed Care Litigation. S.D. Fla. MDL No. 1334. Settlement approved December 31, 2005.

4 Emphasis by using italic font was added to excerpts from Kaminski, 2007, by Dr. Garber.

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