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Behavioral Health Issue Brief Series No. 7


Medicaid & SCHIP; Managed Care Contracting


Medicaid beneficiaries enrolled in managed care arrangements have two basic sets of procedural protections when benefits are denied. The first set consists of the right to timely and adequate notice of "any action affecting [a] claim" for medical assistance, as well as a fair hearing in the case of any individual "whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness." The second is the right to "internal grievance" procedures to "challenge the denial of coverage *** or payment [of medical] assistance." The Health Care Financing Administration (HCFA) is expected to delineate the specific elements of each of these procedural safeguards in a managed care environment -- as well as how the two sets of protections relate to each other -- in forthcoming regulations implementing the Balanced Budget Act (BBA) of 1997.

This Issue Brief examines how state Medicaid agencies approach the issue of grievances and appeals in their contracts with managed care organizations (MCOs) furnishing comprehensive services. The source of information for this Issue Brief is the MCO contract data base maintained by the Center for Health Services Research and Policy and supported in part by the Substance Abuse and Mental Health Services Administration. As a result, this Issue Brief focuses on grievance and appeals procedures for enrollees of managed care organizations and does not address the procedural protections available to individuals who are enrolled in other forms of managed care, such as primary care case management systems.


Funder: SAMHSA.

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