Medicaid Plans Must Identify a Change to Justify Service Denials and Reductions
In a move aimed at safeguarding Medicaid enrollees’ rights when denied services by their health plans, Pennsylvania’s Medicaid plans are required to identify a change in a person’s condition if they wish to stop or reduce a service that the plan had previously approved for the person.
While this requirement has applied to Medicaid plans in the Physical HealthChoices program since last year following changes to the HealthChoices Agreement, more recent guidance from the Departmental of Human Services (DHS) clarifies that this requirement also applies to Community HealthChoices (CHC) plans.
This protection is especially important for people who need ongoing services, such children with medical complexities who receive private duty nursing or home health aide services, and older adults and people with disabilities who receive personal assistance services through the CHC waiver program. Medicaid MCOs review whether ongoing services continue to be medically necessary on a periodic basis, typically every six or twelve months. If a plan determines that a service it approved during the last medical necessity review—say, six months prior—is no longer medically necessary, the plan must now provide specific detail in its denial notice to justify how the member’s condition has changed in a way that warrants stopping or reducing the service now. Alternatively, plans can meet the new requirement by explaining how its earlier approval was made in error.
Below is the relevant language describing this requirement for plans operating in the HealthChoices program, which covers children and low-income adults under age 65 on Medicaidt:
“In the case of a denial of a previously authorized service . . . the denial notice must contain specific information about the change in the Member’s condition, or the error made when the PH-MCO previously authorized the service, that justifies the denial or reduction.” See HealthChoices Agreement (Physical Health), Section V.B.1 (2025).
In March, the Office of Long-Term Living (OLTL) adopted the same requirement for plans operating in the Community HealthChoices program, which covers people on both Medicare and Medicaid ("dual eligibles"), as well as those in nursing facilities and people with disabilities who get home and community based services:
“The purpose of this Operations Memorandum is to clarify that . . . in the case of a denial of a previously authorized service or a reduction in benefits, the denial notice must contain specific information about the change in the Participant’s condition, or the error made when the CHC-MCO previously authorized the service, that justifies the denial or reduction.” See CHC Operations Memorandum (CHC OPS) #2025-04, “Denial Notices - Previously Authorized Services.”
It is important to reference the language above when appealing the denial of a previously authorized service. For more guidance on appealing service denials, consult PHLP’s guides to appealing Pediatric Shift Care Denials and Personal Assistance Services (PAS) Denials. To apply for free legal help with your appeal, contact PHLP’s Helpline on Mondays or Wednesdays at 1-800-274-3258 or staff@phlp.org.
