Situation Report | January 25, 2021
The U.S. Centers for Medicare and Medicaid Services (CMS) recently finalized its definition of “Reasonable and Necessary” in a January 14 final rule.
The newly codified definition (effective March 15, 2021) is nearly identical to the definition of “reasonable and necessary” in chapter 13, section 13.5.4, of the Medicare Program Integrity Manual and had been generally used to make determinations of “reasonable and necessary” but had not been codified.
The newly codified definition is intended to align with a new Medicare Coverage of Innovative Technology (MCIT) pathway that begins Medicare coverage of an item or service on the date of Food and Drug Administration (FDA) market authorization — an effort to provide faster access to new, innovative medical devices.
Under the rule, an item or service would be considered ‘‘reasonable and necessary’’ if it is safe and effective, not experimental or investigational, and is appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service.
To meet this appropriateness criteria, the item or service would need to be:
- Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member.
- Furnished in a setting appropriate to the patient’s medical needs and condition.
- Ordered and furnished by qualified personnel.
- One that meets, but does not exceed, the patient’s medical need.
- At least as beneficial as an existing and available medically appropriate alternative.
- Covered in the commercial insurance market, except where evidence supports that there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals.