Payers only pay for services they consider medically necessary for the diagnosed condition. On a claim, medical necessity is shown by linking each service to an appropriate diagnosis code and supporting it in the clinical documentation.
Coverage policies such as Medicare's national and local coverage determinations (NCDs and LCDs) list which diagnoses support certain services.
Related terms
- ICD-10-CM
- The diagnosis code set used in the US to report why a patient was treated.
- ABN (Advance Beneficiary Notice)
- A Medicare form telling the patient a service may not be covered, before it is provided.
- Prior authorization
- A payer's approval, obtained before a service, that it will consider paying for it.