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SMART - State Management Advisory and Response Team

Authorization and Utilization Review (UR) - FAQs

(Updated 9/09)



 Q1. Regarding planned admissions to hospitals:

Must a Mental Health Plan (MHP) utilize a prior authorization process? And, once an admission is approved, can a MHP concurrently approve one day, then switch to retrospective review? Or, must the whole stay be authorized on a concurrent basis?
A1.  The MHP Point of Authorization (POA) must authorize planned psychiatric hospital admissions in advance of the admission. Concurrent review varies among MHPs. There are no state standards for concurrent review. MHPs must establish their own policies and procedures for the frequency and level of review during inpatient stays and must issue Notice of Actions (NOAs) as required. MHPs may authorize payments for up to seven calendar days of psychiatric hospitalization in advance of service provision per California Code of Regulations (CCR), Title 9, §1820.220(i). Authorization occurs when the MHP’s POA approves the Treatment Authorization Request (TAR). Chart or other review during inpatient stays is not considered authorization.


Q2.  Can an MHP, by way of the contract with the Fee-for-Service/Medi-Cal (FFS/MC) hospital, require all admissions (emergency and planned) to be authorized on a retrospective basis and thus, not be subject to the NOA-B process?
A2.  The MHP’s POA must authorize planned FFS/MC hospital admissions in advance of the admission. The CCR, Title 9, Chapter 11, §1820.220(b)(1) requires that hospitals submit a request for MHP payment authorization prior to the planned admission. §1820.220(i) specifies that MHPs may authorize payments for up to seven calendar days of psychiatric hospitalization in advance of service provision. If an MHP denies the request for payment for a planned admission and the services are therefore not provided, the MHP must send an NOA-B in accordance with CCR, Title 9, Chapter 11, §1850.210.

The MHP’s POA authorizes payment for emergency FFS/MC hospital admissions on a retrospective basis, as the MHP only approves or denies the payment request following discharge (see §1820.220 for exceptions). MHPs cannot require prior authorization for emergency admissions.

When a service is not medically necessary or otherwise not a service covered by the MHP Contract, the MHP must provide a written NOA-C to the beneficiary when the MHP denies payment authorization of a service that has already been delivered to the beneficiary as a result of a retrospective payment determination in accordance with Code of Federal Regulations (CFR), Title 42, 438.404(c)(2).


Q3.  Can an MHP prohibit planned admissions into FFS/MC hospitals if the MHP has its own hospital(s) or identified contract hospitals for planned admissions of children and adults?
A3.   MHPs must ensure that planned admissions occur when the MHP determines that they are necessary. An MHP can opt to only use its own facilities for planned admissions for adults and children if feasible and clinically appropriate. MHPs should note that this might be perceived by contract FFS/MC hospitals as a conflict of interest. If an MHP opts to not allow planned admissions at a contract hospital, this should be clearly addressed in the contract. MHPs must have a process in place for planned admissions in non-contract hospitals in the event that such an admission is determined to be necessary by the MHP per CCR, Title 9, Chapter 11, §1810.310(a)(8).

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 Q4.  Must written records be kept for non-hospital UR decision-making about authorization for payment, or can the authorization be done verbally?
A4.  Both inpatient and outpatient UR decision-making/authorizations must be documented in writing and a NOA must be issued to the beneficiary depending on the action taken by the MHP per CCR, Title 9, Chapter 11 §1850.210. If an authorization is given to a provider verbally, that action must be documented so that authorizations can be effectively monitored.


 Q5.  Must an MHP have an authorization process in place for all services other than psychiatric inpatient hospital services?
A5.  No. The MHP only needs to assure that all services are provided under the direction of a physician, licensed/registered/waivered psychologist, licensed/registered/waivered social worker, licensed/registered/waivered marriage and family therapist, or a registered nurse.


 Q6.  Does the MHP have to provide a specialty mental health service it doesn't offer?
A6.  The MHP has to provide whatever specialty mental health service it determines meets the beneficiary's needs. For example, if the MHP determines day treatment is needed, it must provide the service. If the MHP determines that targeted case management and intensive mental health services are needed, it must provide this intensive level of services. Issuing a NOA does not absolve the MHP of its obligation to provide the specialty mental health service(s) the MHP found to be necessary.


Q7.  Regarding non-hospital UR activities: What is the MHP’s chart review responsibilities?
A7.  MHPs’ Quality Management (QM) Programs must conduct monitoring activities, including clinical chart reviews; however, the DMH has no set standards for this. MHPs should follow the standards they establish in their QM programs. MHPs are encouraged to establish a percentage of charts to review and the frequency of these reviews. These MHP-established standards should be documented in the QM plan and adhered to.

Last modified on: 7/2/2012 8:30 AM