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EPSDT
On Feb. 8, 2006, President George W. Bush signed the Deficit Reduction Act of 2005 (DRA) making changes to the Federal Medicaid program. As a result of these changes, states now have the ability to modify cost sharing and bening programs for children have expressed concern that states might seek to decrease the level of services available under the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) provisions in Medicaid or waive EPSDT services altogether. However, recent clarifications by the Centers for Medicare and Medicaid Service have confirmed that EPSDT is a mandatory set of requirements under Federal law unaffected by the DRA.1 As a result efits package aspects of the program through state plan amendments. Advocates of early screenof the DRA, states may choose to offer a more limited benchmark package that may not offer all the same benefits to optional groups, but must provide all children under the age of 19 the wrap-around health services, including EPSDT.
Medicaid
The Medicaid program is a publicly-funded, entitlement health insurance program designed to help low-income, disabled and elderly people who meet specific eligibility requirements. Medicaid operates as a federal-state partnership and is structured to fund comprehensive services for children and adults with serious health problems. The program divides eligible beneficiaries into mandatory and optional benefit groups. Mandatory groups include children under the age of 6 or pregnant women who fall below 133 percent of the federal poverty level (FPL), children ages 6 to 19 with family income up to 100 percent of FPL, and certain elderly and disabled groups. Optional groups include older children up to 300 percent of FPL, pregnant women over 133 percent of FPL, low-income parents and certain disabled groups. While different sets of benefits may be available to the mandatory and optional benefit groups, states must offer each group:
- Reasonable and adequate coverage;
- Benefits available across the entire state;
- Comparable benefits, if the group is divided into subgroups;
- Benefits determined independently of the person’s pre-existing conditions; and,
- A definition of “medical necessity” used to determine benefits consistent with reasonable and adequate coverage.
EPSDT
The Omnibus Budget Reconciliation Act of 1989 (OBRA ’89) defined the Medicaid EPSDT program with two goals: assure the availability and accessibility of required health care resources; and, help Medicaid recipients and their parents or guardians effectively use available resources. Federal law requires states to provide screening, diagnosis and all “medically necessary” treatment services, including mental health services, to all Medicaid recipients’ children and young adults up to age 19, or to age 21 if the state already provides services to 19- to 21-year-olds. EPSDT is a way to obtain the individualized wrap-around treatment and support services necessary to allow children to remain at home and in their community while undergoing treatment or to return there after a hospitalization or other out-of-home placement. States’ EPSDT programs must offer a range of services, including initial, periodic and interperiodic screening, check ups, immunizations, as well as vision, hearing and dental screening. The program must also offer informational health materials for families, transportation, scheduling of doctors’ appointments, and links to other health-related programs such as maternal and child health (MCH) or Women, Infant and Children (WIC). Each state must report data gathered from the programs as part of the annual Title V MCH Block Grant application.
Changes Under DRA
Under the DRA, states have the option to offer a new coverage category for some groups. These changes do not require a formal waiver process but can be accomplished through an amendment to the state plan. The benchmark package must be actuarially equivalent to other packages offered by the state but does not necessarily have to include the same benefits. Most new benefit plans can be more limited than the traditional Medicaid package. The new benefit structure may be similar to the State Children’s Health Insurance Program (SCHIP) and could require enrollment for certain groups, mostly children and parents who live in poverty. For optional groups, some cost sharing fees may be imposed on prescription medications, non-emergency emergency department utilization and non-exempt services. The DRA sets limits on federal administrative reimbursement to currently funded facilities, such as unlicensed relative homes or hospitals. A clarified definition for medical assistance case management was developed that highlights the specific assistance services that would be reimbursed, such as development of a care plan and service referrals. Direct services are no longer funded as targeted case management. Additionally, coverage cannot be expanded to any group currently not covered by Medicaid.
Most importantly, however, the DRA does not affect the requirement that states cover all EPSDT services for children under the age of 19. Medicaid benefits were defined in OBRA ‘89, Section 1905(r) “to include any other necessary health care, diagnostic services, treatment and other measures that are needed to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services.”2 While benchmark equivalent packages are adequate for the majority of healthy children, new state health care plans must contain a wrap-around package for children and youth with special health care needs (CYSHCN).
Recommendations
With the changes from the DRA, it is important to define the scope and comprehensiveness of services that will be offered under managed care contracts and pediatric purchasing specifications, including wrap around services for CYSHCN. Without early dialogue, cost shifting back to states from contracted health plans may occur, as well as unintended gaps in coverage. Such problems usually delay treatment, and children are sometimes forced to wait for important physical and mental health assistance at a time when they need it most. Establishing regular schedules for screening and incorporating them into benefit packages will ensure children receive preventive care as well as early identification of special needs. It is also important that programs making such changes ensure that families have the correct information they need to make informed health decisions; public outreach and quality information provided in a timely manner will be important components of any such change.
As states consider developing new benefit packages for different populations, AMCHP calls on decision-makers to reinforce the language in the DRA to continue requiring states to provide EPSDT services including “medically necessary” treatment. To ensure that wrap around and EPSDT services are maintained and that CYSHCN have access to adequate coverage to pay for needed service, it is vital that state Medicaid, maternal and child health, and CYSHCN directors work together and share expertise expertise before designing any new health services benefits packages.
Additional Resources
Endnotes
1 - For more information visit the CMS website.
2 - The Omnibus Reconciliation Act of 1989 (OBRA ‘89) Public Law 101-239.
Last Updated
December 11, 2007
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