A Medi-Spa Practitioner’s Refresher on Medical Necessity and Cosmetic Treatments
In Illinois, almost all health insurance companies and HMOs pay claims based on medical necessity. If a treatment is deemed to be medically necessary, an insurance company or HMO will likely pay the claim on that treatment. However, if a treatment is deemed to be purely cosmetic and not medically necessary, then an insurance company or HMO will likely deny that claim. It is a good idea to familiarize yourself with which cosmetic treatments constitute medical necessity so you can advise and bill your clients accordingly.
What Constitutes Medical Necessity?
The Illinois Department of Insurance defines medical necessity as any medical services or supplies that are provided to evaluate and treat a disease, condition, illness, or injury. Healthcare services used for the evaluation of experimental and/or investigational services, procedures, drugs, or devices are considered medically necessary too.
Even though doctors can make their own determinations as to whether a treatment is considered medically necessary, insurance companies and HMOs can choose whether they agree or disagree with the doctor’s classification.
Among the list of medical procedures that are considered not medically necessary in Illinois are cosmetic treatments. However, each insurance company has its own set of policies and procedures regarding when certain exceptions apply to this rule, and your patient will need to determine whether his or her insurance company will pay for a particular cosmetic treatment by contacting the insurance company prior to the procedure.
When are Cosmetic Treatments Medically Necessary?
Each insurance company and HMO has a list of cosmetic procedures they deem to be medically necessary when certain criteria are met. For example, below is a list of cosmetic treatments typically offered by medi-spas that the insurance company Aetna has determined to be medically necessary when certain criteria are met.
- Dermabrasion: Considered medically necessary when conventional ways of removing cancerous and precancerous cells are impractical, and the patient has failed a trial of 5-FU or Aldara.
- Chemical peels: Considered medically necessary when the patient has 15 or more lesions since it would be impractical to treat each lesion separately. The patient must also have failed to respond positively to 5-FU or Aldara treatments.
- Acne treatment: Considered medically necessary for the treatment of acne vulgaris or when used for experimental and investigational purposes.
- Breast reduction surgery: Considered medically necessary when breast hypertrophy causes severe pain, paresthesias, or ulcers.
Make sure you advise your patients to check their insurance company’s website first, and then submit a pre-authorization request for the cosmetic treatment they wish to undergo, if a pre-authorization is required by their insurance company. If a pre-authorization is not required by your patient’s insurance carrier, then he or she will not know whether the procedure they wish to undergo is covered until after the procedure has been performed. By maintaining clear practice policies and documenting the patient’s consent to the treatment, regardless of reimbursements or medical necessity, you can help mitigate potential financial or liability risks to your practice.
If you have questions regarding whether a cosmetic treatment is considered medically necessary for a particular patient, we can help. Jackson LLP’s healthcare attorneys are knowledgeable about the legal and regulatory issues impacting medi-spas and their practitioners. Read more on our dedicated Medical Spa page — then schedule your free initial consultation online or call our office at (312) 985-6484.