GAO Recommends Oversight of Medicaid MCOs’ Prior Authorization for Pediatric Care

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On May 29, E&C Ranking Member Frank Pallone (D-NJ) announced the release of a report that he previously requested from the Government Accountability Office (GAO) on prior authorization practices for pediatric services by Medicaid managed care organizations (MCOs), which now administer benefits for approximately 85 percent of all children enrolled in Medicaid.

After reviewing policies and conducting stakeholder interviews at the state1 and federal level, GAO recommended that the Centers for Medicare & Medicaid Services (CMS) clarify two issues regarding MCO prior authorization for EPSDT and other services:

  1. Set clearer expectations for how states should monitor the clinical appropriateness of MCO prior authorization decisions—as opposed to compliance with timelines and other procedural requirements—including with respect to EPSDT services for children; and
  2. Clarify whether MCOs can require prior authorization for EPSDT services that are not subject to prior authorization under the state’s fee-for-service delivery system.

CMS agreed that clarification is needed on both points. Although CMS recently finalized a rule enhancing prior authorization timeliness and transparency across payers, it appears CMS may consider additional rulemaking or guidance in the near future, perhaps prompted by this and other reports highlighting concerns with certain prior authorization practices and related oversight in Medicaid managed care.

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1 GAO focused on the District of Columbia, Florida, Massachusetts, Missouri, and Utah.



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