Medicaid Rules 132 new definition of Medically Necessary

Medical Necessity or Medically Necessary − An LPHA has determined through assessment that a client has a diagnosis of mental illness or serious emotional disorder as defined in the ICD-9-CM or DSM-IV that has resulted in a significant impairment in the client's level of functioning in at least one major life functional area and needs one or more mental health services that are identified in the Mental Health Assessment and ITP to stabilize the client's functioning, or to restore or rehabilitate the client to a maximum level of life functioning.  For clients under the age of 21, medical necessity or medically necessary may additionally mean that the client has more than one documented criteria of a mental illness or serious emotional disorder as listed in the DSM-IV that is likely to impact the client's level of role functioning across critical life areas and needs a Medicaid reimbursable Part 132 mental health service recommended by the completion of an approved Healthy Kids screen by a physician or the completion of a Mental Health Assessment and included in an ITP that could not have been omitted without adversely affecting the client's level of functioning.
http://www.ilga.gov/commission/jcar/admincode/059/059001320A00250R.html