Introduction

The Health Care Financing Administration (HCFA) published proposed rules (10/1/93) concerning Early and Periodic Screening, Diagnostic and Treatment Services (EPDST) in the Federal Register, (Vol.58, No. 189). The rule would "codify in Medicaid regulations existing policies and legislative changes" at 42 CFR part 440, subpart A and part 441, subpart E, and in the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203) and of 1989 (P.L. 101-239).

In response to requests for information on the impact of the 1989 amendments expanding the program for all Medicaid eligible children including the Title IV-E special needs adoptees, the Secretariat has provided Issue Briefs, conference calls and sessions at the Annual Meetings. The purpose of this Issue Brief is to provide an overview of the proposed rule (see attached). The deadline for comments was no later than 5 p.m. on November 30, 1993.

Provisions of the Proposed Regulations

The following discussion of the EPSDT rules does not address all of the proposed provisions. Instead, items of particular importance to administrators of the Compact and special needs adoption specialists are presented.

· Definition of EPSDT

The definition of EPSDT at §440.40(b) of the current rules for screening and diagnosis to determine physical and mental defects would be revised to accommodate a broader and more flexible program statement. A new §440.50(b) would include general screening, vision, dental and hearing services. In addition to screening, diagnostic services would be included in the required services "to correct or ameliorate" conditions found through EPSDT screens. This change, as mandated by law, clearly adds prevention to the EPSDT focus. The condition at issue need not be chronic to qualify for diagnostic services. Instead, all physical and mental conditions and illnesses disclosed through screening would be subject to EPSDT requirements.

· Service Requirements

Section 441.57 Discretionary Services under the current rules would be retitled "Service Requirements." The change in heading would reflect the fact that Congress eliminated EPSDT service options. Instead, the rules would specify requirements for screening, diagnosis and treatment. Included in the list of screening requirements at 441.57(a) would be a specific directive for laboratory tests to evaluate blood lead levels and health education.

A significant amount of latitude would be available for the health education component. In providing health education, the provider would address the current and anticipated needs of the child based on expected development, as well as "accident and disease prevention, and risk assessment and advice on risk reduction" (Federal Register at 51290). The example used to illustrate the reach and potential of health education concerns the identification of risk factors for high blood lead levels. The health care provider would be expected to explain or educate parents on detection and prevention of lead poisoning including finding and disposing of the source of the lead. The discussion goes on to indicate that Medicaid, under such circumstances, would cover lead source investigations for specific patients "as part of the management and treatment of a child diagnosed with an elevated blood lead level" (at 51290) by the provider.

· Periodicity Schedule

By regulation, the EPSDT services were to be provided according to a periodicity schedule that satisfied reasonable medical and dental standards for the care of children at critical points in their growth and development. Under OBRA, separate, distinct periodicity schedules would be set for each service to be performed for each age group. Thus, instead of a generic screen, states would develop, under § 441.58(b), individual schedules for screening of overall health status, vision, hearing, and dental needs, (or services). Experts in the relevant fields would be consulted in the development of the schedules. Scheduled vision and hearing services may be included in the general screening if the periods would overlap.

OBRA also added a mandate (formerly an option) for further screening "at such other intervals necessary to determine the existence" of suspected conditions for which treatment would be necessary, i.e., interperiodicity schedules. This provision is aimed at instances when health problems are displayed or suspected between scheduled screens (see §441.577(b)(2)). The discussion in the preamble for this issue indicates that states "may not require prior authorization" for these screens (see Federal Register at 51290). And, any condition detected through a screen must be treated "within a medically appropriate time period, not to exceed 6 months" (§441.57(b)(3)).

· Medically Necessary

The 1989 amendments significantly enhanced state responsibilities for services by the requirement to provide whatever necessary health plan or treatment would be indicated through screening. The range of services that must be available without regard to the contents (or limits) of the state Medicaid plan are those described in section 1905(a) of the Social Security Act. This requirement has been the source of considerable debate and speculation -- what controls or limits would states be permitted to exercise under the provision? How would pre-existing conditions be treated? The proposed rules make it very clear that HCFA interprets the requirement in an expansive fashion.

It is worth noting that during the 1992 Annual Meeting of the Association of Administrators of the Interstate Compact on Adoption and Medical Assistance (AAICAMA), a workshop was held (5/30/92) on the subject of EPSDT. The presenter was Jane Horvath, who was at the time director of the Medicaid Unit of the American Public Welfare Association. This session was one of the highlights of the meeting. She said the meaning of the statutory language "discovered by a screen" would most likely include pre-existing conditions. Ms. Horvath stated that resolution of this issue would be very important for children with severe and chronic problems. Since most states had already decided to take a broad interpretation of statutory language and pay for treatment of all conditions cited in an EPSDT screen, whether or not they are pre-existing, the impact would not be unexpected, and, would be welcomed in a number of jurisdictions.

She also indicated her belief that the regulations would specify that states need not "provide payment for every treatment setting allowed under federal law." For example, psychological counseling would not mean a private psychologist or institutional care when a state determines home-based care would be effective and less costly. Ms. Horvath said: "I think the rules are going to say that the state cannot make a universal policy statement that it will never cover institutional care or never cover institutional care when care in the community is available. I believe that the states will be obligated or required, under the regulations, to make case-by-case decisions looking at each child and each requested treatment modality versus an alternative, while considering the history and the condition of the child. I would imagine that to make such a system work, states would have to develop a prior authorization system for certain high cost services and/or services/settings not normally recognized under the state plan."

The proposed rules are in line with Ms. Horvath's predictions. The discussion of a new paragraph (c)(4) to §441.57 indicates:

· States would "pay for the cost of any additional services "necessary to treat pre-existing condition." Any "encounter with a health professional practicing within the scope of his or her practice would be considered a screen";

· As a result of the screen any necessary "care, diagnosis, or treatment would be considered to have been discovered by the screen";

· Screens for the purpose of EPSDT may occur prior to a determination of Medicaid eligibility or may be performed by providers who were not at the time of this screen "participating in the Medicaid program," and

· Child or case specific limits on the amount of EPSDT services received would be acceptable "but additional services must be furnished" in deference to medical necessity for a particular individual.

The parameters for making the medically necessary determination are found at §441.57(f), and to ensure cost-effective treatment at §441.57(g). Specifically states would have the authority to exclude supplies, equipment, treatment or medical services that it considers to be unsafe or experimental or that are not generally recognized. As the discussion makes clear, however, the state would have the option to "cover new or investigative procedures." To the extent alternatives exist to various treatment modalities, states would have the discretion to restrict access to what it determines to be the more cost-effective. This reasoning also would govern overall access to services by requiring prior approval based on considerations of cost, safety, effectiveness, etc." (see Federal Register at 51291).

Additional limits on the reach of EPSDT benefits is found in §441.57(h). Here the rules would dictate that states need only "demonstrate sufficient access" to the array of services set forth in the Act. A service such as physical therapy that would be available through some other optional Medicaid benefit category would be sufficient to satisfy the statutory directive.

· Providers

The 1989 OBRA amendments made it clear that qualified providers include those who would not be able to perform the full range of services and would not be limited to those in the public sector (screening, diagnosis, and treatment). Thus, it would be permissible to use a provider who would furnish some but not all of the EPSDT activities. Pre-OBRA, some states restricted designation of qualified providers in ways that were unrelated to professional licensing requirements. A physician unable to perform all components of the screening could be ineligible. The general authority of the states to determine the qualifying criteria for providers is not altered, but, the possible field of providers would be enlarged in §441.61(e) for the purpose of treatment and diagnosis. Under proposed §441.61 (d), states may limit the general health screening to those providers who are able to supply the full range of services described in §441.57(a)(1) which includes developmental history, health education, and laboratory tests.

· Organ Transplants

In the section labeled "Issues," the preamble to the rules includes a discussion on organ transplants. As indicated above, section 1905(a) of the Social Security Act identifies services that are considered medical assistance and to which EPSDT participants are eligible. Organ transplants are found at section 1903(i) of the Act. HCFA has determined that the transplant procedure includes components found in section 1905(a) and would, therefore, be an EPSDT benefit. States would be responsible for satisfying the statutory mandates governing transplants as well as application of the EPSDT rules.

Conclusions

The rule would not specifically address interstate policy. However, it would appear that through both statute and the proposed rule, the state of residence would be responsible for EPSDT in the same manner it is required to provide Medicaid benefits for adopted children with special needs. The financial participation of the federal government through EPSDT should make it appear advantageous to residence states to work with the adoption assistance states to ensure the full range of medical services required by children with special needs. This should apply to services for pre-existing conditions.

Conditions that would be labeled pre-existing have been the subject of considerable concern among administrators as noted earlier. The proposed rules would clearly make pre-existing conditions subject to EPSDT coverage. Providers -- whether or not Medicaid program participants -- acting in professional capacity conduct screens for the purpose of EPSDT. Subsequent "medically necessary health care, diagnosis, or treatment would be considered to have been discovered by the screen" (Federal Register at 51291). The amount, duration, and scope of services to address physical or mental conditions whether or not pre-existing, would be subject to state imposed restrictions. Adoptive parents could appeal a state's decision to limit a particular service based on the specific (and perhaps unique) aspects of their children's medical needs. A review of the state's denial of a service would focus on medical necessity. The rule would prohibit service limits that have the effect of denying essential care. If the necessity can be established, the service could not be denied assuming, for example, no other acceptable and recognized alternative.

To the extent the residence state prevails, children with special needs would have the option of requesting assistance from the adoption assistance state. It is at this point that the differences between states in the conduct of their EPSDT programs would be highlighted. However, the interpretation of the 1989 OBRA medical necessity provision should serve to pave over differences between states that have heretofore caused significant confusion among adoptive parents.

Association forms and procedures should be reviewed to ensure that they would facilitate EPSDT program participation. The extensive benefits likely through EPSDT would eliminate many of the concerns adoptive parents have about interstate special needs adoption and the impact of a change in residence. Through ICAMA forms, states can exchange information concerning notification of families about EPSDT and the participation of adopted children in the program.

ISSUE BRIEF XXIV

© December 1993

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