A recent case in Michigan highlights the importance of medical necessity when ordering or performing healthcare services. According to the Atlantic, a physician in Michigan is accused of ordering dozens of unnecessary medical tests and deliberately misdiagnosing a patient in order to justify ordering those tests. Obviously, there are good reasons not to do this but, besides the obvious malpractice liability, what kind of trouble can California physicians and healthcare providers get into for ordering treatment that is not medically necessary?
Providing treatment that is not medically necessary would likely constitute gross negligence and unprofessional conduct, and could serve as a basis for the California Medical Board to discipline a physician and suspend their license. Facilities that are complicit in this, such as home health agencies and hospices could likewise lose their licenses and accreditation.
If private insurance companies, Medicare, or Medicaid/Medi-Cal are billed for services that are not medically necessary, it could lead to exclusions from insurance panels; revocation of Medicare billing privileges; or recoupment actions by the insurance companies, Medicare or Medi-Cal to recoup money paid for the unnecessary services. This can result even if the physician believed the services to be necessary. It could lead to criminal prosecution In cases where the physician knew it was not necessary.
All of the above highlights the importance of ordering only medically necessary treatment.