All children under age 21 enrolled in Medicaid through the categorically needy pathway are entitled to the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, which requires states to provide access to any Medicaid-coverable service in any amount that is medically necessary, regardless of whether the service is covered in the state plan. EPSDT’s purpose is to discover and treat childhood health conditions before they become serious or disabling. States must inform all Medicaid-eligible families about the benefit, screen children at reasonable intervals, diagnose and treat any health problems found, and report certain data regarding EPSDT participation annually to the Centers for Medicare & Medicaid Services (CMS).
EPSDT was introduced as a part of the Social Security Act Amendments of 1967. Subsequent legislative changes have shaped the benefit, strengthening standards for identification of children in need of screening, standards for screening, coverage of diagnosis and treatment, and coordination between Medicaid and outside agencies to provide services that Medicaid does not cover (42 CFR 441, Rosenbaum 2002 Memo to SAMHSA).
In fiscal year (FY) 2014, over 40 million children were eligible for EPSDT (CMS 2016). However, just under 60 percent of children who should have received at least one initial or periodic screening received one (CMS 2016). Data are not available on Medicaid spending attributable to EPSDT (for example, spending only for services that were not included in the state plan but were provided solely due to EPSDT).
State Requirements under EPSDT
States are responsible for ensuring that families are informed about the EPSDT benefit, that children are screened at appropriate intervals, and that they receive medically necessary treatment services. States must report data about their EPSDT programs to CMS each year.
Within 60 days of a child’s initial Medicaid eligibility determination, and annually thereafter for families that have not used EPSDT services, the state Medicaid agency must inform all eligible families about the benefits of preventive health care, the services available under EPSDT, and how to obtain them (42 CFR 441.56(a)). The state must also inform families that these services are available without cost except for enrollment fees or premiums that may be imposed on medically needy beneficiaries, and that transportation and scheduling assistance are available (42 CFR 441.56(a)).
Periodicity schedule. The state must ensure that children receive regularly scheduled examinations of physical and mental health, growth, development, and nutritional status following a timetable determined by the state, known as a periodicity schedule. The screening services must include five components: a comprehensive health and developmental history (assessing physical and mental health, as well as substance use disorders), an unclothed physical examination, appropriate immunizations, laboratory tests, and health education (§1905(r) of the Social Security Act (the Act), 42 CFR 441.56(b), CMS 2000, Chapter 5). The state may determine which periodicity schedule it uses, but the schedule must follow reasonable standards of medical and dental practice and must be developed through consultation with medical and dental organizations involved in the care of children (42 CFR 441.56(b)(2)). One such source for periodicity schedules is Bright Futures, developed by the American Academy of Pediatrics (CMS 2014a).
Interperiodic screenings. In addition to screenings on the timetable set by the state’s periodicity schedule, children are entitled to screenings at any time based on an indication of medical need. For example, a child whose school nurse recommends a vision screening because the teacher suspects a vision problem is entitled to that screening even if he is not yet due for another regularly scheduled screening according to the periodicity schedule (CMS 2014a).
Qualified providers. Any provider operating within the scope of his or her practice as defined by state law, whether participating in Medicaid or not, can provide a screening that triggers EPSDT coverage (CMS 2014a). The family does not need to formally request an EPSDT screening in order to receive EPSDT benefits and the screening need not have been conducted while the child was enrolled in Medicaid. However, families seeing providers who do not participate in Medicaid or their managed care plan without prior approval generally will be responsible for the bill. There are exceptions for emergency services and post-stabilization care services related to an emergency condition (42 CFR 438.114).
Diagnostic and treatment services
Diagnosis and treatment of medical conditions. The state must ensure timely initiation of treatment in accordance with reasonable standards of medical and dental practice, generally within six months after services are requested (42 CFR 441.56(e)). In addition to all treatment services provided for in the state plan, the state must provide any additional services if a need for them is discovered, even if the services are not included in the state plan. Only treatments or services that are medically necessary for a particular child are covered for that child. Federal law does not define medical necessity and definitions adopted by states vary.
Inpatient psychiatric care. Children under the age of 21 can receive inpatient psychiatric services in only three facility types: psychiatric hospitals, psychiatric units of general hospitals, and Psychiatric Residential Treatment Facilities (42 CFR 441.151). While states have the option to include this coverage for children in their state plan, whether or not it is in included, states must provide it if medically necessary for a child eligible for EPSDT.
States can receive federal funds for non-psychiatric EPSDT services provided to children in those three settings if certain payment conditions are met (CMS 2012). However, federal financial participation is still unavailable for inpatient psychiatric treatment services to children in other settings, such as nursing facilities.
School-based free care. Under 2014 guidance, Medicaid payment is now allowed for care that is provided without charge to a school’s students, as long as all other Medicaid payment and eligibility requirements for both provider and beneficiary are met (CMS 2014b, Somers 2016). For example, if a school provides hearing screening or vaccines free to all students, Medicaid may be billed for any students who are Medicaid-eligible. Previously, Medicaid payment was not allowed for services provided by schools without charge to the beneficiary. Services provided under the Maternal and Child Health Services Block Grant program under Title V of the Social Security Act, services covered under the Special Supplemental Nutrition Program for Women, Infants, and Children, or provided under an Individualized Education Program or Individualized Family Service Plan under the Individuals with Disabilities Education Act were excepted from this rule (CMS 2014b).
Home and community based service (HCBS) waiver programs. Children enrolled in HCBS waiver programs are also entitled to EPSDT. Children enrolled in waiver programs receive services beyond those defined as “medical assistance” in the Act (§1905(a)), such as habilitative services, respite services, or other services to prevent institutionalization. The waiver services wrap around the EPSDT benefit, creating a comprehensive benefit to allow children with disabilities to remain in their homes and communities (CMS 2014a).
A service need not cure a condition to be covered. Services that maintain or improve a health condition or relieve pain are covered under EPSDT even if they do not cure the health condition. Such services include physical and occupational therapy, and durable medical equipment (e.g. cushions to prevent ulcers or pressure sores, bed rails, and augmentative communication devices) (CMS 2014a). Rehabilitative services are covered by EPSDT because they can ameliorate a physical or mental disability, a feature especially important for children with disabilities, because they often have conditions that cannot be cured, but that can be prevented from worsening (CMS 2014a).
Coverage limitations. While hard limits or caps on services are not permissible under EPSDT, soft caps or limits may be placed for purposes of utilization control (CMS 2014a). For example, states may require prior authorization for a certain treatment service (though prior authorization cannot be required for EPSDT screening services) (CMS 2014a). States may also consider cost-effectiveness. While a state cannot deny a medically necessary service based only on cost, it can consider cost as part of the prior authorization process. A state may cover a less-expensive but equally effective service, but must also consider the child’s quality of life as well as the requirement to cover services in the most integrated setting appropriate (CMS 2014a). However, states must review these limits in light of a particular child’s needs for determination of medical necessity. The family can appeal a state’s decision under the state’s fair hearing procedures (CMS 2014a).
Experimental treatments. Experimental treatment is not defined in the federal Medicaid statute or regulations. Therefore, a state may make its own determination of which treatments or services are experimental, but the decision should be based on the latest scientific information available (CMS 2014a).
Participation data. States submit information about EPSDT to CMS electronically using a form called the CMS-416. Data reported include the participant ratio, which is the percentage of children who were expected to receive at least one screening who did receive such screening. Additional measures include the number of children eligible for EPSDT, the number of children referred for corrective treatment, and the number of children receiving preventive or diagnostic dental services. States report these data by age (CMS 2014). CMS uses information from the CMS-416 to ensure that state programs are fulfilling statutory obligations under EPSDT (GAO 2009).
Participation goals. The Omnibus Budget Reconciliation Act of 1989 required the Secretary of the U.S. Department of Health and Human Services to set participation goals for the states. In 1990, CMS established a goal of an 80 percent enrollee participant ratio in EPDST in each state, per year, by federal FY 1995 (CMS 2000 Chapter 5, GAO 2001). Only complete screenings, comprised of all five components, may be included in this measure (CMS 2000 Chapter 5).
In 2014, the national average participant ratio was 59 percent (CMS 2016). Nationally, only eight states achieved an 80 percent participation ratio at least once between 2006 and 2013 (OIG 2014). In FY 2014, participation ratios were highest for infants under one year, at 88 percent, but only 43 percent for 15 to 18 year olds, and 25 percent for 19 to 20 year olds (CMS 2016).
Coordination with other programs
Coordination between Medicaid and Title V agencies—states and non-profit organizations that promote maternal and child health—is required by law (42 CFR 431.615, HRSA 2016). Medicaid and state Title V agencies and grantees care for many of the same populations and contract with many of the same providers. State Title V agencies have pursued coordination in various ways, such as assisting in the development of EPSDT provisions in managed care contracts, monitoring network adequacy, and helping to develop EPSDT standards of care (HRSA 2016).
 Medicaid eligibility requires both categorical eligibility and financial eligibility. First, an individual must fit into a Medicaid eligibility category, such as children or pregnant women. Then, the individual must meet financial requirements for eligibility. The categorically needy pathway is contrasted with the medically needy pathway, which is optional for states. Under the medically needy option, individuals who are categorically eligible but who have higher incomes can become eligible for Medicaid after incurring a certain amount in medical expenses. The majority of children eligible for EPSDT come through the categorically needy pathway.
 Although EPSDT is not required in separate CHIP, several states provide Medicaid-based Secretary-approved coverage, which includes EPSDT, to separate CHIP enrollees (Cardwell et al. 2014). Three states that do not use a Medicaid-based benefit package nevertheless provide an EPSDT-like benefit, in which service limits may be exceeded when medically necessary (Cardwell et al. 2014). Less is known about how EPSDT is implemented within separate CHIP than in Medicaid.
 Non-psychiatric services are considered to be components of the inpatient psychiatric facility benefit when they are included in the child’s plan of care and are provided by a qualified provider who has entered into a contract with the inpatient psychiatric facility. In order for these services to be considered as “provided by” the inpatient psychiatric facility, the facility must arrange for and oversee the services, maintain records of the services, and ensure that the services are provided under the direction of a physician (CMS 2012). If these conditions are met, the services may be provided outside the psychiatric facility. States have generally paid facilities per-diem rates or base per-diem rates with add-on payments, which would leave the facilities responsible for paying providers of outside services. Another option for states, available through a State Plan Amendment, is to directly reimburse providers of arranged services using the same payment methodologies applicable for such services under the state plan when provided to beneficiaries outside of an inpatient psychiatric facility (CMS 2012).