Medicaid Services for Children

Medicaid law mandates that states provide a full array of federally authorized services to children, when medically necessary. However, many states have failed either to develop specific rules defining those services for Medicaid providers or to issue billing instructions. This makes it very difficult for children to access services to which they are entitled under federal law.

Children who are unnecessarily institutionalized or at risk of unnecessary institutionalization require a full array of intensive community services. Such services to assist the child and support the family are covered under federal law through the rehabilitation services category. In addition, these children will need access to acute hospitalization, crisis services and clinic care (including office-based therapies and medications). Few states have acted to describe this array of services in their Medicaid rules.

A recent study by the Bazelon Center of child mental health services definitions under Medicaid found a number of problems in a great many states.

• Day and visit limits on mental health services in Medicaid managed health care plans are not accompanied by any clear policies for ensuring that families whose children need more are aware of their right to access all medically necessary Medicaid services, and there are no procedures to ensure children of easy access to medically necessary services beyond these limits.
• Definitions of covered services under fee-for-service Medicaid are very limited. Traditional hospital and outpatient medical and clinical treatment is clearly defined in nearly all states. However, intensive community-based services, essential to complying with L.C., are far less well defined. The following services need to be specifically defined and listed in Medicaid rules in order to ensure that the services can be accessed and paid for. For example, the following child services are defined as Medicaid-reimbursable in some but not all states:

• Only three states have secured home- and community-based services waivers for children with mental health care needs: Kansas, New York and Vermont. Two others, Maryland and Ohio, have applied for such waivers. Home- and community-based care waivers, authorized under Section 1915(c) of the Medicaid statute, permit a broad and flexible array of community services to be provided to children in lieu of institutional placement. These waivers have been used extensively for individuals with developmental disabilities as a mechanism to fund deinstitutionalization and could provide substantial resources to states.

For more information on state rules under Medicaid, see the Bazelon Center publication Making Sense of Medicaid for Children with Serious Emotional Disturbance (see the list of resources at the end of this paper).

Next: Expansion of Medicaid Eligibility