No federal or state-funded program has a more profound impact on children than Medicaid. Covering nearly 40 percent of all children in the country, including more than 80 percent of children in poverty and more than half of Black and Latino children, Medicaid is a major driver of health for our nation’s children, with lifelong implications for their well-being. On September 26, the Centers for Medicare and Medicaid Services (CMS) released comprehensive guidance on Medicaid’s federal coverage and access requirements for children. Described by CMS as a “cornerstone” of the Medicaid program, these rules, known as the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) requirements, are aimed at ensuring all children enrolled in Medicaid get the health care services they need “at the right time and at the right place.”
The 57-page document updates and elaborates on previous guidance. Most fundamentally, it lays out longstanding requirements for states, including that they:
- actively promote EPSDT awareness among families and providers
- help families get the care they need
- ensure all children receive regular checkups (including dental, hearing, and vision), diagnostic services, and a comprehensive array of treatment services.
It also describes a range of strategies states are using to address children’s needs and comply with program requirements.
Beyond laying out the basic rules and expectations, the guidance focuses on potential barriers to children and young people receiving the care they need and are entitled to receive.
Medical necessity. Insurance and public coverage programs, including Medicaid, only pay for services that are medically necessary. Medicaid’s medical necessity definition for individuals under age 21 is tailored to children and unlike the definition used in other public coverage programs and insurance products, in that services need not be curative to be covered. The law requires that diagnostic and treatment services must be provided if necessary “to correct or ameliorate defects and physical and medical illnesses and conditions.” Under this definition, services that improve a child’s health or prevent a condition from getting worse must be covered. For example, even if physical or occupational therapy will not cure or even improve a child’s condition, it must be covered if it helps maintains the child’s health and functioning.
Service limits and prior authorization. Under EPSDT rules, services for children and youth cannot be subject to a preset limit (for example, a state or health plan cannot limit the number of therapy sessions in a year), but services can be subject to prior authorization, sometimes referred to as “soft limits.” Many plans require prior authorization before paying for high-cost services, such as inpatient behavioral health services or in-home nursing care.
Coming on the heels of Office of Inspector General and Government Accountability Office reports, the guidance specifies that plans cannot rely on prior authorization standards and tools developed for adults, and instead states must ensure that Medicaid’s child-specific medical necessity definition is applied in all instances, including at appeals of service denials. To ensure compliance, states are required to provide oversight of health plans and ongoing training to hearing officers.
Scope of services. The required scope of services for children, by law, is much broader than for adults. Any service that a state can cover under Medicaid must be available for children, regardless of whether it is covered for adults. As the guidance explains, states must ensure that “available services for . . . children must not be limited to those that are convenient for the state to cover simply because they are aligned with services typically available for adults.” States must anticipate needed services and be prepared (and able) to deliver a comprehensive continuum of services appropriate for children and youth statewide. This is particularly critical for children with disabilities or chronic illnesses, as well as for children with mental health or substance use disorder symptoms or diagnosed conditions.
Community-based behavioral health services. Given the mental health crisis among children and youth, as well as congressional and media investigations into abuses of young people in residential treatment centers, CMS continues to focus on states’ obligations to ensure that a full continuum of community-based behavioral health services are in place. These include screening and assessment, early intervention, crisis services, and high-intensity in-home services and supports. CMS highlights several times in the guidance that states cannot rely on institutional care if a child’s needs could be met at home or in the community. Otherwise, states risk being out of compliance with EPSDT and the Americans with Disabilities Act. While acknowledging workforce challenges, the guidance makes clear that such challenges do not relieve states of their obligations. It offers a range of strategies, including allowing more types of providers to deliver behavioral health services, adopting team-based care models, and using telehealth to improve access to behavioral health specialists.
Conclusion
EPSDT promises that children and young people enrolled in Medicaid will have the full array of preventive, diagnostic, and treatment services they need. While families report and research confirms that children covered by Medicaid fare well in terms of having their health needs met, challenges and gaps persist. The guidance, with its restatement of legal requirements and abundance of best practices, represents an important part of a broader effort CMS is planning with states, families, and stakeholders to keep its promise to children and youth covered by Medicaid.
