Medicaid Toolkit

Medical Necessity

For services to be considered medically necessary, they must be reasonable and necessary for the treatment of illness, injury, disease, disability, or developmental condition.

Medical necessity is a critical factor for determining eligibility for Medicaid-reimbursable therapy and treatment services. Each state determines its own medical necessity criteria for Medicaid reimbursement. According to ASHA's Speech-Language Pathology Medical Review Guidelines [PDF], Medicaid claims may be supported when providers document the following basic elements:

  • Reasonable: Appropriate amount, frequency, and duration of treatment in accordance with standards of practice
  • Necessary: Appropriate treatment for the patient's diagnosis and condition
  • Specific: Treatment targeted to particular goals
  • Effective: Treatment expected to yield improvement within a reasonable amount of time
  • Skilled: Treatment requiring the knowledge, skills, and judgment of a speech-language pathologist (SLP) or audiologist

Audiology and speech-language pathology services are medically necessary to treat speech-language, hearing, balance, swallowing, voice, fluency, and cognitive-communication disorders. Many disorders have a neurological basis, including head injury, Parkinson's disease, stroke, autism, and cerebral palsy. Children who require services as part of their individualized education programs (IEPs) and are identified as having a disability under the Individuals with Disabilities Education Act (IDEA) are also generally considered to have met the requirements.

Medical necessity for audiology services varies from state to state for hearing aid and cochlear implant evaluation and fitting. Most states establish minimum hearing loss criteria for initial and replacement hearing aids, and many require a medical exam as well as an audiologic evaluation to determine whether a hearing aid is medically appropriate. Some states limit the types of hearing aids covered, and many establish a limit on the number of aids and accessories, such as batteries, that beneficiaries may receive within a specified period of time. Some states allow interim replacements or repair of aids that are lost or broken.

Considerations

Although each state establishes a state plan, including specific requirements, relevant documentation for establishing medical necessity may include:

  • medical history, such as pertinent medical history, brief description of functional status, and relevant prior treatment;
  • diagnosed speech, language, swallowing, hearing, or balance disorder;
  • identification of a child with a disability as eligible for services under the Individuals with Disabilities Education Act (IDEA) or determination by an IEP team that services are required;
  • date of onset;
  • physician referral, if required (reauthorization may be required);
  • initial assessment and date—the procedure(s) used by the audiologist or SLP to diagnose a speech, language, voice, fluency, cognitive-communication, swallowing, hearing, or balance disorder and the date the initial assessment is completed;
  • plan of treatment or a treatment program and date established; and
  • progress notes and/or reports.

Advocacy

Professionals may work with their state association leadership, local education agencies, state education agencies, and state Medicaid offices to address specific topics or questions. Successful efforts to improve efficiency for professionals in some states include:

  • streamlining paperwork;
  • establishing evaluation or IEP by a qualified professional as adequate to establish medical necessity and eliminating need for physician signature;
  • expediting physician referral and examination process;
  • clarifying medical necessity criteria and documentation requirements;
  • updating states policy and procedure information;
  • advocating for services not covered (i.e., private practice and telepractice)

Resources

ASHA Corporate Partners