§ 438.210 Coverage and authorization of services. ( a ) *Coverage.* Each contract between a State and an MCO, PIHP, or PAHP must do the following: ( 1 ) Identify, define, and specify the amount, duration, and scope of each service that the MCO, PIHP, or PAHP is required to offer.
( 2 ) Require that the services identified in paragraph (a)(1) of this section be furnished in an amount, duration, and scope that is no less than the amount, duration, and scope for the same services furnished to beneficiaries under FFS Medicaid, as set forth in § 440.230 of this chapter, and for enrollees under the age of 21, as set forth in subpart B of part 441 of this chapter.
( 3 ) Provide that the MCO, PIHP, or PAHP— ( i ) Must ensure that the services are sufficient in amount, duration, or scope to reasonably achieve the purpose for which the services are furnished.
( ii ) May not arbitrarily deny or reduce the amount, duration, or scope of a required service solely because of diagnosis, type of illness, or condition of the beneficiary.
( 4 ) Permit an MCO, PIHP, or PAHP to place appropriate limits on a service— ( i ) On the basis of criteria applied under the State plan, such as medical necessity; or
( ii ) For the purpose of utilization control, provided that— ( A ) The services furnished can reasonably achieve their purpose, as required in paragraph (a)(3)(i) of this section;
( B ) The services supporting individuals with ongoing or chronic conditions or who require long-term services and supports are authorized in a manner that reflects the enrollee's ongoing need for such services and supports; and
( C ) Family planning services are provided in a manner that protects and enables the enrollee's freedom to choose the method of family planning to be used consistent with § 441.20 of this chapter.
( 5 ) Specify what constitutes “medically necessary services” in a manner that— ( i ) Is no more restrictive than that used in the State Medicaid program, including quantitative and non-quantitative treatment limits, as indicated in State statutes and regulations, the State Plan, and other State policy and procedures; and
( ii ) Addresses the extent to which the MCO, PIHP, or PAHP is responsible for covering services that address: ( A ) The prevention, diagnosis, and treatment of an enrollee's disease, condition, and/or disorder that results in health impairments and/or disability.
( B ) The ability for an enrollee to achieve age-appropriate growth and development.
( C ) The ability for an enrollee to attain, maintain, or regain functional capacity.
( D ) The opportunity for an enrollee receiving long-term services and supports to have access to the benefits of community living, to achieve person-centered goals, and live and work in the setting of their choice.
( b ) *Authorization of services.* For the processing of requests for initial and continuing authorizations of services, each contract must require— ( 1 ) That the MCO, PIHP, or PAHP and its subcontractors have in place, and follow, written policies and procedures.
( 2 ) That the MCO, PIHP, or PAHP— ( i ) Have in effect mechanisms to ensure consistent application of review criteria for authorization decisions.
( ii ) Consult with the requesting provider for medical services when appropriate.
( iii ) Authorize LTSS based on an enrollee's current needs assessment and consistent with the person-centered service plan.
( 3 ) That any decision to deny a service authorization request or to authorize a service in an amount, duration, or scope that is less than requested, be made by an individual who has appropriate expertise in addressing the enrollee's medical, behavioral health, or long-term services and supports needs.
( c ) *Notice of adverse benefit determination.* Each contract must provide for the MCO, PIHP, or PAHP to notify the requesting provider, and give the enrollee written notice of any decision by the MCO, PIHP, or PAHP to deny a service authorization request, or to authorize a service in an amount, duration, or scope that is less than requested. For MCOs, PIHPs, and PAHPs, the enrollee's notice must meet the requirements of § 438.404. For Medicaid contracts with an applicable integrated plan, as defined in § 422.561 of this chapter, in lieu of the provisions in this paragraph governing notices of adverse benefit determinations, the provisions set forth in §§ 422.629 through 422.634 of this chapter apply to determinations affecting dually eligible individuals who are also enrolled in a dual eligible special needs plan with exclusively aligned enrollment, as defined in § 422.2 of this chapter.
( d ) *Timeframe for decisions.* Each MCO, PIHP, or PAHP contract must provide for the following decisions and notices: ( 1 ) *Standard authorization decisions.* ( i ) For standard authorization decisions, provide notice as expeditiously as the enrollee's condition requires and: ( A ) For rating periods that start before January 1, 2026, within state established time frames that may not exceed 14 calendar days after receiving the request for service.
( B ) For rating periods that start on or after January 1, 2026, within state established time frames that may not exceed 7 calendar days after receiving the request for service.
( ii ) Standard authorization decisions may have an extension to the timeframes in paragraph (d)(1)(i) of this section up to 14 additional calendar days if— ( A ) The enrollee or the provider requests the extension; or
( B ) The MCO, PIHP, or PAHP justifies (to the State agency upon request) a need for additional information and how the extension is in the enrollee's interest.
( 2 ) *Expedited authorization decisions.* ( i ) For cases in which a provider indicates, or the MCO, PIHP, or PAHP determines, that following the standard timeframe could seriously jeopardize the enrollee's life or health or ability to attain, maintain, or regain maximum function, the MCO, PIHP, or PAHP must make an expedited authorization decision and provide notice as expeditiously as the enrollee's health condition requires and no later than 72 hours after receipt of the request for service.
( ii ) The MCO, PIHP, or PAHP may extend the 72 hour time period by up to 14 calendar days if the enrollee requests an extension, or if the MCO, PIHP, or PAHP justifies (to the State agency upon request) a need for additional information and how the extension is in the enrollee's interest.
( 3 ) *Covered outpatient drug decisions.* For all covered outpatient drug authorization decisions, provide notice as described in section 1927(d)(5)(A) of the Act.
( 4 ) For Medicaid contracts with an applicable integrated plan, as defined in § 422.561 of this chapter, timelines for decisions and notices must be compliant with the provisions set forth in §§ 422.629 through 422.634 of this chapter in lieu of §§ 438.404 through 438.424.
( e ) *Compensation for utilization management activities.* Each contract between a State and MCO, PIHP, or PAHP must provide that, consistent with §§ 438.3(i), and 422.208 of this chapter, compensation to individuals or entities that conduct utilization management activities is not structured so as to provide incentives for the individual or entity to deny, limit, or discontinue medically necessary services to any enrollee.
( f ) *Publicly reporting prior authorization metrics.* Beginning January 1, 2026, following each calendar year it has a contract with a State Medicaid agency, the MCO, PIHP, or PAHP must report prior authorization data, excluding data on any and all drugs covered by the MCO, PIHP, or PAHP, at the plan level by March 31. The MCO, PIHP, or PAHP must make the following data from the previous calendar year publicly accessible by posting them on its website: ( 1 ) A list of all items and services that require prior authorization.
( 2 ) The percentage of standard prior authorization requests that were approved, aggregated for all items and services.
( 3 ) The percentage of standard prior authorization requests that were denied, aggregated for all items and services.
( 4 ) The percentage of standard prior authorization requests that were approved after appeal, aggregated for all items and services.
( 5 ) The percentage of prior authorization requests for which the timeframe for review was extended, and the request was approved, aggregated for all items and services.
( 6 ) The percentage of expedited prior authorization requests that were approved, aggregated for all items and services.
( 7 ) The percentage of expedited prior authorization requests that were denied, aggregated for all items and services.
( 8 ) The average and median time that elapsed between the submission of a request and a determination by the MCO, PIHP or PAHP, for standard prior authorizations, aggregated for all items and services.
( 9 ) The average and median time that elapsed between the submission of a request and a decision by the MCO, PIHP or PAHP, for expedited prior authorizations, aggregated for all items and services.
( g ) *Applicability date.* ( 1 ) Subject to paragraph (f)(2) of this section, this section applies to the rating period for contracts with MCOs, PIHPs, and PAHPs beginning on or after July 1, 2017. Until that applicability date, States are required to continue to comply with § 438.210 contained in the 42 CFR parts 430 to 481, edition revised as of October 1, 2015.
( 2 ) Provisions in this section affecting applicable integrated plans, as defined in § 422.561 of this chapter, are applicable no later than January 1, 2021.
[81 FR 27853, May 6, 2016, as amended at 82 FR 39, Jan. 3, 2017; 84 FR 15843, Apr. 16, 2019; 89 FR 8980, Feb. 8, 2024]