Letter of Medical Necessity

A Letter of Medical Necessity can be a powerful tool in making sure you receive all the benefits you’re entitled to from your health insurer.

Here’s what you need to know about how this important document can work on your behalf.

What is a Letter of Medical Necessity?

A Letter of Medical Necessity is correspondence written by a doctor, verifying that services or medications may be the best thing or the only thing to advance your care. They are typically written when a doctor says you need a certain treatment, but your insurance company disputes that fact.

The LMN is a formal and legal document that contains specific details, supported by documentation and recommendations.

It is sometimes called an LMN, LOMN, or a Doctor's Statement.

Medical Necessity (aka Medically Necessary) is defined as a health care service that a physician, exercising prudent clinical judgment, would provide to a patient. To qualify, the service must meet the following standards ¹.

• To evaluate, diagnose, or treat an illness, injury, disease, or its symptoms 
• In accordance with the generally accepted standards of medical practice 
• Clinically appropriate, in terms of type, frequency, extent, site, and duration, and considered effective for the patient's illness, injury, or disease
• Not primarily for the convenience of the patient, health care provider, or other physicians or health care providers
• Not more costly than an alternative service or sequence of services that will produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury, or disease

Also, "generally accepted standards of medical practice" is defined as ²:

• Standards that are based on credible scientific evidence published in peer-reviewed, medical literature generally recognized by the relevant medical community
• Physician Specialty Society recommendations 
• The views of physicians practicing in the appropriate clinical area
• Any other relevant factors

That may or may not include preventative care, which can be defined as medically necessary. Coverage for preventative care depends on what is specifically included for each patient's specific medical plan.

What Is a Certificate of Medical Necessity Form?

A Certificate of Medical Necessity (CMN) Form is required by the Centers for Medicare and Medicaid Services to provide details on the medical necessity of durable medical equipment, prosthetics, orthotics, or a service to a Medicare beneficiary. It is part of the prior authorization process.

Getting a CMN is a critical part of the healthcare process because it ensures that healthcare dollars are used as efficiently as possible. More important, it will help patients get the medical supplies that they need.

There are different types of CMNs for various requirements. For example, you might need one kind of form for a CPAP machine and another to request an insulin pump or a private duty nursing service.

In general, the CMN states the patient's diagnosis, prognosis, the reason for the equipment, and estimated duration of need.

The CMN Form is completed by both a supplier and the physician.

A DME Information Form (DIF) may also be required. It is completed only by the supplier. A DIF does not require the cost, a narrative description of the equipment, or a physician's signature.

You can view the Department of Health and Human Services sample Certificate of Medical Necessity form here. 

Why Do I Need a Letter of Medical Necessity?

There are a couple of important reasons why an LMN may be required.

First, as previously mentioned, the letter will provide formal documentation and a request to provide coverage for a condition that could be in question with an insurance provider.

As a legal document, the LMN will carry significant weight when appropriately executed, along with appropriate documentation.

The other key reason for an LMN is that some reimbursements for a Flexible Spending Account (FSA) or a Health Savings Account (HSA), administrators may need proof that the expense is legitimate and medically necessary.

You can use your FSA or HSA account to pay for a variety of healthcare products and services for you, your spouse, and your dependents. The IRS determines which expenses are eligible for reimbursement. 

It's best to keep your receipts and other documentation related to your health expenses and reimbursement requests. The IRS may require you to itemize your information and to verify certain selected expenses.

You'll need more than just credit card receipts, canceled checks, and bank documents to meet the IRS standard. Here’s a typical list of the types of things the IRS may look at when determining acceptable expenses for an FSA account. 

Keep in mind that the expense must meet the primary purpose to treat, cure, mitigate, diagnose, or prevent an illness or a disease ³.

There are a few gray areas in this regard. For example, items and services such as vitamins and exercise equipment are usually used to maintain general good health.

Even though the case can be made that these things are mitigating a disease such as obesity, high blood pressure, or osteoporosis, they are not customarily considered medical care that is eligible for reimbursement.

The bottom line is that an item or service is reimbursable as medical care only if a patient's primary purpose for the expense fits within the definition of medical care.

A plan administrator must determine if a personal use item is medical care, based on the facts and circumstances of a particular case.

The expense is not reimbursable if the patient would have purchased it anyway whether or not they had the medical condition. This is known as the “but for" test.

Administrators must carefully review all elements for each case. There is no simple answer that applies across the board.

How to Get a Letter of Medical Necessity

If you are initially denied coverage or if your doctor thinks you may have problems getting coverage for a particular type of treatment based on their experience and knowledge, you can request your attending physician to draft an LMN for you.

You can also draft the letter if you are the patient, but only the attending physician can sign off on the letter to make it an official request ⁴.

You can see what a sample of an LMN looks like here and here.

The Components of a Medical Necessity Letter:

Before drafting a letter, it's best to confirm that the insurance covers a patient, that the diagnosis is covered under terms of the policy, and that the requested treatment, service, or medication is not an exclusion of the policy.

A patient can draft the LMN, but it can only be made official by a doctor. And not just any doctor. Requests and arguments in favor of treatment have to come from a treating physician.

The doctor must know you have a history of some sort with you, and only then can they either write or sign off on the letter.

There are several specific elements an LMN must contain to valid. Those elements include:

Medical need. The requested service should or be reasonably expected to:

• prevent the onset of an illness, or a disability
• reduce or improve the effects of an illness or disability
• achieve the maximum functional capacity of the specific patient in performing daily activities given age and baseline functionality. In other words, 'without this, my patient can't do things other people like them can do.'

It is also essential to say no equally effective treatment is more conservative or less costly.

Patient identification. Specifically, the letter must state the patient’s name, date of birth, the insured’s name, insurance policy number and group number (or Medicare or Medicaid number), 

Key dates. This includes the date the letter was written, and the date the patient was last examined by the doctor writing the LMN.

Physician Identification. The name of the treating physician and his or her relationship to the patient (i.e., “I have been Bob’s cardiologist for eight years.”)

Diagnosis. This must be very specific. It is not good enough to state that the patient has "back pain." For the letter to be valid, the description should read more along the lines of "lumbar spinal stenosis with a herniated disc at L5."

Recommended treatment. This must also be named and described in detail, including services and medications.

Duration. There must be a specified timeframe for treatment. Open-ended, indefinite lengths or lifetime treatments will not be approved. If treatment is expected to continue for a long period, assume that the LMN will need to be renewed from time to time. It's acceptable to state if the disability is permanent or temporary, and the patient's condition is expected to evolve over time. 

Medical history. Only include medical history pertinent to the request for treatment.

A diagnosis of a specific condition should include the primary symptoms, any previous treatments, and what the outcomes of those treatments were (i.e., for a wheelchair approval, state that the patient has cerebral palsy with severe motor impairment).

Summary. A brief and final closing that addresses anything else that should be noted, further driving home the logical points of why a specific treatment is necessary.

Signature. The treating physician’s signature on their letterhead, including their specialty, license number, and contact information.

Supporting Literature. Any additional documentation that might include relevant literature regarding treatment for the patient’s condition, a drug’s full prescribing information, standard of care from a recognized medical society, lab and test results, and any supporting progress.

If possible, the letter should also be crafted in such a way that it lays the groundwork for an appeals process, if needed.

Also, if appropriate, emphasize how the requested service or treatment will prevent the onset of a secondary condition or disability.

And finally, avoid referring to the requested treatment as a way to increase caregiver convenience or as a way to do nice things for the patient.

You can see a sample of an LMN here. 

If you want to request an LMN from your doctor, here’s a sample letter you can use as a template.

You Have the Letter, Now What?

In some cases, you may get an LMN early on in your treatment.

To make sure you're reimbursed for a medical expense, even with a letter in hand, you need to make sure a provider will see your request as a medical necessity.

Although there are lists of what is a typically accepted procedure or preventative care is, sometimes your request may not be completely clear. This could jeopardize your ability to be paid back for expenses that may or may not be covered under your plan.

Read your health insurance documents or call your provider to confirm you are covered for a specific procedure or service. Many providers also have websites that list covered procedures.

Be sure to investigate if there are any exclusions or limitations that may impact what the company will reimburse.

Also, look for limits on the number of times you will be covered for a specific test, service, or treatment.

For example, some plans may limit the number of x-rays or physical therapy sessions you can seek reimbursement for. Other plans may have dollar limits.

Go over limitations with your doctor to see if other alternative forms of treatment may more easily fall within your coverage guidelines.

Be sure to see if you need to go to an in-network care or treatment center to be covered. Sometimes if you go to a lab, doctor, hospital, or clinic outside of your health network, you could be excluded from coverage, or the amount of coverage could be more severely limited ⁵.

Some prescription drugs may not be considered medically necessary. These might include drugs used to treat fertility, weight loss, or weight gain, among many others.

How to Submit a Letter of Medical Necessity

When you submit an LMN, you are certifying that the expenses you are claiming are a direct result of the medical condition described in the letter. You also certify that you would not otherwise incur these expenses if you were not treating this medical condition.

You will only need to submit your LMN and supporting documentation along with the first claim you submit for the service or equipment you are seeking. Documentation can include your provider’s bill or your insurer’s explanation of benefits (EOB) statement.

You will also need to provide the date of service or purchase, actual charges minus discounts or insurance payments, and detailed information on the service rendered or the prescription drug that was purchased.

You need to pay attention to the treatment duration, and if your treatment extends beyond the stated deadline, you will need to submit a new LMN.

At the very least, you must submit a new LMN each medical plan year. They are not approved indefinitely.

Keep a copy of the letter for tax purposes or so that you can seek reimbursement through your FSA or HSA.

Appealing Medical Necessity Denials

There are several reasons why a denial of a medical necessity could take place. The first step to appealing the decision is to determine what those reasons were.

One of the most common reasons is incorrect information. A simple transposition of letters or numbers or leaving out a critical but small piece of the needed information can create delays and frustrations for a patient. Attention to detail is essential.

Another common but often overlooked reason is that no confirmation of benefits took place before the letter was issued. It should be verified that the company of record still insures the patient and what the benefits are.

Other questions to ask might include: Is precertification or prior authorization required? What are the time references for diagnosis and treatment? Is there a preexisting clause?

What are the exclusions? Does the patient's primary payer need to be contacted first, and or is there secondary insurance? Is this an injury that is the result of an automobile or work-related accident and is a part of litigation proceedings?

Be sure that someone checks to make sure personal information, identification numbers, group numbers, policy numbers, and any other identifiers are correct and complete.

Another common mistake is wrong or incomplete medical coding, lack of detail for procedures and diagnoses, and related information.

Making sure these things are verified upfront is a lot less of a hassle than dealing with a denial and needing to submit an appeal.

But, if you want to submit an appeal, either because of the reasons stated above or due to a “failure to meet medical necessity” ruling, here’s what you should do.

• Make doubly sure all information is correct and precise.
• Obtain specific plan information related to this diagnosis, treatment plan, or procedure.
• Familiarize yourself with the appeal process for your specific insurance or payer.
• Verify the most current medical necessity guidelines according to the payer’s policy.
• Be prepared to prove, through documentation, the reason(s) this procedure should be considered medically necessary. You may need to cite case studies, scientific evidence, and common practice ⁶.

A letter of medical necessity is a legal document. It is the formal medical judgment of a licensed professional as to why a specific type of care is needed.

Although an insurer may initially deny treatment, an appeal may have a better chance of success because when your doctor appeals, they will be able to address specific reasons for the denial by the insurer.