Terms

Medicaid CMS The Social Security Administration Low-income families with children, Individuals receiving SSI, Pregnant women, infants, and children with incomes less than a specified percent of the federal poverty level (FPL), Qualified Medicare Beneficiaries (QMBs) Spend down

Definitions
Title XIX of the Social Security Act of 1965 established: Medicaid is administered by: Supplemental Security Income (SSI) is a cash benefit program controlled by: Categorically needy individuals typically include: all the above

The term used for the process of depleting private or family finances to the point where the individual/family becomes eligible for Medicaid assistance is: The program that provides comprehensive alternative care for noninstitutional elderly who otherwise would be in a nursing home is known as: Medicaid coverage should be verified: Aged or disabled individuals who are very poor are covered under the Medicaid and Medicare programs, which are commonly referred to as: a &b Medicare beneficiaries who qualify for certain Medicaid benefits if they have incomes below the FPL and resources at or below twice the standard allowed under the SSI program are known as: When one state allows Medicaid beneficiaries from other states to be treated in its medical facilities, this exchange of privileges is referred to as: Medicaid benefits are the same from state to state. All states have a Medicaid program. In 1972, federal law established the SSI program, which provides federally funded cash assistance to unmarried pregnant women with dependent children. To be eligible for SSI, an individual must be at least 65 years old, blind, or disabled, and have limited resources.

Program of All-Inclusive Care for the Elderly PACE

no less than once a month Dual eligibles, Medi-Medi,

QMBs

reciprocity

F T F

** F F F T

Eligibility for SSI benefits is based on an individual's employment record. All states must cover the cost of prescription drugs for all categories of Medicaid recipients. All providers must accept and treat all categories of Medicaid parties. Providers must agree to accept what Medicaid pays as payment in full for covered services and are prohibited by law to "balance bill." Medicaid, by law, is intended to be the "payer of last resort." The time limit for filing Medicaid claims in all states is 1 year. Providers are never allowed to ask a Medicaideligible patient to make a copayment. Assignment should be accepted on all Medicaid claims. Medicare was established by Congress in 1996 to provide financial assistance with medical expenses to : all the above Medicare requires its beneficiaries to pay premiums, deductibles, and coinsurance, which is referred to as:

T F F T People older than 65, People with end-stage renal disease, People younger than 65 with disability. cost-sharing

Taxes withheld from employees' wages, Taxes Medicare Part A, the hospital insurance part of paid by employers Medicare, is funded through: a & b Medically necessary Coverage requirements under Medicare state that for a service to be covered, in must be considered: Part A coverage is available free of charge to eligible Medicare beneficiaries who: A private organization that contracts with Medicare to pay Part A and some Part B bills and determine payment to Part A facilities is called a: Medicare Part B helps pay for: Medicare pays ________ % of allowable charges after the annual deductible is met. The __________________ is the duration of time during which a Medicare beneficiary is eligible for Part A benefits for services incurred in a hospital or skilled nursing facility (SNF) or both.

are eligible to receive Social Security benefits fiscal intermediary (FI)

Medically necessary physician's services 80% Benefit period

Medicare Part C

Managed Healthcare plans that offer regular Part A and Part B Medicare coverage and additional coverage for certain other services are called: The prescription drug coverage plan, which began in January 2006, is called: The period during which a Medicare beneficiary is responsible for all prescription drug expenses until a total of $3850 (2007 figure) is spent outof-pocket is referred to as the: An individual qualifying for Medicare and Medicaid benefits is referred to as a: The program that provides community-based acute and long-term care services to Medicare beneficiaries is called: A health insurance plan sold by private insurance companies to help pay for healthcare expenses not covered by Medicare is called a: The term used when another insurance policy is primary to Medicare is: Some Medicare health maintenance organization (HMO) enrollees are allowed to see specialists outside the "network" without going through a primary care physician. This is called: A group of medical providers that skip the insurance company middleman and contracts directly with patients is referred to as a: Local medical review policies (LMRPs) were replaced in 2003 by: A form that Medicare requires all healthcare providers to use when Medicare does not pay for a service is the: Medicare Parts A and B are provided free of charge for qualifying individuals. Part A covers custodial and long-term care. Neither Medicare Part A nor Part B covers any preventive care services. For durable medical equipment to qualify for Medicare payment, it must be ordered by a physician for use in the home, and items must be reusable. Most Medicare Part B beneficiaries pay for Part B coverage in the form of a premium deducted from their monthly Social Security check.

Medicare Part D Donut Hole

Dual eligible PACE

Supplemental policy

Medicare Secondary Payer(MSP) self-referring

provider sponsored organization

LCDs ABN

F F F T

F F F F

Medicare beneficiaries are allowed only one "benefit period" per year. An individual must be eligible for Part A or B to enroll in a Medicare Advantage Plan. If a beneficiary has a Medicare Advantage Plan, he or she still needs a supplemental policy. The private organization that determines payment of Part B covered items and services is called a peer review organization. If individuals do not sign up for Medicare Part B when first becoming eligible and later decide to enroll, the monthly premium may be higher because of penalties. When an individual turns 65 and enrolls in Medicare, federal law forbids insurance companies from denying eligibility for Medigap policies for 6 months. Workers' compensation would likely be a primary payer to Medicare. Medicare HMOs typically screen potential enrollees for preexisting conditions. Under certain circumstances, a signed release of information form for Medicare beneficiaries can be valid for more than 1 year. Medicare's definition of medical necessity must specific criteria. Medicare health insurance claim numbers are typically in the format of nine numeric characters followed by one alpha character. The Medicare fee schedule is now based on a resource-based relative value system. Medicare nonPARs do not have to submit claims for their Medicare patients. The process of matching one set of data elements or category of codes to their equivalents within a new set of elements or codes is called a crossover. An individual who has Medicare Part A and B must have a supplement policy.

T F T

T T

T F F

Categories of Covered Services The Medicaid Act identifies numerous categories of medical services for which federal reimbursement is allowed. These categories of services do not describe specific medical treatments or procedures. Rather, they identify broad types of services. As noted in Little Rock Family Planning Service v Dalton, 60 F.3d 497, 498 (8th Cir. 1995), "Title XIX does not identify any specific medical procedures whether they are cesarean sections, transfusions, bypass surgery, or abortions." A. Mandatory Services States are required to cover fourteen categories of services. Each of these required services is defined in federal regulations. Given the breadth of these federal definitions, a specific medical treatment or health care service may fall within the definition of more than one category of service. The following is a list of required or mandatory services. See, 42 C.F.R. Part 440 for details. Inpatient hospital care Outpatient hospital care Physician's services Nurse midwife services Pediatric and family nurse practitioner services Federally qualified health center ("FQHC") Laboratories and x-ray services Rural health clinic services Prenatal care Family planning services Skilled nursing facility services for persons over age 21 Home health care services for persons over 21 who are eligible for skilled nursing services (includes medical supplies and equipment) Early and periodic screening, diagnosis, and treatment for persons under age 21 ("EPSDT") Vaccines for children B. Optional Services In addition to the services that each Medicaid program must provide, a state may choose from more than thirty optional services to include in its state plan. Once an optional service is identified in the state plan, that service must be provided consistent with all federal requirements. The optional services authorized by the Medicaid Act include those listed below. Medicaid's EPSDT program requires that states offer all these services to children up to age 21.

 Podiatrists' services Optometrists' services and eyeglasses Chiropractic services Private duty nurses Clinic services Dental services Physical therapy Occupational therapy Speech, hearing and language therapy Prescribed drugs Dentures Prosthetic devices Diagnostic services Screening services Preventive services Rehabilitative services Transportation services Services for persons age 65 or older in mental institutions Intermediate care facility services Intermediate care facility services for persons with MR/DD and related conditions Inpatient psychiatric services for persons under age 22 Christian Science schools Nursing facility services for persons under age 21 Emergency hospital services Personal care services Hospice care Case management services

 Respiratory care services Home and community-based services for individuals with disabilities and chronic medical conditions C. Understanding the Categories of Services 1. Federal definitions For most coverage categories, the federal regulations provide an explicit definition of covered services. See, 42 C.F.R. Part 440. Here are a few examples of these federal definitions: Home Health Services, include not only home health nursing services, but also home health aides; medical supplies, equipment and appliances suitable for use in the home; physical therapy, occupational therapy, and speech pathology and audiology services provided by a home health agency or facility licensed to provide medical rehabilitation services. 42 C.F.R. 440.70. Mandatory Home Health Services: nursing services, home health aid services, and medical supplies, equipment and appliances. 42 C.F.R. 440.70(b). Optional Home Health Services: physical therapy, occupational therapy, and speech pathology and audiology services provided by a home health agency or facility licensed to provide medical rehabilitation services. 42 C.F.R. 440.70(b). Rehabilitation Services. This category of service includes "any medical or remedial services recommended by a physician or other licensed practitioner of the healing arts . . . for maximum reduction of physical or mental disability and restoration of a recipient to his best functional level." 42 C.F.R. 440.130(d). Speech, hearing and language therapy. The federal definition of this category of service includes "any necessary supplies and equipment." 42 C.F.R. 440.110(c). Prosthetic devices. The federal definition includes "replacement, corrective, or supportive device prescribed by a physician or other licensed practitioner of the healing arts . . . [which will] prevent or correct physical deformity or malfunction; or support a weak or deformed portion of the body." 42 C.F.R. 440.120(c). 2. Services lacking a federal definition When a category of service is not defined in federal law, it may be necessary to look to state law. In this instance, the state definition of the category of service must be consistent with all provisions of the Medicaid Act and its implementing regulations. Durable Medical Equipment. Many states define DME as equipment that: (1) can withstand repeated use; (2) is primarily and customarily used to serve a medical purpose; (3) is generally not useful to a person in the absence of illness or injury; and (4) is appropriate for use in the home. Some states may use this definition of durable medical equipment but also include an eligibility requirement that an individual must be homebound to obtain durable medical equipment. This restriction on access to any home health services, including durable medical equipment and supplies, violates both the comparability requirement of the Medicaid Act. 42 U.S.C. 1396a(a)(10)(b); 42 CFR 240(b) and the prohibition on diagnosis-based decision making, 42 C.F.R. 230(c). See, State Medicaid Director Letter, July 25, 2000, Attachment 3-G.

D. Does the Treatment Sought Fit Within the Scope of a Covered Category of Service? Because the Medicaid Act identifies very broad categories of covered services, Medicaid advocates are often required to establish that a specific treatment or health care service prescribed by a treating health care professional is actually one that is "covered" under the state Medicaid program. For example, "assistive technology" is not referenced in the Medicaid Act. To obtain assistive technology devices or services through Medicaid, one must use the terminology found in the Medicaid Act, e.g., durable medical equipment, prosthetic devices, speech, hearing and language therapy, and establish that the treatment sought by the Medicaid beneficiary is one that fits within the scope of a covered service. Here are a few examples of services that some people with disabilities may require and the applicable coverage categories. Many services will fit into more than one Medicaid category of coverage.

Wheelchair - durable medical equipment, a mandatory service. Augmentative communication device (ACD) - ACDs fit within a number of categories: the mandatory category of durable medical equipment, and the optional categories of prosthetic devices, speech, hearing and language therapy, and rehabilitative services. Standing frame - durable medical equipment, physical therapy.

II. Requirements For Covered Services Although states have some discretion in fashioning the mix of health care services available to Medicaid beneficiaries, the Medicaid Act contains several important limits on this discretion to ensure that beneficiaries have timely and adequate access to health care. These federal limitations on states' discretion form the basis for most Medicaid service advocacy. A. Mandatory Services States must cover services defined as mandatory for all beneficiaries, both adult and children. B. Optional Services If states choose to cover an optional service, this service must be provided in a manner that is consistent with all federal requirements. C. Services for Children States must cover all medically necessary mandatory and optional services for Medicaid eligible children under the age of 21. In 1989, Congress amended the EPSDT provisions of the Medicaid Act to ensure that Medicaid beneficiaries under the age of 21 receive all medically necessary health care. 42 USC 1396d(r). D. State-wideness The Medicaid Act requires that a state plan for medical assistance "provide that it shall be in effect in all political subdivisions of the State. 42 U.S.C. 1396a(a)(1). The meaning of this requirement is clear: states cannot limit health care services available under the state plan to a specific geographic location or simply fail to provide a covered service in a particular area. To comply with this requirement, state Medicaid programs must provide all medically necessary health care services available under the state plan without regard to the county of residence of the beneficiary who is seeking health care services.

Sobky v Smoley, 855 F. Supp. 1123, 1137 (E.D. Ca. 1994). California Medicaid found in violation of 42 U.S.C. 1396a(a)(1) because its methadone treatment program was only available in certain counties and was not "in effect" on a statewide basis. It is insufficient for a state Medicaid program to simply formulate a statewide plan without further ensuring that the plan is in effect throughout the state. Christy v Ibarra, 826 P.2d 361 (Court of Appeals, Co, 1991). Colorado Medicaid in violation of 42 U.S.C. 1396a(a)(1) because case management services through the Home and CommunityBased Services program were not available in certain areas of the state. Although Colorado Medicaid could have waived the state-wideness requirement in developing this waiver program, its failure to do so made the program subject to this requirement. Clark v Kizer, 758 F. Supp. 572, 580 (E.D. Cal. 1990); aff'd in part, vacated in part, Clark v Coye, 967 F. 2d 585 (9th Cir. 1992). California Medicaid found in violation of 42 U.S.C. 1396a(a)(1) as its dental services program did not operate uniformly throughout the state. Medicaid services must be in existence, operational, and functioning. Smith v Vowell, 379 F. Supp. 139 (W.D. Tex 1974) aff'd 504 F. 2d 759 (5th Cir. 1974). Texas Medicaid's argument that 42 U.S.C 1396a(a)(1) simply requires that a plan be formulated, but not necessarily put it into effect, was characterized by the court as "preposterous." E. Reasonable Promptness The Medicaid Act also requires that a state plan for medical assistance: "must . . . provide that all individuals wishing to make application for medical assistance under the plan shall have opportunity to do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals." 42 U.S.C. 1396a(a)(8). Federal regulations implementing this requirement provide that a state Medicaid agency must "furnish Medicaid promptly to recipients without delay caused by the agency's administrative procedures" and "continue to furnish Medicaid regularly to all eligible individuals until they are found to be ineligible." 42 C.F.R. 435.930 Numerous cases interpreting the reasonable promptness requirement of the Medicaid Act have found states in violation of 42 U.S.C. 1396a(a)(8) when access to Medicaid services is delayed or denied. Doe v Chiles, 136 F.3d 709 (11th Cir. 1998). Individuals with developmental disabilities were being placed on long waiting lists for intermediate care facilities (ICFs). The court found Florida Medicaid to be in violation of the reasonable promptness requirement and ordered the state to establish a reasonable waiting period for ICF services not to exceed 90 days. Sobky v Smoley, 855 F. Supp. 1123, 1149 (E.D. Cal. 1994). Insufficient Medicaid funding by the State and counties for methadone maintenance treatment slots caused providers to place eligible individuals on a waiting list for treatment. The court held that this is precisely the sort of state procedure the reasonable promptness provision is designed to prevent. Linton v Carney, 779 F. Supp. 925, 936 (M.D. Tenn. 1990). State policy of limiting the number of nursing home beds that could be used for Medicaid patients violated the reasonable promptness provision by causing these patients "to experience extended delays and waiting lists in attempting to gain access to long term nursing home care. Clark v Kizer, 758 F. Supp. 572, 580 (E.D.Cal. 1990), aff'd in part and vacated in part on other grounds subnom., Clark v Coye, 967 F.2d 585 (9th Cir. 1992). The court granted summary

judgment on a reasonable promptness claim where declarations of county public health officials indicated that a shortage of Medicaid-participating dentists caused frequent delays in obtaining appointments for regular and emergency dental care. F. Freedom of Choice Medicaid beneficiaries are allowed to choose their health care professionals from a range of participating providers. This freedom of choice provision extends to any "institution, agency, community pharmacy, or person, qualified to perform the service of services required . . . who undertakes to provide him such services . . ." 42 U.S.C. 1396a(a)(23). However, under prescribed circumstances, state's may use managed care systems that restrict Medicaid beneficiaries to certain providers. Chisholm v Hood, 110 F. Supp. 2d 499 (E.D.La. 2000). Louisiana's policy of limiting Medicaideligible children with disabilities to occupational, speech, and audiological services provided by their resident school boards violated the children's freedom to choose from a "variety" of providers. G. Equal Access to Care 42 U.S.C. 1396a(a)(30)(A) states that: A state plan for medical assistance must . . . provide such methods and procedures relating to the utilization of and the payment for, care and services available under the plan . . . to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population.

This equal access provision requires states to establish payment rates adequate to assure Medicaid clients: (1) reasonable access, and (2) services of adequate quality. State Medicaid payment rates and methods of payment must be sufficient to attract enough providers so that care and services are available to the Medicaid population at least to the extent they are available to the general population in the geographic area. Rates must also be sufficient to assure quality of care. Clark v Kizer,758 F. Supp. 572, 577 (E.D.Cal. 1990, aff'd in part and vacated in part on other grounds sub nom., Clark v Coye, 967 F.2d 585 (9th Cir. 1992). Medicaid violated the equal access to care provision by utilizing payment rates for dental care that were 40% less for Medicaid beneficiaries than for other patients. Also indicative of this violation was a drop in dentist participation in the program from 83% of licensed dentists to 55% over a ten-year period. Sobky v Smoley, 855 F. Supp. 1123, 1138 (E.D. Cal. 1994). Court refused to find California Medicaid in violation of the equal access provision as the inadequate distribution of methadone services throughout the state did not result from the reimbursement rates paid by the state for this service. Holding that the equal access provision is directed at the problem of inadequate reimbursement rates, the court declined "to expand it to encompass plaintiffs' claims regarding the inadequate amount and distribution of services available." H. Comparability of Services The Medicaid Act contains an equality requirement to ensure that beneficiaries receive the same type of services whether they are categorically eligible for Medicaid or are eligible because they are medically needy. This comparability provision requires that the medical assistance available to one group of individuals "shall not be less in amount, duration, or scope than the medical

assistance made available to any other individual." 42 U.S.C. 1396a(a)(10)(B). This provision also ensures comparability of services between individuals within a group of categorically eligible beneficiaries. Parry v Crawford, 990 F. Supp. 1250, (D. Nev. 1998) Nevada Medicaid found in violation of the comparability requirement of the Medicaid Act because it limited ICF-MR services to individuals with mental retardation and excluded this service for individuals with related conditions. Given that the federal definition of ICF-MR services covers both individuals with mental retardation and related conditions both the comparability requirement and the amount, duration, and scope rule require that this service be available to individuals diagnosed with related conditions. Sobky v Smoley, 855 F. Supp. 1123, 1138 (E.D. Cal. 1994). California Medicaid found in violation of 42 U.S.C. 1396a(a)(10)(B) as it failed to fund enough methadone maintenance treatment for all categorically needy individuals who require this service. Clark v Kizer, 758 F. Supp. 572, 577 (E.D.Cal. 1990), aff'd in part and vacated in part on other grounds sub nom., Clark v Coye, 967 F.2d 585 (9th Cir. 1992). California Medicaid found in violation of the comparability requirement of the Medicaid Act based upon the variance in utilization rates of dental services from county to county by Medicaid-eligible children. Rodriguez v City of New York, 1999 WL 795552 (2nd Cir. N.Y.) New York Medicaid did not violate the comparability requirement of the Medicaid Act by refusing to include safety monitoring as a component of the personal assistance category of service. The comparability requirement does not extend to an examination of the scope of services offered to all eligibility groups. I. Reasonable Standards Requirement According to the Medicaid Act, "[a] State plan for medical assistance must...include reasonable standards...for determining eligibility for and the extent of medical assistance under the plan which...are consistent with the objectives of this [Act]." 42 U.S.C. 1396a(a)(17). Many courts applying this standard have concluded that states cannot exclude medically necessary services from coverage when this exclusion would result in a denial of all treatment for a particular medical condition. Exclusions of treatment from coverage based upon non-medical criteria violate the reasonable standards requirement of the Medicaid Act. Preterm v Dukakis, 591 F.2d 121(1st Cir. 1979). It is unreasonable and violates the purpose of the act to single out one medical procedure, abortion, and limit access to it to this service situations of life and death; it is also inconsistent with the Act which provides a central role for the treating physician in determining proper treatment. Hern v Beye, 57 F.3d 906 (10th Cir. 1995) "This Circuit and several other courts have interpreted the statute as imposing a general obligation on states to fund those mandatory coverage services that are medically necessary . . . It may be that, pursuant to a generally applicable funding restriction or utilization control procedure, a participating state could deny coverage for a service deemed medically necessary in a particular case. But a state law that categorically denies coverage for a specific, medically necessary procedure, abortion, except in those rare instances when the patient's life is at stake is not a "reasonable standard... consistent with the objectives of the [Act]." Hope Medical Group for Women v Edwards, 63 F.3d. 418 (5th Cir. 1995) (same). Pinneke v Preisser, 623 F.2d 548 (8th Cir. 1980). Exclusion of sex reassignment surgery is on arbitrary denial of benefits based solely on the diagnosis, type of illness, or condition where

physician and hospital care are mandatory services and such surgery is "the only successful treatment known to medical science." Weaver v Reagen, 886 F.2d 194 (8th Cir. 1989). Missouri's prohibition on off-label uses of AZT is "unreasonable and inconsistent with the objectives of the Medicaid Act" in light of the fact that the medical community agrees that it is the only available treatment for AIDS. Fred C. v Texas, 988 F. Supp. 1032 (W.D. Tex. 1997), aff'd 167 F.3d 537 (5th Cir. 1998). Denial of coverage for ACD is irrational in light of purpose of the Medicaid Act which is to help individuals attain the capability for independence and self sufficiency. State may not deny treatment solely based upon age as there is no rational basis for distinguishing between those over and under 21. Salgado v Pima County Arizona, 878 P.2d 659 (1994). State provided organ transplant coverage for children but not for adults. The court found it unreasonable to allocate treatment within a service category solely based upon age. McDaniel v Betit, WL 426816 (D.Utah 1996). State may not deny treatment solely because of age. Beneficiary was 22 and state provided ABM transplant for those under 21. Hunter v Chiles, 944 F. Supp. 914 (S.D.Fla.1996). Adults sought ACDs which state conceded it would cover for child if unavailable from other sources. Citing Salgado, court held that "Medicaid funding cannot be denied on the basis of age." Age as sole criterion is wholly unrelated to medical necessity and is unreasonable. Peck v Califano, 454 F. Supp. 484, 488 (D.Utah 1977). Medicaid payment for sterilizations limited to those over 21 fails the constitutional rational relationship test. While the reasonable standards requirement of the Act has provided protection to many Medicaid beneficiaries seeking treatment that falls within the scope of covered services, there have also been several unsuccessful applications of this provision. Rodriguez v City of New York, 1999 WL 795552, cert. denied (2nd Cir. N.Y.) 121 S. Ct. 156 (2000). New York Medicaid's failure to provide safety monitoring as part of the personal assistance benefit does not violate the amount, duration, and scope rule or the provision prohibiting diagnosis-based decision-making. The court refused to consider reasonableness in light of the Medicaid statute as a whole, and accepted the state's allegation of financial constraints as a reasonable basis for its restriction. Cherry v Tompkins, WL 502403 (S.D.Ohio 1995). State amended its level of care criteria for determining whether an individual qualified for home and community based services. The old criteria considered all aspects of an individual's condition, the new criteria looked at few criteria and thus made it more difficult to qualify for waiver services. The court held that the standards were "reasonable" and "consistent" with the act. Nothing in the act required the state to consider all aspects of an individual's condition. J. Amount, Duration, and Scope Rule The reasonable standards requirement of the Medicaid Act is further described by the amount, duration, and scope rule. 42 C.F.R. 440.230. This rule provides that: (a) The plan must specify the amount, duration, and scope of each service that it provides for(1) The categorically needed; and

(2) Each covered group of medically needy. (b) Each service must be sufficient in amount, duration, and scope to reasonably achieve its purpose. (c) The Medicaid agency may not arbitrarily deny or reduce the amount, duration, or scope of a required service...to an otherwise eligible recipient solely because of the diagnosis, type of illness, or condition. (d) The Agency may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures. Services Must Be Sufficient in Amount, Duration and Scope "Each [Medicaid] service must be sufficient in amount, duration, and scope to reasonably achieve its purpose." 42 C.F.R. 440.230(b) 1. Numerical Limits on Services Curtis v Taylor, 625 F.2d 645 (5th Cir. 1980). Doctor visits limited to three per month except for emergencies. "Sufficient to reasonably achieve purpose of the act" if adequate to serve the medical needs of most of the individuals eligible for Medicaid. On average Medicaid recipients saw physicians 5.6 times per year. Only 3.9% of Medicaid recipients needed more than three visits in any one more and only .5% required more than three visit in more than one month. Mitchell v Johnson, 701 F.2d 337, 346-47 (5th Cir. 1983). Texas replaced annual EPSDT dental checkups with one checkup every three years, except under limited circumstances, and deleted eight basic dental services. The court defined the purpose of the EPSDT dental services as "aimed at reducing future Medicaid expense by detecting and remedying incipient dental problems with children who could reasonably be anticipated to become adult Medicaid recipients. The court found the dental plan insufficient in amount, scope and duration to meet the reasonable dental needs of the children. EPSDT provisions expanded since this decision. 2. Drugs Medicaid Act permits states to exclude certain drugs such as fertility drugs, barbiturates, benzodiazepines, and nonprescription drugs. For a complete list see, 42 U.S.C. 1396r-(8)(d)(2). a. Specific drugs Visser v Taylor, 756 F. Supp. 501, 507 (D.Kan. 1990). The state's refusal to cover Clozaril violated Medicaid regulation because it was an arbitrary reduction in the scope of services and a denial of medically necessary treatment. Weaver v Regan, 886 F.2d 194, 197-200 (8th Cir. 1989), reh'g denied (Nov. 6, 1989). Missouri could not deny coverage of AZT for AIDS patients who are Medicaid eligible and whose physicians have certified that AZT is medically necessary. b. Drug Formularies Dodson v Parham, 427 F. Supp. 97 (N.D. Ga. 1977). Invalidating formulary restrictions on prescription drugs as insufficient in amount, scope and duration to achieve their purpose which was deemed to be the care, mitigation or prevention of disease or the maintenance of recipients. The prior authorization system was flawed because prior authorization system for approval of

drugs not on the list did not operate on weekends, at night, or on holidays and did not allow prescribing physicians any discretion in emergencies. Jeneski v Myers, 163 Cal. App. 3d 18 (1984), cert denied sub nom. Kizer v Jeneski, 471 U.S. 1136 (1985). Making certain drugs totally unavailable and ignoring necessity that some patients have for drugs that might be merely palliative for others, violated Medicaid act as discrimination based on medical disorder of the person. 3. DME Formularies HCFA State Medicaid Director, Letter (September 14, 1998) sets out the requirements for DME coverage. States may use DME formularies as an administrative convenience, but the state must provide a reasonable and meaningful procedure for requesting items that do not appear on a State's approved list. The process must be timely and employ reasonable and specific criteria by which an individual item of DME can be judged for coverage. These criteria must be sufficiently specific to permit a determination of whether an item of DME that does not appear on the state's approved list has been arbitrarily excluded from coverage based solely on a diagnosis, type of illness or condition. States may not arbitrarily exclude items from coverage based solely on a diagnosis, type of illness or condition. In evaluating a request for an item of DME, a state may not use a "Medicaid population as a whole" test which requires a beneficiary to demonstrate that, absent coverage of the item requested, the need of "most" Medicaid recipients will not be met. This test, in the DME context, establishes a standard that virtually no individual item of DME can meet. The approved list and the process for seeking modifications and exceptions to the DME list must be made available to all enrollees. Estaban v Cook, 77 F. Supp. 2d 1256 (S.D.Fl. 1999). Florida's cost cap of $582 on coverage of wheelchairs which effectively denied both motorized and customized mobility devices to Medicaid recipients over age 21 failed to comply with HCFA's policy on DME coverage because the cap was absolute and there were no procedures for requesting an exception. The exclusion was unreasonable because it was based solely on age (over 21) rather then medical necessity, and did not comport with the purpose of the Medicaid Act which is to help individuals "attain or retain capacity for independence and self-care." Brisson v Dept. of Social Welfare, 702 A.2d 405 (S. Ct. Vt., 1997) Medicaid agency's refusal to provide a closed circuit television (CCTV) under the optional category of eyeglasses violated the amount, duration, and scope rule of the Medicaid Act. This exclusion is inconsistent with the state's obligation to cover treatment in a manner that is consistent with the federal purpose of providing services to those with the greatest need. 5. Other Kinds of Limits Montoya v Johnston, 654 F. Supp. 511 (5th Cir.1987). Cap of $50,000 on inpatient hospitals services is an unreasonable and arbitrary denial of services to children who needed guarantee of $100,000 in order to be placed on active list for liver transplants. King v Sullivan, 776 F. Supp. 645 (D.R.I.1991). Plaintiffs claimed that state did not spend enough money on ICF-MR services and sought to compel the state to make more group home

services available. The court denied summary judgment for plaintiffs on the issue of whether the services were sufficient to reasonably achieve purposes of the ICF-MR service. Defendants submitted evidence that every plaintiff had been offered a placement, and plaintiffs offered no evidence that the state had promised group home placement to all persons and that persons had been denied these placements. The State May Not Use Arbitrary Distinctions Based Solely on Diagnosis, Type of Illness, or Condition "The Medicaid agency may not arbitrarily deny or reduce the amount, duration, or scope of a required service...to an otherwise eligible recipient solely because of the diagnosis, type of illness, or condition." 42 C.F.R. 440.230 (c) 1. Prohibited distinctions based on diagnosis, condition White v Beal, 555 F.2d 1146 (3rd Cir. 1977). Eyeglasses available to those with eye pathology but denied to persons suffering from other types of visual impairment is discrimination based on diagnosis. Pinneke v Preisser 623 F.2d 546 (8th Cir. 1980). Exclusion of sex reassignment surgery is arbitrary denial of benefits based solely on the diagnosis, type of illness, or condition where physician and hospital care are mandatory services and such surgery is "the only successful treatment known to medical science." Weaver v Regan, 886 F.2d. 194 (8th Cir. 1989). Missouri's rule limiting Medicaid coverage of AZT to only those recipients who met diagnostic criteria listed on the FDA label was an arbitrary denial of benefits based solely on diagnoses, type of illness, or condition in light of widespread agreement in the medical community that AZT was the only approved treatment for the virus and was an effective treatment for those who do not meet the FDA indications. Preterm v Dukakis, 591 F.2d 121 (1979 1st Cir.). When state singles out one condition, a medically complicated pregnancy, and restricts access to abortion treatment to life and death situations it has crossed the line between permissible discrimination based on degree of need and entered into forbidden discrimination based on medical condition. It is unreasonable to single out one medical procedure, abortion and limit access to it to situations of life and death. Hern v Beye, 57 F.3d 906 (10th Cir. 1995). Colorado's Medicaid program only paid for abortions when the mother's life "would be endangered if the fetus were carried to term." Although states may use medical need as a criterion for placing appropriate limits on coverage, a state may not single out a particular, medically necessary service and restrict coverage to instances where the patient's life is at risk. Such a policy denies services solely on the basis of diagnosis or condition, and does so arbitrarily because the denial is not in accordance with a uniform standard of medical need." 2. Distinctions that are not prohibited Cherry v Tompkins, WL 502403 (S.D.Ohio 1995). State's criteria for determining eligibility for home and community based waiver services gave more emphasis to physical rather than cognitive impairments determining level of care requirements for home and community based services. No violation because distinction focused on who should qualify for services, rather than the services provided. Appropriate Limits Must Be Based On Medical Necessity or Utilization Review Procedures

"The Agency may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures." 42 C.F.R. 440.230(d) A. Medical Necessity All Medicaid services must be medically necessary. Beal v Doe, 432 U.S. 438 (1977). Pennsylvania Medicaid did not violate the Medicaid Act by excluding coverage for non-therapeutic abortions as such procedures were not determined by the treating physician to be medically necessary. It is within the discretion of a state Medicaid program to exclude those procedures or treatment determined to be medically unnecessary. 1. Defining Medical Necessity Medical necessity is not defined by the Medicaid Act. However, state law and regulation often offer a definition. While the wording of these definitions may differ somewhat from state to state, numerous courts have concluded that the determination of what treatment is medically necessary must be consistent with accepted standards of medical practice and must be made by the beneficiary's treating physician. 2. The Role of the Treating Physician The importance of the treating physician or other health care professional's in determining what treatment is medically necessary is clear from the legislative history of the Medicaid Act. "The committee's bill provides that the physician is to be the key figure in determining utilization of health services - and provides that it is a physician who is to decide upon admission to a hospital, order tests, drugs and treatments, and determine the length of stay. For this reason the bill would require that payment could be made only if a physician certifies to the medical necessity of the services furnished." S.Rep. No. 404, 89th Cong., 1St Sess., reprinted in 1965 U.S.C.C.A.N. 1943. Relying upon this legislative history, numerous courts have emphasized that State procedures that interfere with a treating physician's professional judgment concerning medically necessary treatment violate the Medicaid Act. Pinneke v Preisser, 623 F.2d 546, 550 (8th Cir. 1980). "[T]he 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 governmental officials." Beal v Doe, 432 U.S. 438 (1977). "[T]he decision whether to fund the costs of abortion thus depends solely on the physician's determination of medical necessity." B. Experimental Procedures States may be required to fund certain experimental procedures. Rush v Parham, 625 F.2d 1150 (5th Cir. 1980). State may refuse to cover experimental treatment, i.e. treatments not generally recognized as effective by the medical profession. The case was remanded for trial on the issue of whether sex-reassignment surgery is experimental in general. Smith v Rasmussen, 57 F. Supp. 2d 736 (N.D. Iowa 1999). Sex reassignment surgery is not experimental and must be covered when medically necessary.

Weaver v Reagan, 886 F.2d 194 (8th Cir. 1989). Missouri's Medicaid program refused to pay for the drug AZT except for patients whose diagnoses and conditions matched the conditions specified on the FDA label for the drug. The state claimed the limit was an "appropriate limit based upon medical necessity" because the drug was "experimental when used for off-label purposes. The court found that FDA labeling was not intended to limit a physician's use of an approved drug and that AZT was generally accepted in the medical community as an effective treatment for AIDS patients who did not meet the FDA indications. The court held that the drug was not experimental, but "generally accepted by the professional medical community as an effective and proven treatment for [AIDS]. C. Utilization Review DeLuca v Hammons, 927 F. Supp. 132 (1996). State regulation limiting the number of home-care attendant hours allocated to Medicaid recipients who are initial applicants for home care, but placing no limit on the number of hours of services for those already receiving home care services is arbitrary and not a reasonable UR to limit unnecessary services. J.K. v Dillenberg, 836 F. Supp. 694 (1993). State Medicaid agency must oversee and remain accountable for uniform state-wide utilization review procedures conforming to bona fide standards of medical necessity. Regional behavioral health authorities found to be state actors and their actions in administering services amount to state action and governed by federal Medicaid law. III. Steps in Analyzing a Denial of Medical Treatment A. Is the client a Medicaid beneficiary? B. Does the treatment sought fall within the scope of a covered category of service? Mandatory services Optional services EPSDT services Waiver services C. Is the service medically necessary for this client's condition? D. Does exclusion of the service violate one of the limits on state discretion? arbitrary distinctions based solely on diagnosis, treatment, condition sufficient in amount, duration and scope to reasonably achieve its purpose unreasonable standards inconsistent with the purposes of the act. inappropriate limit not based on medical necessity or UR