Workmen Compensation

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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.

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 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 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.

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.

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