Medicaid Managed Care - U.S. Senate Special Committee on Aging

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prepaid care situations involving disabled enrollees Definitions vary
widely in their sensitivity to the needs of disabled individuals: Some
include the need for improvement or restoration of function withim a
specified number of treatments or time period (often 60 days), while
others include consideration of preventing the progression of adverse
health conditions or the cost-effectiveness of the treatment
The strict application of a narrow definition of medical necessity can
conflict with disabled enrollees' needs, particularly in the case of services
that offer little hope for improvement but can help to maintain existing
quality of life. For example, people with neuromuscular disabilities may
need physical therapy to prevent deterioration and reduce discomfort even
when restoration or functional improvement is not possible. Conversely,
state officials also pointed out that, in applying the concept of medical
necessity, health plans' flexibility can provide an opportunity for them to
supply services over and above those available in the fee-for-service
program. For example, in one state a child received a technologically
enhanced bed (not covered under the state's fee-for-service program)
because health plan officials decided the bed was likely to reduce
hospitalizations for pressure sores and infections.
The three states we visited address concerns about medical necessity
primarily through the appeal process, giving the medical director of the
<strong>Medicaid</strong> program authority to overturn health plan decisions regarding
what is medically necessary for an individual recipient However,
advocates for disabled individuals said reliance on the complaint and
grievance process puts an undue burden on beneficiaries because (1) the
process requires a significant amount of self-advocacy on the part of
beneficiaries who may not be capable of it and (2) the process can be
extremely time-consuming.
Some states are beginning to include a definition of medical necessity in
health plan contracts and to supplement this definition with guidance on
or monitoring of its application. For example, Arizona approached the
issue by including the concept of "habilitation' (the extent to which
treatment helps to maintain a recipient's current ability to function) in its
monitoring of health plan services. Similarly, Oregon issued guidance for
health plans to use in approving various therapies and equipment
emphasizing such nonmedical outcomes as enhancement of independent
living.
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