Health Law Daily Federal early screening criteria trumps state restrictions for payment purposes
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Monday, October 19, 2020

Federal early screening criteria trumps state restrictions for payment purposes

By Gregory Kane, J.D., M.B.A.

A minor patient seeking treatment under federal early screening guidelines could not be denied due to more restrictive state guidelines.

The denial of a growth hormone treatment for a 12-year-old girl as prescribed by the treating physician under Medicaid’s Early and Periodic Screening, Diagnostic and Treatment (EPSDT) was overturned because the Agency for Health Care Administration (AHCA) impermissibly narrowed the criteria for approval based on state law (Q.H. v. Sunshine State Health Plan, Inc., October 7, 2020, Gross, J.).

Claims for reimbursement. A minor child enrolled as a member of Sunshine State Health Plan, Inc.’s Medicaid plan was prescribed growth hormone treatment by her treating pediatric endocrinologist due to a diagnosed growth hormone deficiency. The doctor submitted a Prior Authorization Request to Sunshine Health for the treatment, which was subsequently denied as not medically necessary because the child’s bone age was not "a minimum of one year behind chronological age." This one-year growth delay was a requirement of the AHCA’s authorization criteria for growth hormone treatment in children. The child requested a Medicaid Fair Hearing regarding the denial, during which an independent external review took place and concluded that the child did not meet the current policy criteria for the growth hormone treatment under the AHCA policy. The hearing officer concluded that the child did not meet AHCA’s prior authorization criteria for hormone treatment because her bone age was not sufficient delayed and the treatment was not medically necessary under the Florida Administrative Code. The child appealed.

Medical necessity. The Medicaid Act does not confer unilateral discretion in defining medical necessity to the treating physician or to the states. Florida courts have held that the AHCA’s definition of "medical necessity" is "overly restrictive" in the context of a claim for EPSDT services. In this case, the child failed to satisfy each of the prior authorization criteria of the AHCA’s policy, but that should not have been dispositive. The state may adopt prior authorization criteria, but cannot apply it in a way that is incongruous with the EPSDT.

Peer review of a service that cannot be approved at the first review level is not limited to just the prior authorization criteria, but must be evaluated on acceptable standards of care, state and federal law, and AHCA’s medical necessity definition. At each stage of this case, treatment was denied by simply reapplying the prior authorization criteria and not via an individualized determination of the child’s needs. EPSDT is not in play only if a child meets all prior authorization criteria. At the Fair Hearing, the child proved that the prior authorization criteria was unreasonably applied to her and that the treatment was necessary for her physical condition. At no point did Sunshine Health dispute the treating endocrinologist’s diagnosis. In denying the treatment, the hearing officer applied the more restrictive definition of medical necessity in the Florida Administrative Code rather than the more expansive definition of the EPSDT standard. Under the plain language of the EPSDT, the child had established that the treatment was necessary for her diagnosis, which is all the EPSDT requires. As such, the decision was reversed and remanded for further proceedings.

Dissent. A dissent by Judge Artau criticized the majority opinion because the AHCA’s authorization criteria were reasonable utilization controls that did not categorically and impermissibly deny the child prescription drug coverage. The AHCA’s restrictions merely required more severe growth delay prior to approval. As these restrictions were lawful and reasonably applied, requiring the AHCA to apply differing criteria was an encroachment of judicial authority.

The case is No. 4D20-741.

Attorneys: Morgan L. Weinstein (Weinstein Law, P.A.) for Q.H. c/o A.H. Craig H. Smith (Hogan Lovells US LLP) for Sunshine State Health Plan, Inc.

Companies: Sunshine State Health Plan, Inc.

MainStory: TopStory CMSNews MedicaidNews MedicaidPaymentNews

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