Supreme Court to Rule on Provider Complaints

Medicaid is a program created by a contract between the Federal government and the State government between them and only them.  They agree about how the program is to be operated and they both sign the contract.

Part of the contract says that the State will determine who can participate in the program in that State based on their credentials and the activities that the State wants to implement within the State’s overall program.

In 1989, Congress mandated that funding must be made available to children with disabilities (the EPSDT program) within the Medicaid program in every State.  Any State that signs the Medicaid contract also automatically agrees to abide by the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) program components.  It’s not negotiable.

When a provider is contracted with the State to provide services under the EPSDT program, they agree to accept the fee paid by the EPSDT program as “payment in full” for their services.  Remember, the State Medicaid Plan describes exactly what the State proposes to do in order to receive Federal funding for its Medicaid program.

The Federal government contributes some standards to the Medicaid contract, such as the EPSDT mandate, and charges the Centers for Medicare and Medicaid Services (CMS) to oversee the Medicaid program and enforce it in each of the States.  The Federal government expects that States will provide enough funding to attract a sufficient number of providers to the Medicaid program, and that they will compensate those providers at a level sufficient to maintain them actively within the Medicaid program.

The CMS reviews the State Medicaid Plan submitted to it by each State and approves the plan, makes recommendations for improvements, or disapproves the plan.  Once the plan is approved by CMS, the State is supposed to comply with it.  It’s a written contract between the Federal government and the State government, after all.  If the State diverts from the CMS approved plan, Congress expects the CMS to intervene to bring the State back into compliance with the plan.

The CMS is effectively “the senior partner” in the Medicaid plan because it controls the delivery of Federal Medicaid funds to the State.  It is empowered to cut off Federal Medicaid funding to the State if the State stops doing what it agreed to do in the State Medicaid Plan that CMS approved.  Thus, the CMS has just one real weapon — a “nuclear option” — to completely cut off Federal Medicaid funds if the State stops doing what it agreed to do in the State Medicaid Plan that CMS approved.  That is becoming a bigger and bigger problem.

The problem is, the CMS “nuclear option” has never been used, and the States, after more than fifty years, have become accustomed to chiseling away at their State Medicaid Plan by refusing to raise Medicaid provider (including mandated EPSDT provider) payment rates.  In Pennsylvania for example, the EPSDT funding rates for Behavioral Health Rehabilitation Services (BHRS, still referred to incorrectly in Pennsylvania as “wraparound services”) haven’t ever been raised.  Since 1992.  How could that possibly meet the Federal government’s expectation that providers are paid at a level that is sufficient to attract them, or retain them, within the Medicaid program?

Providers of BHRS in Pennsylvania are existing on “1992 dollars” while the Autism epidemic, unforeseen 23 years ago, rages on.  Private insurance carriers pay a little more, but only for children with Autism, and their rates are keyed to the State rates in any case.  Medicaid is the payer of only resort for most children who require (and respond remarkably well to) BHRS treatment, which is arguably the only treatment for children with significant behavioral challenges that works.  Medicaid-funded providers in other states are beginning to raise complaints at the Supreme Court when the State freezes their Medicaid payment rates at 2006 levels.  More on that in a moment.

Providers of BHRS are not allowed to demand reasonable compensation from the State Medicaid Agency because they are not “in the contract” between the State and the CMS.  Thus, the CMS can’t really do anything to force States to pay providers of BHRS or other Medicaid-funded treatment a reasonable living wage for the important work they do.  The States are shamefully exploiting this Federal impotence, to the detriment of children throughout the United States.  Some States are even denying that BHRS is a “covered service” under EPSDT.  That’s ridiculous, of course, as States are finding out the hard way. Class Action Lawsuits regarding children who are entitled to EPSDT funding for their treatment are becoming more common.

The State makes contracts with insurance companies that effectively impede access to EPSDT funding for BHRS while schools are allowed to access Medicaid to the tune of one hundred million plus in any given state annually.  The State governments encourage insurance companies to set and enforce their own “quality assurance” policies.  Some of those policies suppress knowledge about, and impede access to, EPSDT funding and BHRS treatment in ways that the CMS could not possibly approve of, given the Federal role in the Medicaid program and the expressed will of Congress since 1967.

As it is today, in 2012, the only viable means of intervening in this awful situation seemed to be the Office for Civil Rights. Complaints against the State Medicaid Agency in Pennsylvania and all of the insurance companies they contract with were filed.  I filed one of them.  Those complaints remain under investigation more than two years later.  The CMS has also been investigating these matters in Pennsylvania for at least the past year.

In June of 2014, the Supreme Court received and agreed to review a case regarding a provider of Medicaid-funded treatment in Idaho that wanted to have its billing rates raised above 2006 levels.  Pennsylvania beats Idaho in the suppression of EPSDT funding for child mental health treatment (BHRS) by a factor of three.  Two Federal courts agreed that the Idaho rates should be raised, in order to comply with a particular section of the Medicaid Act, but the state appealed to the Supreme Court.  The state claims that, since the Medicaid contract is between the Federal government and the State government, providers have no basis for complaining about payment rates.  Oral Arguments were heard in that case on 1/20/2015 and are available here.  A transcript is available here.  The American Medical Association, among more than a dozen other comparably credentialed organizations, submitted briefs in support of the Respondents (the providers).

A decision from the Supreme Court in this case is expected in June.  It will be interesting to see if the Supreme Court recognizes the terrible inequity that exists within the Medicaid contract between the Federal and State governments.  Papers filed with the Supreme Court document that State governments are being allowed to ride roughshod over the Civil Rights of disabled children.  States are being allowed to use insurance companies to do things that suppress access to treatment funding – EPSDT and otherwise.  The Congress and the Federal government have been trying to help disabled people, especially children, for more than fifty years but they have just one “nuclear” weapon that can’t possibly be used, and the State governments know it.

This fifty year battle needs to be joined by the providers of service who stand as advocates for the children and families they are serving.  Parents are terrified that State and local government agencies will take their children away, or act even more aggressively to deny them access to necessary treatment and support, if they object too loudly to the way their disabled children are being treated.  Attorneys are reluctant to challenge State governments when they can’t find plaintiffs who are willing to testify.  Providers are terrorized by demands for compliance with extreme standards that don’t exist anywhere within the Medicaid Act, the State Medicaid Plan or any other description of professional service delivery standards published outside the Managed Care realm if they make too much noise.

It is a pity that the so-called “advocacy community” is so occupied with other things like the search for an “autism gene,” or the passage of legislation that deprives children of their Civil Right of access to Medicaid EPSDT funding in exchange for guarantees of much more limited private health insurance benefits, for example and that the public advocacy organizations won’t represent providers, for reasons that remain obscure.  A resolution to the Civil Rights complaints will probably appear shortly after the Supreme Court issues its ruling in the Armstrong v. Exceptional Child Center case.  Either way, 2015 is going to be an exciting year.


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