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Medical Necessity

The Centers for Medicare and Medicaid Services (CMS), the U.S. agency that administers the Medicare program, defines "medical necessity" as "services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." Medicare will not pay for any tests that CMS determines as unnecessary for diagnosis or treatment of disease.
A claim cannot be submitted to Medicare or other government payers for any test or procedure that is not medically necessary unless:
  • The patient has signed an Advanced Beneficiary Notice (discussed later in this course), or
  • A patient has requested that the claim be submitted for a determination by Medicare.
Medicare does not pay for screening tests or tests that are ordered in the absence of signs or symptoms.