Washington Insider

• By Scott Williams, Annette Dennig
• Oct 01, 2005

Quick social studies flashback: Medicaid was enacted by the Social Security Act of 1965 and is the largest program providing medical and health related services to America's low-income and needy population. Medicaid is a jointly funded, federal-state health insurance program with just under 40 million people, including 60 percent of the nation's children, who are eligible to receive federally assisted income maintenance payments.

While states are not required to participate in the federal Medicaid program, if they do chose this path, and all 50 states have, then they must operate their programs in compliance with the federal statutes. The states must offer certain basic services and have the option of providing others.

The amount of federal funding available to a state varies, this is referred to as federal financial participation (FFP), and is determined by comparing a state's per capita income to the national average. The FFP for any state will range from 50-83 percent, depending on this per capita income formula.

So, is Medicaid working? Most believe not because many states take the approach that to save health care you must cut health care. This is most definitely the wrong answer. Medicaid complains about bleeding from the artery, but so are the beneficiaries. Medicaid's purpose is clearly stated: "to furnish rehabilitation and other services to help such families and individuals attain or retain capability for independence or self care."

Medicaid's mission is to provide what is medically necessary with the end result being independence. The trouble rest with states that are starting to redefine what medical necessity is and their definition is not pretty. Tennessee, for instance, is taking the decision out of the doctor's hands and into the states, effectively leaving the doctor out of the process. This was not the intent of Congress as described below when considering the Medicaid legislation:

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 the above legislative history, numerous courts have emphasized that any State procedure that interferes with a treating physician's professional judgment concerning medically necessary treatment violates the Medicaid Act. The federal courts have become the latest battleground when determining the rights of individuals with disabilities on Medicaid. Keep in mind that it is indeed appropriate to go straight to federal court and that a state fair hearing is not a requirement before doing so.

Why does Medicaid deny coverage if it is illegal? Most folks would say money, and it is a reason, but I have found in my travels to various Medicaid's that the state agency is more concerned with the beneficiary actually getting the appropriate equipment. They don't believe a person can actually require a $25,000 power wheelchair. It really is about educating those who review on product, policies, and practices. Fraud is a big issue and every state Medicaid is interested in certification and having qualified providers serving their beneficiaries. Some have even adopted certification policy (Alabama, California, Georgia, Massachusetts, and Tennessee).

As each state has a different plan, the result is that DME is not routinely funded in every case and in every state. DME has become more expensive since the fold-up, chrome, E&J days. There is a greater chance that it will take a hearing or even litigation to get the item approved. Litigation has been necessary to establish that the equipment in question is indeed medically necessary and even necessary due to Medicaid precluding the funding for a whole class of durable medical equipment, i.e., denial of power chairs for beneficiaries over 21.

This is a perfect example where litigation was appropriate. Florida had a Medicaid cost cap of $582 for wheelchairs effectively denying both motorized and customized mobility devices to Medicaid recipients over age 21. There were no procedures for requesting an exemption. The exclusion was unreasonable because it was based solely on age (over 21) rather then medical necessity. Estaban v Cook, 77 F. Supp. 2d 1256 (S.D.Fla. 1999).

Will it get better or worse? This is my bit of good news for the day. I say better. Money will fluctuate with the economy and will always be an issue. CMS (the department that runs Medicare) will be releasing 50 + codes, coupled with previous accessory codes, and will go into effect Jan. 1, 2006. Each state, under HIPPA, will be required to follow these codes. While each state will have their own allowables, the codes will effectively put the diagnosis and environment of the beneficiary with the appropriate equipment. I can't promise to eliminate denials, however.

So what if you get that Medicaid denial? What can a provider or therapist do when faced with a denial? If the appropriate paperwork and letter of medical necessity have been submitted, turn to your states Protection & Advocacy system (P&A). The P&A is a federally mandated system within each state and territory that provides protection of the rights of persons with disabilities through legally based advocacy. The governor in each state has designated an agency to administer the P&A system and has provided assurance that the system was and will remain independent of any service provider.

It is illegal for a manufacturer or provider to sue but the beneficiary currently has a right to do so. The beneficiary will need to contact the PAIR Program within the P&A system. PAIR stands for the Protection and Advocacy for Individual Rights (PAIR). This program was established by Congress as a national program under the Rehabilitation Act in 1993. PAIR programs were established to protect and advocate for the legal and human rights of persons with disabilities.

It is getting harder and harder to fight back. Medicaid as an entitlement is hanging on by a thread. For instance, in a typical case, the United States Court of Appeals for the Ninth Circuit, in San Francisco, said in August of this year that Medicaid recipients could not enforce the provision of the Medicaid law that promises them "equal access" to care and services. In establishing this guarantee, the court said, "Congress did not unambiguously create an individually enforceable right." This case is under appeal.

Become an advocate for you client. Perhaps the best explanation of Medicaid advocacy was explained by the court in Salazar v. District of Columbia, 954 F. Supp. 278, 281 (D.C. 1996).

This case is about people children and adults who are sick, poor, and vulnerable - for whom life, in the memorable words of poet Langston Hughes, "ain't been no crystal stair." It is written in the dry and bloodless language of "the law" - statistics, acronyms of agencies, and bureaucratic entities, Supreme Court case names and quotes, official governmental reports, periodicity tables, etc. But let there be no forgetting the real people to whom this dry and bloodless language gives voice: anxious, working parents who are too poor to obtain medications or heart catheter procedures or lead poisoning screens for their children, AIDs patients unable to get treatment, elderly persons suffering from chronic conditions like diabetes and heart disease who require constant monitoring and medical attention. Behind every "fact" found herein is a human face and the reality of being poor in the richest nation on earth.

This article originally appeared in the October 2005 issue of HME Business.