In the world of False Claims Act qui tam cases, the concept of medical necessity is a very big issue.
This is because Medicare requires, as a condition of coverage, that services delivered to a patient be “reasonable and necessary for the diagnosis or treatment of illness or injury.” See 42 U.S.C. § 1395y(A)(1)(a). Healthcare providers who wish to participate in the Medicare program must ensure that their services are provided “economically and only when, and to the extent, medically necessary.” See 42 U.S.C. § 1320c-5(A). In other words, Medicare only pays for services that are “medically necessary.”