“Medically Necessary” is an important term in a worker compensation policy. The medically necessary term relates to either of the services or the supplies provided when the insured is in the hospital. These services or supplies also help to identify or treat the sickness or the injury.
Key Takeaways
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The Scope of Necessity: “Medically Necessary” covers every aspect of hospitalization, including tests, medications, and the duration of the stay, provided they are essential for recovery.
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Professional Standards: To be valid, the treatment must comply with widely accepted professional standards set by the Indian medical community and international practices.
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The Doctor’s Mandate: An insurance claim will typically only be settled if the care was specifically prescribed by a Medical Practitioner; voluntary or elective procedures are generally not covered.
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Causal Exclusion: If a worker undergoes treatment for multiple issues during one hospital stay (e.g., burns and an unrelated fracture), only the portion directly caused by the workplace incident is compensated.
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Intensity Control: The policy ensures a worker receives “safe, adequate, and appropriate” care, but it strictly prohibits charges for unnecessary medical intensity or duration.
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Employer Benefit: For firms like the Delhi manufacturer, this clause ensures a successful claim settlement by providing a clear, evidence-based framework for what the insurer is liable to pay.
In worker compensation insurance, ‘medically necessary’ for the insured can arise due to the following incidents:
- Any treatment
- Test
- Medication
- Stay in Hospital
- Part of stay in the Hospital
Medically necessary services or supplies are helpful in the following scenarios:
- Medical management of the ‘Illness’ suffered by the insured
- Medical management of the ‘injury’ suffered by the insured
In a workmen compensation insurance policy, it is important that the insured gets the required amount and intensity of the treatment and care for the given illness and injury.
Additional Read: What Are the Different Type of Medical Expenses Covered Under A Workmen Compensation Policy?
The ‘medically necessary’ should not exceed the level of necessary care. In the case of illness and injury, a person is provided with safe, adequate, and appropriate medical care. It is important that this does not include any unnecessary requirements for that illness or injury concerning its duration or intensity.
One other important clause in workmen’s compensation insurance states that a Medical Practitioner should prescribe the medically necessary for any illness or injury.
There are a set of rules and standards put forth by the international medical practice. The medical community in India has also put forward a set of rules and regulations. It is important that the ‘medically necessary’ stated by the insured should comply with the widely accepted professional standards.
Case study:
A manufacturing company located in Delhi had about 50 workers on-site in the production department. All the manufacturing activities took place on the site day and night. Once, a fire caused due to a short circuit in the electric board burnt three workers. The management staff rushed them to the hospital. All three workers suffered burns and bruises. The hospital discharged them after seven days of treatment for the same.
The manufacturing company had purchased a worker compensation policy and approached the insurance company. A surveyor conducted an investigation. The surveyor noted the following facts:
- Injury/ burns to the workers occurred on the site due to the fire caused by a short circuit in the electric board.
- Paper tests for workers’ burns or other injuries.
- The hospital discharged the workers after completion of the medication process and only after getting consent from the doctor.
As all these facts signified the ‘medically necessary’ conditions in the worker compensation policy, the claim settlement was successfully done by the insurance company. Thus, the manufacturing firm benefitted from its decision to insure workers with this policy.
Summary Table: The “Medically Necessary” Criteria
| Feature | Requirement for Coverage | Exclusion Basis |
| Prescription Source | Must be ordered by a licensed Medical Practitioner. | Self-prescribed or alternative “unproven” treatments. |
| Causal Link | Must directly treat a specific work-related injury or illness. | Treatment for pre-existing or unrelated ailments. |
| Intensity of Care | Level of care must match the severity of the injury. | Treatment that exceeds the standard professional level. |
| Duration of Stay | Limited to the time needed for medical management. | Extended hospital stays for convenience or luxury. |
| Standardization | Must follow international and Indian medical standards. | Experimental or non-standard professional practices. |
| Diagnostic Tests | Limited to tests required to identify the work injury. | General health check-ups or unrelated diagnostics. |
A twist, in this case, would have been when its worker not only suffered burns but was operated on for a broken wrist. Since this worker suffered burns due to fire in the company, he should be treated for the same while being hospitalized. However, if the worker also received treatment for his broken wrist, he cannot claim costs. The fire breakout incident at the company site had nothing to do with the broken wrist. Hence, the Workmen Compensation policy does not compensate such claims.
Frequently Asked Questions (FAQs)
1. What does “Medically Necessary” mean in a worker’s compensation claim?
A) It refers to the services or supplies needed to identify and treat a work-related injury or illness. These must be essential for your recovery, prescribed by a doctor, and must not exceed the standard level of care for your specific condition.
2. Can an employee choose a luxury room or a longer stay just for comfort?
A) No. The insurance will only cover the duration and intensity of the stay that is medically required for treatment. If the doctor consents to a discharge after seven days, any additional days spent in the hospital for personal convenience would not be covered.
3. What happens if a doctor treats a pre-existing condition while I am hospitalized for a work injury?
A) The Workmen’s Compensation policy only covers costs related to the workplace incident. For example, if you are treated for burns but the doctor also treats a pre-existing wrist injury, the insurer will scrutinize the bills and exclude the costs related to the wrist.
4. Are all diagnostic tests covered under the policy?
A) Only tests that are required to identify or manage the specific workplace injury are covered. General screenings or diagnostic tests for unrelated health issues will be rejected during the claim investigation by the surveyor.
5. Why must the treatment comply with “widely accepted professional standards”?
A) This ensures that the insurer is paying for proven, scientific medical care. It prevents claims for experimental or unverified treatments that are not recognized by the Indian or international medical communities as standard practice for that specific injury.
About The Author
Rahul Kumar
MBA Finance
With a wealth of experience in the insurance industry, Rahul is a seasoned writer specializing in articles related to workmen compensation policies (WC policies) for SecureNow. With 12 years of experience in the field, he has acquired in-depth knowledge and expertise in workmen compensation insurance, understanding its complexities and nuances. Their insightful articles provide valuable insights into the importance of WC policies for businesses and employees alike, offering practical advice and guidance on navigating the intricacies of insurance coverage. Trust him to deliver informative and engaging content, backed by years of experience and a passion for educating readers about insurance-related topics.
