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

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requirements or oversight, who will be served, how long they will receive
services, which services they will receive and how much money
will be spent on their care.
In addition to creating its own definition of 'medically necessary,'
the state should expect that mnged care pbans, as they implement that
definition, will set more detailed and condition-specific criteria. States
should therefore require that the plan's internal rules for implementing
the state's definition, such as practice guidelines, be made available both
to the state and to advocacy groups in the state. In this manner, the
plan's operating criteria can be reviewed to ensure that they meet the
state's expectations with respect to the provision of services.
Consumer, family and advocacy groups are increasingly concerned
about whether managed care for mental health services will allow individual
choice and be provided in sufficient amount to meet individual
needs. These groups are now organizing to influence many aspects of
their state's RFP and contract, including the definition of 'medically
necessary.' Many states are now recognizing the need to consult consumers,
families and advocates about the contracts. Since these documents
will govern the public system for years to come, their success
depends on their support by important stakeholders in the state.
PROBLEMS WITH T here are some serious problems with the current state contracts
concerning medically necessary care. Most are not specific enough and
THE CURRENT grant managed care companies too much discretion. As a result, states
may leave themselves liable for mandated <strong>Medicaid</strong> services that the
APPROACH plans will not provide-in particular, services that go beyond the plan's
very traditional concepts of what is necessary.
Most contracts between states and managed care entities provide
minimal guidance on what is to be considered a medically necessary
mental health service. Some have no definition at all of this important
phrase. This gives the managed care entity extremely broad discretion
to determine what services will be furnished to individual members of
the plan at particular times and can also lead to confusion among members
as to what services they7-re entitled to receive. In some cases, the
state will find that mandated <strong>Medicaid</strong> services are not being provided
through the masnaged care entity and that this is quite legal under the
Defining 'Medicallv Necessary' Serv.ies to Protcc, Plan Members
POLICY ANALYSIS BY THE BAZELON CENTER FOR MENTAL HEALTH LAW 7