Why Do I Need a Letter of Medical Necessity?

by Donna Crisalli, Technical Advisor

To be reimbursable from an FSA or HSA, an expense must be for medical care. Some items or services may be for medical care or may be for personal use. To tell the difference, plan administrators often request a “letter of medical necessity," or LMN.

An expense is for medical care if the primary purpose for the expense is to treat, cure, mitigate, diagnose, or prevent a disease or illness, or to affect a structure or function of the body. Items and services that usually are personal, such as air conditioners, may be used for medical purposes, for example to reduce the symptoms of asthma. Other items and services, such as vitamins and exercise equipment, usually are used to maintain general good health, which is not medical care eligible for reimbursement, but may be used to treat or mitigate a disease, such as high blood pressure, osteoporosis, or obesity.

An item or service is reimbursable as medical care only if an individual's primary purpose for the expense fits within the definition of medical care. Because a plan administrator is unable to look into someone's mind, the plan administrator will look at certain objective facts and circumstances to determine an individual's purpose. These include:

(1) Has a doctor or other medical professional determined that the individual (or a qualifying family member) has a disease or illness?

(2) Has a medical professional recommended the item or service to treat, mitigate, etc., the medical condition?

(3) Is the item or service medically effective?

(4) How soon did the individual purchase the item or service after the diagnosis of the medical condition?

(5) Are there less expensive treatments?

These questions don't need to be asked if the item or service has no use other than medical care (for example, x-rays and other diagnostic tests, supplies and equipment such as bandages and wheelchairs). These facts are relevant only when an item has a non-medical use. They are guidelines for a plan administrator to determine if a personal use item is medical care, based on all the facts and circumstances of a particular case.

There is no set requirement that every one of the facts and circumstances is present in every case. However, it always will be necessary to determine that a medical condition is present and that the item or service is for the treatment or improvement of the medical condition. The letter of medical necessity provides the plan administrator with at least this information. (The term “letter of medical necessity" is misleading because there is no requirement that the treatment is necessary if it is for medical care. It is the shorthand plan administrators use for a letter from a health provider providing this basic information.)

However, a letter from a doctor or other health care practitioner stating that there is a medical condition and prescribing the item or service may not provide all the information a plan administrator may need. First, the medical use has to be the primary purpose for the expense. Second, the expense is not reimbursable if the individual would have purchased it anyway (would not have purchased it without the medical condition, a requirement called the “but for" test). The plan administrator may ask for information relating to some or all of the other facts and circumstances to determine if the medical use is the primary purpose for the expense and whether the “but for" test is satisfied.

Let's apply these rules to some concrete examples.

Jack's doctor diagnoses Jack with a heart condition. The doctor recommends light exercise, such as brisk walking, to lessen the symptoms and reduce the risk of a heart attack. The next day Jack buys a $500 pair of athletic shoes and begins walking a mile every day. Jack has never walked for exercise or owned athletic shoes. Jack has a medical condition that the shoes will help, he buys the shoes right away, and he has never owned this type of shoes before. Jack did not buy the cheapest shoes available, but the rest of the facts and circumstances show that his primary purpose in buying the shoes is to help his heart condition and he would not have bought them “but for" the medical condition. Jack may be reimbursed for the athletic shoes from his FSA.

Jill has high blood pressure. Her doctor suggests she buy a blood pressure monitor. Jill buys a smart watch, which has a blood pressure monitoring function. Jill owns a smart watch but was thinking about upgrading it. After buying the new watch, she does not have to buy another blood pressure monitor. Jill has been using a smart watch, planned to buy one before the doctor made the recommendation, and chose an expensive device with many other functions besides monitoring blood pressure. Although Jill may use the watch for a medical purpose, the facts and circumstances show that the medical function is not Jill's primary purpose in buying the watch and she would have bought it or a similar watch even if she did not have the medical condition. The smart watch is not eligible for reimbursement.

James has emphysema. His doctor recommends light exercise, but James also has severe arthritis and is unable to walk for exercise. He builds a simple lap pool in his yard and uses it only to swim laps, which he does most days. His family members also sometimes swim laps in the pool. James works long hours and lives in a remote area, and it is not convenient for him to go to a gym or other facility with a pool on a regular basis. James uses the pool for medical purposes, he built it only after receiving the doctor's advice, and he built the most basic pool for the purpose. There are reasons why he does not engage in another kind of exercise. Although his family members also sometimes use the pool, the facts and circumstances indicate that James's primary purpose in building the pool is to treat his emphysema and he would not have built the pool otherwise. James may use his HSA for the cost of the pool.

Jane has not had a medical condition and has been getting massage therapy once a month to reduce stress and improve her general good health. Jane's chiropractor diagnoses Jane with muscle strain from lifting a heavy object and suggests massage therapy might help the condition. At her next massage therapy appointment, Jane asks the therapist to focus on the strained muscles. Jane may have a medical purpose for this particular massage therapy appointment, but the facts and circumstances indicate that the medical purpose is not her primary purpose and she would have had the massage therapy even without the medical issue. Jane is not entitled to reimbursement for the massage therapy.

In each of these situations, a LMN would tell the plan administrator that there is a medical purpose for the athletic shoes, the smart watch, the swimming pool, and the massage therapy, which usually are personal and not medical expenses. The plan administrator would need to know more of the facts and circumstances, however, to determine whether the medical purpose is the primary purpose and if the “but for" test is satisfied. This additional information may be included in what the plan administrator calls a “letter of medical necessity" or the plan administrator may request it separately.

These rules may seem very complicated, but when the answer to the question “is this an expense for medical care" depends on the facts and circumstances, there is no simple answer that applies in every case.


Embrace the new season by entering our Shape Up for Summer Sweepstakes!

When it's an especially beautiful day, it can feel like a crime to stay indoors. So it's no coincidence that many of us will use the warmer weather to jump start a fitness plan. To help you gear upfor summer, has your back with our Shape Up for Summer Sweepstakes!

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Now, what are you waiting for? Use your FSA funds to stay safe and healthy all year long!


May FSA Mailbag! Your top Learning Center questions answered!

Each month, we receive hundreds of great questions from our customers about everything relating to FSAs in ourFSA Learning Center. This past April, we received a number of fantastic questions relating to product eligibility and account coverage, which may be helpful to other FSA users as well.

Here are our favorite Learning Center questions that could help you see your consumer-directed healthcare account in a new way.

"How do I get reimbursed for a humidifier?"

Humidifiers are only eligible for FSA reimbursement with a Letter of Medical Necessity (LMN) from a physician that is submitted with a traditional claim. This letter must outline how a humidifier will be used to treat a specific medical condition, and its pivotal role in the treatment process. We actually covered this topic in one of our most recent blog posts, as products like air filters, humidifiers and air purifiers fall into a gray area of FSA eligibility.

"Can I redact personal information on receipts that I submit for reimbursement?"

A plan administrator will need to know specific information about a potentially eligible item or service and the person for whom the claim is being submitted for in order to approve an expense. However, it may be possible to withhold certain information that a member does not wish to share on a receipt. For details on exactly what information will be needed to approve your expense, please contact your plan administrator, whose information can typically be found on the back of your account debit-card or by asking your employer for their contact information.

"Can I use my FSA to pay for prescription scuba mask?"

Scuba diving is not a medically necessary activity, therefore, it would most likely not be eligible for FSA reimbursement. However, your benefits administrator will be able to provide you with further details. Sometimes when an item must be altered to meet the needs of a medical condition, the cost difference in the specified item vs. the item without the medical component will qualify. To find out if you may be eligible to submit for reimbursement of a portion of the cost of the mask, contact your FSA benefits administrator.

"Received reimbursement for over payment from hospital. Do I need to return this money to my benefits card?"

Probably. If you paid for the expense to the hospital using your FSA debit-card, the money most likely needs to be returned to the FSA plan. To find out the details you'll need to contact your FSA administrator, whose information can typically be found on the back of your FSA debit-card.

"To get money out of my FSA, do I need to present a paid receipt or just a bill that needs paid?"

First, it's important to note that account holders do not withdraw FSA funds, rather they make direct purchases with an FSA card (similar to a traditional debit card tied to an FSA account), or expenses are paid for with traditional payment methods (cash, check, credit/debit card) and the receipt for the qualifying product/service are submitted to the benefits administrator as a claim for reimbursement. Proof of payment is typically not a required form of documentation from a benefits administrator, but you will want to direct any specific questions to them. For more information on how to use your account and file claims, speak with your FSA benefits administrator!

For everything you need to understand your FSA and spend on qualifying products, rely on! We have the web's largest selection of FSA-eligible products to help you maximize the potential of your healthcare benefits!


10 FSA eligible products for Michael Phelps' post-Olympic recovery

Michael Phelps once again wowed at the Olympics taking home 5 gold medals and 1 silver medal! Let's see how he can recover with FSA eligible products.

By the time the 2016 Summer Olympics in Rio de Janeiro come to a close, Michael Phelps will have already become the most successful Olympian in world history. With 28 total medals to his name since his Olympic debut in 2000, Phelps took home another 5 gold medals and 1 silver medal in this year's games. With all that brilliance in the pool, we think that Phelps may need some well-deserved R&R...Let's see how Michael Phelps can recover with FSA eligible products:

Kinesiology Tape

Ever wondered what that special tape is that Olympians wear? Kinesiology tape is designed to aid the healing process of sore muscles and joints by providing support and stability to these areas without restricting the patient's range of motion. It can even be worn in the pool!

Check Out: KT TAPE PRO, Pre-cut, 20 Strip, Synthetic, Jet Black

Cold Packs

If Phelps is feeling any lingering soreness from his record-setting performance, then cold therapy is the perfect solution! Cold packs can ease inflammation and pain from sore muscles and joints to benefit Olympians and amateur athletes alike!

Check Out: Koolpress Oversized Reusable Gel Compress Ice Packs 11X21, 3 pack

Acupressure Mat

Acupressure mats target pressure points in the back and neck to reduce pain in the body and speed recovery times. These matsare extremely helpful in treating back/neck/shoulder pain, migraine headaches and even fibromyalgia pain. We think Michael Phelps will love the gold version!

Check Out: Kenko Gold Acupressure Mat with Pillow

Heat Wraps

Heat therapy is a tried-and-tested method of alleviating aches and pains due to overexertion, and heat therapy wraps are especially helpful for back injuries. These wraps are air-activated for 8 hours of relief from pain.

Check Out: ThermaCare Air-Activated Heatwraps Low Back & Hip, Large/Extra Large 2 ea


Michael Phelps will certainly be on his fair share of press tours in the weeks following the Olympics, so he better make sure he's protected from the sun! FSA eligible dermatological sunscreen is available in varying strengths and applications to safeguard the Olympian from UV rays wherever he's headed.

Check Out: La Roche Posay Anthelios 45 Face Shaka Ultra Fluid Sunscreen, 1.7 oz

Check Out:Vichy Capital Soleil SPF 50 Ultra Light Sunscreen

TENS Machine

Transcutaneous Electrical Nerve Stimulation (TENS) is a type of therapy that alleviates pain by interfering with the brain's pain signals with low-voltage electric current. This is a perfect, medicine-free way to provide pain relief for a post-Olympic recovery plan!

Check Out: Icy Hot Smart Relief TENS Therapy Starter Kit

Foot Circulator

If Michael Phelps is feeling any leg stiffness after his Olympic showing, a foot circulator can help! This provides both foot and body stimulation using electrical current, which can improve blood circulation to sore muscles and ease stiffness.

Check Out: Ultimate Foot Circulator with Remote

Waterproof Bandages

There's a good chance that Michael Phelps won't be out of the pool for long! If he decides to put off retirement for one more Olympic showing, he won't miss a beat in his training regimen with waterproof bandages to handle any scrapes and cuts along the way.

Check Out: Band-Aid Tough-Strips Waterproof One Size, 20 ea

Blood Pressure Monitor

Michael Phelps is in the best shape of his life, but checking blood pressure levels is a good step to take for your overall health once you hit the age of 30 or older. Blood pressure monitors have evolved into versatile devices with smartphone compatibility, taking heart rate readings and tracking these numbers over time to give people a better sense of their state of health.

Check Out: Qardio Arm Wireless Blood Pressure Monitor

Elastic Bandages

A sudden injury like a sprained ankle or pulled muscle can dramatically derail an Olympian's training regimen, and one of the best fixes for these acute injuries is an elastic bandage. These athletic treatments can be fashioned into slings or around a joint to immobilize the area and promote the healing process.

Check Out: ACE 3" Self-Adhering Elastic Bandage