Medically necessary services and prior authorization

For any service or item to be covered by Medicare, it must:

• Be eligible for a defined Medicare benefit category,
• Be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and
• Meet all other applicable Medicare statutory and regulatory requirements.

Medically necessary services that have been provided to the patient are billed to Medicare for consideration and processing. If a service is denied, the provider and the patient have a right to request a redetermination of the denial. 

Title XVIII of the Social Security Act, Section 1862(a)(1)(A) allows coverage and payment for items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member.

Section 1862(a)(1)(A) of the Social Security Act is the basis for denying payment for types of care, specific items, services, or procedures, not excluded by any other statutory clause, meet all technical requirements for coverage, but are determined to be any of the following:

• Not generally accepted in the medical community as safe and effective in the setting and for the condition for which it is used;
• Not proven to be safe and effective based on peer review or scientific literature;
• Experimental;
• Not medically necessary in the particular case;
• Furnished at a level, duration or frequency that is not medically appropriate;
• Not furnished in accordance with accepted standards of medical practice; or
• Not furnished in a setting (such as inpatient care at a hospital or SNF, outpatient care through a hospital or physician's office or home care) appropriate to the patient's medical needs and condition.

To be considered medically necessary, items and services must have been established as safe and effective. That is, the items and services must be:

• Consistent with the symptoms or diagnosis of the illness or injury under treatment;
• Necessary and consistent with generally accepted professional medical standards (e.g., not experimental or investigational);
• Not furnished primarily for the convenience of the patient, the attending physician or other physician or supplier; and
• Furnished at the most appropriate level that can be provided safely and effectively to the patient.

Title XVIII of Social Security Act, Section 1862(a)(10) states no payment may be made under Part A or Part B for any expenses incurred for items or services where such expenses are for cosmetic surgery or are incurred in connection therewith; except as required for the prompt repair of accidental injury or for improvement of the functioning of a malformed body member.

Title XVIII of the Social Security Act, Section 1833(e) states that no payment shall be made to any provider for any claim that lacks the necessary information to process the claim.

Prior authorization initiatives

CMS runs a variety of programs that support efforts to safeguard beneficiaries’ access to medically necessary items and services while reducing improper Medicare billing and payments. Prior authorization helps to ensure that all applicable Medicare coverage, payment, and coding rules are met before a service is furnished. This does not change any medical necessity or documentation requirements.

Under prior authorization, the provider submits a prior authorization request (PAR) and receives a decision prior to rendering services. The PAR must include all supporting medical documentation for provisional affirmation of coverage for the item or service to the MAC who reviews the request and issues an affirmed or non-affirmed decision. For more information, please visit our prior authorization initiative page.