Q&A: EPSDT Wraparound Services

EPSDT is a comprehensive benefit that requires states, among other things, to provide for ?arranging for (directly or through referrals to appropriate agenc ies, organizations, or individuals) corrective treatment? found to be needed during an examination. Id. at § 1396a(a)(43)(C). Treatment benefits are defined to be ?such other necessary health care, diagnostic services, treatment, and other measures described in § 1396d(a),? whether or not such services are covered in the state?s Medicaid plan. Id. at § 1396d(r)(5). Such items and services need to be covered when ?necessary ? to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services.? Id.

CMS? August 2006 Letter to California. In connection with ongoing litigation in California, the federal Centers for Medicare & Medicaid Services (CMS) has recently discussed how the Medicaid EPSDT requirements apply to coverage of wraparound services. See Letter from Gale P. Arden, Director, Department of Health and Human Services, CMS Services, Center for State Operations, Disabled and Elderly Health Programs Group, to Stan Rosenstein, Deputy Director, Department of Health Services, Medical Care Services (Aug. 16, 2006) (on file with author) (?CMS Letter of August 2006?). The letter states:

Since the term ?wraparound services? is not used in the [Medicaid] law to describe covered benefits, it is necessary to define the term before it is possible to determine if these services are within the scope of Medicaid coverage?. For coverage purposes, CMS does not recognize ?bundles? of services, except to the extent that the list of Medicaid services contains a bundled service (for example, ?inpatient hospital services??). Otherwise, CMS must compare each component service individually to the benefits set forth in section 1905a [1396d(a)] of the Act.

Id. at 1-2. The position taken by federal agency in the August 2006 letter is similar to its previous statements on the issue. See, e.g., Letter from Pamela Caron and Barbara J. England, Department of Health and Human Services, Health Care Financing Administration, Health Insurance Specialist, Division of Medicaid, to Patricia MacTaggert, Director, Health Care Purchasing, Minnesota Department of Human

Services (Sept. 20, 1995) (on file with author) (stating ?[w]raparound services are not listed as a covered service in section 1905(a) of the Social Security Act and only those components of ?wraparound? services which clearly meet the definition and requirements of the listed services may be covered under Medicaid?).2

But while the CMS Letter of August 2006 reflects a consistent agency policy, it may impose a more exacting degree of description and “proof? upon the entity seeking coverage. For instance, CMS Letter of August 2006 classifies the plaintiffs? descriptions of the component services as ?very general? and refuses to recognize coverage without more information. By contrast, CMS approved a state plan amendment from West Virginia in 1993 that included descriptions similar to those used by the California plaintiffs, finding that they qualified as ?rehabilitation? services.3 In addition, CMS claims for itself (and impliedly not the courts or the states) the authority to make the ultimate coverage decision: ?The kind of detailed review that is necessary to make final determinations on whether these services are within the scope of Medicaid coverage is one of the functions of the CMS review and approval process for Medicaid state plan amendments.? CMS Letter of August 2006 at 2.

Recommendations. Because it was produced for litigation, the deference due to the CMS Letter of August 2006 in the case may be questionable.4 Nevertheless, the CMS policy will affect advocates engaged in other litigation or state plan advocacy. In addition, this method of analyzing whether a requested service is covered by Medicaid is increasingly being applied by states to individual claims for medical assistance. In the last three months, the National Health Law Program has worked with advocates for children in Florida, North Carolina, and Washington whose clients have been denied Medicaid coverage of services that providers and case workers have described as wraparound services.

To maximize Medicaid coverage of services through the EPSDT program, child advocates can take the following steps:

First, work with clients? treating providers and case workers to break down (unbundle) services to determine the extent to which each component can be fit within a Medicaid box ? that is, described as a benefit listed in § 1396d(a) of the Medicaid Act. For example, a service component may fit the definition of a ?diagnostic,? ?preventive,? or ?rehabilitative? service that is for the maximum reduction of physical or mental disability and restoration of the individual to the best possible functional level. See 42 U.S.C. § 1396d(a)(13); 42 C.F.R. § 440.130.

A service component may also qualify as a ?case management.? However, advocates should be aware that the Medicaid Act was recently amended to more specifically define this service. See Deficit Reduction Act of 2005, Pub. L. No. 109-171, § 6052 (amending 42 U.S.C. § 1396n(g)(2)).5 Case management now includes: (1) assessment of a Medicaid-eligible individual to determine service needs (e.g. taking

client history, gathering information from other sources such as family, providers, and educators), (2) development of a specific care plan, (3) referral and related activities to help the individual obtain needed services, and (4) monitoring and follow up activities, including those to insure that the service plan is effectively implemented. Case management does not include the direct delivery of medical, education, social or other services to which the individual has been referred. With respect to foster care services, activities excluded from case management include: research gathering and completion of paper work required by the foster care program, assessing adoption placements, recruiting or interviewing potential foster parents, serving legal papers, home investigations, providing transportation, administrating foster care subsidies, or making placement arrangements. See 42 U.S.C. § 1396n(g)(2)(A)(iii). Contacts with individuals who are not eligible for Medicaid do not count as case management unless the purpose of the contact is directly related to managing the eligible individual?s care. Id. at § 1396n(g)(3). Moreover, federal Medicaid funds are only available for case management if there are no other third parties liable for the services, such as another medical, social, or educational program. Id. at § 1396n(g)(4)(A); see also CMS Letter of August 2006 at 5 (stating that case management services for children in foster care ?may not be used to replace or supplant payments that the law recognizes as administrative expense of the foster care program?). Thus, in its Letter of August 2006, CMS states that the development, tracking and adapting of a child?s treatment plan may be precluded by the newly-added DRA language. Id.