An updated AAP policy statement advocates for consistent medical necessity definitions that recognize unique pediatric developmental, epidemiologic, dependency, demographic and cost-related factors.
The policy seeks to help members justify medical necessity for individual patients in the clinical setting as well as more broadly when negotiating medical necessity criteria within payer contracting.
It also calls for payers and relevant agencies to seek out experienced pediatric physicians to inform medical necessity determinations and to articulate the criteria used for medical necessity determinations, along with a transparent appeal process.
The policy Considerations in the Determination of Medical Necessity in Children: Application to Contractual Language, from the Committee on Child Health Financing, is available at https://doi.org/10.1542/peds.2022-058882 and will be published in the September issue of Pediatrics.
Medically necessary services generally are defined as being clinically appropriate, based on evidence and likely to produce incremental health benefits that justify their cost. Medical necessity exists when the medical community recognizes health services as appropriate for the diagnosis, prevention or treatment of a condition or injury.
Typically, payers only cover health care services that are medically necessary, so the determination of medical necessity is vital to patients, providers, payers and agencies involved with providing or regulating the provision of health care.
5 D’s of pediatrics
A more inclusive medical necessity definition is needed in pediatrics to reflect that infants, children and adolescents have unique characteristics, which health services researchers call the 5 D’s of pediatrics (Forrest CB, et al. JAMA.1997;277:1787-1793, https://bit.ly/3d81dV6; Stille C, et al. Acad Pediatr. 2010;10:211-217, https://doi.org/10.1016/j.acap.2010.05.002):
- Development: Growth and maturation occur continuously from birth through young adulthood.
- Dependency: Reliance on parents and other adults for caregiving and access to health care.
- Differential epidemiology: Unique patterns for health, illness and disability.
- Demographic patterns: Relatively high rates of poverty and increasing ethnic diversity.
- Dollars: Overall costs are relatively small, and return on investment occurs over an extended time period.
With the 5 D’s in mind, the policy defines pediatric medical necessity based on a recent AAP policy statement and Bright Futures guidelines:
“ … health care interventions that are evidence-based, evidence informed, or based on consensus advisory opinion and that are recommended by recognized health care professionals or organizations, such as [those represented by] the AAP, EPSDT services, and Bright Futures to promote optimal growth and development in children and youth and to prevent, detect, diagnose, treat, ameliorate, or palliate the effects of physical, genetic, congenital, developmental, behavioral, or mental conditions, injuries, or disabilities” (AAP policy Guiding Principles for Managed Care Arrangements for the Health of Newborns, Infants, Children, Adolescents and Young Adults, https://doi.org/10.1542/peds.2022-058396).
“ …Furthermore, new evidence, new community influences, and emerging societal changes dictate the form and content of necessary health care for children”
(Hagan JF, et al. Bright Futures: Guidelines for Health Supervision of Infants, Children, and Adolescents, 4th Ed, https://bit.ly/3zXrXAT).
Medicaid’s ideal model
The Medicaid program’s Early Periodic Screening, Diagnosis and Treatment (EPSDT) scope of benefits standard serves as a potential model for optimal medical necessity determinations in the pediatric setting.
Within Medicaid, states are required to provide all medically necessary services mandated by EPSDT, regardless of whether those services are part of the state’s Medicaid program. The requirement also pertains to Medicaid managed care programs.
This federal treatment requirement and EPSDT’s definition of medical necessity are intended to ensure uniform and comprehensive health insurance coverage for children and adolescents covered within the Medicaid program across the nation. Under Medicaid, states are required to establish a periodicity schedule for each type of screening service included in the EPSDT standard: medical, vision, hearing and dental, in consultation with recognized professional organizations.
Although states have the discretion to follow other schedules, federal regulations recommend states follow the periodicity schedule for preventive services outlined in Bright Futures, which provides an evidence review for inclusion on the periodicity schedule.
States are required to cover visits outside the periodicity schedule if such visits are necessary to determine the need for further care in children with various conditions. The state’s Medicaid program is required to pay for a complete diagnostic evaluation if a need for additional evaluation of a child’s health is determined during a periodic or inter-periodic screening.
Furthermore, if a health condition is discovered, EPSDT requires the state to ensure the provision of necessary treatment. All conditions — medical, mental, developmental, acute and chronic — must be treated, including conditions not newly discovered during a screen.
The extensive benefits and broad medical necessity standards adapted by EPSDT allow Medicaid to meet the needs of children facing serious, often lifelong diseases and disabilities by providing access to specialized services. These services include rehabilitative and habilitative services, extended inpatient care, physical and speech therapy, eyeglasses, hearing aids and other durable medical equipment, private duty nursing, medically necessary prescription drugs, and targeted case management services.
Among the recommendations in the policy are a call for increased clarity and transparency in defining medically necessary care, including the need to articulate a clear process for the evaluation and determination of medical necessity that addresses the following:
- how to provide clinical and scientific evidence that supports the efficacy and value of interventions that meet a child’s needs;
- how to incorporate and value appropriate pediatric medical subspecialty, pediatric surgical specialty or expert opinion or testimony that supports the use of an intervention;
- how and when coverage decisions will be made; and
- how to assist families or physicians who wish to appeal medical necessity denials.
Dr. Giardino is a lead author of the policy statement and a former member of the Committee on Child Health Financing.
Templates and tips on drafting an effective letter for the medical necessity of an intervention can be found in the medical home portal resources on working with insurance companies, https://bit.ly/3Q1Qc6z, and the AAP News article “Focus on Subspecialties: How to help Medicaid patients receive medically necessary services,” https://bit.ly/3oQjQzI.