(Aug. 19, 2026) – The U.S. Department of Health and Human Services Office of Inspector General recently issued an audit finding Kansas did not adequately ensure its three KanCare managed care organizations complied with federal mental health and substance use disorder parity requirements related to prior authorization.

The audit examined MCO practices during calendar year 2023 and found none of the three MCOs completed or provided the state with a complete analysis demonstrating that prior authorization requirements for mental health and substance use disorder services were no more restrictive than those for medical and surgical services.

OIG also found that, for outpatient out-of-network services, one MCO denied prior authorization requests for mental health and substance use disorder services at a higher rate than for comparable medical and surgical services. OIG identified potential data reliability issues at another MCO.

According to OIG, Kansas did not provide sufficient guidance to MCOs on conducting parity analyses and lacked adequate policies and procedures to monitor compliance. OIG cautioned these shortcomings may have limited access to behavioral health services and delayed needed treatment.

OIG recommended Kansas strengthen its oversight of MCO parity analyses and supporting data, provide more detailed instructions to MCOs, and implement policies and procedures to improve ongoing monitoring. The State of Kansas has agreed with all three recommendations, and KDHE recently noted that it previously made adjustments in KanCare 3.0 and will have further conversations with the MCOs to address these findings.

KHA is reviewing the findings and seeking feedback from member hospitals on their experiences with MCO prior authorization requirements for behavioral health services. Please share any feedback
with Jaron Caffrey or Shannan Flach.