Q & A
Medicaid and Deference to Treating Providers
Produced by Sarah Somers
National Health Law Program1
November 2008
Q. My twelve year-old client?s doctor requested coverage for twelve
hours per day of private duty nursing. The state Medicaid agency
denied the request, stating that twelve hours was too expensive
and that coverage would only be authorized for six hours per day.
The state?s attorney handling the case told me that the state has
the ultimate say on medical necessity and can veto the decision of
the treating provider. Is this correct?
A. No. State Medicaid agencies should give deference to the treating
providers? decisions. This is particularly true if the beneficiary is
under 21. The agencies do, however, retain control in other ways,
including the right to implement utilization review procedures and
requirements governing participating providers.
Discussion
The role of the treating provider in determining necessity for services
Congress intended that the treating physician play a central role in
determining utilization of health services in the Medicaid program and that the
physician should decide which Medicaid services are appropriate for an
individual and in what amount. See S. Rep. 89-404 (1965), reprinted in 1965
U.S.C.C.A.N. 1943, 1986. This is particularly true in the context of Medicaid?s
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) requirements,
where the statute requires coverage of services necessary ?to correct or
ameliorate? a child?s health condition. 42 U.S.C. § 1396d(r)(5).
Numerous court decisions have recognized this principle and can provide
support for advocates when challenging state Medicaid agency denials of
recommended services under EPSDT:
? Rosie D. v. Romney, 410 F. Supp. 2d 18, 26 (D. Mass. 2006)
(holding that ?if a licensed clinician finds a particular service to be
medically necessary to help a child improve his or her functional
level, this service must be paid for by a state's Medicaid plan
pursuant to the EPSDT mandate?);
? Collins v. Hamilton, 349 F.3d 371 (7th Cir. 2003) (holding that a
state?s discretion to exclude services that have been deemed
medically necessary under EPSDT by a treating provider has been
?circumscribed by the express mandate of the statute?);
? Pediatric Specialty Care, Inc. v. Ark. Dep?t of Human Servs., 293
F.3d 472 (8th Cir. 2002) (reminding the state that it has a duty to
?arrange for corrective treatments prescribed by physicians?);
? S.D. v. Hood, 2002 WL 31741240 at *7 (E.D. La. Dec. 5, 2002),
aff?d, 391 F.3d 581 (5th Cir. 2004) (rejecting agency decision to
deny Medicaid coverage where the evidence supporting this
conclusion was offered by a doctor who had never examined the
patient and who did not have the same qualifications as the
patient?s treating experts);
? Urban v. Meconi, 930 A.2d 860, 865 (Del. S. Ct. 2007) (holding that
the administrative decision-maker must give ??substantial weight? to
the opinions of treating physicians; ? generally should give less
probative weight to the opinion of a physician who has never
examined the patient; ? and should not substitute its expertise for
the competent medical evidence.?) (citations omitted);
? Hummel v. Ohio Dep?t of Job & Fam. Services, 844 N.E.2d 360,
364 (Ohio App. 2005) (affirming lower court reversal of agency
decision denying Medicaid coverage, stating that the ?medical
opinion and diagnosis of a patient?s treating physician are entitled
to substantial deference in deciding whether to grant medical
benefits?);
? Emily Q v. Bonta, 208 F. Supp. 2d 1078 (C.D. Cal. 2001) (holding
that therapeutic behavioral services must be provided when
medically necessary and that an authorized practitioner of the
healing arts must make that determination).
A state has significantly more leeway to define medical necessity for
services for adults and can impose limits on coverage of services. However, the
principle of deference to the treating provider has been recognized in cases
involving services for adults as well. ?The treating physician has had a greater
opportunity to examine and observe the patient. Further, as a result of his duty
to cure the patient, the treating physician is generally more familiar with the
patient?s condition than are other physicians.? Connor v. Rudolph, No. 01-A-01-
9601-CH-00046, 1996 WL 591176, *5 (Tenn. App. Oct. 11, 1996) (reversing
decision denying Medicaid benefits). According to the Eighth Circuit Court of
Appeals, ?The Medicaid statute and regulatory scheme create a presumption in
favor of the medical judgment of the attending physician in determining the
medical necessity of treatment.? Weaver v. Reagan, 886 F.2d 194, 200 (8th Cir.
1989). Requiring coverage of the requested drug therapy, the Court further
stated that ?the decision of whether or not certain treatment or a particular type of
surgery is ?medically necessary? rests with the individual recipient?s physician and
not with clerical personnel or government officials.? Id. at 199-200 (citations
omitted). Other useful cases include:
? Holman v. Ohio Dep?t of Human Services, 757 N.E.2d 382, 388-89
(Ct. App. 2001) (reversing agency?s denial of coverage noting ?it is
well settled that treating physicians? opinions based on objective
evidence should be accorded significant weight ? and, if the
opinion is uncontradicted, complete deference must be given to
such opinions and diagnoses?) (citations omitted);
? A.M.L. v. Dep?t of Health, 863 P.2d 44, 47-48 (Utah App. 1993)
(reversing administrative decision based on agency-hired physician
rather than the opinion of the treating physician).
Cases concerning programs other than Medicaid can also be useful. See
generally Williams v. Astrue, No. 07-1054, 2007 WL 4239462, *3 (D. Kan. Oct..
30 2007) (?[T]he opinion of an agency physician who has never seen the
claimant is entitled to the least weight of all. ?. A treating physician?s opinion
about the nature and severity of the claimant?s impairments should be given
controlling weight by the Commissioner if well supported by clinical and
laboratory diagnostic techniques and if it is not inconsistent with other substantial
evidence in the record.?); see generally Lewis v. Callahan, 125 F.3d 1436 (11th
Cir. 1997) (holding that, in social security and SSI disability determinations, the
opinion of the treating physician must be given substantial weight unless ?good
cause? is shown); Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 608 (1999)
(Kennedy, J., concurring) (stating that ?[t]he opinion of a responsible treating
physician in determining the appropriate conditions for treatment ought to be
given the greatest of deference.?)
Control by state agency
Some written guidance from the federal Centers for Medicare and
Medicaid Services (CMS), which administers the Medicaid program,2 may
appear at odds with this principle. Letters to state officials have stated that, in
general, the definition and determination of medical necessity is ultimately up to
the state. See, e.g., Letter from Christine Nye to Regional Administrator, Region
VIII (Oct. 3, 1991) (stating that the state defines medical necessity, even under
EPSDT, and need not cover services that are not necessary). States may use
such guidance to argue that they can override a treating provider?s determination
that a service is necessary. When determining necessity for services for a
beneficiary under age 21, however, they must conform to the statutory definition
of necessity in the EPSDT statute (?necessary to correct or ameliorate?) and
cannot impose cost limits through the guise of medical necessity.
State agency personnel may argue that deference to the treating provider
would mean that they would relinquish control over their Medicaid programs.
This is not true, because there are many safeguards in place. First, to be
covered under EPSDT, services must fall within one of the categories listed in 42
U.S.C. § 1396d(a). Moreover, CMS has made it clear that states retain
discretion to define the amount, duration, and scope of medically necessary
treatment covered by EPSDT in several specified ways:
? States do not have to cover treatment that is unsafe or
experimental. See, e.g., U.S. Dep?t of Health & Human Servs.,
CMS State Medicaid Manual § 5122; Letter from Rozann Abato,
Acting Director Medicaid Bureau, to State Medicaid Directors (May
26, 1993) (stating that services are not covered if they are unsafe
or experimental or not generally recognized as accepted
treatment);3
? States may also choose to cover a service in the most economic
mode, as long as it is ?similarly efficacious? to alternative services,
does not delay services and does not violate other federal laws
such as the Americans with Disabilities Act. Id. See also, e.g.,
Dep?t of Health & Human Servs., Dear State Medicaid Director,
Attachment 4-B (Jan. 10, 2001). States may also exclude items
that are not medical in nature. See, e.g., May 26, 1993 Letter from
Rozann Abato, id.;
? States may require prior authorization for treatment services, so
long as it does not delay delivery of care and is consistent with the
?preventive thrust? of EPSDT. H.R. Rep. No. 101-247 at 399,
reprinted in 1989 U.S.C.C.A.N. 1906, 2125;
? States may place tentative limits on services, as long as there is a
process to allow coverage beyond the limit for a child. May 26,
1993 Letter from Rozann Abato, id.
It is important to remember, however, that states are not permitted to deny
medically necessary treatment under EPSDT solely based on cost or the
existence of hard caps on services for adults. See, e.g., U.S. Dep?t of Health &
Human Servs., HCFA, Transmittal Notice MCD-90-90 (Region IV) (Sept. 18,
1990) (stating that, under the Omnibus Budget Reconciliation Act of 1989, limits
on quantity or cost of services are precluded in EPSDT if they prevent the
provision of medically necessary services); Memorandum from Christine Nye,
HCFA Medicaid Director, to Regional VIII Administrator, HCFA (1991) (stating
that Montana?s limits on the number of hours of psychologist and physical
therapist services that could be covered for children under 21 were no longer
legal under the 1989 legislation if they resulted in excluding necessary services.)
In addition, in order to be certified for reimbursement by Medicaid,
providers must meet multiple requirements of state and federal law, as well as
many contractual ones. Accordingly, physicians who are eligible to receive
Medicaid reimbursement for providing services have already met numerous
requirements, many of which are imposed by the state itself. See, e.g., 42
U.S.C. §§ 1320a-7 (imposing civil monetary penalties for failure to comply with
certain Medicaid requirements); 1396a(a)(27) (establishing record-keeping
requirements); 42 C.F.R. §§ 447.1 ? 447.31, 447.46, 447.56 (2006)(requirements
related to eligibility for payments. Most of these requirements are intended to
regulate the quality of care and economic efficiency. See, e.g., 42 U.S.C. §
1396a(a)(30)(A) (requiring provider reimbursement rates to be ?consistent with
efficiency, economy and quality of care?). These requirements imposed on
Medicaid providers are safeguards to limit waste and ensure that only qualified
providers participate in Medicaid and only medically necessary care is covered.
A Case to Watch
The District Court for the Northern District of Georgia recently decided a
case on deference to the treating provider in EPSDT cases. In Moore v. Medows,
563 F. Supp. 2d 1364 (N.D. Ga.), the state Medicaid agency reduced coverage
of a child?s private duty nursing services from 94 hours per week to 84 hours per
week. The basis for the reduction was, in part, the cost of the care and the fact
that the child?s mother could not be present during the time that nurse was caring
for the child. The court granted summary judgment for the plaintiff, holding that
The state must provide for the amount of skilled nursing care which the
Plaintiff's treating physician deems necessary to correct or ameliorate her
condition. The Defendant may not deny or reduce the hours of skilled
nursing care that is medically necessary based upon cost or the lack of a
secondary caregiver.
Id. at 1357. The state has appealed the decision to the Eleventh Circuit Court of
Appeals. It has been briefed and should be scheduled for oral argument in the
next several months. Counsel for the plaintiff is the Georgia Advocacy Office, the
state P & A. NHeLP will keep advocates informed about developments in the
case.
Advocacy Tips
Work with the treating provider to help them write the best possible
recommendation/prescription for coverage of services under EPSDT. They
should describe the individual?s condition, his or her need for the service, and
explain how the service will ?correct or ameliorate? the child?s condition.
If a service is denied as experimental, remember that a service is not
experimental simply because it?s rare. Discuss the service with the treating
provider, review medical literature about the condition, and determine whether
other states Medicaid programs or Medicare cover the procedure.
Even if the service denied is for an adult, the cases cited in this Q & A may
help convince the state agency to reverse a denial based purely on medical
necessity.
1 Produced by the National Health Law Program with funding from The Nathan Cummings
Foundation, the Public Welfare Foundation, and a grant from the Training Advocacy Support
Center (TASC), which is sponsored by the Administration on Developmental Disabilities, the
Center for Mental Health Services, the Rehabilitation Services Administration, the Social Security
Administration, and the Health Resources Services Administration. TASC is a division of the
National Disabilities Rights Network (NDRN).
2 Before 2001, CMS was called the Health Care Finance Administration (HCFA). Written guidance
predating that change will refer to HCFA, rather than CMS.
3 All CMS guidance cited in this Q & A are available from NHeLP. Send requests to
