Vol. 7, No. 1 Winter 1999	Previous Issues Subscribe to AT Messenger Download PDF Viewer
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Medicaid Litigation Puts Assistive Technology Coverage At Risk

Laura J. Waterland, Esquire, Disabilities Law Program Staff Attorney

A recent court case, now pending on a petition for certiorari before the United State Supreme Court, could empower States to drastically limit and reduce Medicaid 1 services, including coverage for assistive technology. In Emerson and DeSario, et al v Thomas, 139 F.3d. 80 (2nd Cir. 1998), the United States Court of Appeals of the Second Circuit upheld a Connecticut Medicaid policy which a) excluded specific items from the definition of durable medical equipment ("DME") and b) restricted coverage of DME to an exclusive list of items. The Plaintiffs have filed an appeal with the United States Supreme Court under the name Slekis v. Thomas, 119 S. Ct. 37, 67 U.S.L.W. 3228 (1998).

The Desario Case

In the DeSario case, one set of plaintiffs, led by Emerson, requested payment for air purifiers and air conditioners as DME. These particular items were among those excluded outright from the definition of DME as being primarily non-medical in nature. Other plaintiffs, led by Ms. DeSario, requested items not excluded from the definition of DME but not on the DME "list." Specifically, DeSario, a quadriplegic, asked for an environmental control unit, and another quadriplegic with skin problems asked for a special oil-filled mattress. In both situations, Connecticut Medicaid denied payment, irrespective of plaintiffs' assertions (with appropriate documentation) of medical necessity.

The Court rejected the plaintiffs' argument that Connecticut must consider whether requested items were medically necessary. In doing so, the Court rejected a fairly well-established and basic tenet of Medicaid law-that a State must pay for all medically necessary services that fall within their Medicaid Plan and which are covered services under the Medicaid statutes and regulations. The Court opined that the State need only apply "reasonable standards" consistent with the Medicaid statute in defining and limiting the services they will provide. Connecticut based its exclusive DME list on an evaluation of the needs of the State's Medicaid population as a whole. Thus, if an individual's needs fall outside the parameters that the State sets for coverage, "he must look elsewhere for assistance." An individual seeking an item not on the list would have to attack the integrity of the State's evaluation of the whole population's needs-a daunting task indeed.

This ruling is wholly inconsistent with other case law in the area. For example, in Visser v. Taylor, 756 F. Supp. 501 (D. Kan. 1990), the Kansas Medicaid Program was found to have illegally excluded a particular medication (Clozapine for schizophrenia) from its list of covered medications, without allowing an individual to assert medical necessity as a way of obtaining payment. The Court found that the State was arbitrarily discriminating based on diagnosis or condition. This particular plaintiff suffered from intractable schizophrenia that was essentially unresponsive to other medications. The Court concluded that Kansas, by refusing outright to pay for the medication under any circumstances, was discriminating against people with severe schizophrenia that was resistant to all medications but Clozapine. One can see how this argument prevents any absolute exclusions on specific items, unless there is statutory limitation elsewhere, such as for certain organ transplants, experimental procedures, or abortions. "A State may not eliminate funding for medical services certified by a qualified physician as being medically necessary." Visser, 756 F. Supp. at 507.

Likewise, in Weaver v. Reagen, 886 F.2d 194 (8th Cir. 1989), the Court rejected the denial of coverage for the HIV medication AZT. The Court concluded that Medicaid law had been "interpreted to require that a State Medicaid plan provide treatment that is medically necessary in order to comport with the objectives of the Act." Weaver, 886 F.2d at 198. The Court held that there cannot be an irrebuttable assumption that something is not medically necessary. See also, Planned Parenthood Affiliates of Michigan v. Engler, 73 F.3rd 634 (6th Cir. 1996); and Hern v. Beye, 57 F.3rd 906, (10th Cir.), cert. denied, 516 U.S. 1011 (1995). In these cases, the Court rejected the restriction of abortion services to life threatening situations when federal law allowed services in the event of rape, holding that a state may not single out a particular medically necessary service and restrict coverage, and that doing so discriminated based on diagnosis.

In sum, almost all other cases have supported the concept that if the state has opted to participate in the Medicaid program, and has included a type of service (mandatory or optional) in its State Plan, it must pay for all those services that are medically necessary.

This issue has also come up in other AT-related cases. For example, in Fred C. v. Texas Health and Human Services Commission, 988 F. Supp. 1032 (W.D. Tex. 1997), the Court rejected a state policy which paid for augmentative communication devices ("ACDs") for people under 21, but not for adults. The policy was found to be irrational, and the court concluded that Texas could not arbitrarily exclude ACDs from coverage under the Adult Medicaid program, which provided DME under the Medicaid home health services option. Texas has appealed this decision to the United States Court of Appeals for a second time.

Similarly, in Hunter v. Chiles, 944 F., Supp. 914 (S.D. Fla. 1996), the court threw out Florida's policy of excluding ACDs for adults under the Medicaid program. The Court put it very plainly. "Once a state chooses to cover one of the optional services which could possibly provide Medicaid funding to augmentative communication devices, that state is required to provide ACDs." Hunter, 944 F. Supp. at 919. Because ACDs were covered services as DME (under physical therapy, home health or prosthetics), the court evaluated the plaintiffs' requests for medical necessity and ordered Florida to provide the ACDs.

The Federal Response

The Health Care Financing Administration ("HCFA"), the federal agency responsible for administering the Medicaid Program, issued a policy letter in response to the DeSario decision on September 4, 1998. HCFA very clearly repudiates the Second Circuit in its letter, finding that while states may develop a list of pre-approved items of DME as an "administrative convenience," Medicaid must provide a reasonable and meaningful procedure for requesting items that do not appear on the list. More significantly, HCFA takes the position that 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 needs of 'most' Medicaid recipients will not be met."

HCFA goes on to instruct State Medicaid directors on the requirements for an acceptable policy. The policy must employ a timely process, using reasonable and specific criteria which an individual item must meet, to permit a determination whether an item has been arbitrarily excluded from coverage based solely on a diagnosis, illness or condition. The beneficiary must be given notice and a right to a fair hearing.

Delaware's Policy

The Delaware Medical Assistance Program (Delaware Medicaid or "DMAP") includes coverage for durable medical equipment in its State Plan. The State Medicaid Provider Manual states that "DMAP will only pay for services considered medically necessary." (DME Provider Specific Policy - I.1). The manual defines DME as equipment that:

• can withstand use;
• is primarily and customarily used to serve a medical purpose;
• generally is not useful to a person in the absence of an illness or injury, and;
• is needed to maintain the client in the home (equipment will NOT be purchased or rented for use in any inpatient or outpatient treatment setting. A medically necessary power wheelchair that meets the criteria for "Power Vehicles" in this manual MAY be covered for Medicaid eligible nursing home residents).

DME is covered when medically necessary and prescribed by the licensed, attending medical practitioner to carry out his/her written plan of care. Items requested for the convenience of the patient or caretaker, to items which do not maintain or improve the health status of the patient, will not be considered as "medically necessary." Documentation of the written order must be maintained in the DME provider's client-specific file. DME Provider Specific Policy - III.3.

The DMAP manual goes on to list the criteria for medical necessity:

The DMAP will only pay for services considered medically necessary. For purposes of this manual, all of the following criteria must be met. The items/services must be:

• a reasonable and necessary part of the patient's treatment plan;
• consistent with the symptoms or diagnosis of the illness or injury under treatment;
• not furnished for the convenience of the patient, their family, the attending practitioner, or other practitioner or supplier;
• necessary and consistent with generally accepted professional medical standards (i.e.,not still experimental or investigational);
• established as safe and effective; and
• furnished at the most appropriate level which can be provided safely and effectively to the patient. DME Provider Policy - I.1.

Delaware Medicaid's Provider Manual has a fairly exhaustive list of DME. According to Jo Rybicki, an administrator at the Delaware Medicaid office, this is a non-exhaustive list, made mostly for the benefit of providers. Some of the DME is asterisked, meaning that the provider need not get pre-authorization from Medicaid. However, most of the DME items require pre-approval. The list includes several "miscellaneous" codes which allow the provider to submit requests for DME that is not on the list.

Delaware will pay for non-listed DME provided its medical necessity can be established. The Provider must submit a "Medicaid Certificate of Medical Necessity" signed by the prescribing physician. This form includes information regarding the beneficiary's diagnosis and details of the equipment. Typically, the Provider must also include a Letter of Medical Necessity from the physician. In this document, the physician needs to outline the diagnosis/prognosis; treatment plan, reason for requested item; estimated direction of use; and expected therapeutic effect. The physician needs to include tests and summaries in support of the request.

Delaware's policy would appear to comport with HCFA's post-DeSario policy letter. A recent case handled by the Disabilities Law Program indicates, however, that there may be gaps in the policy. The DLP represented a severely disabled child whose treatment team decided she should wear "Pull-Ups" disposable pants instead of diapers as part of her therapy. Her treatment team wanted to include toilet training as part of her regimen of proposed therapy and rehabilitation. The Medicaid managed care program refused to pay for the Pull-Ups, relying on DMAP's Provider Manual written policy that "Medicaid will not cover Pull-Up disposable training pants (for over age 4) as they are not viewed as an appropriate treatment for incontinence and do not represent the least costly appropriate alternative health services available." Delaware Medicaid does pay for incontinence products in general. (DME Provider Specific Policy III.10 - III. 11).

This policy would appear to create an irrebuttable presumption that a specific service ("Pull-Ups") is never medically necessary. However, the vast majority of case law and HCFA Policy indicate that such an exclusion is illegal. The hearing officer in the case found for the DLP's client, finding that Medicaid was required to consider the individual's circumstances and the medical necessity of Pull-Ups to this particular beneficiary.

Any Medicaid beneficiary whose request for needed DME (or anything else) has been denied should strongly consider requesting a fair hearing. One, the beneficiary should challenge any attempt by Medicaid to exclude without regard to medical necessity any specific service that falls within the State Plan. Two, the beneficiary should feel free to challenge a denial based on medical necessity if the beneficiary has medical documentation to back up the request. The Medicaid's policy manuals and/or Medicaid office's decision is not the "last word" on any denial of service.

Conclusion

In conclusion, Medicaid beneficiaries and their families should be concerned, as disabilities rights advocates are, about the holding in DeSario and its broad and potentially catastrophic implications for Medicaid coverage. If Connecticut's methodology of providing services based on the "population as a whole" is upheld, disabled and elderly populations, whose medical needs are greater and more complex, but who compose a minority of the Medicaid population, could suffer reductions in service. Many advocacy groups have voiced their opposition to the decision, and HCFA has taken a strong position, so there is reason to be hopeful.

Delaware's policy on DME coverage comports for the most part with HCFA's position on listing of covered services. Still, beneficiaries need to scrutinize all denials of coverage, both to ensure that the Medicaid policy does not unlawfully exclude a particular item and that the decision has been based on all available evidence of medical necessity.

Please call the Disabilities Law Program to consult with an advocate if you encounter any difficulties obtaining payment from Medicaid or Medicare for necessary assistive technology. In New Castle County, call 575-0690; in Kent County call 674-8500; and in Sussex County call 856-0038.

1998 Guide to Health Insurance for People with Medicare

Developed jointly by the National Association of Insurance Commissioners and the Health Care Financing Administration of the U. S. Department of Health and Human Services

For single copies, call the Medicare Hotline at 1-800-638-6833 (voice); TTY/TDD 1-800-820-1202. This publication is also available on the Internet on HCFA's consumer website address http://www.medicare.gov.

Footnotes

Medicaid is a federal/state cooperative program designed to provide medical services for certain populations. While the U.S. Congress enacted the controlling legislation (Title XIX of the Social Security Act) and regulations (42 CFR Parts 430-498), States have considerable flexibility in formulating eligibility, benefits and reimbursement policies, which are documented in the State Medicaid Plan. Once states opt to participate in Medicaid, they must provide certain mandatory services to designated populations. States may also choose to participate in certain optional programs. "Optional" services nevertheless are subject to all Medicaid laws and regulations. AT is usually funded as durable medical equipment under the home health care, physical therapy, speech and language, or prosthesis Medicaid options.

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