Research on medical necessity decision making in managed care

The Foundation's Changes in Health Care Financing and Organization program was designed to support research, demonstration, and evaluation projects examining major changes in health care financing.Conflicts among consumers, physicians, and insurers -- both over definition of "medical necessity" and its application to individual coverage decisions -- have brought the discussion of medical necessity to state legislatures, the Medicare program, and the U.S. Congress for resolution. The purpose of this project is to conduct a study to provide input about medical necessity decision making for policy making at the state and national level. National testing of recent findings from California research (conducted at Stanford University's Center for Health Policy) suggests that physician medical directors in health plans and groups base decisions on a variety of sources of evidence, produce variable and inconsistent decisions about the same case, rarely address cost effectiveness issues publicly, discuss and communicate these decisions poorly to consumers and treating physicians, and fail to monitor and use information from decision making for improvement purposes. While contractual definitions appear to have little impact on the application of medical necessity to individual cases, it is not clear how organizational policies, accreditation, regulation and legislation impact the decision making process. The methodology for this study is a telephone survey of a sample of health plan medical directors in 48 states.

Grant Details

Amount Awarded $347,553.00

Awarded on: 5/19/2000

Time frame: 6/1/2000 - 10/31/2001

Grant Number: 39396


Stanford University

450 Serra Mall
Stanford, 94305-2004


Linda A. Bergthold
Project Director