U.S. Judge refuses to block Medicaid coverage limits

A federal judge refused to block the state Department of Human Services from enforcing a rule limiting Medicaid coverage of intensive day-habilitation services for very young developmentally delayed children.

At the same time, U.S. District Judge James Moody Jr. refused to throw out a lawsuit filed June 14 contending the rule violates the Medicaid Act.

Facilities in El Dorado, McGehee and DeWitt providing the intensive day services for children up to six years old filed the suit, along with two sets of parents, saying they believe stricter requirements will unfairly deprive many children of the maximum amount of help they are entitled to under federal law.

But officials with the department’s Division of Developmental Disabilities testified at a July 18 hearing the goal of the stricter requirements is to move children who don’t need the most intensive services into more natural and integrated environments, which help them more in the long-run. They said the intensive services are provided in a “segregated” environment consisting only of developmentally delayed or disabled children, which federal law and child welfare experts frown upon.

In an order issued late Thursday afternoon, Moody said the plaintiffs failed to show they were entitled to a preliminary injunction. He said he advised the parties July 29 of his preliminary findings, and gave them opportunities to file additional arguments, but after considering the additional arguments, he won’t change his initial findings.

Citing the case’s reliance on “voluminous acronyms” making the facts of the case hard to mentally digest, Moody even had a glossary of those acronyms prepared to assist anyone reviewing his order. He noted it was necessary to use the acronyms to keep the order relatively concise.

The acronyms that have been used prolifically in written briefs and oral

arguments — and requently used one after another in a single sentence — include ADHS, CHMS, CMS, DDTCS, EIDT, EPSDT, FAPE, IDEA, IEP, IFSP and ITP. The first stands for the Arkansas Department of Human Services; the last, for Individual Treatment Plan. Most of those in-between refer to particular services or programs.

The lawsuit concerns services provided under the EIDT — Early Intervention Day Treatment — program, which is a successor program to the former CHMS — Child Health Management Services — program, and the former DDTCS — Developmental Day Treatment Clinic Services —program.

The department effectively merged the two former programs to create the Early Intervention Day Treatment program serving patients in a clinical setting. The new program went into effect for new applicants July 1, 2018, but children who were already in the successor programs were given until Aug. 1 of this year to comply with rules of the new program.

One of the former programs allowed Medicaid coverage of day treatment services without a requirement a child demonstrate a clinical need for medical services. The new program requires a child to be prescribed nursing services, occupational therapy, physical therapy or speech therapy in addition to day habilitation services, in order to qualify.

“Day habilitation services prescribed by physicians for the treatment of developmental disabilities in children from birth to six without one additional therapy is now insufficient to qualify” for the Early Intervention Day Treatment program, Moody said.

This so-called One Therapy Rule is what the lawsuit protests.

The plaintiffs say the rule “has deprived hundreds of Medicaid-eligible children from getting day habilitation services ordered by their primary care physicians since that time,” Moody noted. He said they also claim “hundreds of additional children will lose day habilitation services if the Rule is not enjoined.”

But he said the plaintiffs failed to demonstrate they were likely to succeed on the merits of their case, so he couldn’t grant a preliminary injunction preventing the rule’s enforcement. However, Moody said the plaintiffs “have stated plausible claims for relief,” so the case cannot be dismissed, as the department requested.

He said he’ll scheduled a final hearing on the merits of the case.