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Series: Medicaid Managed Care Organizations' Denials

Announced on  | Last Modified on  | Series Number: W-00-24-31535
Status
Active
Agency
Centers for Medicare and Medicaid Services

OBJECTIVE

The State Medicaid agency and the Federal Government are responsible for the financial risk for the costs of Medicaid services. State Medicaid agencies contract with managed care organizations (MCOs) to ensure that beneficiaries receive covered Medicaid services. The contractual arrangement shifts the financial risk from the State Medicaid agency and the Federal Government to MCOs, which can create an incentive for MCOs to deny beneficiaries' access to covered services. Our audits will determine whether Medicaid MCOs complied with Federal requirements when denying access to requested medical and dental services, behavioral health services, and associated drug prescriptions that required prior authorization.

There are 4 projects in this series.

Project titles will remain unpublished until projects are complete and reports are posted.

ACTIVE PROJECTS IN THIS SERIES (2)

Project A-09-24-02007 • Announced on Aug 19, 2024

Project OAS-25-07-039 • Announced on Feb 5, 2025

COMPLETED PROJECTS IN THIS SERIES (2)

Community Behavioral Health

Project A-03-24-00204 • Completed on June 8, 2026

Review of Behavioral Health MCO Denials in Louisiana

Project A-06-24-02000 • Completed on March 30, 2026

TIMELINE

  • February 8, 2024
    Series Number W-00-24-31535 Assigned
  • February 8, 2024
    Project Announced

    Review of Behavioral Health MCO Denials in Louisiana - A-06-24-02000

  • February 20, 2024
    Project Announced

    Community Behavioral Health - A-03-24-00204

  • August 19, 2024
    Project Announced

    Project A-09-24-02007

  • February 5, 2025
    Project Announced

    Project OAS-25-07-039

  • March 30, 2026
    Project Complete - A-06-24-02000

    Review of Behavioral Health MCO Denials in Louisiana complete. Report Published

  • June 8, 2026
    Project Complete - A-03-24-00204

    Community Behavioral Health complete. This audit resulted in 6 recommendations.

  • Today
    2 Audits In-Progress
  • Est FY2027
    Estimated Fiscal Year for Series Completion

2 REPORT PUBLISHED

Community Behavioral Health Did Not Comply With Requirements When Denying Prior Authorization Requests (A-03-24-00204)

26-A-03-072.01 to CMS - Open Unimplemented
Update expected on 12/07/2026
We recommend that CBH update its policies and procedures to include: (1) a requirement to reconcile discrepancies between addresses of record and addresses given to treatment providers and (2) a process for determining when a change of residency occurs and notifying the CAO accordingly.

26-A-03-072.02 to CMS - Open Unimplemented
Update expected on 12/07/2026
We recommend that CBH implement a process for identifying service requests that are considered approved because a decision notification was not sent within the 21-day window.

26-A-03-072.03 to CMS - Open Unimplemented
Update expected on 12/07/2026
We recommend that CBH coordinate with the State agency to implement a revised initial denial notice that informs enrollees that they have the right to be provided, upon request and free of charge, all documents, records, and other information relevant to the adverse benefit determination as required by 42 CFR section 438.404(b)(2).

26-A-03-072.04 to CMS - Open Unimplemented
Update expected on 12/07/2026
We recommend that CBH revise the language it uses in the denial notice to clarify when services are denied as requested but CBH recommends alternate services that do not require a prior authorization, as opposed to services being completely denied with no alternate services recommended.

26-A-03-072.05 to CMS - Open Unimplemented
Update expected on 12/07/2026
We recommend that CBH update its policies to comply with its HealthChoices Agreement by requiring staff to document the following for enrollees under 21 years of age: (1) steps taken to contact the enrollee's representative to request that the enrollee's representative ask the provider to communicate with CBH, and (2) efforts to reach the provider before issuing denial notices.

26-A-03-072.06 to CMS - Open Unimplemented
Update expected on 12/07/2026
We recommend that the State agency revise the denial notice template in the HealthChoices Agreement to include a statement that the enrollee has the right to be provided, upon request and free of charge, all documents, records, and other information relevant to the adverse benefit determination.

View in Recommendation Tracker

Louisiana Healthcare Connections Generally Complied With Federal and State Process Requirements When Denying Prior Authorization Requests (A-06-24-02000)

LHCC complied with Federal and State requirements when it denied 64 of the 76 sampled behavioral health service requests that required a prior authorization. However, the remaining 12 denied service requests did not meet the administrative or procedural requirements. Specifically, LHCC did not:

  • Provide written notices of adverse determinations (11 prior authorization denials)
  • Provide written notice of adverse determination within the specified timeframe (1 prior authorization denial)

Based on the sample results, we estimated that 3,209 prior authorization denials for behavioral health service requests during our audit period (15.8 percent) did not comply with Federal and State requirements.

Recommendations are updated each month and may not immediately be available for recently completed projects.
Work Plan Type
Office of Audit Services
HHS Agencies
Centers for Medicare and Medicaid Services
Issue Areas
Managed Care
Target Groups
-
Financial Groups
Medicaid