CurrentOptumPolicy BH803 NY122025

Alternate Level of Care (ALOC) for behavioral health inpatient stays - New York Medicaid

State-specific supplemental clinical criteria for New York Mainstream Medicaid adults and children regarding Alternate Level of Care (ALOC) placement, admission, continued stay, and discharge criteria for behavioral health inpatient services; used by Optum for medical necessity determinations and reimbursement decisions.

Policy Summary

PayerOptum

PolicyAlternate Level of Care (ALOC) for behavioral health inpatient stays - New York Medicaid

Policy CodePolicy BH803 NY122025

Change TypeAnnual review; no clinical changes

Effective DateDec 1, 2025

Next Review DateDec 1, 2025

Key ActionAll requests for Alternate Level of Care must be reviewed with a Behavioral Health Medical Director; facility must notify Optum when member status changes to ALOC and document barriers and estimated resolution date.

POLICY UPDATE CHANGES

Annual review completed December 2025; version history includes 9/17/2024 Version 1 and 12/2025 Annual Review.

WeeklyContinued stay review frequency

3Minimum referrals every 14 days if placement unsuccessful

Medical DirectorRequired reviewer for ALOC requests

Coverage Summary

Optum Behavioral Health state-specific supplemental clinical criteria for New York Mainstream Medicaid (Policy Number: BH803 NY122025) provide guidance on Alternate Level of Care (ALOC) for behavioral health inpatient services. These criteria are used by Optum for medical necessity determinations and reimbursement decisions for New York Medicaid adults and children.

Medical Necessity Criteria

Alternate Level of Care (ALOC) - General

ALOC may be considered when ALL of the following are met:

ALL of the following

Member is no longer deemed to be psychiatrically acute but continues to require inpatient hospitalization on a Behavioral Health unit to await confirmed placement with established transition date at the recommended level of care (e.g., nursing home, community residence, 820 residential, etc.).
Member will continue to receive skilled Behavioral Health and medication/medical interventions.
Facility has actively engaged in appropriate discharge planning and there is a confirmed discharge plan in place; ALOC should not be considered when appropriate discharge planning has not occurred.
Facility has identified the member meets criteria for ALOC and has informed Optum Behavioral Health that the member's status has changed to 'Alternate Level of Care.'
All requests for ALOC require Behavioral Health Medical Director review.
A member awaiting placement at a state psychiatric center does not meet criteria for ALOC; Optum continues to reimburse at the acute inpatient psychiatric rate in that situation.
If the plan determines ALOC appropriate but an appropriate provider of such care has not been identified (in- or out-of-network), the plan must continue to approve and reimburse for services provided by the current provider (per referenced OMH guidance).

Admission Criteria for Administrative Payment (Less than Acute Level of Care)

Admission/administrative payment for continued hospitalization is appropriate when ALL of the following apply and skilled intervention continues:

ALL of the following

Thoughts of serious harm to self or others are no longer considered an acute risk and are manageable at a lower level of care.
The individual is able to perform activities of daily living with prompting and is manageable at a lower level of care.
The need for medication monitoring and therapy continues but can be met at a lower level of care.
Medical comorbidity is manageable at a lower level of care.
The facility has identified the member meets criteria for ALOC and notified Optum Behavioral Health that the member has been transitioned to an 'alternative level of care status' within the facility, including barriers to transitioning and an estimated date of resolution.

Continued Stay Criteria

Continued ALOC inpatient stay is supported when ALL of the following operational expectations are met:

ALL of the following

Continued stay reviews will occur weekly.
Facility will report on the discharge plan and document that the facility Social Worker is actively engaged in securing appropriate placement options.
Facility will make weekly contacts to recommended referral sources awaiting confirmation of acceptance and a date of transition.
If facility is unsuccessful securing placement, they will send referrals to at least three (3) alternative placement options every fourteen (14) days.At least 3 referrals every 14 days

Discharge Criteria

Discharge from ALOC (i.e., end of administrative-rate coverage) is appropriate when ANY of the following is met:

ANY of the following

The member has been transitioned to the recommended next level of care.
The member remains psychiatrically and medically stable and has not decompensated requiring transition to an acute level of care.
The facility has met the required efforts to secure appropriate placement options as documented in continued stay criteria.
An appropriate placement has been located and the member refuses the available placement option.

Provider Actions & Requirements

Prior Authorization

Medical Director Review Required for ALOC

All requests for Alternate Level of Care must be reviewed with a Behavioral Health Medical Director; facility must notify Optum when member status changes to ALOC and document barriers and estimated resolution date.

Documentation Required

Discharge Planning and Social Work Documentation

Facility must document active discharge planning, make weekly contacts with referral sources, and include documentation of the member's current mental status, medications, and participation in the milieu to support continued stay reviews.

Billing Rule

Reimbursement Rate Distinction

When ALOC is approved, reimbursement may be negotiated at a lower administrative rate for continued inpatient treatment; however, a member awaiting placement at a state psychiatric center does not meet ALOC criteria and Optum continues to reimburse at the acute inpatient psychiatric rate.

Documentation Required

Referral Attempts

If unsuccessful in securing placement, the facility must send referrals to at least three alternative placement options every 14 days and report these efforts to Optum.

Background & Definitions

These State- or Contract-Specific Clinical Criteria defined by state regulations or contractual requirements are used by Optum to make behavioral health medical necessity determinations for New York Medicaid members. They are supplemental to other clinical criteria and may be used in conjunction with externally developed criteria when required or when state/contractual requirements are absent.

Prior to applying these criteria, reviewers must reference the member's specific benefits, eligibility, and any federal or state regulatory requirements that supersede the member's benefits; if the requested service is limited or excluded by the member's benefit, the member's benefit prevails.

All requests for ALOC require review by a Behavioral Health Medical Director and facilities must document active discharge planning and ongoing communication with Optum regarding barriers and estimated resolution dates.

Alternate Level of Care (ALOC): A status for members who are no longer psychiatrically acute but continue to require inpatient hospitalization while awaiting confirmed placement at a lower level of care; may be reimbursed at a negotiated lower administrative rate for continued inpatient treatment if criteria are met.

OpenPayer

Alternate Level of Care (ALOC) for behavioral health inpatient stays - New York Medicaid

Coverage Summary

Medical Necessity Criteria

Provider Actions & Requirements

Background & Definitions

Revision History