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Authority for Services in Lieu – 2016 Managed Care Regulations


By Green & Healthy Homes Initiative


The Centers for Medicaid and Medicare Services (CMS) published managed care regulations on April 25, 2016. They provide a way forward for healthy homes projects by leveraging regulations that let managed care organizations pay for services “in lieu of existing state plan services”, so long as specific conditions are met. If they are, managed care organizations can work with their state Medicaid leaders to allow for Federal Financial Participation or matching dollars in the reimbursement of healthy homes services.

Key Takeaways

The managed care regulations provide a path forward by including “services in lieu of state plan services” in the CMS approved contracts between managed care organizations and the state, either directly or as an amendment, and without requiring a specific waiver or State Plan amendment.

Services in lieu of state plan services can be offered if four conditions are met and, if so, they are considered as if they were state plan services. The conditions are:

  1. State determination that the alternative is medically appropriate, cost effective, and are included in the state’s contract with the managed care provider;
  2. Enrollees with the managed care provider cannot be required to participate in the alternate services;
  3. Alternate services are provided at the option of the managed care provider; and
  4. If so, those alternate services are otherwise treated as if they were part of the state plan.

Either contract – between CMS and managed care provider or the managed care provider contract with the provider of “in lieu” services – may be performance based or include performance based elements.

Read the Full Paper: Authority for Services in Lieu – 2016 Managed Care Regulations


Andrew E. Olsen, Green & Healthy Homes Initiative

Ruth Ann Norton, Green & Healthy Homes Initiative

Michael T. McKnight, Green & Healthy Homes Initiative


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