Medical necessity is established in part by the procedure codes found in the Common Procedural Terminology code sets and diagnosis codes identified in the International Classification of Diseases, 9th revision, notes Today's Hospitalist. The ICD-9 codes are used to support the reasons for providing the associated procedures or equipment.
When referring to an insurance claim for health care services, medical necessity means that the diagnosis, as indicated by the CPT or, in the case of Medicare, the Health Care Common Procedure Coding System code that is documented on the claim requires the level of evaluation and treatment provided to the patient, explains the American Academy of Orthopaedic Surgeons. Documentation in the patient's medical record must support the diagnosis, which in turn must support the level of service given to the patient.
Standard code sets used in electronic transmissions of health insurance claims are maintained by different professional entities and are used for specialized purposes when billing. The CPT code set, established by the American Medical Association, describes medical procedures and physician services, explains the Centers for Medicare & Medicaid Services. For dental services, health care providers use the Code on Dental Procedures and Nomenclature code set distributed by the American Dental Association.