Courts Say States Must Improve Services to Medicaid Children

April 1, 2005

Being insured under Medicaid does not guarantee that children are receiving federally mandated health services, according to a March 22 federal court ruling that criticized many aspects of the Medicaid program in the state of Oklahoma.

The U.S. District Court for the Northern District of Oklahoma called on the state to come up with remedies for its failure to assure that care and services are available to Medicaid-eligible children "to the extent that such care and services are available to the general population in the geographic area." The court also found that Medicaid children in Oklahoma are not receiving the early and periodic screening, detection and treatment (EPSDT) specifically required by federal law; and that the state is not furnishing medical assistance "with reasonable promptness" to all Medicaid-eligible children.

The Oklahoma ruling follows closely on similar findings by a federal court in Illinois, which ruled last year that Cook County, Illinois, which includes Chicago, also fails to ensure that Medicaid children "have pediatric care and services to the extent that such care and services are available to the general population" and that Medicaid children are not provided early and periodic screening, detection and treatment.

Both court rulings emphasize that state-mandated levels of reimbursement to physicians who treat Medicaid patients are far below the rates doctors can charge private patients, and even below current Medicare reimbursements. Pediatricians who brought the Oklahoma case to court charged that the low payments authorized in Oklahoma discourage doctors from taking new Medicaid patients, putting children at risk of receiving no care at all or long-delayed treatment. The rates also make it virtually impossible to refer a Medicaid child for specialist care, the Oklahoma court was told.

The lengthy rulings are a catalog of services that are effectively unavailable to Medicaid children, including dental care and the attention of specialists for conditions such as seizures or asthma. Both Cook County and Oklahoma have been given deadlines for coming up with remedies for their current deficiencies.

In Oklahoma, that may include improving transportation and other services available to Medicaid children in rural areas. Chicago seems to face particular problems with unresponsive or poorly informed officials who give incorrect or dismissive advice to prospective Medicaid clients.

Both jurisdictions currently face budget shortfalls that have led many states to cut back on Medicaid reimbursements or recruitment. Children make up the largest Medicaid population but its least expensive; the largest part of state Medicaid payments go to maintain elderly indigent patients in nursing homes.

The two cases are Oklahoma Chapter of the American Academy of Pediatrics v. Michael Fogarty, in the United States District Court for the Northern District of Oklahoma; and Memisovski v. Maram in the United States District Court for the Northern District of Illinois, Eastern Division. The Illinois ruling is available at www.IllinoisAAP.org/memisovski.org.

See also www.healthinschools.org/sbhs/medicaid.asp.

Excerpts from Medicaid Court Rulings

The following are excerpts from the March 22, 2005, ruling of the U.S. District Court for the Northern District of Oklahoma on the Oklahoma Medicaid program:

From 1995 through December 31, 2003, provider reimbursement under Oklahoma?s Medicaid fee-for-service schedule never exceeded 72% of Medicare. Under commercial plans, Oklahoma physicians are reimbursed at rates of 130% to 180% of Medicare.
According to a 2003 survey conducted by the AAP, only 34% of Oklahoma?s pediatricians participate fully in the Medicaid program by accepting all new Medicaid patients. At the same time, 69% of Oklahoma?s pediatricians accept all new privately insured patients.
There is a much higher participation rate (80.8%) for non-office based pediatricians, which includes pediatricians employed by hospitals and clinics, medical schools or universities, community health centers, and "other" patient care employment settings. The data in Oklahoma demonstrate that the safety net pediatricians are already at "full patient capacity or beyond."
A high percentage of Oklahoma?s pediatricians cite hassles in the claims processing structure as a very important reason for limiting participation in Medicaid. Approximately 93% of Oklahoma?s pediatricians reported that low reimbursement is a very important reason why they would limit their participation in the Medicaid program.
Due to an insufficient number of providers willing to see Medicaid patients, recipients in Oklahoma often experience long delays in obtaining appointments for medically necessary care.
Of 413,302 children eligible to receive EPSDT dental services in fiscal year 2001, only 69,360 (17%) received any dental services.
The following are excerpts from the August 23, 2004, ruling by the U.S. District Court for the Northern District of Illinois on the Cook County Medicaid program:

There are approximately 800,000 children on Medicaid in Illinois, and approximately 600,000 of those children are in Cook County.
Cook County Medicaid reimbursement rates are, on average, approximately half of the federally established Medicare reimbursement rates for the same service, delivered in the same location by the same provider.
The major studies on physician reimbursement rates have concluded that physician reimbursements are the predominant factor in the decision to participate in the Medicaid program at all, to participate in a limited fashion, or to participate fully. Physicians also limit their Medicaid practices because of an unpredictable Medicaid payment system and Medicaid payment delays.
There are virtually no pediatric dentists in Cook County who accept Medicaid reimbursement.
Children on Medicaid rarely get vision and hearing screens from physicians who provide EPSDT services.
Doctors who practice in Cook County have difficulty finding a pediatrician or specialist who will accept referrals of Medicaid patients.
Children who receive primary care in clinic settings ordinarily must wait long periods of time for an appointment and, for a walk-in emergency, must wait in line often for hours or return on a different day. Children served by private-pay pediatric practices ordinarily receive much prompter appointments and access to care for emergencies without undue waiting.
The state [of Illinois] performs no investigation and has no policies directed to whether individual children are actually receiving appropriate care.
The state brought forth no evidence that it conducts in-person checks of providers to determine whether they supply the full complement of EPSDT services, nor did the state present any evidence that it checks whether a provider has received appropriate training to deliver the full complement of EPSDT services.
The defendants have no knowledge regarding the state of access for Medicaid-enrolled children in Cook County and have never tried to learn what the level of access might be.


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