Spotlight on Medical Necessity Criteria for Substance Use Disorders

Background

Medical necessity criteria should reflect generally accepted standards of care for the patient’s condition. Yet, for substance use disorders (SUDs), some health plans have used medical necessity criteria to restrict care and control costs.

Historically, health plans have had significant discretion in selecting and applying medical necessity criteria. They have also resisted disclosing both their standards and explanations of how the criteria apply to a member’s specific condition, despite legal disclosure requirements. These practices have made it difficult for patients to obtain affordable, lifesaving SUD care and challenge health plan denials based on lack of medical necessity.

This report examines state requirements for public and private health plans to use specific medical necessity criteria and, in some cases, level of care assessment tools when applying the medical necessity criteria.

Key findings

• As of October 1, 2020, 15 states require state-regulated commercial health plans to use specific criteria or level of care assessment tools to determine medical necessity for SUD treatment.
• As of October 1, 2020, 24 states require Medicaid plans to use specific medical necessity criteria or level of care assessment tools to determine medical necessity for SUD treatment.

Recommendations

States should select specific medical necessity criteria that reflect generally accepted standards of care for SUD and require public and private health plans to use the state-designated criteria for medical necessity determinations. In addition, states should designate an evidence-based level of care assessment tool and require public and private health plans to use the state-designated tool in medical necessity determinations to promote standardization and fidelity in applying the medical necessity criteria.