EPSDT and “Medical Necessity”

Medical necessity is the defining factor for all Medicaid services accessed through EPSDT (for children on Medicaid under 21) or any participants in a state’s 1115 or 1915 Medicaid waiver programs.

The tendency over the past years has for states to try to exert control over determination of medical necessity in order to control their budgets.  Regardless of what a treating provider says, these folks claim that the state Medicaid agency doesn’t have to follow it.

A Hawaii state Medicaid official recently posed a challenge for me:  to find and show her where in federal or state law did it say that the treating physician is the only decision maker for “medical necessity”.

She’s asking the wrong question:  the real question is where in federal law does it give state Medicaid employees the right to ignore what a treating practitioner says is medically necessary.

The answer to that is that US CODE Title 42,1396d(r)(5) apparently says this is specifically something they cannot do.

According to federal judges, that little paragraph, inserted in federal law in 1989, “took away a state’s discretion not to provide

necessary treatment for individuals under the age of twenty-one.”  Another federal judge stated it this way: “a state’s

discretion to exclude services deemed “medically necessary” by an EPSDT provider has been circumscribed by the express

mandate of the statute.” (quoted from the same text as above).

And again, “it would still be improper if the state’s program limited necessary treatment.”

In other words, what your child’s treating provider says is medically necessary can’t be reduced or limited or changed by state Medicaid agency employees and contractors.

The state Medicaid agency has the right to review the request to ensure it is not fraudulent, and then to issue a prior authorization.  But they can’t change it.

State officials seem to tend to look at this issue as one having to do with their legal rights.  What they are forgetting is that the constitutional rights granted by the Americans with Disabilities Act and the legal rights granted to children under federal Medicaid law are there to protect the people with the disabilities.

Federal law now explicitly strives to avoid potential conflicts of interest between state Medicaid agency employees and the people they are supposed to be caring for.  Federal regulations forbid case managers (a mandated EPSDT service) from being employed by any entity they can approve or disapprove services. Federal law doesn’t allow Medicaid employees to change what a doctor says is medically necessary because it could conflict with the legal and constitutional rights of the individual.

Medical necessity is a civil and legal right of the individual, not the state.  Civil and legal rights granted under Federal law cannot be restricted by state law.  No matter how much a state wants to try to re-write federal law, they can’t.  Don’t let your state try to tell you anything otherwise.