Issue Brief: Medicaid Early and Periodic Screening, Diagnosis, and Treatment as a Source of Funding Early Intervention Services

Executive Summary

The term “early intervention services” refers to formal attempts by persons outside of the family to work with the child and family to address cognitive, emotional, and resource limitations that exist in the child’s environment. These services target the first few years of life and include health, education, and social services. Health services include comprehensive diagnostic screenings; nutrition services; behavior therapies; physical, speech and occupational therapies; day treatment; family support services; and health education describing expected developmental milestones.

Congress has provided for the coverage of early intervention services in a number of federal statutes. For example, the Individuals with Disabilities Education Act provides federal funding for developmental and behavioral services infants and children under age three who have developmental delays or are at risk of delays.1 The Title V Maternal and Child Health Services Block Grant allows federal funding to ensure maternal and child access to quality health services and to increase the numbers of young children who receive check ups and needed follow-up care.2 This issue brief focuses on Medicaid, particularly the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) benefit, as an important, but underused source of federal funding for early intervention services. It will summarize the importance of early childhood intervention and then discuss how early intervention services can be provided as EPSDT.

“All children are born wired for feelings and ready to learn.”

National Research Council and Institute of Medicine (2000)

Introduction

The term “early intervention services” refers to formal attempts by persons outside of the family to work with the child and family to address cognitive, emotional, and resource limitations that exist in the child’s environment. These services target the first few years of life and include health, education, and social services. Health services include comprehensive diagnostic screenings; nutrition services; behavior therapies; physical, speech and occupational therapies; day treatment; family support services; and health education describing expected developmental milestones.

Congress has provided for the coverage of early intervention services in a number of federal statutes. For example, the Individuals with Disabilities Education Act provides federal funding for developmental and behavioral services infants and children under age three who have developmental delays or are at risk of delays.1 The Title V Maternal and Child Health Services Block Grant allows federal funding to ensure maternal and child access to quality health services and to increase the numbers of young children who receive check ups and needed follow-up care.2 This issue brief focuses on Medicaid, particularly the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) benefit, as an important, but underused source of federal funding for early intervention services. It will summarize the importance of early childhood intervention and then discuss how early intervention services can be provided as EPSDT.

The Importance of Early Childhood Intervention Services

The National Research Council and Institute of Medicine recently issued a voluminous report, From Neurons to Neighborhoods, that presents scientific evidence showing the importance of early childhood development and early intervention services. It finds that the

brain and nervous system undergo their most dramatic development during the first few years of life. From birth to age five, children develop foundational linguistic, cognitive, emotional, social, and moral capabilities upon which subsequent development builds. The differences among what children know and can do are obvious by kindergarten. These differences are strongly associated with social and economic circumstances, and are predictive of subsequent academic performance. Redressing these disparities through early intervention services is critical, both for the child and for society. Parents and other regular caregivers are “active ingredients” of environmental influence during a child’s early years. The report also finds that very young children can experience deep and lasting grief, sadness, and emotional impairment. Given the short- and long-term risks that accompany early mental health impairments, there is an urgent need to address the severe shortage of programs and professionals with the necessary expertise.

Though this report provides crucial support to proponents of early intervention services, the effectiveness of these services has been previously documented in a variety of studies. For example:

Breast-feeding is recommended by pediatricians to help infants grow and to anchor mother-infant interactions. A survey by The Commonwealth Fund found that mothers are much more likely to breast feed when educated and encouraged to do so by their doctor or nurse and when they receive post partum home visits by nurses.

Consistent reading times and daily home-life routines have been shown to influence healthy brain development in very young children. The majority of low-income parents surveyed by The Commonwealth Fund wanted information from providers on how to optimize their child’s development, including information on how to discipline the child, toilet training, and sleep habits. (Unfortunately, the vast majority of low-income families reported these matters were not discussed during visits with providers.)

Educating parents about infant communication has resulted in significant differences between the intervention group and the control group regarding sensitivity to communication cues and social-emotional growth-fostering behaviors.

Guidance from the pediatrician during office-based visits has resulted in intervention group infants showing advanced vocal imitation compared with the control group and the intervention mothers being rated higher on their interactions with their children.

Education and assistance provided to mothers in an intensive care unit nursery had a significant effect on the cognitive development of low birth weight infants, to the point where their development approximated that of normal birth weight infants.

Home-based parent-training of low-income, African-American, teenage mothers of pre-term infants resulted in their infants rating higher on standardized intervention tests than control group infants.

The children of mothers who participated in a high-risk prenatal/early infancy home visitation program of health education experienced fewer accidents and emergency room visits, compared to a control group. These mothers initiated breast feeding more frequently and improved the home environment more frequently than the control group.14 A fifteen year follow-up of the children when compared to control groups, showed them to have experienced fewer instances of running away and fewer arrests, lifetime sex partners, cigarettes a day, and days having consumed alcohol.

Findings such as these establish the following potential benefits of early intervention services for low-income children: improved emotional and cognitive development, improved educational outcomes, increased economic self-sufficiency for the parent and later the child, and improvements in health-related indicators such as reproductive health and substance abuse. While only a few studies have compared the costs and benefits of these services, a 1998 study by researchers at the RAND Corporation concluded that early childhood intervention services are a potential source of cost savings.

Unfortunately, many children are not receiving the early intervention services they need. Ignorance about funding sources has been one impediment. Many states and health care providers operate under the impression that only limited early intervention services can be covered through Medicaid. To the contrary, the Medicaid Early and Periodic Screening, Diagnosis and Treatment service can be used to cover a broad array of early intervention services.

Identifying At-Risk Children Through EPSDT Screens

Medicaid-eligible children and youth under age 21 are entitled to receive EPSDT. EPSDT is a comprehensive benefit that includes: screening, diagnosis, and treatment services and outreach. Four separate screening services—medical, vision, hearing, and dental—must be offered at pre-determined, periodic intervals. From birth through age five, the American Academy of Pediatrics recommends fourteen medical screening visits.20 For Medicaid-eligible children, the medical screen must include:

a comprehensive health and intervention history which assesses both physical and mental health;

a comprehensive, unclothed physical examination;

appropriate immunizations;

laboratory tests (including lead blood testing at 12 and 24 months and otherwise according to age and risk factors); and

health education, including “anticipatory guidance to the child (or the child’s parent or guardian).”

The EPSDT screen is an essential early intervention service. Properly focused, this screen can be used to diagnosis developmental problems and risks and to provide health education to the child and family about expected developmental milestones and activities for maximizing the child’s early growth. Therefore, it is critical for health care providers who are treating young children to know the full scope of EPSDT. A variety of avenues can be used for disseminating this information, including regulations, Medicaid managed care contract requirements, provider manuals, provider bulletins, provider training, and EPSDT screening forms.

The EPSDT screening form is a pre-printed, uniform encounter form that a number of states have developed for providers to record and track activities that occur during a child’s visit. Copies of the completed form typically are placed in the child’s medical record and may also be sent to the Medicaid agency. Use of these forms has been associated with improved well-child visits. In recent years, some states have developed sets of screening forms that focus on ageappropriate activities.

At least 27 states have developed EPSDT screening forms for participating providers. The National Health Law Program recently reviewed these screening forms to determine the extent to which they target early intervention services. Table 1 shows that a number of states’ forms place at least some emphasis on early intervention. In particular, the following should be noted:

Diagnostic assessment. All of the forms specifically required a diagnostic assessment. Nine states included age-specific prompts (e.g. Arizona, Maine, and Texas). For example, for the 15 month visit, some forms ask whether the toddler can point to one or more body parts, walk well, feed self with fingers, listen to a story, put blocks in a cup, and wave bye-bye.

Nutritional Assessment. All of the forms included reference to nutritional assessment. Fourteen included a question about the Women Infant and Children (WIC) program, and ten specifically addressed breast-feeding and formula.

Vision, Hearing, Speech, and Dental Assessments. All of the forms required vision and hearing assessments. The majority also included either a dental assessment or a referral to dental care. Nine of the forms included a speech assessment.

Health Education. Virtually all of the forms referred to health education, counseling, and/or anticipatory guidance. Ten included age-specific prompts (e.g., postpartum adjustment, reading to the child). For example, for the three year visit, some forms ask about eading to the child, dental care, limiting TV, eating healthy foods, and/or referrals to Head Start.

Social Service Referrals. Fourteen forms suggested a referral to the WIC program. Several forms, and most notably West Virginia’s form, included referrals to other social service agencies, including early intervention, family planning, further health education, and Head Start.

In sum, the effectiveness of EPSDT screening forms has been well documented. A number of states have included information on these forms to prompt EPSDT medical screeners to provide age-appropriate early intervention screening and make needed referrals for follow up services and treatment.

Covering Early Intervention Services as EPSDT Treatment Services

If an illness or condition is diagnosed during a screen, EPSDT requires state Medicaid agencies to “arrange for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment.” EPSDT benefits include all of the services that the state can cover under § 1396d(a) of the Medicaid Act, whether or not such services are covered for adults. Table 2 lists these services. In addition, the Medicaid Act says the service must be covered for a child if it is “necessary . . . to correct or ameliorate defects and physical and mental illnesses and conditions[.]”

The Medicaid Act, § 1396d(a), does not uniformly list covered services using the terminology that health care providers may use when describing an early intervention need. In these cases, it must be determined whether the service described by the provider fits within a category that is included in the Medicaid Act. In other words, Medicaid can cover the early intervention service only to the extent that the service fits within a Medicaid service category.

Table 3 lists a range of early intervention services, showing which Medicaid service category, if any, the service may be coverable through and whether the Centers for Medicare and Medicaid Services (CMS) has issued any specific statements regarding coverage of the service. Table 3 shows that CMS has approved EPSDT coverage of a number of early intervention services, including:

intervention assessment of the child,

assessment of home life and of parent/child relations,

nutritional assessment and diet instruction,

health education and anticipatory guidance to the child and family,

basic living and social skills development,

child and family counseling,

parent skills training, and

case management.

In addition, CMS has recognized Medicaid coverage to fund preparation and use of pocket-sized records for young children (sometimes called “health passports”); health diaries for new mothers; telephone support services to children and their families; brochures, videos, and newsletters that are explicitly directed at assisting Medicaid-eligible individuals to access Medicaid services; and home visiting programs that include parent education. CMS has discussed limits, however:

• Medical necessity. The service must be medically necessary; in other words, it must be needed to “correct or ameliorate” a physical or mental condition.

• Focus on the child. Family members may be included in health education, case management, counseling, and therapy; however, the services must be directed exclusively toward the treatment/benefit of the child. For example, if directed exclusively to the treatment of the child, mental health services can include individual, family, and group skills training, family psychotherapy, and family skills training. However, the services cannot extend to a point where they become a means of treating persons other than the Medicaid-eligible child. As recently noted by CMS in reference to case management services, “[P]olicy permits contacts with non-eligible … individuals to be considered Medicaid case management activity, and to be billed to Medicaid, when the purpose of the contact is directly related to the management of the eligible individual’s care. It may be appropriate to have family members involved in all components related to the eligible individual’s case management.… On the other hand, contacts with non-eligibles … that relate directly to the dentification and management of the non-eligible[’s] … needs and care cannot be billed to Medicaid.”

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