Medical Necessity Policy

SUD Specialty Group – CA, Mental Health Specialty Group, P.A., Mental Health Specialty Group NJ, PC, and Mental Health Specialty Group KS, P.A. (collectively, “Group”) contracts with Path, CCM, Inc. d/b/a Rula (“Rula”) for management and administrative support services. Each entity within the Group and Rula may be referenced herein as a Company and, collectively, as the Companies.

Policy Statement

This policy outlines medical necessity for outpatient behavioral health treatment and the documentation requirements for establishing medical necessity through the patient’s health record.  

Applicability:

This policy applies to all team members. For purposes of this policy, the Companies’ team members include individuals who would be considered part of the workforce, such as employees, independent contractors, and other persons whose work performance is under the direct purview of the Companies’  business practices. 

Definitions

Medical Necessity: healthcare services or supplies needed to diagnose or treat an illness or injury, condition, disease, or its symptoms and that meet accepted standards of medicine. 

Medical necessity for treatment is determined by the presence of symptoms and functional impairments that require clinical intervention for improvement.

Policy

1. Medical necessity may be uniquely defined by an individual patient’s health plan or insurance. This policy intends to provide a broad view of medical necessity criteria and documentation. 

2. Medical necessity of behavioral health requires that the service provided must reasonably be expected to improve symptoms associated with the patient’s diagnosis, whether secondary to illness, disease, injury, or deficits in functioning, and consistent with generally accepted standards of practice. These standards of practice include credible scientific evidence published in peer-reviewed literature (evidence based practices) and/or treatment approaches that are generally recognized by the appropriate behavioral health community.

3. According to the American Medical Association (AMA), medical necessity mandates the provision of healthcare services that a physician or other healthcare provider, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms, and that are:

1. In accordance with generally accepted standards of medical practice (based on credible scientific evidence published in peer-reviewed literature)

2. Clinically appropriate, in terms of type, frequency, extent, site, and duration, and considered effective for the patient’s illness, injury, or disease

3. Not primarily for the convenience of the patient, physician, or other healthcare provider, and not more costly than an alternative service or sequence of services that are at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient’s illness, injury, or disease

4. Medical Necessity Documentation in the patient’s health record will reflect:

   1. A DSM-5-TR diagnosis that is the primary diagnosis and focus of treatment

   2. Reasonable expectation of reduction in behaviors/symptoms for the current condition with the proposed treatment at the outpatient level of care.

   3. Documented evidence outlining the need for treatment to address the significant negative impact of the identified diagnosis on the patient’s life. Negative impact (i.e. functional impairment) may be present in any of the following areas: activities of daily living, social/interpersonal, occupational/educational, health/medical compliance, and/or ability to maintain safety for either self or others

   4. The patient requires ongoing treatment/intervention in order to maintain symptom relief and/or psychosocial functioning for a chronic recurrent mental health illness. Treatment is intended to: prevent intensification of symptoms, prevent deterioration in functioning that would result in admission to higher levels of care, and/or improve overall functioning.

Attachments: None.

Updated December 10, 2025 15:30