Medical Necessity & Peer Review

A medical necessity denial is a refusal to pay a bill because the treatment was not necessary, usually based on a peer review or a medical examination. First-party benefits cover only "necessary expenses" for health services (Insurance Law § 5102(a)(1)), so necessity is a proper ground, but the denial must be issued on the prescribed form within 30 calendar days after proof of claim (11 NYCRR 65-3.8(c)). When a peer review or examination report is the specific reason, the insurer must release a copy to you, your attorney or your treating physician on written request (11 NYCRR 65-3.8(b)(4)). Get the report first; the rebuttal is written to it.

Obtain the peer review report, which the insurer must release on written request when it is the reason for the denial (11 NYCRR 65-3.8(b)(4)), then answer it with the treating provider's written statement, which may be an affirmation under penalty of perjury (CPLR 2106). It should answer the reviewer's reasons point by point with the chart's findings and test results. The dispute goes to arbitration or court at your option (Insurance Law § 5106(b)). Law changed January 1, 2024: CPLR 2106 lets any person affirm under penalty of perjury instead of swearing an affidavit; before then only New York attorneys and licensed health-care practitioners could.

The statute pays only "necessary expenses" for medical and other professional health services (Insurance Law § 5102(a)(1)); neither Article 51 nor 11 NYCRR Part 65 defines necessity further. In practice the question is whether the treatment was appropriate for the diagnosed condition under accepted standards, supported by the findings and diagnostic results in the chart, and consistent with the patient's course. A peer reviewer or examining physician gives an opinion on that question and the treating provider answers it. Two related rules: physical and occupational therapy must be rendered on referral (Insurance Law § 5102(a)(1)(ii)), and the insurer must release the report it relied on (11 NYCRR 65-3.8(b)(4)).

Yes. A single examination report can support a cut-off if it gives the insurer information which clearly demonstrates that the applicant is no longer disabled; the insurer discontinues by sending the prescribed denial form (11 NYCRR 65-3.8(b)(2)). Otherwise the insurer may not interrupt benefits while a medical examination is pending unless you or your attorney caused the delay (11 NYCRR 65-3.8(b)(1)). Each denied bill must be paid or denied within 30 calendar days after proof of claim (11 NYCRR 65-3.8(c)). Demand the report (11 NYCRR 65-3.8(b)(4)), have the treating provider answer it in writing, and then arbitrate or sue (Insurance Law § 5106(b)).

A peer review is a records-only evaluation in which a licensed provider retained by the insurer reads the chart and bills and opines on whether the treatment was necessary; the reviewer does not examine the patient. The regulation requires the insurer to release it to the applicant, the applicant's attorney or the treating physician on written request when it is the specific reason for the denial (11 NYCRR 65-3.8(b)(4)). The denial must issue within 30 calendar days after proof of claim on the prescribed form (11 NYCRR 65-3.8(c)). A report that does not engage this patient's findings is easier to rebut.