Opinion ID: 71592
Heading Depth: 2
Heading Rank: 1

Heading: Florida's Medicaid System:

Text: 27 The Medicaid Act, Title XIX of the Social Security Act, is a cooperative federal-state program designed to allow states to receive matching funds from the federal government to finance medical services to certain low-income persons. Schweiker v. Gray Panthers, 453 U.S. 34, 36, 101 S.Ct. 2633, 2636, 69 L.Ed.2d 460 (1981). States may voluntarily choose to participate in the Medicaid program. See 42 U.S.C. § 1396b(a). When a state, like Florida, has elected to participate in the Medicaid program 7 , it must provide certain services 8 , including early and periodic screening, diagnostic, and treatment services (EPSDT) for qualified aid recipients under age twenty-one 9 . 28 In Florida, EPSDT services include in-patient psychiatric hospital services for individuals under age twenty-one 10 , such as those provided by Plaintiffs. Federal law does not appear to require states to provide in-patient psychiatric treatment in their EPSDT programs. See 42 U.S.C. § 1396d(r); 42 C.F.R. § 441.56(c). However, even when a state elects to provide an optional service, that service becomes part of the state Medicaid plan and is subject to the requirements of federal law. See Sobky v. Smoley, 855 F.Supp. 1123, 1127 (E.D.Cal.1994) (collecting citations). In-patient psychiatric care must therefore be provided by the hospitals to their patients as long as medical necessity exists 11 . An adolescent Medicaid recipient in an acute care facility is entitled to receive full hospital services of room, board, medical supplies, diagnostic and therapeutic services, use of the hospital facilities, drugs, nursing care, and all supplies and equipment necessary to provide care (Pretrial Stipulation, Doc. 89). There are no financial caps imposed upon such services when provided to patients under the age of 21 years. See Fla.Stat. § 409.908(1)(a). 29 Moreover, in administering EPSDT programs, participant states, such as Florida, must comply with the Medicaid regulations, particularly the 62 conditions set forth in 42 U.S.C. § 1396a(a) 12 . Specifically, the Boren Amendment 13 to Title XIX dictates that although administration of Medicaid plans is the responsibility of the states, a participating state must make payments for hospital services 30 through the use of [reimbursement] rates ... which the State finds, and makes assurances satisfactory to the Secretary [of HHS], are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and Federal laws ... and to assure that individuals eligible for medical assistance have reasonable access ... to in-patient hospital services of adequate quality.... 31 42 U.S.C. § 1396a(a)(13)(A). In other words, a participant State must do two things to be in compliance with the Boren Amendment: first, ensure individuals have reasonable access to facilities of adequate quality; and second, reimburse health care providers in a manner that is reasonable and adequate to meet the costs of efficiently and economically operated facilities. The Secretary of HHS, through the Health Care Financing Administration (HCFA) 14 , then either approves or disapproves the State's proposed reimbursement system. See 42 U.S.C. § 1396a(b). 32 In Florida, AHCA establishes and applies the methodology for determining the per diem rate that a hospital receives for psychiatric medicaid patients 15 . This formula is based upon allowable cost and divided by allowable days, which results in the per diem rate for each individual hospital. The per diem rate is not determined for each service in a hospital which the hospital provides or performs, but is an average of all services provided in that hospital from a prior year plus an inflation factor for the current year; therefore, the per diem rate is different for each hospital, and will change every year. Since the Medicaid hospital reimbursement rate reflects an average cost of all hospital services for each facility, the rate over-compensates for some services and under-compensates for other services (Pretrial Stipulation). 33 A state agency with oversight over an approved Medicaid reimbursement system 16 is authorized to contract with peer review organizations (PROs) to carry out its duty to promote the effective, efficient, and economical delivery of health care services ... and the quality of services of the type for which [Medicaid] payment may be made. 42 U.S.C. § 1395y(g). See also id. at § 1320c-7(a) (authorizing states with approved Title XIX plans to contract functions to PROs). PROs are only permitted to recommend making Medicaid payments for services that are reasonable and necessary for the diagnosis or treatment of illness or injury. See 42 U.S.C. § 1395y(a)(1)(A). In addition, in determining whether Medicaid services are necessary, PROs must review 34 some or all of the professional activities in the area ... of institutional ... providers of health care services in the provision of health care services and items for which payment may be made ... for the purpose of determining whether ... (A) such services and items are or were reasonable and medically necessary ...; (B) the quality of such services meets professionally recognized standards of health care; and (C) in case such services and items are proposed to be provided ... on an in-patient basis, such services and items could, consistent with the provision of medical care, be effectively provided more economically on an outpatient basis or in an in-patient health care facility of a different type. 35 .... 36 42 U.S.C. § 1320c-3(a)(1). The PRO determines through its review whether Medicaid payments are to be made for the services reviewed. 42 U.S.C. § 1320c-3(a)(2). The PRO's determination is conclusive, unless the determination is changed as the result of any hearing or review of the determination. 42 U.S.C. § 1320c-3(a)(2)(C). See id. at § 1320c-4. 37 KEPRO is under contract with the State of Florida for this purpose. On a retrospective basis, KEPRO reviews provider claims, utilizing criteria which have been established by the State of Florida, to determine whether payment for the services should be allowed, disallowed or allowed for a reduced number of days. Florida's Agency for Health Care Administration (AHCA), relying on the KEPRO determination, makes the final decision regarding reimbursement for the services. In the meantime, the provider receives reimbursement for the services provided on a monthly basis, so at the end of the fiscal year, if there has been an adverse determination by KEPRO so that certain days or admissions are denied, AHCA sends a recoupment letter to the provider requesting that payment be disgorged. The provider either repays the state, or funds are deducted from future payment, after administrative remedies are exhausted. 38 Florida does not reimburse providers in any amount for what it terms administrative or grace days, which are defined by regulation as days a patient remains in the hospital beyond the point of medical necessity while awaiting placement in a nursing home or other place of residence. Fla.Admin.Code r. 59G-4.150(1)(a). 39 On the other hand, Florida reimburses Plaintiffs and the 23 other Medicaid providers of in-patient hospital care for the provision of medically necessary psychiatric treatment to these patients. Florida also reimburses providers of medically necessary psychiatric care in alternative, lower level care facilities once the medical necessity for in-patient treatment ends 17 . However, due to organizational 18 or funding deficiencies in the state's medical assistance program, there is an extreme shortage of available spaces at alternative care facilities for the adolescent psychiatric patients.