2021 Parity Evaluation for NJ FamilyCare Plan A and ABP

NJFamilyCare requires all recipients, regardless of their eligibility and or population group, to be enrolled

into one of five Medicaid managed care plans. The available service packages include Plans A, ABP, B, C

and D. Plans A and ABP are an identical service package and are the only service packages for which the

State and its contracted managed care plans are required to complete a parity analysis. The three CHIP

plans B, C and D (beginning 7/1/18) provide Early Periodic Screening, Diagnosis and Treatment (EPSDT)

coverage and are therefore deemed compliant with parity requirements. At present, all physical health

services are provided by Managed Care Organizations (MCOs) while the majority of mental health and

substance use disorder (SUD) services are provided Fee-For-Service (FFS). This applies to Medicaid and

CHIP programs. Therefore, the State has completed the narrative portion for this parity analysis with

input collected from each of the managed care plans.

The State’s FFS program only allows prior and retro-authorization in three circumstances. The first is with

programs that require treatment planning. The authorization requires a properly completed treatment

plan be submitted prior to authorization for payment for services. The treatment plan is reviewed for

completeness, required signatures and clinical appropriateness. An example would be community

support services. Services provided and billed must match the services listed and approved in the

treatment plan. The second use of prior authorization is to ensure that services are being provided at the

appropriate clinical level so that the individual will best benefit from the service being offered. An

example would be transportation services. The client is eligible for transportation, but may not be

appropriate for the level of transport requested. Lastly, authorization is used when multiple providers

may be involved in treatment. Authorization ensures fiscal responsibility and reduces the ability for two

providers to bill for the same service at the same time. An example where this is utilized is private duty

nursing.

For 2021, NJ declared a state of emergency under which all PA and copayments, medical-surgical and

behavioral health were suspended. This suspension applied to managed care and FFS products.

The MCOs are contractually required to meet the requirements listed for any service authorized through

the State plan or through the Comprehensive waiver. Additionally, unless otherwise stated in the

contract, the MCOs are required to follow any applicable rules published in the New Jersey administrative

code. As for Non-Quantitative Treatment Limits (NQTLs), the plans are free to utilize measures to ensure

fiscal appropriateness and medical necessity. Plans may not otherwise limit services authorized by the

State and must ensure that any NQTL may be overridden when determined medically necessary or as

required under EPSDT. All plans have demonstrated that their prior authorization requirements meet

these standards and that the concurrent or retrospective review of the member’s records demonstrated

that the services are appropriate and based on medical necessity criteria.

For both FFS and MCOs, all cases are reviewed by licensed clinicians. In the event that a request does not

meet established national clinical criteria or other established criteria, the case is referred to a physician

medical director for review. Medical directors consider the social determinants of health as well as the

individual’s unique clinical situation as applied to national best practice guidelines to assure that all

medically necessary services are authorized. Any provider or recipient may request a second appeal to

an independent medical peer for a final determination.

Within NJFamilyCare, there are three sub-population groups for which MCOs cover MH/SUD services for

Plan A and ABP. They are recipients receiving Managed Long Term Services and Supports (MLTSS), Division

of Developmental Disabilities (DDD) involved recipients and individuals enrolled in a Fully Integrated Dual

Eligible Special Needs Plans (FIDE-SNP). Each sub-population receives the majority of their behavioral

health and all of their physical health services from the managed care plan. The limited behavioral health

services not covered by the MCO are programs that involve targeted case management such as Programs

for Assertive Community Treatment (PACT) and community support services which are provided FFS. The

remaining subpopulations of Plan A and ABP receive all of their behavioral health services through FSS.

All acute inpatient admissions, regardless of the admitting diagnosis, are covered by the recipient’s

managed care plan for all population groups.

For the purposes of this parity analysis, behavioral health shall consist of mental health and substance use

disorder services and is identified as MH/SUD and defined as those conditions listed in ICD-10-CM,

Chapter 5 (with the exception of subchapter 1, “Mental disorders due to known physiological conditions”),

including a subset of mental health conditions listed in ICD-10-Chapter 5 identified with the diagnosis

codes F10-F19. This subset identifies conditions in which the use of one or more substances leads to a

clinically significant impairment. Medical and surgical benefits shall be those services associated with the

diagnosis and treatment of Medical Surgical conditions listed in ICD-10-CM, Chapters 1 through 4, and

Chapter 5, subchapter 1 only, as well as Chapters 6 through 20. These services shall be identified as M/S.

For the purposes of this Parity analysis, MH/SUD and M/S services have been listed under one of four

benefit classifications consisting of inpatient, outpatient, prescription drugs and emergency care. The

categories have been defined as follows:

“Inpatient” shall consist of all covered services or items provided to a beneficiary when a

physician has written an order for admission to a facility. Those services provided in a facility

may be for MH/SUD treatment as well as M/S services as defined above.

“Outpatient” shall consist of all covered services or items that are provided to a beneficiary in a

setting that does not require a physician’s order for admission and do not meet the definition of

emergency care.

“Emergency Care” shall consist of all covered services or items delivered in an Emergency

Department (ED) setting or outside of an ED setting but provided to stabilize an

emergency/crisis, other than in an inpatient setting.

“Pharmacy” shall consist of durable medical equipment and covered medications, drugs, and

associated supplies that require a prescription as well as services delivered by a pharmacist

working in a free standing pharmacy.

The core services within these categories are attached for comparison.

Under NJ FamilyCare guidelines, and in compliance with the Mental Health Parity and Addictions Equity

Act of 2008 (MHPAEA), neither the State nor the contracted Managed Care Organizations (MCOs) may

impose:

• an aggregate lifetime dollar limit on any MH/SUD or M/S benefits

• an annual dollar limit on any MH/SUD or M/S benefits

• any financial requirements to MH/SUD benefits in the Inpatient classification

• any financial requirements to MH/SUD benefits in the Outpatient classification

• any financial requirements to MH/SUD benefits in the Emergency classification

• any financial requirements to MH/SUD benefits in the Pharmacy classification

Through regulations and contract language, NJ FamilyCare does not allow for any aggregate lifetime dollar

limits on any benefits, M/S or MH/SUD. Since there are no annual dollar limits or any financial

requirements on any M/S or MH/SUD services, NJ FamilyCare meets MHPAEA parity requirements for this

section.

Under NJ FamilyCare contract guidelines and regulations, New Jersey’s contracted MCOs cannot impose:

• Financial requirements—Payment by beneficiaries for services received that are in addition to

payments made by the state or the MCO for those services. This includes copayments,

coinsurance, and deductibles.

• Quantitative treatment limitations—Limits on the scope or duration of a benefit that are

expressed numerically that are applied in a manner that is more restrictive than those that apply

to M/S benefits in the same classification. This includes day or visit limits.

• Aggregate lifetime or annual dollar limits—Dollar limits on the total amount of a specified benefit

over a lifetime or on an annual basis.

Therefore, since the State (or any of the five contracted MCOs) cannot impose any of the above

limitations, NJ FamilyCare (Medicaid and CHIP) is determined to be compliant with the parity

requirements listed in MHPAEA for this section.

A detailed analysis was also completed for Non-Quantitative Treatment Limits (NQTL) to ensure

compliance with parity guidelines. This detailed analysis includes the State FFS system as well as individual

analyses provided by each contracted plan. The MCO NQTL analyses can be seen in the attached

appendices. An NQTL is defined as a limit on the scope or duration of benefits that may be extended if

determined medically necessary; thus making it a “soft” limit. Parity prohibits New Jersey and its

contracted MCOs from imposing an NQTL on MH/SUD benefits in any of the four classifications unless,

the processes, strategies, evidentiary standards, or other factors used in applying the NQTL to MH/SUD

benefits in the classification are comparable to the processes, strategies, evidentiary standards, or other

factors used in applying the NQTL to M/S benefits in the classification. The factors used in applying the

identified NQTLs are not applied more stringently for MH/SUD benefits than the factors used to apply the

NQTL in the M/S benefits in the same classification.

To allow comparison between MS and BH/SUD and to assist with the analysis, each service group was

assigned to one of the four categories (inpatient, outpatient, pharmacy and emergency). Several BH/SUD

NQTLs have been identified that span across categories. First, and most prominent, is the medical

management criteria utilized by both the State and the contracted MCOs in all four categories for both

MH/SUD and M/S services. Medical management criteria are intended to ensure services are provided at

the appropriate level of care. However, they may have the effect of limiting or denying services that fail

to meet medical necessity. Prior authorization, a subcomponent of applying the criteria, is required to

ensure that service requests are being provided at the clinically appropriate level. This reduces fraud and

abuse for the State while ensuring recipients receive the proper level of care. Prior authorizations are

based solely on Medicaid eligibility and clinical necessity and may be overridden at any time if determined

medically necessary. They are NJ FamilyCare’s way to ensure service requests have been evaluated and

to allow payment for those services. None of the medical management criteria, including prior

authorizations, that is utilized by the State or MCO for MH/SUD services require any processes, strategies,

evidentiary standards or other factors that are applied more stringently than, the processes, strategies,

evidentiary standards, or other factors used in applying the NQTL to M/S benefits in each of the M/S

classifications.

The State of New Jersey does have a regulation requiring the use of less expensive services if the other

services are considered equivalent. This requirement is generally not applied to MH/SUD services since

Mental Health services, other than acute inpatient services and SUD (ASAM), do not use medical

management criteria. An example of how this law could be applied in a medical situation would be a

client requesting a power wheelchair when they are capable of utilizing a manual chair. The request for

the higher cost device would be denied unless medical necessity for a power chair could be provided. For

MH/SUD, an example would be an individual seeking partial care services on a daily basis without

demonstrating a need for this service. The State would approve individual or group therapy 2 days a week

if the same outcome would be expected and treatment is determined medically appropriate by a medical

professional. However, In the event this situation did arise, and it was determined medically appropriate

by the State’s Medical Director, the service would be approved at the higher level. For MH/SUD services,

clients may choose between available services provided those services meet evidentiary standards that

demonstrate an appropriate level of care. All services may be approved if medically necessary. The

standard for applying restrictions to levels of care is not applied more stringently for MH/SUD than for

M/S services in equivalent categories.

Geographical limitations could possibly span all four categories. However, NJ FamilyCare does not have

any geographic limitations on provider inclusion. Both FFS and the MCOs contract with providers outside

of New Jersey. Fee-for-service is open to any provider in any state. The MCOs limit their providers to the

contiguous states surrounding New Jersey. However, both the State and MCOs offer “one time” provider

agreements to providers who are outside of the network who provide urgent or emergent services outside

of New Jersey. These agreements are easy to complete and ensure individuals travelling outside of New

Jersey, but within the United States, can receive urgent medical care as needed. In support of the primary

care model of care, the MCO contract requires routine or well care be provided by the individual’s primary

care physician. All providers follow the same guidelines and there are no differences between providers

for MH/SUD and M/S services.

Rate setting for professional services have the potential to involve all four categories. Professional

services are generally set at a specific percentage of Medicare rates. Rates do not increase with Medicare

increases unless that requirement is part of the rate setting methodology. Therefore, rates across all

specialties and provider types may vary. Factors such as a shortage of providers have resulted in specific

rates being increased. APNs are paid 85% of the physician rate. Managed care plans generally set initial

rates at the FFS rate but are free to negotiate rates independently. For professional services, rates vary

depending on provider saturation and contracting needs. The rate setting process is the same for other

professionals including PhDs and MA professionals. The majority of M/S service providers are reimbursed

by the MCOs and the majority of BH/SUD providers are reimbursed by FFS. However, reimbursement

rates are determined in an equable manner for MH/SUD and M/S providers with both sides reacting to

supply and demand as well as an examination of commercial rates for similar services.

Practitioner types are limited to those that are approved through regulation and through the State plan.

Under FFS, which covers the majority of MH/SUD services, the State only recognizes physicians, APNs and

psychologists as billable providers. However, any provider may practice within their licensure when their

services are billed through an outpatient hospital or independent clinic. Most of the MH/SUD services

within FFS are provided by clinic providers. Other than psychiatrists, there does not appear to be an

unusual shortage of providers. To help attract psychiatrists, FFS has worked with programs to increase

rates and billing opportunities to help offset the high cost of these providers.

The managed care contract allows MCOs to contract with any provider if the service they provide is

covered in the State plan. These providers can practice as an “in lieu of service”. Practitioner types, facility

types, or specialty providers are not excluded in writing or in operation from providing covered benefits

if they complete the enrollment and contracting requirements of the managed care plan. However, the

provider must be contracted with the managed care plan in order to provide services to covered

beneficiaries.

The network requirements for FFS and MCOs are different. With the exception of any lawfully imposed

moratoriums on provider enrollment, NJ FFS offers an “any willing provider” environment. Any willing

provider can apply, and if they meet eligibility requirements (license, accreditation, no debarment history,

etc.), they may enroll as a FFS provider. Managed care plans contract with networks of qualified health

care providers and home and community-based service providers (as applicable to state) to the enrolled

membership in its Plan. The plan performs initial and ongoing assessments of its organizational providers

in compliance with applicable local, state, and federal accreditation requirements. Information and

documentation on organizational providers is collected, verified, reviewed, and evaluated in order to

achieve a decision to approve or deny network participation. Neither the State nor the MCOs employ

different criteria for MH/SUD or M/S provider enrollment.

With the exception of a few provider groups that the State mandates be open to enrollment, MCOs are

not an open provider network. However, MCOs are contractually required to contract with providers for

new recipients who require continuity of care with their present provider. They are also required to cover

services for specialists who offer a unique specialty or area of expertise not available within the network,

such as a “center of excellence”. MCOs must also have adequate providers who can meet the recipient’s

needs. Therefore, MCOs must also allow for out of network providers when there are no equivalent

contracted providers available within the network. The provider enrollment process for the State and for

MCOs does not apply different standards between M/S and MH/SUD providers.

With the exception of limited MCO pharmacy services (addressed below), neither the State nor the

contracted MCOs apply requirements for the completion of a particular service prior to approval for

another. This process is commonly referred to as “step therapy”. Evidentiary standards are utilized to

determine what service is medically appropriate based on national care guidelines. This process may

resemble step therapy at times, but evidentiary guidelines are case by case, taking multiple client specific

factors into account to determine the most appropriate plan of care. Any of the guideline

recommendations may be overridden if determined medically necessary by providers or the MCO/FFS

medical director. Each provider is entitled to speak with the medical director regarding a negative

decision. This affords the provider the opportunity to provide evidentiary standards or new clinical

information that may result in a revised decision. This process utilizing physician interaction and

evidentiary standards are applied evenly across M/S and MH/SUD services and are not applied more

stringently for MH/SUD.

Category specific NQTLs are identified and addressed below. With only minimal time periods as an

exception, all M/S services are covered by the managed care plans. For examples of national standards

of care utilized by the managed care plans, and applied to M/S services, please see attached appendices.

OUTPATIENT BH/SUD

Parity allows states to apply “soft limits” which are benefit limits that allow for an individual to exceed

numerical limits for M/S or MH/SUD benefits on the basis of medical necessity. These benefits are

considered to be an NQTL. Mental health partial care has an example of a soft limit and is listed under

the “outpatient” category of service. The MH partial care benefit is a psychiatric day care program limited

to 5 hours a day, 25 hours a week. This limit was imposed based on nationally accepted standards of care

and recognition of an individual’s limited ability to participate in active therapy beyond five hours a day.

However, if determined medically necessary, services can be authorized to exceed the program limits.

This limitation does not exceed the M/S Outpatient limit imposed on medical day care which is also 5

hours a day, 5 days a week.

There are two other soft limits utilized for BH/SUD services; the American Society of Addiction Medicine

(ASAM) criteria and Pre-Admission Screening and Resident Review (PASARR) criteria. ASAM is a set of

nationally recognized criteria developed to provide outcome oriented and results-based care in the

treatment of SUD. The M/S equivalent would be Milliman Care Guidelines (MCG) used to evaluate

necessity for outpatient M/S services such as physical therapy. PASARR is an advocacy program mandated

by CMS to ensure that nursing home applicants and residents with mental illness and

intellectual/developmental disabilities are appropriately placed and receive necessary services to meet

their needs. Neither is to be utilized to limit medically necessary services based on financial or cost-based

rationale. MCOs may not impose any Non-Quantitative Treatment Limitations (NQTLs) on MH/SUD

services in the inpatient classification beyond the utilization of the American Society of Addiction

Medicine (ASAM) criteria or the Pre-Admission Screening and Resident Review (PASARR) criteria

authorized and required in the State Plan.

All SUD services provided by independent clinics or outpatient hospital programs, including MCO and FFS

covered services, must meet ASAM criteria to ensure they are providing the appropriate level of care.

These services include SUD partial care, Intensive Out-Patient services (IOP), Medically Assisted Treatment

(MAT), short term rehabilitation and non-acute detoxification. Services that are determined to meet the

appropriate level of care are given an authorization number which will allow the provider to bill for the

service. Authorization numbers are an essential component of utilizing ASAM criteria as they ensure that

the recipient was evaluated by the State (or a state contracted entity) and determined clinically

appropriate for the service being billed. ASAM criteria is unique to SUD services, however, an equivalent

practice would be authorization of physical therapy services. As long as the individual is making progress

toward their goals, the authorization will continue. The process is clinically driven. Neither prior

authorization is used for length of stay. There are no length-of-stay limits for BH/SUD or M/S services as

long as the therapy is determined medically necessary.

Several SUD services have soft limits beyond the use of ASAM criteria. Outpatient psychotherapy MH/SUD

services provided by independent practitioners or independent clinics (including Federally Qualified

Health Centers (FQHC)) do not require any authorization. These services include initial assessments as

well as individual, group or family psychotherapy. Providers are required to ensure the service provided

is medically appropriate. These services are limited to one service modality (individual, group or family)

per day up to a total of five services per week. This limit is based on nationally recognized practice

standards. If an individual requires more frequent or more intensive service, these limits may be

overridden. However, exceeding these limits indicate individuals should be reassessed under ASAM

criteria and would likely require a higher level of care.

Outpatient mental health programs such as partial care and Community Support Services (CSS) utilize

prior authorization to ensure that a completed individual rehabilitation plan is properly completed and

signed in addition to medical necessity. Authorization is not used to limit admission or continuation of

medically necessary services. This practice was necessitated by failure of the provider types to complete

an appropriate treatment plan. A proper treatment plan is essential to provide quality, patient focused

services to these mental health services. This is a unique use of prior authorization limited to BH/SUD.

While M/S rehab services require prior authorization, that authorization is based on medical necessity

only and not the successful completion of treatment planning prior to the provision of a service.

Outpatient IOP SUD partial care services also have additional soft limits. IOP is defined as a bundled

service requiring 3 hours of therapy per day, 3 days per week. While IOP is a defined service, services

provided within that definition can be provided in additional quantities if medically necessary. Similarly,

SUD partial care is a bundled service requiring 20 hours of psychoeducational therapy per week. Services

can be provided in addition to the services included in the description of partial care. Again, if there is a

need for additional services, ASAM criteria may indicate a higher level of service is required. The soft limit

associated with SUD partial care is equivalent to the limit imposed on medical day care in the outpatient

M/S category. As the NQTLs meet the definition of a soft limit and the identified limits on outpatient

MH/SUD services do not require any processes, strategies, evidentiary standards or other factors that are

applied more stringently than, the processes, strategies, evidentiary standards, or other factors used in

applying the NQTL to M/S benefits in the outpatient M/S classification, Outpatient MH/SUD services are

compliant with the parity requirements in MHPAEA.

INPATIENT MH/SUD

All inpatient mental health and SUD inpatient admissions are now covered by managed care for all

managed care members. MCOs may not impose prior authorization on any emergent mental health

admission. Concurrent review is allowable. Those who are FFS do not require prior authorization if in

state and are still required to meet medical necessity criteria determined through concurrent review. This

applies to M/S and BH/SUD inpatient hospitalization and short term rehabilitation. FFS providers self-

attest that they are providing utilization review of Medicaid clients and they are sampled throughout the

year by a contracted vendor to ensure compliance. Managed care plans provide ongoing utilization

reviews to prevent fraud and abuse as well as to ensure appropriate utilization to control cost while

ensuring appropriate care. Services beyond the recommendations of the approved guideline criteria, New

Jersey policy or accepted industry guidelines may be approved as long as documentation supports that

decision.

For both M/S and mental health admissions, medical necessity may be determined by utilizing Milliman

criteria. Inpatient substance use disorder follows ASAM criteria. Both are a nationally recognized set of

best practice guidelines utilized to ensure medical necessity and appropriateness of treatment. Managed

care plans provide ongoing utilization reviews to prevent fraud and abuse. In addition, utilization review

ensures appropriate utilization, controls cost and ensures appropriate care. The use of Milliman criteria

and ASAM criteria represent soft NQTL limits since services can be extended beyond criteria guidelines.

Both clinical management criteria are utilized by MCOs and the State equally for M/S inpatient and

BH/SUD inpatient services. These services do not require any processes, strategies, evidentiary standards

or other factors that are applied more stringently than, the processes, strategies, evidentiary standards,

or other factors used in applying the NQTL to M/S inpatient benefits.

Beyond acute care facilities, MH/SUD inpatient services include admissions to a Psychiatric Residential

Treatment Facility (PRTF) for children up to 21 years of age, Adult Mental Health Rehabilitation (AMHR),

admissions to a short term SUD rehabilitation facility or admission for non-acute detoxification. PRTF and

AMHR services currently do not require authorization under FFS. AMHR under an MCO does require

authorization based on the presence of a mental health diagnosis and the regulatory requirements for

this program. MCOs utilize this authorization to ensure fiduciary appropriateness and to evaluate

individuals for less restrictive services in the community. All facility based SUD inpatient services that are

FFS covered are no longer subject to the Institution for Mental Diseases (IMD) exclusion. These services

have been added to the continuum of SUD services available under ASAM guidelines. Short term

rehabilitation and non-acute detoxification are now authorized when determined appropriate by ASAM

criteria. This is equivalent to M/S authorization for subacute rehabilitation services which are provided

without limit for as long as medically necessary. There are no associated day or unit limits for any of these

services. There are no processes, strategies, evidentiary standards or other factors applied more

stringently than equivalent services in inpatient M/S.

All of the identified NQTLs meet the definition of a soft limit and the identified limits on inpatient MH/SUD

services may be exceeded if medically necessary. Therefore, since none of the identified NQTLs require

any processes, strategies, evidentiary standards or other factors that are applied more stringently than,

the processes, strategies, evidentiary standards, or other factors used when applying the NQTL to M/S

benefits in the inpatient M/S classification, this category of service meets the Parity standard established

by MHPAEA.

Pharmacy BH/SUD

All pharmaceutical products provided through a specialty care or traditional pharmacy, are covered by

MCOs for all populations in NJ FamilyCare. Contracted managed care plans utilize a preferred drug

formulary that ensures access to all drug classes. Certain drugs routinely require prior authorization

including those for the treatment of addiction. The requirement for prior authorization is based on

utilization, safety and the Drug Utilization Review Board (DURB) recommendations. These

recommendations ensure safe and appropriate usage of certain drug classes. The State DURB program

and all its managed care partners have established effective quality assurance measures and systems to

reduce medication errors and adverse drug reactions while improving medication utilization.

Managed care plans should not require the completion of a course of action or failure of another

treatment plan (step therapy) before approving a service for mental health or SUD treatments.

Pharmaceutical services are covered by the MCO for all population groups for both M/S and BH/SUD

services. Managed care entities utilize step therapy when there are several different drugs available on

the Preferred Drug List (PDL) for treating a particular medical condition. A step therapy guideline that is

designed to encourage the use of therapeutically-equivalent, lower-cost alternatives (first-line therapy)

before “stepping up” to more expensive alternatives is permissible if medically appropriate. For

commonly prescribed drugs, the adjudication process may systematically assume a failed treatment based

on previous claims history. This automated process reduces the need for prior authorization requests. To

see how plans apply Step Therapy (ST) protocols, please refer to the attached appendices.

1) Step Therapy (ST) protocols specifically indicate the quantity and name(s) of the preferred

alternative drug(s) that must be tried and failed within a designated time period.

2) At point-of-sale, claims history is reviewed electronically for first-line therapy. If the member has

met the ST criteria, they will not be subject to the Drug Evaluation Review (“DER”) process and

will receive the ST medication.

3) Requests for exceptions to drugs listed on the PDL requiring ST shall be reviewed for approval.

NJ FamilyCare MCOs rely on ST and do not have prescription “tiers”. The use of tiers is commonly used in

commercial plans as a way for MCOs to separate the drugs they cover within classes based on safety and

cost. Generally, secondary tiers require higher copayment amounts for prescription drugs in addition to

the need for prior authorization. NJ FamilyCare does not allow copayments. Therefore, the MCOs rely on

Step therapy. If a prescription for mental health drugs has not met the fail requirements, or the prescriber

wants to bypass the lower step drug(s), a prior authorization is required. As per an executive order,

substance use medication assisted treatment may not be prior authorized with the exception of non-

formulary medications. The prescriber must contact the MCO and provide the required information

supporting a non-formulary drug. If the correct information is received, the MCO has 24 hours to make a

decision. If the decision supports the prescriber, the authorization is given and the beneficiary receives

their drug. If the decision does not, the prescriber may prescribe the alternative in formulary medication.

These decisions are required to be based on medical necessity. However, ST is not applied any more

stringently for BH/SUD than it is for M/S prescriptions. All adverse determinations are appealable based

on best practice guidelines and medical necessity. All prescribers have the right to call and speak with the

medical director at the plan responsible for the negative decision. If unsuccessful, they may go to an

outside peer for an independent decision.

Managed Care providers use this utilization management tool for drugs that have a high potential for

inappropriate use. Step therapy is essential to maintain our recipients’ safety and health. To ensure step

therapy protocol remains current, these protocols are developed and reviewed at least annually. They

indicate the criteria that must be met in order for the drug to be authorized (e.g., specific diagnoses, lab

values, trial and failure of alternative drug(s), allergic reaction to preferred product, etc.).

Pharmacy services contain several measures beyond step therapy which include prior authorization.

Authorization for certain pharmaceutical products ensures that providers comply with pharmacy practice

standards, drug utilization review, internal medication error identification systems, medical therapy

management programs, and pharmacy and therapeutics committee recommendations. This helps to

ensure that recipients receive safe, high-quality, cost-effective pharmaceutical therapy. All prior

authorizations, requirements, and edit restrictions can be overridden by the State or MCO pharmacy

department staff once medical necessity is established and safety is assured. Therefore this NQTL is a soft

limit which is applied equally for M/S and BH/SUD pharmaceutical services. There is no dollar or quantity

limit and usage can be extended beyond DURB limits if clinically indicated. Therefore, this category of

service meets the parity standard established by MHPAEA.

Emergency BH/SUD

Emergency services provided for diagnoses defined as a BH/SUD service do not have any prior

authorization or service limits. There are no NQTLs, financial requirements or service limits on any

BH/SUD services other than transportation in the BH/SUD Emergency category. For transportation,

authorization is used to determine if the transport is emergent or non-emergent. This is the same

requirement as for M/S services. Emergent transportation is the responsibility of the MCO and non-

emergency transportation is the responsibility of a contracted broker. Prior authorization is used strictly

to ensure proper billing to the correct payer. There is no service limitation. Emergency services in an

emergency department are evaluated for medical necessity for billing purposes only. The Emergency

Medical Treatment and Labor Act (EMTALA) requires that emergency screening and stabilization services

cannot be denied to anyone who reasonably thinks their condition is potentially life threatening. While

services are screened for medical appropriateness, the client is not assessed a copayment if the service

does not meet an emergency level of care. Therefore, there are no identified financial or service limits in

MH/SUD Emergency. All services are applied equally among M/S emergency and BH/SUD emergency

categories. Therefore, this category meets parity requirements in MHPEA.

Conclusion:

NJ FamilyCare meets parity in each of the four required categories listed under BH/SUD. No MH/SUD

service requires any processes, strategies, evidentiary standards or other factors that are applied more

stringently than those applied to M/S services.

Availability

The criteria for any medical necessity determination for all MH/SUD benefits, whether provided FFS or by

an MCO, will be identified. However, most evidentiary standards and treatment criteria guidelines are

licensed products and reproduction of the criteria is prohibited. However, as outlined in 42 CFR

438.236(c), MCOs are required to provide, upon request, practice guidelines to all affected providers and

recipients. These practice guidelines identify the criteria utilized and explain how the criteria is applied.

As required by 438.915(a) the MCO shall make the criteria for medical necessity determinations available

to enrollees, potential enrollees and providers upon request. Providers of MH/SUD and all Medicaid

recipients are sent an initial denial letter citing the criteria utilized to make the medical necessity

determination. The denial letter includes both levels of appeal available to the recipient.

The State of New Jersey is actively working on making Medicaid (including CHIP) information available to

all interested parties by listing that information online.

NJ FamilyCare Plan A/ABP recipients with mental health and substance use disorder services

covered by their selected managed care plan:

o Managed Long Term Services and Supports (MLTSS) recipients

o Division of Developmental Disabilities (DDD) involved recipients

o Fully Integrated Dual Eligible Special Needs Plans (FIDE SNP) recipients

All NJ FamilyCare plan A/ABP mental health and substance use disorder benefits are covered by

managed care under the NJ State Plan for each classification below. No mental health or SUD benefits

were added to the Managed Care Plan (MCP) benefit package to meet the requirement in 42 CFR

438.910(b)(2). Inpatient psychiatric hospitalizations may be provided in an Institution of Mental Disease

(IMD) as an “in lieu of” service.

MCOs are responsible to provide any medically necessary service to any individuals under the age of 21

that is identified during an EPSDT evaluation.

Definitions for the Purposes of Parity Analysis

Mental Health (MH)- Those conditions listed in ICD-10-CM, Chapter 5 with the exception of subchapter

1, “Mental Disorders due to know physiological conditions”.

Substance Use Disorder SUD-a subset of mental health conditions listed in ICD-10-chapter 5 and

identified with the diagnosis codes F10-F19, which identify conditions in which the use of one or more

substances leads to a clinically significant impairment.

Medical and Surgical benefits- those services associated with the diagnosis and treatment of Medical

Surgical conditions listed in ICD-10-CM, Chapters 1-4, Chapters 5 subchapter 1 and chapters 6 through

20.

Standards Used for the Classification of Benefits

Inpatient: All covered services or items provided to a beneficiary when a physician has written an order

for admission to a facility. Those services provided in a facility may be for MH and/or SUD treatment as

well as for Medical/Surgical services as defined above under “Definitions for the Purposes of Parity

Analysis”

Outpatient: All covered services or items that are provided to a beneficiary in a setting that does not

require a physician’s order for admission and do not meet the definition of emergency care. Outpatient

MH/SUD services are those services provided for those conditions listed in ICD-10-CM Chapter 5 (with

the exception of subchapter 1) while Medical/Surgical services are those services associated with the

diagnosis and treatment of those conditions listed in ICD-10-CM, Chapters 1-4, Chapter 5 (subchapter 1)

and Chapters 6 through 20.

Emergency Care: All covered services or items delivered in an emergency department (ED) setting or to

stabilize an emergency/crisis, other than in an inpatient setting. Those services delivered for treatment,

stabilization or diagnosis of a MH/SUD as defined in the “Definitions for Purposes of Parity Analysis”

above shall be considered emergency care for the treatment MH/SUD. Those services provided for the

treatment, stabilization or diagnosis of a medical or surgical service as defined above in “definitions for

Purposes of Parity Analysis” shall be considered emergency care for medical and surgical benefit.

Pharmacy: Durable medical equipment and covered medications, drugs and associated supplies that

require a prescription, and services delivered by a pharmacist who works in a free-standing pharmacy.

Those medications, drugs and associated supplies used for the treatment of a condition listed in ICD-10-

CM Chapter 5, with the exception of subchapter 1) shall be applied to and considered MH/SUD. Those

medications, drugs and associated supplies used for the treatment of a condition listed in ICD-10-CM

Chapters 1-4, Chapter 5 subchapter 1, and Chapters 6-20 shall be applied to and considered

medical/surgical services.

Aggregate lifetime limits, Annual Dollar Limits and financial requirements

a) MCOs may not impose an aggregate lifetime dollar limit on any MH/SUD benefit.

b) MCOs may not impose an annual dollar limit on any MH/SUD benefit.

c) MCOs may not impose any financial requirements to any MH/SUD benefits in the inpatient

classification.

d) MCOs may not impose any financial requirements to any MH/SUD benefits in the outpatient

classification.

e) MCOs may not impose any financial requirements to any MH/SUD benefits in the emergency

care classification.

f) MCOs may not impose any financial requirements to any MH/SUD benefits in the pharmacy

classification.

Quantitative Treatment Limitations

a) MCOs may not impose any quantitative treatment limitations to MH/SUD benefits in the inpatient

classification.

b) MCOs may not impose any quantitative treatment limitations to MH/SUD benefits in the outpatient

classification.

c) MCOs may not impose any quantitative treatment limitations to MH/SUD benefits in the

emergency care classification.

d) MCOs may not impose any quantitative treatment limitations to MH/SUD benefits in the pharmacy

classification.

e) MCOs may not implement different tiers of prescription drug benefits.

Non-Quantitative Treatment Limitations

a) MCOs may not impose any Non-Quantitative Treatment Limitations (NQTLs) on MH/SUD

services in the inpatient classification beyond the utilization of the American Society of

Addiction Medicine (ASAM) criteria or the nationally accepted medical criteria they have

identified on their health plan’s website. ASAM is a set of nationally recognized criteria

developed to provide outcome oriented and results-based care in the treatment of SUD and

is required for use by the health plan in contract language. Health plans are also required to

follow state PASAAR criteria which determines if residents with mental illness and

intellectual/developmental disabilities are appropriate to be placed in long term care and able

to receive and benefit from necessary services intended to meet their needs. No medical

criteria is to be utilized to limit medically necessary services based on financial or cost-based

rationale.

b) MCOs may not impose any Non-Quantitative Treatment Limitations (NQTLs) beyond prior

authorization on MH/SUD services in the outpatient classification. MCOs must follow those

limits in the State Plan/Regulations or ASAM criteria. Physician and outpatient services have

regulatory limits in place that are based on established practice models and used to limit

billing errors and limit fraud and abuse. All limits can be overridden if medical necessity is

established. All prior authorizations are based on clinical necessity and are not based on

fiscal limitations.

c) MCOs may not impose any Non-Quantitative Treatment Limitations (NQTLs) on MH/SUD

services in the emergency care classification. As per contract language, MCOs cannot

impose a prior authorization on emergency services.

d) MCOs may not impose any Non-Quantitative Treatment Limitations (NQTLs) on MH/SUD

services in the pharmacy classification beyond step therapy and prior authorization limits

utilized to ensure safety and care that is clinically appropriate and based on nationally

recognized guidelines. All pharmacy services are available and prior authorization decisions

and step therapy requirements can be overridden if medically necessary. Providers can

appeal directly to the pharmacy unit or medical director at the MCO in addition to the required

appeals and grievance requirements.

Benefit Type

Inpatient

Outpatient

Prescription

Drugs

Emergency Care

- Surgery

(established

medic al c riteria)

- Anesthesia

- Medic al/Surgic al

bed (medical

criteria)

- Medication

administered

during the

admission

- Lab

- Radiology

- Ac ute medic al

detox (ASAM

c riteria)

- Short term rehab

(medic al c riteria)

- Custodial

Nursing (PAS)

- Phys ic ian vis it

urgent

- Phys ic ian w ell

visit (limits)

- gyn/obstetrics

Doulas- no PA

- Outpatient

surgical center and

endoscopy (auth)

- optometry- limits

- Home-based

skilled nursing

(medic al c riteria)

- home based rehab

and respiratory tx

(medic al c riteria)

- Home infusion

Prior authorized

- PDN-(tool with

auth)

- PT/OT/ST (auth)

- Lab

- Radiology (some

services authed)

- Personal care

provided in the

beneficiary’s home

(Unit limit, PA)

- Medical day care

(limit units per day

per week, PA)

- Subacute

acute rehab

services (Criteria)

- assisted living

(authorized)

- group homes

(DCP&P)

- Opioid Overdose

Recovery Program

(no PA)

Lactation

consultants

- Generic and

name brand

medications

- Narcotic meds

(may require prior

auth.)

- Prescription

medication

required prior to a

radiology study

- Nic otine

reduction therapy

- Hep C T x ( PA)

- Prosthetics and

Orthotics (PA)

- Hearing aids

(PA)

- DME supply

(limits and PA for

beds, wheelchairs,

pumps, lifts,

standers, molded

braces, vents,

incontinence

products).

Breast pumps- no

- eyewear/contacts-

(limits)

- Ambulance/ALS

- Air

ambulance/SCT

(authorized)

- Consultation

delivered in an ED

- Medic ations

administered

during an ED visit

- Lab

- Radiology

provided in an ED

- bedside surgical

Benefit Type

MH/SUD

Inpatient

- Psyc hiatric

hospitalization

(medic al c riteria)

- PRTF

- Psychotropic

medication

administered in

hospital

- Short term SUD

rehab ( ASAM)

- Long term SUD

rehab ( ASAM)

- residential

w ithdraw al

management

(ASAM)

Outpatient

- MH psychiatrist

visit

- SUD physician

visit

- MH

Psychotherapy

(limits)

- OP MH c linic

psychotherapy

(limits)

- Partial care/PH

(PA w ith limits

units per day/wk)

- I OP (ASAM)

- MAT (no PA)

- Non-acute detox

ambulatory

(ASAM)

- OP SUD

psychotherapy (no

PA)

- AMHR group

homes

- PACT/ICMS

- Rehabilitation

services

- Peer support

(children PA)

Care management

(no PA)

Prescription

Drugs

- Generic and

name brand

medications (e.g.,

SSRIs,

antipsychotics)

- Vivitrol (No PA)

- Suboxone

-Sublocade (No

PA)

- Nic otine

reduction therapy

(limited PA)

Emergency Care

- Crisis

stabilization (FFS)

- Psychotropic

medication

administered in an

- mobile c risis

NJ FamilyCare Plan A CHIP Pregnant Women recipients with mental health and substance use

disorder services covered by FFS and M/S services by their selected managed care plan

All NJ FamilyCare plan A CHIP Pregnant women mental health and substance use disorder benefits,

other than acute hospital services, are covered by FFS Medicaid under the NJ State Plan for each

classification below. Inpatient psychiatric and acute substance abuse detoxification are the responsibility

of the MCO. No mental health or SUD benefits were added to the Managed Care Plan (MCP) benefit

package to meet the requirement in 42 CFR 438.910(b)(2). Inpatient psychiatric hospitalizations may be

provided in an Institution of Mental Disease (IMD) as an “in lieu of” service.

MCOs and FFS are responsible to provide any medically necessary service to any individuals under the

age of 21 that is identified during an EPSDT evaluation.

Definitions for the Purposes of Parity Analysi s