Q & A: Medicaid and Deference to Treating Providers

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 
somers@healthlaw.org. 

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