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In Lieu of Services and Settings

In the 2016 Medicaid and CHIP managed care final rule, CMS finalized 42 CFR § 438.3(e)(2) that formally recognized states’ and managed care plans’ abilities to cover services or settings that are substitutes for services or settings covered under the state plan (also known as ILOS). As CMS acknowledged in its 2015 notice of proposed rulemaking, managed care plans historically had flexibility under risk contracts to cover alternative services or services in alternative settings to meet enrollees’ needs, and CMS believed codifying the practice in regulation would bring consistency to plans’ use of such alternatives, as well as ensure adequate enrollee protections.

State Medicaid Director Letter: Additional Guidance on Use of In Lieu of Services and Settings in Medicaid Managed Care

This guidance addresses an innovative option states may consider employing in Medicaid managed care programs to reduce health disparities and address unmet health-related social needs (HRSNs), such as housing instability and nutrition insecurity, through the use of a service or setting that is provided to an enrollee in lieu of a service or setting (ILOS) covered under the state plan.  Further, with this guidance, CMS seeks to clarify an existing option that states can pursue to enhance and expand these efforts through the use of ILOSs.

Institution for Mental Disease (IMD) Frequently Asked Questions (FAQs)

This document is the second set of published FAQs and addresses common questions related to section 438.6(e) for payments to managed care organizations (MCOs) and prepaid inpatient health plans (PIHPs) for an enrollee that is a patient in an IMD in the Medicaid and Children's Health Insurance Program (CHIP) Managed Care Final Rule.