EPSDT’s Impact on Medicaid Audits

Because the breadth of EPSDT is so large and covers so many Medicaid recipients under 21, many NC auditors conducting Medicaid audits are either overlooking the importance of EPSDT or lacking the comprehension of the ever-arching arms of EPSDT.

First, what in the heck is EPSDT?  It’s an acronym for Early and Periodic Screening, Diagnostic and Treatment.


The Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit provides comprehensive and preventive health care services for children under age 21 who are enrolled in Medicaid. EPSDT is key to ensuring that children and adolescents receive appropriate preventive, dental, mental health, and developmental, and specialty services.

Early Assessing and identifying problems early
Periodic Checking children’s health at periodic, age-appropriate intervals
Screening Providing physical, mental, developmental, dental, hearing, vision, and other screening tests to detect potential problems
Diagnosis Performing diagnostic tests to follow up when a risk is identified, and
Treatment Control, correct or reduce health problems found.

How EPSDT works in real life:

The simplest way to think about EPSDT, is to throw out all entrance criteria for whichever Medicaid service is at issue (as long as the Medicaid recipient is under the age of 21). (Please understand that this is not the legal standard for EPSDT).

The way North Carolina explains EPSDT in the DMA Clinical Policies is as follows:

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) is a federal Medicaid requirement that requires the state Medicaid agency to cover services, products, or procedures for Medicaid beneficiaries under 21 years of age if the service is medically necessary health care to correct or ameliorate a defect, physical or mental illness, or a condition [health problem] identified through a screening examination** (includes any evaluation by a physician or other licensed clinician). This means EPSDT covers most of the medical or remedial care a child needs to improve or maintain his/her health in the best condition possible, compensate for a health problem, prevent it from worsening, or prevent the development of additional health problems.

For example, if, in order to receive Medicaid services for X the Medicaid recipient must meet criteria A, B, and C, but only meets A and B, the Medicaid recipient can still receive the services if the recipient is under 21 and:

  • The Medicaid recipient can show that the services are medically necessary to correct or ameliorate a medical condition.

Ok, you understand the definition of EPSDT. But how does EPSDT come into play during a Medicaid audit?

Many audited services have undergone prior authorization by the contracted company for DMA.  For example, for mental health services, prior authorization comes from ValueOptions (VO).  Then years later, the Carolinas Center for Medical Excellence (CCME) or other recoupment auditing contractor (RAC) audits the same services that were previously authorized, and, in many cases, decides that medical necessity was not met because the entrance criteria had not been met.

The difference in opinion between VO and CCME, in many cases, is a lack of understanding the strength of EPSDT.

Time and time again, I have gone to reconsideration reviews when the Medicaid recipients were all under 21 and argued that medical necessity was met through EPSDT.  Yet, time and time again, the RAC (whether CCME or Public Consulting Group (PCG)) representative vehemently disagrees that EPSDT is applicable. He or she argues that the entrance criteria must be met regardless.

Because, in my past life, I actually worked for the Attorney General’s office in the Medicaid department, I saw hundreds of hundreds of decisions from the Office of Administrative Hearings (OAH) stating that medical necessity was met via EPSDT. In some cases, the Medicaid recipient had not even met one entrance criteria for the Medicaid services.  But EPSDT has been interpreted to be extremely broad and encompassing.

Despite the importance of EPSDT, it appears that no one explained this to the contracting companies conducting the NC Medicaid audits. Perhaps someone should tell them….

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on February 25, 2013, in CCME, Division of Medical Assistance, EPSDT, Health Care Providers and Services, Medicaid, Medicaid Audits, Medicaid Eligibility, Medicaid Recipients Under 21, Mental Health, Mental Illness, North Carolina, OAH, RAC, Reconsideration Reviews and tagged , , , , , , , . Bookmark the permalink. 7 Comments.

  1. For outpatient specialized therapies (OT, PT, speech–not Mental health), CCME is who we go through for authorizations. They are the same entity performing the Post Payment Validations (PPV). They choose a client, and ask for all documentation for an authorization period. For example, Johnny received auth for 2 visits/week of OT for a 6 month period. We would then send everything–the evaluation, the plan of care, therapy/treatment notes, and the service order signed by Johnny’s primary care physician. CCME looks through the documents and tells you that you failed and they are recouping the money for the whole 6 month authorization period. When asked to point out exactly what failed, these same nice CCME workers who previously answered authorization questions so kindly, tell you that you weren’t in compliance with policy 10-A. Well, policy 10-A covers a lot of information, and when pressed, they hem and haw and tell you to read the policy. I asked if it was the forms we have created for our treatment notes, and whether they have templates which we could look at or use in place of ours. No, they have no templates and don’t care what our forms look like, as long as all the necessary information is on them. I was on the phone for over an hour on one case, and never got a straight answer out of them. I wanted to bang my head on the desk, and in fact I think I did when she sweetly asked if she could help me with anything else. We went through the PPV process for I think 6 clients (all have the exact same documentation methods/forms)and passed only one. We never appealed because we felt we would not be allowed to pass, which I am sure is exactly the reaction they want all providers to have.

    • As a PS…we are a pediatric only clinic. Rumours from other small therapy clinics who also had failed PPVs hinted that if the CCME reviewer could not read the doctor’s signature, they failed and recouped the money. How does the doctor’s signature in any way negate that the treatment was medically necessary and provided in the proper manner? It is one thing to refill the Medicaid coffers by recouping money from “fraudulent” providers, but to harass providers who are honestly trying to do the right thing (and NOT tell them what it is that they did wrong!) is horrible.

  2. Annette,

    You hit the hammer on the nail. Hard!! This is precisely the type of audit harassment I have been blogging about. I have witnessed CCME reps arguing that if they cannot read the doctor’s signature that they have no way of ensuring that the doctor is licensed, and, therefore, failing the health care provider and recouping the money for good services rendered.

    Another issue I have run into is if the assessments are signed by a legal guardian with a different last name as the Medicaid recipient, the assessment is failed as “assessment not compliant.” But, in reality, CCME needed to know who the legal guardian was.

    Annette, Incorrect auditing techniques as discussed above makes it IMPERATIVE for the health care providers to appeal these processes. I am currently filing Motions to Stay and Temporary Restraining Orders on behalf of providers in this exact situation.

    I’m sorry you went through this. I’m sorry you didn’t appeal.

  3. I went through an administrative hearing in February, haven’t heard back yet. Yes, I am quite familiar with the “refer to policy 10 A” statement they use when they refuse to tell you exactly what it is you’ve done wrong. However, at my administrative hearing, I had the opportunity to pin the auditor down as to exactly what she meant by “not in accordance with policy 10A.”And of course she was unable to articulate exactly what the documentation sin was that I had committed, because, honestly I don’t think even they know sometimes. 10A is just their catch all, obviously. The good part is, it was obvious to me that the administrative hearing judge saw that CCME was unable to state exactly what error it was that I had committed. I realize it’s too late for you, but always, always appeal.

    • Diana,

      That is EXACTLY what everyone else is going through. I almost think there should be a support group for health care providers going through these audits. In all serious, if you went through an administrative hearing in February you should have heard something by now. Who was your ALJ?

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