Issued: September 30, 2022

What is happening?

North Carolina’s six Local Management Entities/Managed Care Organizations (LME/MCOs) launched the NC Child and Family Improvement Initiative on May 1, 2022, to create a statewide solution to the current pressing challenges of the service delivery system for children and youth.

Building on the early successes of the NC Child and Family Improvement Initiative, the LME/MCOs have established a standardized, statewide rapid access Utilization Management and Review protocol to ensure that children and youth can receive medically necessary residential services without delay. A particular objective of this standardized pass-through benefit is to expedite service options for children and youth.

When will the change take effect?

All six LME/MCOs will implement this standardized pass-through benefit effective October 1, 2022.

How does the change affect providers?

Beginning October 1, 2022, the standardized pass-through benefit will expedite admissions for:

  • Therapeutic Foster Care (TFC)
  • Intensive Alternative Family Treatment (IAFT)
  • Residential Treatment Level II and Level III Programs
  • Level IV Programs and Psychiatric Residential Treatment Facility (PRTF) services for youth ages 14 years and up

How will pass-through authorizations work for each residential service?

Regardless of the level of care, all children and youth should only receive medically necessary treatment that meets clinical coverage policy requirements and is delivered in the least restrictive setting in accordance with applicable laws. All children and youth will be subject to continued stay review for concurrent authorizations, as outlined in each LME/MCO benefit plan.

Children and youth who have completed treatment, accomplished established treatment goals, or who are failing to make progress in treatment will not meet continued stay criteria. All children must have a viable discharge plan ready to execute for step-down upon completion of treatment in these highly restrictive levels of care. A discharge plan for each child must be shared with their LME/MCO to include as a part of the comprehensive transition plan to a safe, stable, least restrictive treatment environment. Each LME/MCO will assign a Care Manager to each child as they complete a planned transition back to the community.

Please see additional details by residential venue below.

Therapeutic Foster Care (TFC) and Intensive Alternative Family Treatment (IAFT)

Children and adolescents who receive an assessment that indicates it is medically necessary to receive TFC or IAFT can receive a pass-through admission to TFC and IAFT programs with an in-network provider for up to 180 days.

Prior authorization is not waived for out-of-state or out-of-network providers. If a member or their guardian chooses an out-of-network or out-of-state provider, that provider must have services approved through the prior authorization process outlined in clinical coverage policy. All TFC and IAFT services are subject to a post-payment clinical review and concurrent authorization following the initial pass-through authorization period. Providers shall submit a notice of admission Treatment Authorization Request/Service Authorization Request (TAR/SAR) to the member’s LME/MCO to initiate the pass-through period within 72 hours of admission.

All children must have a discharge plan developed that includes a step-down plan prior to the end of the pass-through authorization period.

Residential Treatment Level II and Level III Programs

Children and youth who have received an assessment or assessment addendum within 30 days prior to admission that indicates it is medically necessary to receive treatment in a Residential Treatment Level II or Level III Program within the LME/MCO network will have a 120-day pass-through admission. The assessment must be specific to the appropriate level of residential treatment needed to treat the child’s presenting condition.

Prior authorization is not waived for out-of-state or out-of-network providers. If a member or guardian chooses an out-of-network or out-of-state provider, that provider must have services approved through the prior authorization process outlined in clinical coverage policy.

All children must have a discharge plan developed that includes a viable step-down plan prior to the end of the pass-through authorization period.

Providers shall submit a notice of admission TAR/SAR to the member’s LME/MCO to initiate the pass-through period within 72 hours of admission. LME/MCOs cannot support children and youth to remain in this level of care when it is no longer medically necessary; especially if the child is ready to step down or return home to his or her family.

Level IV and Psychiatric Residential Treatment Facility (PRTF)

All children and youth ages 14 years and up will receive a 60-day pass-through admission to Level IV or PRTF level of care for any in-state Level IV Program or PRTF that is in good standing with the NC Department of Health and Human Services. The child must have an assessment prior to admission that specifically recommends Level IV or PRTF as the appropriate level of care. Providers shall submit a notice of admission TAR/SAR to the member’s LME/MCO to initiate the pass-through period within 72 hours of admission. Children who are under age 14 years or any out-of-state or out-of-network requests will still require prior authorization approval before accessing the Level IV or PRTF services.

Additional PRTF Guidance:

  1. All members must have a licensed clinical professional complete a Comprehensive Clinical Assessment (CCA) to determine an accurate diagnosis and the most appropriate course of treatment for the condition. The clinical professional who completes the assessment will determine whether a child needs out of home treatment and the appropriate level of care. The licensed clinical professional will also recommend treatment interventions that will address the behavioral health condition that has led to out of home treatment.
  2. If PRTF treatment is recommended, the Behavioral Health Clinical Home must complete the universal application to send to potential PRTF providers with the completed CCA recommending the level of care, recommended treatment interventions and any other pertinent clinical information.
  3. Once a member aged 14 years and up has been accepted to a PRTF facility for admission, the provider updates the member’s Person-Centered Plan (PCP) to include goals and interventions expected for treatment in a PRTF level of care and as outlined in the CCA. A service order must be completed and signed by a psychiatrist/physician and legal guardian in addition to the person completing the PCP. Sometimes the accepting PRTF program will complete the PCP, and other times the accepting PRTF will require the clinical home to complete the PCP. A discussion must occur to clarify who is doing what task, as the accepting PRTF will typically not sign the service order citing potential conflict of interest.
  4. If a member is under the age of 14 years, the PRTF must obtain authorization from the LME/MCO that certifying medical necessity has been met prior to admission.
  5. If a PRTF is out-of-state, the PRTF provider must first enroll with the NC Medicaid program in NCTracks and complete a single case agreement with the LME/MCO before services can be requested. All out-of-state providers must obtain authorization from the LME/MCO certifying that medical necessity has been met prior to admission.
  6. The Clinical Home must ensure that a Certificate of Need (CON) that has all required signatures is completed for all children under age 18 regardless of pass-through for prior authorization. Each signed CON is only good for two weeks. The Clinical Home-Targeted Case Manager, Family Centered Therapist, High Fidelity Wraparound team, Multi-systemic Therapy provider or Intensive In-Home provider is typically responsible for assisting with CON paperwork to access this level of care.
  7. If the PRTF facility is outside of North Carolina the provider must complete and submit state-required Interstate Compact Placement of Children (ICPC) paperwork to the Interstate Compact in addition to prior authorization. Some facilities require ICPC paperwork to be processed prior to allowing the member to be admitted, so this can cause a delay if not done in a timely manner. ICPC paperwork is NOT a part of the prior authorization process, but it is a part of out-of-state PRTF processes required by NCDHHS. Prior authorization must be completed once the ICPC process is complete.
  8. For continued stay, the PRTF provider must submit a Treatment Authorization Request (TAR)/Service Authorization Request (SAR) along with the following required documentation: CCA recommending PRTF level of care, PCP and PCP update with signed service order, and CON. The same request and documentation are required for youth under age 14 years, out-of-network, and out-of-state requests, which are all excluded from the pass-through.
  9. Specialized or enhanced PRTF programs are excluded from the pass-through benefit and providers must submit a TAR/SAR with applicable documentation for all dates of service.

Who should providers contact with questions?

If you have questions, please contact us at Umquestions@partnersbhm.org or by phone at

MHSU UM Workgroup: 704-842-6436.

What is the NC Child and Family Improvement Initiative?

North Carolina’s six LME/MCOs launched the NC Child and Family Improvement Initiative on May 1, 2022, to create a statewide solution to the current pressing challenges of the service delivery system for children and youth in foster care. The goal of the Initiative is to implement a statewide model to ensure seamless access to quality care for youth and families served by the child welfare system regardless of where they live in North Carolina.

To learn more about the NC Child and Family Improvement Initiative, click here.