While acknowledging the potential value of the use of AI in facilitating Medicaid prior authorization decisions, the agency that advises Congress on Medicaid and Children’s Health Insurance Program policy will recommend to Congress that the programs erect guardrails to protect those they serve.

During a recent meeting of the Medicaid and CHIP Payment and Access Commission, members of that group discussed a staff report on the use of AI in Medicaid prior authorization decisions and endorsed the following principles for the use of AI in this manner:

  • The Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services to issue guidance to state Medicaid agencies and Medicaid managed care plans clarifying that, for determinations of medical necessity, the language at 42 CFR 438.210(b)(3) requires an individual with appropriate expertise to review and authorize all decisions to deny service authorizations or to authorize a service in an amount, duration or scope that is less than requested, including those proposed by automated systems. This guidance should clarify further that (1) adverse determinations may not be made by automation tools alone; (2) adverse determinations must be made based on individualized determinations of medical necessity; and (3) all existing regulatory requirements related to adverse determinations apply whether or not automation is used in the process of issuing an authorization decision.
  • The Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services to amend the regulations at 42 CFR 440.230 to provide that, for determinations of medical necessity in fee-for-service Medicaid programs, any decision to deny a service authorization request or to authorize a service in an amount, duration, or scope that is less than requested, be made by an individual who has appropriate expertise in addressing the enrollee’s medical, behavioral health, or long-term services and supports needs.
  • The Secretary of the U.S. Department of Health and Human Services should direct the Centers for Medicare & Medicaid Services to issue guidance to state Medicaid agencies and Medicaid managed care plans specifying ways in which existing regulatory oversight processes, including the external quality review process and mandated plan reporting required for Managed Care Program Annual Reports, can be used to create effective oversight of managed care plans’ use of automation in utilization management (42 CFR 438.66, 42 CFR 438.350 and 42 CFR 438.66(e)(1)).
  • State Medicaid agencies should amend their Medicaid managed care plan contracts, on a timeline that is practicable, to require disclosure or other reporting of the use of automation in plans’ coverage and authorization processes described at 42 CFR 438.210. Disclosure should facilitate state visibility into the applications of automation tools and other meaningful elements of automation, such as plans’ protocols for testing, evaluation, and oversight. To the extent possible, states should modify existing reporting requirements or existing oversight processes to minimize additional administrative burden.

Essentially, MACPAC wants greater transparency in Medicaid and CHIP prior authorization practices that use AI; that qualified humans review care denials generated through AI; and that states require Medicaid managed care plans to disclose in their contracts how they use AI to make coverage, utilization, and authorization decisions.

Learn more about MACPAC’s views on the use of AI in Medicaid prior authorization decisions from the MACPAC paper “Automation in Medicaid Prior Authorization” and the Healthcare Dive article “MACPAC calls for increased transparency in Medicaid AI prior authorization.”