CurrentBaylor Scott & White Health PlanPolicy 213

Medical Necessity Determination

Defines how Baylor Scott & White Health Plan determines medical necessity and coverage review hierarchies for Medicare, Texas Medicaid, and other plans; applies to providers requesting coverage determinations for covered persons.

Policy Summary

PayerBaylor Scott & White Health Plan

PolicyMedical Necessity Determination

Policy CodePolicy 213

Change TypeNo material changes

Effective DateN/A

Next Review DateSep 8, 2026

Key ActionSubmit sufficient clinical information to allow a medical necessity determination; providers may request peer-to-peer review or a formal appeal if denied for lack of medical necessity.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3Medicare hierarchy items

3Medicaid hierarchy items

AppendixDefinitions included

4Policy history entries

Coverage Determination Hierarchies & Criteria

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Medicare hierarchy: 1. National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) and CMS guidance; 2. Internally developed BSWHP Medical Policy (based on peer-reviewed medical literature); 3. InterQual Medicare Products (with guidance to use Commercial sources when appropriate); 4. Generally accepted standards of medical practice (peer-reviewed literature, specialty society guidelines, online resources).

Document lists order and guidance on using InterQual when specific product sources are absent.

Medicaid coverage hierarchy

For Medicaid plans, coverage determinations follow this hierarchy:

Medicaid hierarchy: 1. Texas Medicaid Provider Procedures Manual (TMPPM); 2. Internally developed BSWHP Medical Policy (based on peer-reviewed medical literature); 3. InterQual Commercial Products (with guidance to use Medicare sources when appropriate); 4. Generally accepted standards of medical practice (peer-reviewed literature, specialty society guidelines, online resources).

Policy states coverage criteria shall not be more restrictive than TMPPM and may waive PA where TMPPM recommends no PA.

Other plans coverage hierarchy

For other plans, coverage determinations follow this hierarchy:

Other plans hierarchy: 1. Applicable state and federal mandates; 2. Internally developed BSWHP Medical Policy (based on peer-reviewed medical literature); 3. Generally accepted standards of medical practice (peer-reviewed literature, specialty society guidelines, online resources); 4. InterQual Commercial Products (with guidance to use Medicare sources when appropriate); 5. Follow CMS rules in instances where none of the above apply.

Order and usage guidance extracted from policy.

A determination that a service is medically necessary under this policy does not by itself guarantee that the service will be paid or covered under a member’s benefit plan. This policy does not supersede federal or state coverage mandates or the specific terms of the member’s benefit plan. In the absence of a controlling mandate, coverage and any applicable limitations, exclusions, or conditions are determined by the member’s benefit plan documents; when there is a conflict, the plan document governs.

If the clinical documentation supplied with a request is insufficient to permit a coverage determination, the request will be denied as Not Medically Necessary by the reviewing Medical Director. Providers retain the right to pursue peer-to-peer review or file a formal appeal within the applicable regulatory time frames if a denial is issued for lack of medical necessity.

Provider Requirements, Authorization & Appeal Processes

Prior Authorization

Prior Authorization Required When Applicable

Prior authorization requirement varies by service and benefit plan. Providers must check member-specific benefit coverage and obtain prior authorization when required before rendering services to avoid claim denials or member liability.

Check the member's plan benefits and Evidence of Coverage/Summary Plan Description for prior authorization requirements.
Obtain prior authorization when required and document authorization number on claims.

Documentation Required

Required Clinical Information for Review

Providers should submit complete clinical information with the initial request to allow a timely medical necessity determination. Ensure documentation includes history, relevant diagnostic testing, treatment tried and failed (if applicable), and the clinical rationale for the requested service.

Include relevant clinical records, diagnostic reports, current medications, and progress notes.
If delegated vendors (e.g., eviCore) handle authorization, follow their submission requirements and forms.

Denial Risk

Denial for Insufficient Information

If the reviewing Medical Director determines there is insufficient information to make a determination, the request will be denied as Not Medically Necessary. Providers will be notified of the denial and must supply additional information via the appeals or peer-to-peer process if they wish to request reconsideration.

Insufficient information denials are issued consistent with Texas Department of Insurance (TDI), CMS, and TMPPM rules.
Denials for lack of medical necessity may be reconsidered through peer-to-peer review or formal appeal within regulatory timeframes.

Note

Appeal & Peer-to-Peer Rights

When a denial for lack of medical necessity is issued, providers have the right to request a peer-to-peer discussion with the reviewing clinician or file a formal appeal within the timelines set by applicable regulations. For medications under the medical benefit, refer to BSWHP Medical Coverage Policy 215. Internal coverage criteria and medical policies are publicly accessible on the Medical Resources for Providers website.

Peer-to-peer and appeal rights follow regulatory-defined timeframes.
See Medical Coverage Policy 215 for medication-specific appeal guidance.
Access coverage criteria and delegated vendor criteria (e.g., eviCore) on the provider resources site.

Policy Purpose & Scope Background

This policy defines how Baylor Scott & White Health Plan (BSWHP) applies the concept of medical necessity across plan types and prescribes the hierarchy of guidance used when making coverage review determinations. For Medicare plans, determinations prioritize Federal CMS guidance including National and Local Coverage Determinations, followed by internally developed BSWHP medical policy, InterQual Medicare product guidance, and then generally accepted standards of medical practice. For Medicaid (Texas) plans, determinations prioritize the Texas Medicaid Provider Procedures Manual (TMPPM), then BSWHP medical policy, InterQual commercial products, and generally accepted standards of practice; the policy states criteria shall not be more restrictive than TMPPM. For other plans, BSWHP follows applicable state and federal mandates first, then its internal medical policy, generally accepted standards of practice, InterQual commercial products, and when none of these apply, CMS rules as appropriate.

Definitions of Medical Necessity by Program

Reasonable and Necessary (Medicare)

Governing authoritySection 1862(a)(1)(A) of the Social Security Act (Medicare) requires that no payment be made for items or services that are not reasonable and necessary for diagnosis or treatment or to improve function of a malformed body member.

Core criteriaService must be not experimental or investigational; safe and effective; appropriate in duration and frequency; furnished in an appropriate setting; provided in accordance with accepted standards of medical practice; ordered and furnished by qualified personnel; and meet but not exceed the beneficiary's medical need.

Relation to NCDs/LCDs/CMS guidanceReasonable and necessary guidelines apply in the absence of a National Coverage Determination (NCD), Local Coverage Determination (LCD), or CMS Manual Instruction.

Scope note - malformed body member'Malformed' is defined as abnormally formed or misshapen; services to improve function of a malformed body member are covered when reasonable and necessary.

Medically necessary (Texas Medicaid)

Regulatory sourceTexas Administrative Code, Title 1, Part 15, Chapter 353, Subchapter A, Rule 353.2 definition of 'Medically Necessary'.

Members birth through age 20Includes Texas Health Steps services and other health or dental services necessary to correct or ameliorate a defect or physical or mental illness or condition; determination may consider additional relevant factors referenced in the rule.

Members over age 20Non‑behavioral health services that are reasonable and necessary to prevent illness, provide early screening/intervention/treatment for conditions that cause suffering, deformity, functional limitation, worsening disability, illness/infirmity, or endanger life.

Compliance requirementsServices must comply with requirements of any final court order that applies to the Texas Medicaid program or managed care program.

Medically Necessary (Other plans)

Definition summaryHealth care services a healthcare provider, exercising prudent clinical judgment, would provide to evaluate, diagnose, or treat an illness, injury, disease or its symptoms.

Standards of practiceServices must be in accordance with generally accepted standards of medical practice.

Clinical appropriatenessServices must be clinically appropriate in type, frequency, extent, site and duration, and considered effective for the patient's condition.

Cost and convenienceServices must not be primarily for convenience of the patient or provider and must not be more costly than an alternative that is at least as likely to produce equivalent therapeutic or diagnostic results.