Medicaid MCOs, or managed care organizations, are tasked with providing services to many Medicaid members nationally. MCOs generally need patients to get approvals from the insurance company before service or treatment can be rendered.
This step is commonly stated as prior authorization, and it enables an MCO to gauge if the recommended treatment or medication can be delivered and if it is a medical necessity.
The MCO can even deny a request for treatment or allow partial treatment in some cases. Hence, practices need to have a strong understanding of Medicaid prior authorization rules to get claims reimbursed and keep patients happy.
An OIG report in 2023 revealed a denial rate of 12.5% for prior authorization. This is tantamount to a possible delay in treatment or restricted access to care. In 2024, the government issued the Interoperability and Prior Authorization rule. This is aimed at automating the prior authorization process and increasing transparency for Medicaid.
An increasing number of states have now curtailed State Medicaid requirements through their respective state legislation. A few months ago, the Department of Health and Human Services launched a voluntary initiative where many insurance companies assured a reduction in healthcare prior authorization across states.
This included faster timeframes to clear prior authorization requests as well as simpler language for patient communication. The 24th annual Medicaid budget survey revealed that many states need to provide standard prior authorization decisions within seven calendar days or less. Some states need MCOs to electronically offer prior authorization denial letters.
Medicaid prior authorization rules involve a multiple-step process in which an insurance company needs a dental practice to obtain approval before offering treatment and services. Federal regulations enable the MCO to restrict treatment based on medical requirements. It also sets processes and timeframes that the MCO needs to adhere to when offering prior authorization.
As per federal regulations, the MCO must come up with prior authorization decisions within 14 calendar days, although many states have outlined shorter timeframes.
Many states require the MCO to send denial notices electronically. The enrolee has 60 calendar days from the receipt of the denial notice to appeal to the MCO. A delay in receiving denial notices does not provide adequate time to request an appeal. Notices sent electronically enable enrolees to receive denial notices immediately and, hence, can take necessary action.
MCOs from a majority of states indicated usage of standardized prior authorization denial notice templates. The language used in the templates was also standardized. A denial The notice can be due to missing data or additional documents needed by the MCO to approve the request.
The usage of a standardized denial notice language can help an enrollee understand the prior authorization process and steps thereafter. An external party, such as an ombudsperson office, could provide counsel to enrollees and help them thoroughly understand the appeals process.
Enrollees who want to appeal an MCO’s prior authorization decision can ask for a reconsideration. The states have a choice in offering an external medical review, but it is not binding on the state.
An external review is a clinical review of an MCO’s decision to defend a denial by an independent entity that is not affiliated with the MCO or the state. When offered, the enrollee must not have to bear the cost, and there must be no disruption in the enrollee’s “continuation of benefits.”
Prior authorization has often been considered a major administrative hurdle in healthcare. It has been crafted to control expenses and ensure absolute medical need for any service or procedure. As a result, patient care can get delayed while the dental team can get saddled with extra work. Medicaid touches the lives of nearly 80 million Americans and, hence, plays a key role in dental care.
In the recent past, there have been considerable reforms at the federal and state levels. Quicker response times, focus on electronic transactions, and increased transparency are some of them. Medicaid is administered at the state level, and hence its implementation can vary across the nation.
For providers, that means staying ahead of State Medicaid requirements isn’t just helpful — it’s essential. This article breaks down what’s happening nationally, highlights reforms in key states, and shows how technology can help providers adapt.
The CMS (Centers for Medicare & Medicaid Services) is pushing for reforms in prior authorization, and some initiatives include:
Guidelines for prior authorization for a few states are below
The state is pushing for real-time authorization and is syncing Medicaid as per federal reforms. Providers are expected to make electronic submissions and have defined response timelines based on CMS guidelines. It has initiated pilot programs for real-time prior authorization. It has also facilitated automated adjudication for some services.
Dental practices now need to have the tools and software to manage electronic prior authorization requests. The dental team needs to be trained to navigate through payer portals.
Texas Medicaid has not yet pushed for complete reform. While electronic prior authorization requests happen to a limited extent, a lot of processes are dependent on manual modes.
A few services are eligible for electronic prior authorization requests, while most need phone requests. Practices have complained about long hold times and a lack of clarity in documentation requirements. Texas Medicaid is managed through MCOs, and requirements can differ based on the plan.
Hence, the dental practice needs to handle multiple workflows based on which MCO covers the patient’s plan. While phone-based follow-up takes time, call automation solutions can be adopted by the practice to handle a high number of payer calls.
Medicaid managed care is much more advanced in New York. Electronic prior authorization is widely used, and multiple payers offer portal-based transactions. The state has aligned with federal goals for cutting down on delays that lead to delays in patient care. It has made compliance for dental practices simpler by offering concise guidelines.
Many practices have automated workflows that benefit from quicker turnaround times and a lesser number of denials.
Different states have varying Medicaid prior authorization rules. This can be challenging for a dental practice. A process for a prior authorization request in one state might differ in another state. Lack of standardization across states often leads to errors or delays.
A dental practice can opt for a flexible platform that can adapt to the rules prevailing in multiple states. Regular calls to payers can be made through automated calling software. The dental team can also be trained to handle the few cases where automation does not work.
Prior authorization can be an administrative burden for dental practices. It can lead to delays in patient care while also demoting the dental team at times. The practice needs to follow the rules when it comes to prior authorization.
