LOCUS vs. ASAM vs. MCG: which medical necessity criteria do behavioral health payers actually use?

What are LOCUS, ASAM, and MCG — and why do payers use different ones?

The three frameworks were built by different organizations for different questions. LOCUS (Level of Care Utilization System) was developed by the American Association for Community Psychiatry to rate adult mental health resource intensity across six levels. The ASAM Criteria were developed by the American Society of Addiction Medicine for substance use and co-occurring disorders, organized around dimensional risk rather than a fixed level map in its newest edition. MCG Behavioral Health Care Guidelines are proprietary criteria published by MCG Health (a Hearst subsidiary) covering mental health, substance use, and medical/surgical utilization review.

Payers pick among them — or combine them — based on the clinical question, any state or contractual mandate, and their utilization management vendor. LOCUS and ASAM are published; MCG is licensed and not publicly posted, so providers see it only through payer portals or a paid subscription. CALOCUS-CASII is the pediatric companion to LOCUS for ages 6-18, and ECSII covers birth through age 5.

Which payers use ASAM Criteria in 2026 — and what changed with the 4th Edition?

ASAM 4th Edition for adults began rolling out in late 2023 and throughout 2024-2025. Optum/UnitedHealthcare adopted it for commercial plans, with adolescent treatment continuing to follow the 3rd Edition (Optum ProviderExpress 4th Edition FAQ). Cigna/Evernorth applies ASAM nationally for substance use reviews (Evernorth Medical Necessity Criteria). Aetna references ASAM for substance use alongside LOCUS/CALOCUS for mental health (Aetna LOCUS/ASAM page). Carelon applies ASAM for SUD in most states and defers to state-mandated versions where required.

The substantive change in the 4th Edition is structural. The older 3rd Edition mapped patients to five discrete levels (1, 2.1, 2.5, 3, 4) based on six assessment dimensions. The 4th Edition reorganizes around dimensional risk profiles and treatment needs, with placement emerging from the risk picture rather than being read off a grid (Optum ASAM 4th Edition Quick Reference Guide). Two documentation implications for PHP/IOP programs:

Progress notes that only cited a “2.5” level of care without the underlying dimensional reasoning will read as underdeveloped against 4th Edition reviewers.
Continuing-stay justification needs to track the specific risks (withdrawal, biomedical, emotional/behavioral, readiness, relapse, recovery environment) that are keeping the patient at PHP/IOP rather than stepping down.

Adolescent programs should continue to document against ASAM 3rd Edition until the 4th Edition adolescent criteria are finalized and adopted.

Which payers use LOCUS or CALOCUS-CASII — and for what levels of care?

Aetna is the clearest commercial example: LOCUS for adults 19+, CALOCUS-CASII for ages 6-18, and ECSII for birth through 5 (Aetna patient-care programs page). Several Medicaid managed care organizations in states that have adopted LOCUS administratively also use it for adult mental health utilization review. Carelon Behavioral Health, which administers mental health benefits for a number of BCBS plans and state Medicaid programs, lists LOCUS and CALOCUS as among its recognized criteria sets depending on the benefit plan (Carelon Medical Necessity Criteria).

LOCUS is a six-level resource-intensity scale: I (Recovery Maintenance) through VI (Medically Managed Residential Services). Partial hospitalization typically corresponds to Level V (Medically Monitored Non-Residential Services); IOP commonly maps to Level IV. A LOCUS score is produced from ratings across six dimensions — risk of harm, functional status, comorbidity, recovery environment, treatment/recovery history, and engagement — which is different language from ASAM’s six dimensions but solves a similar documentation problem: show why the current level of care is the lowest intensity that will work.

Which payers use MCG or InterQual for behavioral health?

Anthem/Elevance publicly announced adoption of MCG Care Guidelines for behavioral health services, with ASAM applied to substance use disorder reviews where state law or member contract requires it (Anthem provider news: MCG Care Guidelines adopted for behavioral health services). Several Medicare Advantage carriers and regional BCBS plans also apply MCG or InterQual as the primary framework for mental health inpatient and PHP/IOP review, though specific vendor choices vary by plan and region and should be verified against each plan’s current provider manual.

Practical points for PHP/IOP programs:

MCG and InterQual are proprietary. Providers do not typically get the full criteria text; they see the portions exposed through the payer’s concurrent-review system. The correct response when a denial cites MCG is to request the specific criterion language and the reviewer’s rationale in writing.
MCG Behavioral Health Care Guidelines are structured around goal-length-of-stay ranges and explicit continued-stay indicators. Progress notes that document measurable movement (or lack of movement) against treatment-plan goals will read more cleanly against MCG than narrative-only notes.
When state law mandates ASAM for substance use, MCG cannot override that requirement.

How do Medicaid and Medicare Advantage differ on criteria?

Medicaidis state-by-state. State Medicaid agencies (and the MCOs they contract with) set the medical necessity framework through the state plan, managed care contract, or a standalone behavioral health bulletin. A meaningful number of states have administratively adopted the ASAM Criteria as the standard for substance use level-of-care determinations, driven in part by the 2024 federal parity rule’s scrutiny of NQTLs. The exact count shifts — in our review for this article in April 2026 we saw roughly thirty states citing ASAM in their Medicaid behavioral health guidance, but that figure is approximate and we recommend confirming the current status in your state’s Medicaid provider manual before relying on it.

Medicare Advantage carriers apply MCG or InterQual for mental health utilization review in common practice, but CMS’s April 2023 MA final rule (codified at 42 CFR 422.101) clarified that when a Medicare National Coverage Determination or Local Coverage Determination exists, those coverage criteria govern over proprietary utilization-management tools for the covered service. For PHP specifically, CMS LCD L37633 sets the minimum medical necessity standard: the physician must certify that inpatient psychiatric care would be required if PHP services were not provided, the patient must require at least 20 hours per week of structured programming, and continued stay must be supported by documented clinical progress or justification. An MCG or InterQual criterion that is stricter than L37633 is not enforceable for traditional Medicare-covered PHP; whether and how that principle reaches Medicare Advantage denials is an open area of dispute that providers should track.

Did the 2024 federal parity final rule change which criteria payers can use?

The rule does not prescribe a specific criteria set. What it does is reclassify medical necessity criteria — including the choice and application of LOCUS, ASAM, MCG, or InterQual — as a non-quantitative treatment limitation (NQTL) under the Mental Health Parity and Addiction Equity Act. Plans are required to produce a comparative analysis showing that the NQTL, as written and as applied, is no more restrictive for mental health and substance use benefits than for medical/surgical benefits (Federal Register, September 23, 2024; DOL EBSA fact sheet).

Two things to hold separately:

The underlying statute (MHPAEA, 2008) and the 2013 final rule remain in force. Parity obligations on medical necessity criteria did not disappear.
Enforcement of the 2024 final rule’s new provisions is paused. Following litigation brought by the ERISA Industry Committee, the Departments of Labor, HHS, and Treasury announced in 2025 that they will not enforce the new 2024 NQTL requirements pending resolution. As of April 2026 that pause remains in effect; providers should treat the 2024 rule as signal for where enforcement is likely to go rather than as currently enforceable law.

The practical implication for PHP/IOP denial management is limited in the short term and potentially significant in the longer term. A denial that relies on a stricter behavioral health application of a criteria set than the plan uses on the medical/surgical side remains a viable parity argument under the 2013 rule.

What should a PHP or IOP document to satisfy all three criteria sets?

The three frameworks ask overlapping questions, so a well-structured note can satisfy all of them without writing to each one separately. In our reading of the published criteria, the minimum documentation elements are:

Diagnosis and acuity. DSM-5-TR diagnosis, current symptom severity with concrete clinical observations, and a statement of why the current level of care is the least intensive that addresses the acuity. ASAM dimensional risk language, LOCUS dimension ratings, and MCG severity-of-illness criteria all trace back to this.
Failure or inadequacy of less intensive care. Either a documented step-down attempt that failed or a clinical argument for why outpatient care is not sufficient. Required by CMS LCD L37633 and echoed in every commercial criteria set.
Physician certification for PHP. The physician attestation that inpatient psychiatric care would be required without PHP. A Medicare-specific requirement, and the cleanest framing to lift into commercial notes as well.
Structured programming hours. Document that the patient is engaged in at least 20 hours per week for PHP (or the applicable IOP hour range) with the specific therapies attended. Audited routinely.
Measurable goals and progress against them. Treatment-plan goals with objective indicators and each note referencing movement or lack of movement. Aligned with MCG’s continued-stay indicators and LOCUS’s engagement dimension.
Risk profile for continued stay. Why the patient has not yet met step-down criteria. ASAM 4th Edition makes this explicit through dimensional risk; LOCUS asks it through the risk-of-harm and functional-status dimensions; MCG asks it through discharge-readiness checklists.
Coordination of care. Communication with the ordering physician, outpatient prescriber, or next level of care. Often the difference between an approved concurrent review and a medical-necessity denial.

A program that builds this into its note template reduces payer-specific rework and gives the appeals function a cleaner record to work from.

Key takeaways

ASAM 4th Edition (adults) now governs substance use reviews at Optum/UnitedHealthcare, Cigna/Evernorth, Aetna, and Carelon on a commercial basis; adolescent programs continue on ASAM 3rd Edition.
LOCUS and CALOCUS-CASII are the primary mental health criteria at Aetna and at several Medicaid MCOs; PHP typically maps to LOCUS Level V and IOP to Level IV.
MCG Behavioral Health Care Guidelines are the primary framework at Anthem/Elevance and at several Medicare Advantage carriers; they are proprietary and not publicly posted.
CMS LCD L37633 sets the minimum for traditional Medicare PHP and, per the 2024 MA final rule, generally governs over stricter MA proprietary criteria for the covered service.
The 2024 federal parity final rule reclassifies medical necessity criteria as an NQTL, but enforcement of the new provisions is paused as of April 2026 — the 2013 rule and the underlying MHPAEA statute still apply.

How Lucida helps

Lucida is a denial management platform built specifically for PHP and IOP behavioral health. We track medical necessity criteria by payer, highlight documentation gaps before concurrent review, and structure the appeals record when a denial crosses payer-specific or parity lines.

See it on your own data — request a risk scan or book a demo. For more on medical necessity and denials, see our PHP & IOP FAQ.