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Medi-Cal Fee-For-Service (FFS) Prior Authorization Section 1135 Waiver Flexibilities Relative to the 2019-Novel Coronavirus (COVID-19)

Originally published April 6, 2020 and updated on May 5, 2020

On March 16, 2020, and March 19, 2020, The Department of Health Care Services (DHCS) submitted requests to waive or modify a number of federal requirements under Section 1135 of the Social Security Act (Title 42 United States Code section 1320b-5) to the Centers for Medicare & Medicaid Services (CMS). DHCS’ Section 1135 Waiver submission requested various flexibilities related to the response to coronavirus disease 2019 (COVID-19), including temporary flexibility on prior authorization and medical necessity processes and requirements for certain Medi-Cal benefits in the fee-for-service delivery system during the emergency period. On March 23, 2020, CMS submitted an approval letter to DHCS summarizing its approval of specific requested Section 1135 Waiver flexibilities.

DHCS is issuing the following guidance relative to the temporary suspension of Medi-Cal fee-for-service prior authorization requirements under California’s approved Medicaid state plan for certain benefits. The following guidance includes extension of existing  prior authorizations, as described in detail below and will remain through the end of the response to COVID-19.

Prior Authorization Flexibilities Generally
Under Social Security Act Section 1135(b)(1)(C), CMS approved DHCS’ request to waive or modify the state plan prior authorization requirements and processes for benefits administered through the Medi-Cal fee-for-service delivery system. Specifically, CMS indicated that DHCS could temporarily suspend new and extend pre-existing Medi-Cal fee-for-service prior authorization requirements and processes required under the Medicaid state plan for certain benefits.

As a result, DHCS is temporarily suspending prior authorization requirements for all Medi-Cal covered benefit categories covered in the state plan, which are currently subject to prior authorization, including but not limited to elective hospitalizations and/or procedures, durable medical equipment (DME), magnetic resonance imaging (MRI), hearing aids, laboratory services, speech/occupational/physical therapy services, nonemergency medical transportation, etc. These temporary prior authorization related flexibilities are an important step in eliminating unnecessary face-to-face contact, limit beneficiaries’ exposure to others who may be infected with COVID-19 and promote appropriate social distancing, as well as ensuring continued, timely access to Medi-Cal covered benefits and services.

Treatment Authorization Request (TAR) and Service Authorization Request (SAR) Requirement
For all Medi-Cal covered benefit categories covered in the state plan, which are currently subject to prior authorization, please note that TARs and SARs are still required; however, providers are instructed to incorporate the statement, “Patient impacted by COVID-19” within the Miscellaneous Information field on the TAR and the Freeform Message Text field on the SAR. If the TAR or SAR designates that the beneficiary is impacted by COVID-19,  this designation may be submitted after services have been rendered and will be expedited and approved, as appropriate, and the provider will be reimbursed for the claim. Providers must still submit supporting documentation to justify the need or medical necessity and maintain documentation of medical necessity in the patient’s medical file.

For TARs that are already authorized, if the provider needs an extension of the “through date” of service, providers are instructed to go into the eTAR system to update the TAR with a change of service requesting an extension period. Providers are instructed to incorporate the statement, “Patient impacted by COVID-19” within the Miscellaneous Information field. Similarly, for SARs, providers are instructed to go into the Provider Electronic Data Interchange (PEDI) portal to update the SAR with a change of service requesting an extension period. Providers are instructed to incorporate the statement, “Patient impacted by COVID-19” within the Freefrom Message field.

TARs and SARs with the above designations may be submitted after services have been rendered and will be expedited and approved, as appropriate, if the TAR or SAR indicates that the beneficiary is impacted by COVID-19, and the provider will be reimbursed for the claim. Providers must still maintain documentation of medical necessity in the patient’s medical file and when appropriate submit supporting documentation to justify the need or medical necessity for the extension.

The need for a TAR or SAR should not negatively affect providing the covered benefit to the beneficiary as the TAR or SAR can be submitted retrospectively. As noted above, providers and suppliers must still provide and maintain documentation indicating the need for the benefit and in the instance of DME, indicate the equipment was lost, destroyed, irreparably damaged or otherwise rendered unusable or unavailable in response to COVID-19.

Emergency Services
As a reminder, emergency services are exempt from prior authorization requirements, but must be justified according to the following criteria:

  • A statement by a physician, podiatrist, dentist, or pharmacist that describes the nature of the emergency, including relevant clinical information about the patient’s condition, and statement why the emergency services rendered were considered to be immediately necessary. A mere statement that an emergency existed is not sufficient. A statement by a pharmacist may only pertain to dispensing of drugs.
  • DHCS may require providers to follow procedures for retroactive authorization that the medically necessary service needed to be provided on an emergency basis.

Additional Resources
Any questions regarding this notice may be directed to the Telephone Service Center (TSC) at 1-800-541-5555, Monday through Friday, 8 a.m. through 5 p.m. except holidays.

For general Medi-Cal information, visit the Medi-Cal website, and for COVID-19 specific information, visit DHCS COVID-19 Response webpage.

For additional COVID-19 information and resources, providers are encouraged to review the following resources: