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<Prudent Strategies in Taking Out Medical Insurance> pdf (Chinese Version only)

Know More About “Medically Necessary”

– an insurance provision which you better check it out before hospitalization

Most people thinks that the medical expenses during hospitalization is payable by insurance if such hospitalization was recommended by doctors.

In fact, insurers will assess the claim in accordance with the policy conditions, the scope of cover offered to the patient and also the medical conditions during the confinement period.  In some cases, the Insured member may have to bear the expenses if the treatment can be effectively done on out-patient basis, or there is no treatment at all during the hospitalization.

In order to improve the transparency of policy conditions, some medical insurance policies may include the provisions of “Medically Necessary” that further elaborate the principles of claims assessment explicitly in the policy wordings.  Here are some major considerations that may be stated in the provisions:

1. Is there emergency need?
2. Any reasonable alternatives (e.g. out-patient basis)?
3. Is it just for the convenience of parties concerned?
4. Testing only and no treatment during hospitalization?

Since different policies may contain different provisions on the "Medically Necessary", Insured members are suggested to understand the policy provision, or consult with the insurers before admission to hospital.

Case Study

Ms Lee was suffered from chest pain, abdominal pain and generalized malaise for 2 weeks.  She consulted with GP and was admitted to hospital upon GP's recommendation, a series of laboratory tests, x-ray, electrocardiogram and ultrasound were performed during the confinement.  Finally, the ultrasound revealed a gallbladder polyp but she was discharged the next day without active treatment during the confinement.

Ms Lee then submitted her claim to the insurers but it was rejected due to the relevant expenses in that confinement was not "medically necessary". Ms Lee called the insurers and asked: "My admission to the hospital was recommended by my attending doctor, why you rejected my claim?"

The insurer replied that:  "Although the series of investigative tests might be necessary to find out the underlying diagnosis suffered by the insured, all of them could have been effectively performed on an outpatient basis.  Besides, we had already consulted your attending physician and he agreed that your condition was not urgent and the performed diagnostic tests could be carried out on an outpatient basis.  Hence, the claim application of this confinement was considered as not medically necessary under the policy terms and conditions of this Hospital and Surgical Medical Insurance."