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Quality Improvement


This report addresses how the term "medical necessity" is defined in private health insurance coverage decisions. It summarizes a review of the literature, an extensive review of legal cases that challenge insurer decisions, materials prepared by the insurance industry, consultation with experts in the field, a review of investigations conducted by State departments of insurance and attorneys general, and interviews with health care executives regarding the decision-making process itself. The report does not explore factors that can affect access to care that might be considered clinically necessary by treating professionals or the effects of medical necessity decisions on therapeutic outcomes.


This report was prepared by the Center for Health Services Research and Policy, Department of Health Policy, The George Washington University School of Public Health and Health Services under contract number 01M008689 for the Substance Abuse and Mental Health Services Administration (SAMHSA), U.S. Department of Health and Human Services (DHHS). Jeffrey Buck, Ph.D., Associate Director for Organization and Financing, Center for Mental Health Services, served as project officer for this report. William L. Wallace, Ph.D., assisted with the preparation of this report.

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