Where Medical Necessity Fails (And How AI Helps)

Hi and happy Tuesday,

Last month, I watched a level-4 office visit and a routine CT both get denied for the same reason: medical necessity. The coding was fine. The claim was clean. But the documentation didn’t connect the dots to the payer’s policy, so cash stalled.

Today, I’ll show you where “medical necessity” breaks down, what AI can realistically fix, and how to bullet-proof your notes, orders, and claims without changing systems.

The real failure point

Medical necessity denials rarely come from bad coding: they happen when documentation doesn’t line up with policy. Here’s how to close that gap.

Add a single, policy-mapped sentence to the note so the rationale travels with the claim:

Pattern:
Medical necessity (for [service]): [condition/severity], failed [conservative therapy + duration], objective findings [exam/labs/imaging], guideline/policy [cite], risk of not treating [brief].

Example 1: (Ortho MRI):
Medical necessity (MRI knee): Persistent knee pain with instability after 6 weeks of PT and NSAIDs; positive Lachman and joint-line tenderness; MRI medically necessary per plan criteria to evaluate meniscal tear and guide surgical planning.

Example 2: (Dental implant):
Medical necessity (D6010 implant, #19): Non-restorable #19 with chronic infection; CBCT shows inadequate crown-to-root ratio/insufficient ridge width; meets [Payer] implant criteria; implant indicated post-extraction with socket graft (D7953) planned to achieve adequate ridge width.

Can AI “fix” medical necessity?

Yes, if you define “fix” as making the right evidence obvious, early, and reusable.

AI can’t overrule policy or invent facts. But it can:

• Surface criteria at the right moment (while charting, not weeks later)

• Nudge missing elements (duration, failed therapy, severity, laterality)

• Ensure evidence travels with the claim (attachments + necessity rationale)

• Standardize appeals (draft concise letters that map facts to criteria)

Guardrails: AI should assist, not decide. Clinicians remain the source of truth; PHI must stay within secure systems.

👉 Want more prompts like this?

What AI can’t (and shouldn’t) do

Not everything can be automated. AI won’t:

• Override non-covered indications (policy always wins)

• Replace the clinician (AI only prompts, the provider supplies facts)

• Fix missing attachments by magic (if x-rays/CBCT aren’t captured, start there)

Next week, I’ll share how an AI platform breakdown hit one of the largest DSOs and how to avoid this 6-figure disaster.

See you next Tuesday,
Dino Gane-Palmer