Non-Covered Services and Not Medically Necessary Services


To ensure the proper procedures are utilized when receiving a denial from the insurance company that indicates the services that are non-covered or not medically necessary.


Post claim adjudication, denials will be reviewed and compared to state/payer guidelines.

If the balance is assigned to the practice/provider of service, the claim will be adjusted, and no further follow-up will be required.

Non-covered services are not covered by the payer per their policies and are, therefore, a patient responsibility. If an optional ABN of non-coverage or a practice non-covered service agreement is on file, the claim can be passed to patient responsibility and the normal patient statement process will ensue. These types of documents are generally not required by the payers so non-covered service balances should be assigned to the patient. Additionally, if a payer EOB/ERA specifically assigns a non-covered service to the patient, the non-covered amounts will be posted to the patient’s account and the normal collection process will ensue.

If the denials are found to be due to a Not Medically Necessary denial, the amount will be adjusted off if the provider/practice is In-Network or operating under a preferred/participating provider agreement. If the provider/practice are Out-of-Network, the balance will be assigned to the patient.

Non-Covered Definition

For services that do not meet policy coverage criteria, non-covered services may be collected at the time of service. Medicare does not require an ABN for notice of non-coverage but recommends one be used for the sake of beneficiary clarity. If the patient insists the service be billed to Medicare using an ABN form, be sure to assign the GY modifier to the charge line in Insight. Commercial payers typically do not have their own notices of non-coverage.

Not Medically Necessary Definition

Payers have specific criteria for establishing the medical necessity for the coverage of treatment. These are generally contained in Provider Manuals, payer medical policies specific to PT, OT, and Speech, in provider update bulletins and on payers’ websites. Services and treatments that do not fall within these medical necessity guidelines are not considered medical necessary and are not paid by the payers. If you or your practice is In-Network (operating under a preferred provider agreement and credentialling) these charges cannot be collected from the patient. If you or your practice are Out-of-Network providers, the charges my be collected from the patient within the limits provider for under state laws/regulations.


Some states and/or private payers will allow some services to be performed. Clinics should work directly with the payer representatives to ensure the reimbursement policy is clearly defined in their payer contracts.


Clinicient (the “Company”) is providing this information for general guidance. The application, impact and change of laws can vary widely. Accordingly, the information is provided with the understanding that it is not offered as legal or any other professional advice or services and as such should not be used as a substitute for consultation with professional and licensed advisers. While we have made every attempt to ensure that the information contained herein is accurate at the published time, the Company is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided "as is," with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance and fitness for a particular purpose. In no event will the Company or its subsidiaries, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information..

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