The Medicaid and CHIP Payment and Access Commission approved recommendations to boost transparency with Medicaid prior authorization automation and AI use.
MACPAC advises Congress on Medicaid and CHIP, or the Children’s Health Insurance Program, policy. Recommendations were shared during a May 7 meeting.
“Current federal policy neither prescribes nor prohibits specific uses or adoptions of automation in PA,” the presentation said. “Limited federal guidance on automation in Medicaid PA is slowing the adoption of automation tools.”
The Congressional Budget Office did not find any direct effects on spending with the recommendations.
Here are the four recommendations:
1. CMS should release guidance to state Medicaid agencies and managed care plans to keep humans in the loop regarding medical necessity determinations. Automated tools cannot decide denials on their own, and such decisions must be based on individualized determinations of necessity. All regulatory requirements should still apply, regardless of automation.
2. CMS should modify regulations so denials and more limited authorizations are done by a person with appropriate expertise who can support the enrollee’s needs.
3. CMS should issue guidance to state Medicaid agencies and managed care plans outlining how the existing regulatory oversight processes can be leveraged to oversee automation in utilization management across managed care plans.
4. State Medicaid agencies should update managed care plan contracts to require disclosures of the use of automation in coverage and authorizations. States should look to existing reporting requirements and oversight capabilities to reduce administrative burden.
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