HCFA stops using not medically necessary’

New nomenclature is more specific

The Health Care Financing Administration is retiring those three little words — "not medically necessary" — that often have been the only official justification many providers have received explaining why their claim for Medicare payment was denied.

The move to stop using the moniker came as a result of lobbying by provider groups such as the American Medical Association, which found the term insulting. They felt it insinuated that the medical service was not needed, when in actuality denial of the payment often was based on a determination that the particular service was simply not covered.

"We’re tickled pink about this decision," says AMA Trustee William H. Mahood, MD. "The AMA for quite some time tried to get HCFA to make the change because a patient would receive a denial of coverage for a test or a service and see the words not medically necessary’ and think that their doctor didn’t know what he was doing or made a mistake," he says. "Physicians would face a long phone call or unnecessary visit to explain that it was a coverage decision."

In the future, HCFA will list more specific reasons for any claim denials, ranging from such phrases as "the information provided does not support the need for this service or item" to "Medicare does not pay for more than one assistant surgeon for this procedure."

The AMA also is pressing private insurers to follow Medicare’s lead. "HCFA is not the only one sending those nasty letters and nasty comments on the explanation of benefit forms," says Washington, DC, physician Carlos Silva, MD.

All but eight of the 24 Medicare carriers currently use Medicare summary notices rather than explanation of benefits notices for each claim, according to HCFA records. Under the agreement with the AMA, the remaining eight will make the switch after they come into compliance with the government’s year 2000 computer requirements.