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In or Out: An Examination of Medicaid's Coverage Determination Policies

Manatt Health Solutions

As the largest US purchaser of health services, Medicaid decides whether millions of Americans can get new medical interventions. How do state programs determine what to cover?

Two doors side-by-side in a wall. One of them is open.

Medicaid, the joint federal and state program that provides health insurance for low-income people, is rapidly becoming the largest purchaser of health care services in the United States.

Given Medicaid's size and scope, and the central role it plays in the health insurance market, information on how it determines which health care services and interventions to cover has significant implications, not only for Medicaid enrollees but also for the entire health care system, including developers of emerging technologies.

This report reviews how Medicaid and other large public health insurance programs in the US and abroad determine coverage for specific health interventions (e.g., procedures, therapies, technologies, and devices) within a covered benefit category. It highlights themes from research on and interviews with select state Medicaid agencies regarding their coverage determination processes and standards, including approaches to covering behavior change interventions. Finally, it discusses policies and procedures for achieving greater rigor and transparency in this decisionmaking.

The authors conclude that state agencies, including California's Medi-Cal, should consider incorporating the following core features into their coverage determination policies:

  • A defined process by which third parties may initiate a coverage review
  • A systematic evaluation of high-cost, high-utilization services
  • A systematic approach to securing and evaluating evidence of the effectiveness and value of the new intervention
  • A defined standard by which the state will evaluate whether to cover the intervention

The full report is available under Document Downloads.

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