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In Lieu of Services Policy

In Lieu of Services (ILOS) are services that have been approved by NCDHHS to be medically appropriate and cost-effective substitutes for covered services or setting under the State Medicaid Plan.

In Lieu of Services (ILOS) are services that have been approved by the NC Department of Health and Human Services (NCDHHS) to be medically appropriate and cost-effective substitutes for covered services or setting under the State Medicaid Plan.

This policy ensures that In Lieu of Services made available to Alliance members are developed, approved, deployed, changed, terminated and administered according to NCDHHS requirements.

Use of ILOS

Alliance may offer ILOS, but members are not required to use an ILOS. Alliance will not offer any ILOS without written approval from NCDHHS, including ILOS that have been previously approved by NCDHHS.

Approval of ILOS

Before offering ILOS services, Alliance will submit an ILOS Service Request Form for approval by NCDHHS. The same form will be submitted when Alliance wants to offer an ILOS previously approved by NCDHHS for another health plan.

Changes or Removal of ILOS from the Alliance Benefit Plan

Alliance will not change, reduce or remove ILOS without written approval from NCDHHS during a contract year.

Alliance will notify members of a change, removal, or reduction of ILOS by mail at least 30 days before the effective date of the change.

Alliance will update all marketing and educational material to reflect approved changes to ILOS at least 30 days before the effective date of the change.

Alliance monitors the cost-effectiveness of each approved ILOS by tracking utilization and expenditures at least quarterly or more frequently if overutilization or overspending is identified. ILOS monitoring will also be increased if requested by NCDHHS.

List of Alliance ILOS

In Lieu of Services
ILOS NameRevenue / Procedure CodeDescription / Definition
Child Assertive Community Treatment (Child ACTT)H0040 U5 HA ESTeam‑based, multidisciplinary approach to serve children in their homes, kin‑ship placements, DSS foster homes, or may begin during transition from a more restrictive residential setting.
Behavioral Health Crisis Assessment and Intervention (BHCAI) – Level 5T2016 U5 U6
In‑Home Therapy ServicesH2022 HE U5 / H2022 TS U5 ESChildren and adolescents (ages 3‑20) receive individual & family therapy, parenting and coping strategies due to complex psychosocial situations or multisystem involvement.
Family‑Centered Treatment (FCT) – Level 1H2022 U5 U1 ESEvidence‑based, intensive in‑home treatment for at‑risk children/adolescents & families; promotes permanency and reduces residential/PRTF stays.
Transitional Youth Services (TYS)H2022 U5 ESHome‑ and community‑based outpatient program supporting transition‑age members (16‑21) with mental‑health or substance‑use diagnoses to independent living.
Acute & Sub‑Acute Services – Institute for Mental Disease (IMD)RC 0160 ES24‑hour continuous intensive evaluation & treatment in an IMD for acute/sub‑acute inpatient psychiatric or substance‑use disorders.
High‑Fidelity Wraparound (HFW)H0032 U5 ESIntensive, team‑based, person‑centered service providing coordinated, integrated, family‑driven care for youth/young adults with serious emotional disturbance (SED) and dual diagnoses, at risk of residential placement.
Short‑Term Residential Stabilization (STRS)T2016 TF U5 ESCommunity‑based, comprehensive service for adults with developmental disabilities who choose active habilitation supports to acquire independent‑living skills.
Residential Services – Complex Needs (Children with IDD & co‑occurring MH)H0018 HA ESShort‑term residential treatment for members with primary intellectual/developmental disabilities (ID/DD) and co‑occurring mental‑health diagnosis or significant behavioral characteristics.
  • Use of ILOS
  • Approval of ILOS
  • Changes or Removal of ILOS from the Alliance Benefit Plan
  • List of Alliance ILOS