Final answer:
Medical necessity refers to the requirement of a medical service for a patient's health. It impacts payment by determining whether healthcare services are covered and reimbursed by insurance. In a fee-for-service system, medical necessity justifies the need for services.
Step-by-step explanation:
Medical necessity refers to the requirement that a certain medical service or treatment is deemed necessary for a patient's health and well-being. It is based on the judgment of healthcare professionals and considers factors such as the patient's condition, symptoms, and medical guidelines. Medical necessity is an important factor in determining reimbursement and payment for healthcare services.
The concept of medical necessity impacts payment in different healthcare financing systems. In a fee-for-service system, medical care providers are reimbursed based on the cost of services they provide. This means that the payment is directly linked to the services rendered, and medical necessity plays a role in justifying the need for those services.
For example, if a patient undergoes a surgery, the medical necessity of the procedure will determine whether the insurance company or payer will cover the costs. If the procedure is deemed medically necessary, the insurance company will likely provide payment based on the fee-for-service model. However, if the procedure is considered elective or not medically necessary, the patient may be responsible for the full cost of the procedure.