JURIST Guest Columnist Brian Harris, Willamette University College of Law, Class of 2014, discusses the many institutional problems faced by foster children with behavioral health issues…

Approximately 35 percent of children and teens enter [PDF] foster care with significant dental and oral health problems. More problematic is the degree of behavioral health issues plaguing children in foster care. Children in foster care represent only three percent of children in Medicaid, yet they represent 15 percent [PDF] of Medicaid children using behavioral health services. Many states have aggressively sought to protect the health of children in foster care by tying screening requirements to their Medicaid programs [PDF]. As of 2010, 35 states have enrolled foster care children in Medicaid managed care programs.

Under the federal Social Security Act, people in Medicaid can receive benefits if the benefits are covered by their state and are deemed “medically necessary” [PDF] for the person in question. However, states provide the statutory and regulatory definitions of “medically necessary”, not the federal government.

The Early Periodic Screening, Diagnosis and Treatment (EPSDT) provisions of federal law create a unique medical necessity standard for children under 21. Under these rules, states are to provide any “necessary health care, diagnostic services, treatment and other measures” that are needed to “correct or ameliorate defects and physical and mental illnesses and conditions.” Federal law requires coverage even in cases that would be denied to an adult. The result is a mandatory standard of medical necessity that may preempt state definitions as applied to those under 21. In fact, a class action lawsuit forced Arizona to re-tool its definition [PDF] of medical necessity, and a similar case [PDF] is ongoing in Ohio.

The states use criteria, laid out in their medical necessity definitions, to determine if a preventative treatment is necessary to a child in foster care. Preventative treatments, such as Comprehensive Child Family Treatment (CCFT), have shown great success stabilizing children with severe behavioral problems.

For example, Oregon defines “medically appropriate” treatments as those that are consistent with a health or mental condition, are appropriate standards of good health practice and are recognized treatments, are not done solely for convenience and are the most cost effective choice.

Tennessee defines “medical necessity” statutorily. Tennessee’s coverage is generally more restrictive than Oregon. Tennessee provides TennCare, the agency running the state Medicaid program, some discretion towards deciding what constitutes medical necessity. TennCare used its discretion to add permanency to the criteria for determining medical necessity for foster care children.

Moreover, TennCare, through an interagency agreement with Tennessee’s Department of Child Services, coordinates enrollment and ongoing health services for all children in state custody. TennCare is notified as soon as a child enters state custody and assigns the child immediate Medicaid eligibility and a primary care practitioner (PCP) to serve as a medical home. PCPs are members of TennCare Select’s Best Practice Network of physicians, dentists and behavioral health care providers who have agreed to serve the health care needs of children in foster care.

Arizona has taken the unique approach to enroll foster care children into a single Medicaid health plan specifically tailored for them. After JK v. Dillenberg, Arizona re-tooled its medical necessity definition to be based on the principles of individualized services that are tailored to the needs of each child and family and are coordinated in accordance with the best practices in the most appropriate setting. Arizona’s principles led to the development of Medicaid benefits with a broad array of home-and community-based services and supports, as well as jointly developed goals and protocols by behavioral health and child welfare. Moreover, Arizona has empowered child and family teams to determine medical necessity for the service plans. Service plans developed by the child and family teams are considered Medicaid “authorized” services. A few designated services—inpatient hospitalization, residential treatment, group home care and psychotropic medications—still require prior authorization outside of the teams.

Even though seemingly arbitrary, the varying state definitions of medical necessity can have a big impact. The small amount of discretion provide by Tennessee has increased treatment success. Oregon’s standard has resulted in the ceasing of funds once a child is stabilized. Oregon’s standard neglects a major root cause of behavior problems afflicting children in foster care—the lack of permanency. Permanency is essential to a child’s wellbeing and is the primary goal in juvenile dependency. Oregon’s definition results in the treating of the symptoms rather than a root cause. Children placed back into unstable conditions are likely to regress to pre-treatment behaviors. Arizona was forced to revise its standard due to litigation over its definition. The revised standard for children under 21 has led to a robust system that promotes a wide array of services tailored to an individual’s needs.

Oregon and other states can receive the same results experienced by Tennessee and Arizona by revising their definitions of medical necessity. For example, Oregon can revise their laws to include permanency as a criterion for children in foster care. Other states can adopt Arizona’s principles and funding structure to develop an individually focused system. Furthermore, with increasing litigation over whether state medical necessity standards conflict with the federal EPSDT standard, states like Oregon should re-evaluate their definitions to lower the risk of litigation.

Brian Harris is a JD/MBA candidate and a development intern at Family Building Blocks. He was a research assistant for Institute for Better Legislating from 2011-12, during which time he also served as a law clerk for the Oregon Department of Justice. He earned a Bachelor of Arts in Psychology from Western Washington University in 2009.

Suggested citation: Brian Harris, The Role of Permanency in Medical Necessity for Foster Children, JURIST – Dateline, Feb. 2, 2014, http://jurist.org/dateline/2014/02/brian-harris-medicaid-children.php.