RetiredCareSourcePolicy N/A

Medical Necessity Determinations (Arkansas PASSE)

Defines how CareSource (PASSE program in Arkansas) determines medical necessity, applicable definitions, hierarchy of evidence, and conditions of coverage for services provided to PASSE members.

Policy Summary

PayerCareSource

PolicyMedical Necessity Determinations (Arkansas PASSE)

Policy CodePolicy N/A

Change TypeRetired / archival

Effective Date07/01/2022

Next Review DateN/A

Key ActionDetermine medical necessity using the defined hierarchy (benefit contract, federal/state regs, CareSource policies, evidence-based guidelines, peer-reviewed evidence, specialty consultation).

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

6 levelsHierarchy items

NCSSNCSS included

09/30/2023Archived

07/01/2022Effective

Coverage Criteria & Determinations

Medical Necessity Determination Hierarchy

CareSource will determine medical necessity based on the following hierarchy (listed order reflects precedence):

Hierarchy (in order): A. Benefit contract language; B. Federal regulation or state regulation (including state waiver regulations when applicable); C. CareSource medical policy statements; D. Nationally accepted evidence-based clinical guidelines (such as MCG Health and clinical practice guidelines published by consortiums of medical organizations); E. Professional judgment of the medical or behavioral health reviewer supported by resources (peer-reviewed studies, national panels/consortiums, Commercial External Review Organizations, specialty and sub-specialty societies); F. Consultation from a like-specialty peer.

Items are considered in this order when determining medical necessity; professional judgment should reference the listed resources (e.g., peer-reviewed studies, NIH/CDC/AHRQ, CERO like Up-to-Date/Hayes).

General Criteria for Coverage

Covered when ALL of the following are met:

General Medical Necessity: Service is reasonable and necessary for the patient's condition; no equally effective, more conservative, or less costly alternative exists; the request is documented in the medical record with sufficient specificity and supporting diagnoses (ICD-10-CM codes with highest level of specificity); and the frequency of the service is within allowed national, local, or membership limits.

Policy Summary

PayerCareSource

PolicyMedical Necessity Determinations (Arkansas PASSE)

Policy CodePolicy N/A

Change TypeRetired / archival

Effective Date07/01/2022

Next Review DateN/A

SourceLink

On This Page

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Nonmedical community supports and services (NCSS) are services authorized under federal authority (e.g., sections 1905, 1915(c), and/or 1915) and included in the PASSE program. NCSS are intended to prevent or delay institutionalization or to help an individual leave an institutional setting by supporting safe, independent community living. NCSS are identified through the Independent Assessment and must be documented in the member's individually created Person-Centered Service Plan (PCSP), reviewed regularly through care coordination, and tied to specific member needs.

Because NCSS are not medical in nature, they are distinct from services covered as medical benefits. Inclusion of NCSS in a member's PCSP indicates they are provided as supports under the PASSE program rather than as medically necessary treatments that would be adjudicated under standard medical coverage rules.

Provider Requirements & Actionable Rules

Note

Medical necessity hierarchy used for determinations

CareSource determines medical necessity using a clear hierarchy of evidence and authority. Reviewers first consult the member's benefit contract, then CareSource medical policy statements, followed by applicable federal and state regulations (including waivers), and nationally accepted evidence‑based clinical guidelines (for example, MCG®). When those sources are insufficient, reviewers may rely on professional judgment supported by peer‑reviewed studies, national panels (NIH, CDC, AHRQ, NCCN, SAMHSA), commercial external review organizations (e.g., UpToDate, Hayes), specialty society guidance, or like‑specialty peer consultation.

Documentation Required

Documentation requirements to support medical necessity

Document the member’s diagnoses and clinical status with the highest level of ICD‑10‑CM specificity available. Records should describe the patient’s presenting problem(s), onset and course, whether conditions are acute or chronic, prior interventions and responses, and any objective findings that support the need for the requested service. Insufficient or non‑specific diagnosis coding, lack of supporting clinical detail, or absence of documentation of prior treatment attempts may result in denial for lack of medical necessity.

Use ICD‑10‑CM codes at full specificity.
Describe acute vs chronic status and relevant timelines.
Include prior conservative treatments and responses.

Step Therapy

Conservative‑care and step‑through requirements

Providers must demonstrate that no equally effective, more conservative, or less costly alternative is appropriate before higher‑intensity, higher‑cost, or more invasive services will be approved. This includes conservative management, watchful waiting, or lower‑intensity interventions when clinically reasonable. When applicable, document trials of alternative treatments, duration, and clinical response.

Document trials of equally effective and more conservative options.
State why alternatives were contraindicated or ineffective.

Denial Risk

Denial risk for frequency limits and unsupported coding

Services may be denied when frequency or duration exceeds limits established by national coverage policies, local medical policies, or clinically accepted standards, or when submitted ICD‑10‑CM codes and clinical documentation do not support the medical necessity of the service. Providers should verify applicable frequency limits and ensure coding and records align with the clinical indication to avoid payment denials.

Noncompliance with frequency/duration limits may lead to denial.
ICD‑10‑CM codes must support the medical necessity of billed services.

Background & Scope

The purpose of a medical necessity determination is to define whether a requested service, procedure, or product is a benefit under the member's plan by evaluating if it is reasonable and necessary or appropriate given the patient’s condition and current clinical standards. Definitions of medical necessity vary among entities (including CMS and AMA), but commonly require that care be appropriate to the clinical situation.

Medical necessity determinations vary by entity and rely on documented medical evidence in the patient's record. Even when a service is reasonable and necessary, coverage can be limited if it is provided more frequently than allowed by national or local policies or accepted standards. ICD-10-CM diagnosis codes should support medical necessity, and providers are expected to document conditions, specificity of diagnosis coding, and the clinical circumstances (acute, emergent, chronic) that justify the service.

Key Definitions

Medically Necessary / Medical Necessity — definition and explanation

DefinitionA service reasonably calculated to prevent, diagnose, correct, cure, alleviate, or prevent worsening of conditions that endanger life, cause suffering or pain, result in illness/injury, threaten to cause or aggravate a handicap, or cause physical deformity or malfunction.

Necessity ConditionCovered only when no equally effective, more conservative, or less costly course of treatment is available or suitable; a course of treatment may include observation or no treatment.

Decision AuthorityDetermination of medical necessity may be made by the Medical Director for the PASSE Program or by the PASSE Program Quality Improvement Organization (QIO).

Documentation ImplicationMedical necessity determinations require documentation that supports that the service is appropriate and that alternatives were considered.

MCG Health — definition and role

DefinitionMCG Health: developed care guidelines that align with principles of evidence-based medicine and evidence-based best practices to direct informed care.

Role in hierarchyListed as an example of nationally accepted evidence-based clinical guidelines used to determine medical necessity.

Use caseClinical practice guidelines published by consortiums of medical organizations and generally accepted as industry standard are considered under this resource.

Evidence standard linkageMCG Health is referenced alongside other external resources (e.g., Up-to-Date, Hayes) and national panels when evaluating evidence supporting services.

MHPAEA — definition and parity note

DefinitionMHPAEA (Mental Health Parity and Addiction Equity Act): a 2008 federal law that prevents group health plans and issuers providing mental health and substance use disorder benefits from imposing less favorable benefit limitations than for medical/surgical coverage.

Parity requirementCoverage for diagnosis and treatment of behavioral health disorders must not be subject to limitations that are less favorable than those applied to medical conditions under this policy.

Application in reviewReviewers will determine medical necessity consistent with MHPAEA rules and the policy's established hierarchy of evidence and guidance.

Hierarchy referenceMHPAEA language is used to frame that the reviewer will follow the defined hierarchy (benefit contract, federal/state regulation, CareSource policy, nationally accepted guidelines, professional judgment, like-specialty consultation) when assessing parity and necessity.

OpenPayer

Medical Necessity Determinations (Arkansas PASSE)

Coverage Criteria & Determinations

Provider Requirements & Actionable Rules

Background & Scope

Key Definitions

Policy Revision History