Medicaid Appeals Involving LME/MCOs

Table of Contents

If you receive Medicaid services, you have the right to appeal any denial, reduction, suspension, or termination of services. In North Carolina, Local Management Entities/Managed Care Organizations (LME/MCOs) administer behavioral health services. They decide what services you can have. You can appeal the LME/MCO’s decision to do any of the following:

  • Stop providing a service that you have been receiving;
  • Cut the number of hours or units of the service you get;
  • Deny a request for services; or
  • Deny a request for a home modification or assistive

If you believe the service you requested is medically necessary, you should appeal the LME/MCO’s decision. This guide provides step-by-step instructions for this process.

What is a Medicaid appeal

The Medicaid appeal process is how you fight a denial or reduction of services. You can make an appeal with or without an attorney. Although an attorney can be helpful, you can be successful in a Medicaid appeal on your own or with the help of a trusted relative or friend.

When can I appeal

When the LME/MCO takes an “action,” you have the right to appeal. An action generally relates to services.

The following are examples of actions an LME/MCO may take:

  • Deny or terminate a service (say no to your request);
  • Reduce or suspend a service (cut back on the number of hours or units of a service you receive); or
  • Give limited authorization for a service (approve the service, but only for a certain number of weeks or months).

In these cases, you have the right to appeal the LME/MCO’s action.

Terms you need to know

Local Management Entity/Managed Care Organization (LME/MCO) – The State of North Carolina pays LME/MCOs to manage its behavioral health services.

These are the LME/MCOs’ responsibilities:

  • Building and managing a network of service providers
  • Providing care coordination to help the people they serve request appropriate services
  • Authorizing or denying requests for services
  • Paying providers for services

North Carolina has six LME/MCOs:

  • Alliance Health
  • Eastpointe
  • Partners Health Management
  • Sandhills Center
  • Trillium Health Resources
  • Vaya Health

Behavioral Health Services – This term refers to all services for mental health, developmental disabilities, and substance abuse.

LME/MCOs manage behavioral health services that are paid for by the State and by Medicaid.

5 Steps to a Medicaid Appeal

When you appeal the LME/MCO’s action, you will need to show that the service is a medical need. Medicaid only provides services that are considered medically necessary.

The federal government defines medical need as “health care services or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.”

Step 1: The Notice

The Notice must say why the service was denied or reduced. This explanation is called the clinical rationale. The clinical rationale should explain the medical reason why the LME/MCO did not approve the service. However, you will have to call the LME/MCO to get the full clinical rationale. The number to call is on the notice.

The LME/MCO will send you a Notice saying that it has denied your request for a service or a home modification. The LME/MCO must also send you a Notice if it has decided to stop providing a service you currently get, or it is cutting the number of hours of a service you receive.  You have 60 days to appeal this denial to the LME/MCO.

The Notice should also include:

  • The date when the service will end or change (if you receive the service now)
  • Information about how to appeal the decision
  • Contact information for Legal Aid of North Carolina or other legal services groups
  • A Reconsideration Request Form

You have 60 days from the date on the notice (not 60 days from the date you receive the notice) to submit the Reconsideration Request Form to the LME/MCO.


The grievance process is for complaints that do not involve an “action” (a denial, reduction, suspension, or termination of services). For example, you can file a grievance if you are not happy with the quality of care or services you are getting either from the LME/MCO itself, such as care coordination, or from your provider agency.

Filing grievances is important. The State holds LME/MCOs accountable for customer satisfaction. By filing a grievance, you let the State and the LME/MCO know it is not doing a good job and how the LME/MCO needs to improve.

LME/MCOs must respond to your grievance in 30 days.

Step 2: Reconsideration by the LME/MCO

“Reconsideration” is a required step in the appeal process. When you submit your Reconsideration Request Form, the LME/MCO must take a second look at your request. Someone who was not involved in the original decision to deny or reduce the service will review your Reconsideration request.

Reconsideration is not a formal proceeding like the hearing that comes later in the appeal process, but you can give the reviewer new information to consider. For example, you can give the LME/MCO a letter from your doctor explaining why the service you asked for is medically necessary. You can also correct misinformation.

The LME/MCO must complete the Reconsideration process within 30 days of when you submitted the Reconsideration Request Form but a decision is typically issued within a couple of weeks.

Sometimes, 30 days is too long—for example, if the life, health, or functional abilities of the person receiving services is in jeopardy.  In that case, you can request an Expedited Reconsideration. The LME/MCO has 3days to act on that request. If it accepts the request, the LME/MCO has another 3 days to do the Reconsideration and give you an answer.

You will get a letter in the mail about the result of the Reconsideration. If the original decision is reversed, congratulations! You can work with your service provider to get the service started or re-started.

If the LME/MCO stands by its original decision, you will need to file an appeal to the Office of Administrative Hearings (OAH).  You have 120 days from the date on the Notice (Reconsideration review decision notice) to file an Appeal Notice with the Office of Administrative Hearings.

You must file the State Fair Hearing Request Form (Appeal Notice) with your LME/MCO and the Office of Administrative Hearings. You file the appeal by mailing or faxing the Appeal Request Form to the address or fax number listed on the form. Faxing may be the easiest way to ensure the appeal is filed properly. Make sure that the information on the request is correct, including your address and preferred phone number and reason for appeal. The beneficiary or the legal guardian must sign the request, even if someone else is helping to represent you at the hearing.

Step 3: Obtain Your Case File

You are entitled to see the information that was used by the LME/MCO to deny your service request as well as other documents in your file. You are entitled to the entire case file at no charge.

The LME/MCO will only want to provide the documents it used to deny your request. However, you should ask for your entire file as it may contain documents that support your request for services. You can get a copy of your case file by contacting the LME/MCO and requesting it.  The denial(s) you received will have information about who to contact to request the file.

At the end of this document is a sample letter of how to request your complete file. In general, we suggest that you request records from the prior three years and that you ask to have those documents be sent to you electronically.

Step 4: Mediation

If you appeal to the Office of Administrative Hearings (OAH), you will be offered the opportunity to have a mediation on your case. Mediation is an informal, voluntary process where you and the LME/MCO will talk out your disagreements. Mediation should take place within 10 days after the Office of Administrative Hearings receives your Notice of Appeal.

You don’t have to participate in mediation but DRNC strongly suggests that you do; it will help you better understand why services were denied.

Mediations are held over the phone and you can have your provider on the phone to help explain why services are needed. You can also present new information that the LME/MCO did not already know about. A neutral mediator will guide the discussion in hopes of reaching a settlement.

A settlement could mean the LME/MCO reverses or adjusts its decision. Another possible outcome is that you and the LME/MCO agree to postpone the appeal so the LME/MCO can collect or review new information.

Even if you and the LME/MCO do not reach a settlement, mediation can be a helpful experience for the following reasons:

  • Both sides can negotiate without fear that any statements will be used against them (The mediation is confidential. Any admission or offer discussed in mediation cannot be brought up during a hearing later by either side.)
  • Both sides can brainstorm about other services that might meet your
  • You will learn more about why the LME/MCO denied or reduced the service and what the LME/MCO will argue at the hearing.

You do not have to agree to the mediation. However, if you tell the LME/MCO you will go the mediation, make sure you are there for the appointment or phone call. If you are not, and you do not have a “good cause” for missing the mediation, your appeal will be dismissed.

You do not have to agree to a settlement in mediation. If no settlement is reached, your appeal continues with an administrative hearing at the Office of Administrative Hearings.

Step 5: The State Fair Hearing

This appeal hearing is called a “State Fair Hearing” or a “Contested Case Hearing.” This is your opportunity to make your case before an Administrative Law Judge. You and the LME/MCO will get to present evidence, including documents and witness testimony. Your goal is to show the judge that there is a medical need for the service you requested.

You will receive a letter by certified mail with your hearing date. The first notice that you receive from Office of Administrative Hearings (OAH) setting the hearing date will be for a “soft” hearing, NOT the actual hearing with witnesses, evidence, etc. During this “soft” hearing, the judge will again ask both parties to try to settle the case. If you can’t settle at this time, OAH will then schedule a full hearing date. They will find a date that works for all parties:  OAH, the LME/MCO, and you.

Even though the first hearing date is usually a “soft” hearing, DRNC suggests you contact the judge’s clerk to confirm that the date in the first notice that you receive is not the actual hearing but just the “soft” hearing. You can contact the clerk at 984-236-1932 to confirm.

If you need more time to prepare for the hearing, or if you have a scheduling conflict, you can ask the judge for a later court date. This is called a continuance. You need to show “good cause” for why you need a continuance. Examples of good cause include:

  • having a scheduled medical procedure or
  • trying to arrange for a witness, like a doctor, to testify at the hearing.

To request a continuance, you must write a letter to the judge and send a copy to the attorney representing the LME/MCO.  Be sure to include your case number on all correspondence with the Office of Administrative Hearings.

The hearing will be by phone unless you request an in-person hearing. If you request an in-person hearing, it will be in the county that contains the headquarters of the LME/MCO. You can request the hearing be in your county of residence if you can show that the enrollee’s condition limits travel.

The LME/MCO must share with you any documents it intends to submit at the hearing. They must send these documents to you in a “reasonable time” before the hearing. How many days qualify as a reasonable time depends on the number of documents. If they send the documents at least 5 days before the hearing, that is considered a reasonable time.  If you have not already requested your (or your child’s) case file, contact the attorney representing the LME/MCO and ask for a copy (see the example letter at the end of this fact sheet for how to request your file).

You have the same obligation to share any documents you want to present at the hearing with the LME/MCO. You will need to mail one copy of your documents to the Office of Administrative Hearings and one copy to the LME/MCO. See the letter with your hearing date for addresses and more information about submitting your documents.

Natural supports for adults with disabilities provided by family members

LME/MCOs cannot require you to volunteer to provide natural support hours to adult beneficiaries. Natural supports are defined as unpaid supports that are provided voluntarily to the individual in lieu of 1915(c) HCBS waiver services and supports. Natural supports may not be compelled. (42 C.F.R. § 441.301(c)(2)(v))(emphasis added).

When developing the individual’s person-centered plan, the team must first identify the needs of the individual and then what natural supports are available. Everything else will be covered by a paid support/service. Do not allow the LME/MCO to tell you when you must provide natural support. You let your team know when and how many hours you are available to provide natural support. It is the LME/MCO’s responsibility to provide for paid supports for the other medically necessary hours. If your availability to provide natural supports changes and you cannot provide the hours that you first agreed to, ask for a revised plan to reflect your availability.

Preparing for mediation and the appeal hearing

It is a good idea to prepare for the mediation as if it were a hearing. These are the keys to being successful:

  • Know your rights
  • Be organized

Remember, your goal is to show that there is a medical need for the service requested.

Steps to take before the mediation or appeal hearing

1. Gather documents

Organize any information or records you have documenting the medical need for the service. If the service was reduced or discontinued in the past and that had a negative effect, gather any documents you have showing that effect.

2. Request documents

You have the right to see all of the information in your file, including any information the LME/MCO used when it made the decision to deny, terminate, or reduce the service. Contact the LME/MCO to request a copy of your entire file (for at least the last 3 years), and not just the documents that the LME/MCO used to support its decision. You want the entire file because there may be documents in the file that justify the services you have been receiving that the LME/MCO now says you no longer need.

3. Share documents

If you are going to mediation, send the mediator any new documents the LME/MCO should see before the mediation. The mediator will give it to the LME/MCO. Get these documents to the mediator several days before the mediation, if possible.

Regarding a hearing at the Office of Administrative Hearings, mail one copy of your documents to the Office of Administrative Hearings and one copy to the LME/MCO. If you share new documents close to the hearing date, the court may postpone the hearing to give the LME/MCO time to review the documents.

4. Invite others

You should invite medical professionals, such as your doctor, to help explain the medical need for the requested Direct care workers and others involved in providing care can also be good witnesses. If they cannot attend the mediation or hearing, they can write a letter explaining the medical need for the service.

5. Read the service definition and Clinical Coverage Policy

Read the Service Definition and Clinical Coverage Clinical Coverage Policies and service definitions describe the criteria and factors evaluated in approving or denying requests for services. You should be familiar with the Clinical Coverage Policy that governs the service you requested. For example, Clinical Coverage Policy 8P governs how Innovations Waiver services are implemented and contains definitions of the services offered under the Waiver.

The State makes Clinical Coverage Policies available on their website.

6. Have a plan

During the mediation (or the “soft” hearing), the LME/MCO may offer to provide some of the services you requested, but not as much as you wanted. This is a settlement offer. Have in mind the number of hours of the service you feel would meet your medical need. If you are willing to settle for fewer hours, you may be able to reach a settlement and avoid a hearing. However, you don’t have to settle. If you feel you need the number of hours originally requested, be prepared to provide evidence of that need at the hearing.

Proving Your Case

You need to present evidence that shows the judge:

  • How the service you asked for is medically necessary
  • The type of service and the amount of hours you need
  • How the service has helped you, or will help
  • How not getting the service will negatively affect your

To prove your case, you will need to present evidence. Evidence can include witness testimony, records, documents, videos or any other items that show the judge you should win.


Witnesses can include anyone who can testify to your medical need for the service. Your treating physician, nurse, aides, case manager, caregivers, direct support workers/staff can be helpful in proving your case. They should be prepared to describe the service requested, how it helps you, how many hours of the service you need, and what the effect of not having the service would be.

Witnesses can testify by phone (even for in-person hearings). You must provide the judge with the phone numbers where your witnesses can be reached before the hearing. Check with your witness to make sure they are available on the day of your hearing. If a witness is only available to testify at a certain time of day, let the judge know that before the hearing date so that they can accommodate that schedule. If one of your witnesses is not available, that may be “good cause” for a requesting a continuance (a later court date).

Records and Documents

Records and Documents that will help the judge understand what the service is and why you need it are essential to proving your case. These may include letters from your doctor, medical records, school records, and information about the service found in clinical coverage policies or elsewhere.

To speed up the process of getting these documents, be selective. For example, you probably do not need your child’s entire school record to prove a need for Community Living and Support services. However, a recent occupational therapy evaluation may be helpful.

New evidence

You can submit evidence regardless of whether you had it before or after the LME/MCO denied your service request and regardless of whether the LME/MCO had a chance to see the evidence before the hearing.  This means that you can present evidence the day of the hearing that you may not have already provided to the LME/MCO prior to the hearing. It is possible that the judge will continue the hearing to give the LME/MCO an opportunity to review the new evidence but the court will still consider this new evidence.

Dos and Don’ts at the Hearing


Call the judge “your honor,” “judge,” “ma’am,” or “sir.”

Call the attorney representing the LME/MCO “Mr.” or “Ms.” and their last name.

Stand up when you talk to the judge. If you cannot stand, tell the judge and ask if you may remain seated.

Ask the judge’s permission when you move around, such as when you want to go toward a witness. (“Your honor, may I approach the witness stand?”)


Do not accuse the witness of lying. You can point out evidence that contradicts the witness’s testimony when it is your turn to question the witness.

Do not interrupt. If you have a question or comment, wait until the witness or attorney is finished speaking.

Do not take things personally. Remember, the attorney and witnesses for the other side are trying to prove their case. They are not attacking you. Do not get upset.

Avoid going off topic

A Medicaid appeal hearing can only address the issue of the denial, suspension, reduction, or termination of services. This is not the time to bring up other issues you have with the LME/MCO or your service provider, or any frustrations/dissatisfaction that you have. In DRNC’s experience, it does not help your case to divert the judge’s attention from the question at hand. It is better to stay focused.

After the hearing

You will receive the Final Notice of Decision, which will have the judge’s decision. The judge will answer these three questions:

  • Did the LME/MCO do something wrong when it denied or changed the service?
  • Did the LME/MCO have a good reason for its decision?
  • Did the LME/MCO follow all laws when it made the decision?

This decision is final and cannot be reversed without a hearing in State Superior Court. You can appeal the Administrative Law Judge’s decision to Superior Court. You have 30 days from the date on the Final Notice of Decision to file a Petition for Judicial Review in the Superior Court in the county where you live. You can appeal your case to Superior Court without an attorney. However, DRNC recommends that you contact an attorney to help you with this process.