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George Washington University, School of Public Health and Health Services, Department of Health Policy, Geiger Gibson Program in Community Health Policy


Medical Necessity


This Policy Brief explores the implications of state Medicaid reforms – whether implemented either as §1115 demonstrations or as part of state plan flexibility measures under the Deficit Reduction Act of 2005 (P.L. 109-171) – that limit benefits, coverage, and payments for medically necessary health care. Following a background and overview, the Policy Brief identifies a series of considerations that come into play when states approach the issue of benefit re-design, particularly in the context of developing coverage innovations that utilize "consumerdriven" and "defined-contribution" arrangements. As used in this Policy Brief, the term "defined-contribution" means the payment of a flat, per-capita amount toward the cost of health plan enrollment, regardless of benefit design or actual health care utilization and cost. The term "limited-benefit" plan means a health plan whose benefit and coverage design is narrower and more restricted than that utilized under "traditional" Medicaid benefit design. The use of more limited "alternative benefit" arrangements is now permitted for certain beneficiary groups under the DRA.


Funder: Supported by a gift to the Geiger Gibson Program in Community Health Policy by America's Health Insurance Plans (AHIP).

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