What you need to know about In Lieu of Services?

01/21/2025

What is an In Lieu of Service?

In-lieu-of services are services offered by MCOs that substitute for Medicaid state plan services or settings, as allowed by 42 Code of Federal Regulations (CFR) § 438.3(e)(2).

As allowed by 42 C.F.R § 438.6(e) and 42 C.F.R. § 438.3(e)(2), we provide services in the following HHSC-approved settings in lieu of an acute care inpatient hospital setting:

Inpatient services for acute psychiatric conditions in a freestanding psychiatric hospital for up to 15 calendar days per month for members aged 21-64 only.

Partial Hospitalization Services: Partial Hospitalization Programs may provide services for mental health, substance use disorder, or both. These services resemble highly structured, short-term hospital inpatient programs. The treatment level is more intense than outpatient day treatment or psychosocial rehabilitation. Available for all members.

Intensive Outpatient Services: Intensive outpatient services, also referred to as IOP services are used to treat behavioral health issues that do not require detoxification or 24-hour supervision. IOPs are generally less intensive than PHPs. They may be delivered for mental health, SUD, or both. IOP services are organized non-residential services providing structured group and individual therapy, educational services, and life skills training which consists of at least 10 hours per week for four to 12 weeks, but less than 24 hours per Day. Available for all members 

Prior Authorization process for ILOS:

• Prior Authorization:
  • Prior Authorization is required for inpatient services in an IMD, partial hospitalization and intensive outpatient program. 
  • BCBSTX will follow the service authorization notice requirements described in UMCM 3.21 and will provide written notice to both the provider and the member when in-lieu-of services are authorized, reduced, or denied. All in-lieu-of services require prior authorization and requests may be submitted by phone, fax, or through the Availity portal.
  • All requests for inpatient services in an IMD, partial hospitalization and intensive outpatient services will be reviewed for medical necessity. For Mental Health MCG Guidelines 28^th Edition will be utilized. For Substance Use, ASAM 3^rd Edition will be utilized. 

We will not require members to use in-lieu-of services or settings instead of a covered service or setting.  We may offer members the option of these services or settings when medically appropriate and cost-effective.  Members must agree to receive in-lieu-of services before we authorize the service.  Provider contracts will require the provider to document member choice and consent to receive the ILOS and to provide this documentation to us upon request. 

Submission of Claims

Authorization will be required for claims payment for both PHP and IOP. If an urgent need for BH services, providers will not be penalized for obtaining authorization after initiation of services. 

Claims Codes and Modifiers

BCBSTX chosen procedure and modifier code combinations will be unique to each in-lieu-of service. 

If you have questions or require assistance, please reach out to our Medicaid Provider Network Team at 1-855-212-1615 or email Texas Medicaid Network Department.

The above material is for informational purposes only and is not a substitute for the independent medical judgment of a physician or other health care provider. Physicians and other health care providers are encouraged to use their own medical judgment based upon all available information and the condition of the patient in determining the appropriate course of treatment. References to other third-party sources or organizations are not a representation, warranty or endorsement of such organization. The fact that a service or treatment is described in this material, is not a guarantee that the service or treatment is a covered benefit and members should refer to their certificate of coverage for more details, including benefits, limitations and exclusions. Regardless of benefits, the final decision about any service or treatment is between the member and their health care provider.