Prior authorization (PA) is a tool used by health care payers to require approval before a patient receives a specific service, item, or medication. The process ensures the requested care is medically necessary, aligns with clinical standards, and is cost-effective. Yes, Medicaid frequently requires prior authorization for many services, but the specific requirements vary significantly depending on the state and the type of Medicaid plan a beneficiary is enrolled in. This mechanism requires the health plan to review clinical documentation before agreeing to cover the cost, helping to control utilization and manage program costs.
Understanding the Regulatory Structure
The variability in prior authorization rules stems from the dual federal and state administration of the Medicaid program, which operates under Title XIX of the Social Security Act. Federal guidelines establish the broad framework, but individual states possess the authority to design and implement their own specific PA policies. This means a service requiring prior approval in one state might be automatically covered in a neighboring state.
A distinction exists between Medicaid’s fee-for-service (FFS) model and Managed Care Organizations (MCOs). While FFS Medicaid is directly administered by the state, MCOs are private health plans that contract with the state to provide care for most beneficiaries. MCOs often have their own utilization management programs, and their PA requirements can differ from the state’s FFS rules. However, MCO requirements cannot be more restrictive than FFS rules in defining medical necessity. Federal regulations require both FFS programs and MCOs to establish written criteria for evaluating the appropriateness of services, basing decisions on medical necessity and clinical evidence.
Services Commonly Requiring Pre-Approval
Prior authorization is reserved for medical services or items that are expensive, non-emergency, or considered high-utilization, allowing the payer to verify their appropriateness before the cost is incurred. Common services requiring pre-approval include:
- Prescription drugs, especially those not on the plan’s preferred drug list (PDL) or high-cost specialty pharmaceuticals.
- Durable medical equipment (DME), such as wheelchairs, oxygen tanks, and specialized hospital beds, to confirm medical necessity and appropriate sizing.
- Non-emergency inpatient admissions and elective surgeries.
- Complex imaging procedures like CT scans and MRIs.
- Certain rehabilitation services, including physical, occupational, and speech therapy, once a beneficiary exceeds a defined number of visits.
Submitting and Tracking a Request
The responsibility for initiating and documenting a prior authorization request rests with the health care provider, such as the physician, facility, or pharmacy. The provider must gather comprehensive clinical documentation, including clinical notes, relevant test results, and a rationale for why the requested service or medication is medically necessary. Submissions are typically made electronically through a payer’s portal or via fax, using specific forms and codes to identify the service and diagnosis.
Federal regulations establish clear timeframes for payers to issue a decision, preventing undue delays in patient care. For standard, non-urgent requests, Medicaid Managed Care Organizations (MCOs) must currently provide a decision within 14 calendar days of receiving the request. For urgent situations that could jeopardize the patient’s life or health, an expedited request must be processed within 72 hours. New federal rules are set to shorten the standard review period for MCOs and FFS programs to seven calendar days, starting in January 2026.
The patient’s role involves proactively following up with their provider to ensure the request was submitted promptly and completely. Delays often occur when the payer needs additional documentation, which can extend the review timeline. Patients should ask their provider for the authorization reference number to track the status directly with the health plan.
Resolving a Prior Authorization Denial
Internal Appeal
If a Medicaid prior authorization request is denied, the beneficiary has the right to challenge that decision through a structured resolution process. The first step involves an internal review, often referred to as a reconsideration or internal appeal, filed with the health plan or state Medicaid agency. The individual reviewing the appeal must have the appropriate clinical expertise and cannot have been involved in the initial denial decision. For MCOs, this internal appeal must be resolved within 30 calendar days for standard cases and 72 hours for urgent cases.
State Fair Hearing
If the MCO upholds its denial, the beneficiary is entitled to pursue a formal State Fair Hearing, which is the highest level of administrative review. This hearing involves an impartial administrative law judge who reviews the evidence from both the beneficiary and the payer. In cases where a previously authorized service is being reduced or terminated, the beneficiary has the right to request continued benefits while the appeal is pending, provided the request is made in a timely manner. The deadline to request a State Fair Hearing typically ranges from 90 to 120 days from the date of the adverse decision notice.