Is California’s Child Health Screening Shift Illegal?

As the Chronicle reported recently, some mental health and child welfare leaders are critical of California’s changes to its Early Periodic Screening and Diagnostic Treatment (EPSDT), a Medicaid-required program to identify and serve low-income children with  physical and mental health challenges.

The state has moved away from reimbursements and toward a county-by-county allocation process, in which funding for the program is doled out based on projections.

For Californians, the issue with the change is functional. Will those allocated dollars meet the needs of all children that qualify and need EPSDT services?

But it also poses a question for other states: Is rolling federal entitlements into state block grants even legal? As states contemplate ways to constrain spending, it is a legitimate question.

“I don’t believe it’s legal,” said Alex Briscoe, director of the Alameda County Health Care Services Agency.

Others aren’t so sure. “I don’t think standing alone, it constitutes a violation of law,” said Patrick Gardner, founder and president of Young Minds Advocacy.

Here is the situation. EPSDT is a program that says if a child is Medicaid eligible, it is required that he or she gets screened and treated accordingly. The idea behind EPSDT is to identify and deal with potential health issues – which include mental health, preventative health, dental health, and other special health services – at an early age as to avoid possible lifelong impact.

Ask people from ten different states how valuable EPSDT is, and you’ll probably get ten different answers. That is because while screening and treatment is required, the quality of both range from place to place. The quality also ranges within states, at the county or city level.

California has “realigned” – or devolved – its social services spending, putting most of it into local allocations and giving counties a lot of freedom on how to spend it. The total amount to be divided into those allocations is pegged to sales tax and a cut of vehicle registration fees.

This creates a situation where the federal share is static, the state allocation is relatively static, and any variation to the level spending on EPSDT will depend on only two things:

  • Changes to the state allocation. And since this is connected to sales tax revenue, that could change in either direction.
  • Increased spending on the services at the county level.

So if there was an increase in the number of Medicaid-eligible children – which is pretty likely because of the Affordable Care Act’s Medicaid expansion provisions – county systems may be put in a position where they need to shoulder the entirety of new costs related to said increase.

And that is where this becomes a legally interesting issue, because the feds have no real direct connection with counties on Medicaid. The requirements of the entitlement, including EPSDT, are a contract between the federal government and the states.

If a county simply responds to the increase by not providing EPSDT to all children who are eligible for it, turning youths away, then Medicaid-eligible youth would have been denied a mandatory service.

EPSDT expert and George Washington University Professor Sara Rosenbaum, who said she was not following the shift California, affirmed for us generally that the outright denial of EPSDT to any Medicaid-eligible youth would be a violation of federal law.

Briscoe believes that the experience thus far under realignment thus far has convinced him that, even without a surge in Medicaid-eligible youths, less youth will be served through EPSDT.

“This practice will have an effect, intended or not, restricting access to entitlement over time,” he said.

Gardner said that it would actually take such a restriction to land the state in court.

“I’m not sure the allocation would rise to that natural denial of services,” Gardner said. “It would have to go to the next step. Was the child denied services? If so, was it the formula? And that’s the challenge, there’s so many moving parts it’s hard to ID the reason for the denial.”

Youth advocates in California will have to patrol for a more subtle negative reaction than outright denial: Placing those children onto an ever-growing waiting list to be screened and treated. Which would, perhaps, also trigger a legal action.

John Kelly is the editor-in-chief of The Chronicle of Social Change

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John Kelly
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John Kelly is editor-in-chief of The Chronicle of Social Change.