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Columbia Street,
2nd Floor
Chapel Hill, NC 27514
(919) 968-6308
Fax (919) 968-8855

June 1, 2009

Ms. Charlene Frizzera

Acting Administrator
Center for Medicare and Medicaid Services
Department of Health and Human Services
Hubert H. Humphrey Building
200 Independence Ave, SW
Room 445-G
Washington, D.C. 20201

RE: File Code CMS-2287-P

Notice of Proposed Rule
Medicaid Program: Rescission of School-Based Services Final Rule,
Outpatient Services Definition Final Rule, and Partial Rescission of
Case Management Services (RIN 0938-AP75)

Dear Ms. Frizzera:

The National Health Law Program (NHeLP) writes to comment on the Interim
Final Rule entitled “Medicaid Program: Rescission of School-Based Services Final Rule,
Outpatient Services Definition Final Rule, and Partial Rescission of Case Management
Services,” published in the Federal Register on May 6, 2009. We submit these comments
to indicate our strong support for this proposed rule because of our concerns about the
Proposed Rule affecting case management services, originally published in the Federal
Register on December 4, 2007 (CMS 2237-IFC).

NHeLP is a public interest law firm working to increase and improve access to
quality health care on behalf of low-income individuals by providing legal analysis and
representation, information, education and policy advocacy. With offices in California,
North Carolina and Washington, D.C., NHeLP provides specialized assistance on
indigent health care matters to attorneys, community-based organizations and national
and state policy makers.

NHeLP supports rescission because we believe that the December 4 Rule would
result in considerable denial of coverage for medically necessary case management
services. We also believe that the proposed definitions would impermissibly narrow the
scope of services that can be covered under the case management option and are
inconsistent with the statutory purpose of Medicaid coverage of case management
services, which are to “assist individuals eligible under the plan in gaining access to
needed medical, social, educational, and other services.” See 42. U.S.C. §§ 1396n(g)(2),

A. Interim Final Rule §441.18 Significantly Restricts Medicaid Case

Management for Children Enrolled in Foster Care

One of the most significant restrictions found in the December 4 Rule applies to
case management services provided to children in foster care. While the DRA statute
provides a short list of specific foster care-related services, such as research gathering and
home investigations, which are not covered as Medicaid case management services, the
December 4 Rule departs from the statute by excluding the complete universe of services
“integral to the administration of foster care programs.” 72 Fed. Reg. at 68093 (Dec. 4,
2007). This indicates that any case management service deemed to be integral to the
delivery of foster care services would no longer qualify for federal matching funds.
Similarly, it would prohibit child welfare/child protective services agencies and possibly
their contractors from receiving any federal matching funds despite the fact that they may
be qualified Medicaid providers and they are providing covered Medicaid services.

This restriction would also conflict with a fundamental requirement governing

coverage of Medicaid services for children and youth. Pursuant to the Early and Periodic
Screening, Diagnostic and Treatment (EPSDT) requirements, Medicaid beneficiaries are
entitled to receive all necessary services listed in 42 U.S.C. § 1396d(a) to correct or
ameliorate physical or mental illnesses and conditions, regardless of whether those
services are covered under a States’ plan. 42 U.S.C. §§ 1396a(a)(43), 1396d(r)(5). The
December 4 rule contains no qualification that would allow evasion of the EPSDT
requirement for services for which there are overlapping obligations by different

Moreover, this restriction diverges greatly from the legislative intent of Congress
at the time of passage of the DRA statute. A letter from Senator Charles Grassley (R-
Iowa), Chair of the Senate Finance Committee at the time of DRA passage, to Secretary
Mike Leavitt of the U.S. Department of Health and Human Services highlighted the fact
that Congress believed that payment of case management services for children in foster
care should come from Medicaid funds. Letter from Senator Charles E. Grassley,
Chairman of Senate Finance Committee, to Mike Leavitt, Secretary of U.S. Health and
Human Services (April 5, 2006) (on file at the National Health Law Program).
Specifically, the letter stated “disallowance of reimbursement under Medicaid for
services specified in the DRA for TCM for children in foster care . . . is in direct
contradiction to Congressional intent.”

The approach in the December 4 Rule would also be problematic because it

assumes that targeted case management for foster care children will be covered by other
federal funds, including those available under Title IV-E Foster Care and Title IV-B
Child Welfare Services. Title IV-E generally covers only the cost of providing food,

clothing, shelter, daily supervision, school supplies, a child’s personal incidentals,
liability insurance and reasonable travel for a child’s visitation with family or other
caretakers. See 42 U.S.C. § 675(4)(A)(2007). The funds do not cover the cost of medical
supervision of children in foster care. See id. Similarly, the focus of Title IV-B is not
medical assistance. See 42 U.S.C. §§ 621-22, 625 (2007). Because of that, Medicaid
funds have filled the gap of case management services needed by children in foster care,
but not covered by other child welfare resources.

As mentioned above, targeted case management for children in foster care

provides critical services to ensure that these children obtain needed medical care. In
fact, in 2001, 144,508 foster care-enrolled children (17%) received targeted case
management services. Rob Green, Anna Sommers & Mindy Cohen, Urban Institute,
Medicaid Spending on Foster Children 3 (Brief No. 2, August 2005). The report entitled
“Medicaid Spending on Foster Children” by the Urban Institute found that children in
foster care who received targeted case management had higher utilization rates for
several health care services than children who did not receive targeted case management
in the categories of physician services, prescription drugs, dental services, rehabilitation
services and clinic-based services. See id. Evidence such as this illustrates the benefit of
providing Medicaid case management services to foster children and also underscores the
need to expand, rather than restrict, such coverage.

B. Interim Final Rule §441.18 Substantially Limits Medicaid Case

Management Services for Children in School Settings

As noted above, EPSDT requires that all children in the Medicaid program be
able to obtain case management services when necessary to correct or ameliorate physical
or mental illnesses or conditions. 42 U.S.C. § 1396d(r)(5). Often, states will choose to
provide these services to children with special health care needs in school settings so that
they may be assured receipt of free and appropriate public education (FAPE), as the
Individuals with Disabilities Education Act (IDEA) and Section 504 of the Rehabilitation
Act dictate. See Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et seq.
and The Rehabilitation Act, 29 U.S.C. § 794 et seq. IDEA, a federal law that governs all
special education services, provides funding to state and local governments to guarantee
special education services to students who satisfy the eligibility criteria; Section 504, a
civil rights law that prohibits discrimination against students based on disability, requires
that schools provide these children with reasonable accommodations. See id.

The Medicaid Act provides that CMS may not prohibit or restrict payment for
covered services furnished to a child with a disability simply because such services are
covered as a part of an Individualized Education Plan (IEP). See 42 U.S.C. §
1396b(c)(2007). Despite this requirement, the December 4 Rule would place significant
restrictions on states’ ability to cover services provided as part of an IEP. It limits FFP to
case management activities that are not a core component of non-medical programs.
Specifically, it states:

Case management does not include, and FFP is not available in expenditures for
. . . activities, for which an individual may be eligible, [which] are integral
to the administration of another non-medical program, such as guardianship,
child welfare/child protective services, parole, probation, or special education

72 Fed. Reg. at 68093. Language in the Preamble maintains that case management
involved in the IEP and Individualized Family Service Plan (IFSP) processes should be
covered when furnished to a Medicaid-eligible child by a Medicaid qualified provider
who assists in gaining access to and coordinating needed services; however, it holds that
processes purely serving an IDEA function should not be covered. See id. at 68087.
Similarly, the December 4 Rule disallows FFP when the case management service is
performed solely to satisfy obligations of Section 504 of the Rehabilitation Act to ensure
equal access to the educational program or activity. See id.

Thus, the December 4 Rule would significantly fragment the delivery of case
management to students receiving special education services. While in the past, one case
manager and one case management plan could satisfy dual mandates for IDEA or Section
504 and Medicaid, those functions will likely have to be divided among providers and
also among processes, one for Medicaid and another for IDEA or Section 504.

C. Interim Final Rule §441.18 Restricts Case Management for

Individuals Transitioning to a Community Setting

The December 4 Rule would place severe restrictions on case management

services for those individuals who are transitioning from an institution to a non-
congregate community setting. It constitutes a significant departure from the DRA
statute, which mentions nothing of these restrictions nor the current CMS policy, which
allows states to offer targeted case management for up to 180 days for those in
institutions to help them transition into community. Rather, it impedes access to case
management services that would ease Medicaid beneficiaries’ transition to a community
setting. Accordingly, it is at odds with the U.S. Supreme Court’s Olmstead v. L.C.
decision, which held that the Americans with Disabilities Act (ADA) requires states to
provide services to individuals in the most integrated community settings appropriate to
their needs. See Olmstead v. L.C., 119 S.Ct. 2176 (1999).

The December 4 Rule conflicts with measures created by the DRA itself to
transition individuals currently residing in institutional settings, such as The Money
Follows the Person Rebalancing Demonstration. In addition, these requirements appear
onerous to community providers who may not be able to obtain timely reimbursement as
a result of discharge delays and other circumstances beyond their control. In fact, the
documentation requirements for obtaining FFP may prevent providers from receiving
reimbursement at all.

Accordingly, NHeLP strongly supports the proposed rule to rescind the December
4, 1997 case management rule.

We thank you for the opportunity to provide comments and for your
consideration of these comments. We hope that they will be helpful.


Sarah Somers
Senior Attorney