We at Georgetown CCF have been poring over CMS’s new EPSDT state health official (SHO) letter. Naturally, we do have some favorite points and analysis we will continue to highlight through this series on Say Ahhh!!! Today’s topic: The importance of state agency oversight of Medicaid managed care organizations, which the SHO refers to as Managed Care Programs (MCPs). The guidance includes one sentence three times. And it bears repeating yet again:

“Regardless of how significant the MCPs’ role may be in administering EPSDT, the state retains ultimate responsibility for assuring compliance with EPSDT requirements.” (pages 4, 7 and 25)

Why am I leaning in to the redundancy? Say Ahhh! readers know that most children in most states experience Medicaid coverage through risk-based managed care, where the state Medicaid agency contracts with private insurers to deliver needed services for a fixed monthly per-member per-month payment. My colleagues have written, yes, repeatedly on the general lack of transparency and accountability for children’s access to timely care at the MCO level (and stay tuned for more content on that topic soon!). Given the unrealized potential of EPSDT to help children get the right care at the right time, more scrutiny on the performance of individual MCOs is essential to make progress. This is key for all children, but especially young children, where early detection and intervention can mean the difference between small preventable complications and more complex conditions that are more challenging and costlier to treat.

Other favorite points related to Medicaid managed care responsibilities from the SHO:

Any “optional” (for adults) services are required for children. This is not new news for child health policy enthusiasts, but based on what we learn about access to well-established, developmentally appropriate services, we can’t say it enough.

• “Regardless of delivery system, children entitled to EPSDT must have access to services that can be covered under section 1905(a) of the Act when those services are necessary to correct or ameliorate an identified medical need. Thus, while services available to adults may include limits on the amount, duration, and scope of services that can never be exceeded (i.e., a “hard limit”), states are not permitted to apply these kinds of limits to any service covered under EPSDT in either a FFS or managed care delivery system.” (pp. 20-21)

• ‘If an MCP is contractually responsible for all medically necessary services for EPSDT-eligible children, the MCP is obligated to ensure access to those services, including access to services that may not otherwise be listed as a covered service in its contract.’ (pp. 25-26)

State Medicaid agencies should use contracts with MCOs to specify responsibilities under EPSDT. This includes key details such as outreach and education, specific services, payment, quality measurement, performance improvement, and network adequacy. Contracts provide terms for accountability.

• “When a managed care delivery system is used to deliver some or all services required under EPSDT, states must identify, define, and specify the specific EPSDT services that the MCP is required to cover in the MCP’s contract.” (p. 25)

• “When states include some services covered under EPSDT in their managed care contracts but exclude specific section 1905(a) services from such managed care contracts, the contract must be explicit that the MCP is required to cover all medically necessary section 1905(a) services except those that are explicitly excluded. The state maintains the obligation under EPSDT requirements to ensure a child receives coverage of those explicitly excluded medically necessary services to correct or ameliorate identified medical needs.” (p. 25)

• “States must monitor and oversee MCPs and must have mechanisms in place to hold MCPs accountable for fulfilling all contracted responsibilities.” (pp. 24-25)

States and MCOs must ensure definition and application of medical necessity for children consistent (i.e. broader) with EPSDT. MCOs can’t have a one-size-fits-all medical necessity determination process for treatment services. And a diagnosis, especially for young children may not be the most appropriate criteria to determine whether a service is needed. This is consistent with the resurgence in states to remove a mental health diagnosis as the sole criteria for dyadic or family therapy, for example. Add to this that tools used to manage utilization and authorize care must be consistent with the broader EPSDT standard.

• “Given the obligation under EPSDT requirements to ensure a child receives coverage of medically necessary section 1905(a) services to correct or ameliorate identified medical needs, medical necessity reviews cannot have the effect of imposing a hard limit for EPSDT-eligible children, nor can they result in inappropriate limits on access to a service.”  (p. 26)

• “States should avoid requiring an EPSDT-eligible child to have a specific behavioral health diagnosis for the provision of services, as screenings may identify symptoms that require attention but do not meet diagnostic criteria. This may be particularly salient when addressing the developmental and behavioral health needs of children under age 5.” (p. 41)

• “While many states and MCPs rely on [commercially available utilization management] software to streamline the process of authorizing care, states must ensure that any software used by MCPs in this process is consistent with the EPSDT requirement to cover medically necessary care that can be covered under section 1905(a), as well as regulatory requirements for coverage and authorizations of services.” (p. 27)

MCOs can’t require prior authorization for screening services. Preventive screenings are available to all children, even outside of a well-child visit. Any services requiring “approval” must be made on an individualized basis (ideally by a medical professional), not a blanket prohibition.

• “Importantly, under CMS’s interpretation of section 1905(r)(5), prior authorization must be conducted on a case-by-case basis, evaluating each child’s needs individually, and it must not delay the delivery of needed treatment services. Additionally, under CMS’s interpretation of section 1905(r), states may not impose prior authorization requirements for EPSDT screening services.”  (p. 21)

States can do more to ensure MCO networks have sufficient pediatric expertise and providers. And if a child can’t get the care they need, MCOs must arrange for out-of-network care.

• “MCPs must maintain a sufficient network of providers with pediatric expertise who can be accessed in a timely manner. If an EPSDT-eligible child does not have timely access to a network provider for medically necessary care, the MCP must arrange for and cover medically necessary covered services out-of-network, including out-of-state if necessary, for as long as the MCP’s provider network is unable to provide the medically necessary services.” (p. 27)

• “States have broad flexibility to establish reasonable provider qualifications related to the fitness of the provider to perform covered medical services, and states can require that MCPs use network providers that meet these standards.” (p. 33)

Make sure health care providers understand the benefits and protections available under EPSDT for children, especially the more comprehensive pediatric benefit. This is consistent with what we’ve learned in our projects with the American Academy of Pediatrics (AAP) over the years.

• “States and MCPs should help to ensure the availability and accessibility of services for children by educating providers on EPSDT requirements. It is particularly important for providers to understand that the adult section 1905(a) benefits packages are a subset of services that should be available for an EPSDT-eligible child and hard service limits for adults do not apply to an EPSDT-eligible child’s medically necessary care.” (p. 27)

These are merely a few of our favorite points related to managed care oversight. Time to make the new guidance go fully viral to state agencies and their contracting MCOs, just as the Beyoncé and Taylor Swift tours reached all the corners of U.S. As children take their rightful place at center stage, it’s “SHO time” ¹ for managed care!

[This is part of a blog series on federal guidance that aims to improve enforcement of the Early and Periodic Diagnostic Screening and Treatment (EPSDT) requirement for children enrolled in Medicaid. ]

1. pun credit to our colleagues at AAP ↩︎