1. (1) The procedures in this section apply only to an appeal or request for agency action arising from an action taken by an MCO.

2. (2) Terms in this section are defined as follows:

   1. (a) "Adverse benefit determination" means one of the following actions by an MCO:

      1. (i) the denial or limited authorization of a requested service, including the type and level of service, any requirement for medical necessity, appropriateness, setting, or effectiveness of a covered benefit;
      2. (ii) the reduction, suspension, or termination of a previously authorized service;
      3. (iii) the denial, in whole or in part, of payment for a service;
      4. (iv) the failure to provide a service in a timely manner;
      5. (v) the failure to act within the time frames provided in 42 CFR 438.408(b) (2025);
      6. (vi) the denial of a request by a Medicaid member who is a resident of a rural area with only one MCO to exercise the member's right under 42 CFR 438.52(b)(2)(ii) to obtain services outside of the network;
      7. (vii) the denial of a member's request to dispute a financial liability, including cost sharing or any copayment, premium, deductible, coinsurance, and other member financial liability; or
      8. (viii) the restriction of a Medicaid member who uses services at a frequency or amount that is not medically necessary, in accordance with state utilization guidelines.
   2. (b) "Appeal" means a review by an MCO of an action as defined in this section or a request for the office to review a final decision made by an MCO as a result of the MCO's appeal process.

   3. (c) "Grievance" means an expression of dissatisfaction about any matter other than an adverse benefit determination, including:

      1. (i) the quality of care or services provided and aspects of interpersonal relationships, such as rudeness of a provider or employee or failure to respect the member's rights, regardless of whether remedial action is requested; and
      2. (ii) a member's right to dispute an extension of time proposed by the MCO to make an authorization decision.
   4. (d) "Grievance and appeal system" means the processes the MCO implements to handle an appeal of an action and grievance.
   5. (e) "Party" means the agency, or other person commencing an adjudicative proceeding, any respondent, and any MCO who is or may be obligated to pay a claim or provide a benefit or service to a member.
3. (3) An MCO shall establish a grievance and appeal system in accordance with this rule, 42 CFR 431.200 et seq. and 42 CFR 438.400 et seq. and the MCO's contractual obligations entered into with DIH.
4. (4) The MCO grievance and appeal system shall include a written internal grievance and appeal procedure for an aggrieved person to challenge an action by the MCO.
5. (5) The MCO shall provide to its members and providers written information that explains the grievance and appeal procedure, including a right to request a state fair hearing in accordance with this rule.
6. (6) The MCO's notice of action shall comply with the requirements set forth in Section R410-14-3, 42 CFR 438.402, and 42 CFR 438.404.
7. (7) The MCO's written notice of final decision shall comply with the requirements set forth in 42 CFR 438.408 and include an explanation of the aggrieved person's right to a state fair hearing in accordance with this rule.

8. (8)(a)(i) Unless otherwise stated in this section, an aggrieved party may appeal an MCO final written disposition on an action by requesting a state fair hearing in accordance with this rule.

   1. (ii) The hearing request shall include a copy of the final written notice of the MCO disposition.

   2. (b)(i) An aggrieved person must exhaust the MCO grievance and appeal procedure before requesting a state fair hearing for an action other than the restriction of a Medicaid member. In the case of an MCO that fails to adhere to the notice and timing requirements in 42 CFR 438.400 et seq., the member is considered to have exhausted the MCO's appeals process.

      1. (ii) The hearing request shall include a copy of the final written notice of the MCO decision.
   3. (c) The aggrieved party shall request a hearing within 120 days from the date of the MCO final written notice of the decision.

   4. (d)(i) If an appeal is based on a dispute regarding the payment liability between two or more MCOs, the aggrieved person is not required to exhaust the MCO grievance procedure for each MCO before requesting a state fair hearing under this rule.

      1. (ii) If DIH identifies an MCO that may be liable to pay the claim and did not participate in the underlying grievance procedure, DIH shall send notice to that MCO that the MCO may be subject to liability and of the MCO's right to participate in the state fair hearing.

      2. (iii) If more than one MCO is party to the state fair hearing, DIH shall provide a notice to each party that shall include:

         1. (A) the identity of each party;
         2. (B) the reason for the dispute;
         3. (C) a copy of the hearing request;
         4. (D) a statement specifying that any MCO that did not participate in the underlying MCO grievance and appeal procedure may be subject to payment liability, described in Subsection (8)(d)(ii); and
         5. (E) a statement of the right to participate in the state fair hearing.
   5. (e) DIH may file an answer or other response or position statement in the hearing proceeding at any time so long as it gives notice to other parties no fewer than five days before the hearing. If DIH chooses not to file a response or position statement, DIH does not waive the right to participate in the hearing.

9. (9)(a) If the MCO or state fair hearing presiding officer reverses a decision to deny, limit, or delay services that were not furnished while the appeal was pending, the MCO shall authorize or provide the disputed services promptly and as expeditiously as the member's health condition requires but before 72 hours from the date the MCO receives notice reversing the determination.

   1. (b) If the MCO or state fair hearing presiding officer reverses a decision to deny authorization of services and the member received the disputed services while the appeal was pending, the MCO or DIH shall pay for those services in accordance with state policy and rule.

KEY: Medicaid

Date of Last Change: September 19, 2025

Notice of Continuation: August 12, 2022

Authorizing, and Implemented or Interpreted Law: 26B-1-202(1); 26B-1-204; 63G-4-102