Everyone under the age of twenty-one in Medicaid should have access to health care services they need thanks to Medicaid’s Early and Periodic Diagnostic Screening and Treatment (EPSDT) requirement. In short, EPSDT requires children to get regular screenings and treatment when necessary. And this isn’t a vague hope – it’s the law.
However, in at least 36 states more than 80 percent of children enrolled in Medicaid get their care through managed care organizations (MCOs), and this raises numerous challenges to ensuring EPSDT compliance. MCOs use utilization management techniques, such as prior authorization, to limit access to care in ways that can violate EPSDT requirements and improperly deny children access to the health care they need. CMS’s new EPSDT guidance, issued September 26, 2024 (overview blog available here), reaffirms many important constraints on utilization management processes that states and MCOs must obey. It also identifies best practices for states implementing EPSDT. Ultimately, it is an important new tool for advocates and policymakers looking to strengthen access to care for kids.
At the outset, the guidance makes clear that states have “ultimate responsibility” for EPSDT compliance by their MCOs. States cannot look the other way or blame MCOs if children are not receiving their EPSDT services. More specifically, let’s look at five key protections the guidance reinforces.
First, the guidance is clear that MCOs are not allowed to apply any prior authorization processes for EPSDT screening services. Full stop.
Second, the guidance makes clear that the legal obligations for children are simply different than those for adults, meaning states and MCOs cannot just throw kids into the same processes they have set up for adults. The important practical point for day-to-day MCO processes, is that, for example, if (as is often the case) the MCO has software it uses to approve or deny service requests, it cannot use the adult software to make coverage decisions for children. More broadly, while a state can set reasonable service limits for adults, it cannot apply those limits to children in the same way. Each of the following points expand on this concept.
Third, the guidance notes that a state need not cover every possible type of service for adults in Medicaid; it can choose to cover a reasonable subset of services in its Medicaid state plan. Children, however, must be provided any type of potential Medicaid service that is medically necessary, even if the service is not on the official “list” of covered adult services.
Fourth, while a state can also sometimes set a reasonable limit on the amount or duration an adult can access some service (such as 3 visits per month), the guidance reiterates that children must be allowed to exceed any such limits if medically necessary for the child.
Fifth, the guidance repeats that states and MCOs must also evaluate the medical necessity of services for children based on a broad definition of medical necessity that applies in EPSDT. MCOs are not allowed to only approve services that will lead to “a full recovery.” They also must approve services that will “correct or ameliorate” or “maintain or improve a child’s current health condition.”
The above requirements are not just technical details. They clarify issues that come up over and over and over again as barriers to care for children. Advocates and policymakers can use the new EPSDT guidance as a benchmark and checklist to evaluate whether their state is complying with the requirements for children and ensuring they have full access to care as required under the law.
While we hope the guidance will make an immediate impact, there is more work for CMS to do. Specifically, for prior authorization, CMS needs to address the elephant in the room.
CMS’s guidance addresses numerous prior authorization pitfalls (again, really helpful), but it doesn’t really speak to the broad systemic incentive problems. In other words, even if you fix the medical necessity standard and the “correct or ameliorate” standard and every other example described above, you haven’t yet gotten to that elephant. As long as states let them, MCOs can still target almost all services (except for screening services) with prior authorization processes, forcing families and providers to jump through confusing hoops to access services that are medically needed and to which children are entitled. Sure, a parent that convinces their provider to send in three different superfluous forms, or secures representation from a legal services attorney, may be likely to ultimately get their service. But most families will be tripped up with these administrative hurdles long before the finish line. There is simply insufficient systemic disincentive to prevent MCOs from erecting unnecessary hurdles, and a clear reward for MCOs every time they do. Game, set, match.
Consider, for instance, that CMS’s guidance provides helpful clarification that prior authorization cannot have the effect of delaying access to needed treatment. This standard is a slam-dunk in the abstract, but an airball in reality. The standard needs to be applied with clarity to the reality of prior authorization, where delay is the norm in practice, and honestly, it sometimes seems like the objective. In any case, the clear reality for patients is: delays and worse outcomes. Don’t believe me? Ask the American Medical Association.
CMS’s guidance clearly moves the ball forward, and should help solve many recurrent problems that prevent the promise of EPSDT becoming a reality for all children covered by Medicaid. It’s a great win for children. And we hope it opens the door to CMS and state Medicaid agencies taking on the prior authorization elephant left in the room.
[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. ]
