Children With Autism Left Behind by Low Medicaid Rates

This article was originally published by Stateline, an initiative of The Pew Charitable Trusts, and was written by Michael Ollove.

Reagan Wright, who is nearly 14, is devoted to all things American Girls, and dreams of becoming a veterinarian. For a child with autism spectrum disorder, Reagan is considered high-functioning.

Which isn’t to say, her mother Emily Wright emphasizes, that Reagan is not a handful.

“There are social issues,” Emily said. “Troublemaking and keeping friends. She says inappropriate things. And there are outbursts. Lots and lots of meltdowns.” The Wrights pulled Reagan out of public school this year, and she now is taught at home through a state-approved, virtual school.

Reagan’s medical providers recommend she undergo applied behavior analysis, one of the most common and effective treatments for children with autism. Referred to as “ABA” for short, the intensive treatment rewards autistic children for substituting positive behaviors for problematic conduct.

Yet, while the South Carolina Medicaid agency has approved Reagan for the treatment, her mother Emily says it’s unlikely she’ll be able to find a provider willing to accept the amount of money South Carolina Medicaid pays for ABA.

“They won’t say how long their waiting lists are, but I’m told it’ll take years,” Emily said.

The reason, according to a class action federal lawsuit filed last month against the South Carolina Department of Health and Human Services, is that its Medicaid reimbursement rate for ABA “is among the worst in the nation and has severely limited and will continue to limit children’s access to medically necessary legally required treatment.”

A similar class action federal lawsuit was filed late last month in Northern California on behalf of young, severely disabled children who, the suit alleges, were not receiving the approved in-home nursing care that the lawsuit contends would keep them from institutionalization. That case also alleges a shortage of available nurses willing to accept low Medicaid reimbursement rates.

Both cases assert that the states are violating the law by not providing medically necessary treatment and, as the South Carolina suit alleges, are causing “irreparable injury” to children in need of those services. Neither case specifically asks the states to pay providers more, but legal and health policy analysts say that could be the eventual result. Medicaid, which provides health care coverage to low-income people, is a joint federal-state program. 

In recent years, courts, including the U.S. Supreme Court, have curtailed the ability of individuals to legally challenge Medicaid rates as insufficient, but some think that the South Carolina and California cases, focused as they are on children, might open a new and effective strategy.

“The argument isn’t that the injury is that you haven’t paid an adequate rate, it’s that I’m not getting services I am entitled to,” said Dan Unumb, an attorney and executive director of the Autism Legal Resource Center, a group that advocates on behalf of those with autism and their families.

By coincidence, the lawsuits were filed at a time when the Trump administration is seeking to curtail an Obama-era directive calling for federal oversight of Medicaid reimbursement rates to assure that they are adequate to provide beneficiaries with access to health services.

Lowest Rate

Medicaid reimburses medical providers less than other payers. According to the Kaiser Family Foundation, on average, Medicaid pays providers 72 percent of what Medicare, the federal health plan for the elderly, pays for the same services. The disparity is even greaterbetween Medicaid and private insurers.

Those lower rates have a substantial impact on access to medical services. A 2013 analysis of federal data found that physician acceptance rates of new patients in Medicaid was significantly lower than in Medicare or private insurance, particularly in states with lower Medicaid payment rates. That means longer wait times to see providers and having to travel farther from home to get health care.

Although the Medicaid statute says that the rates paid must be “sufficient to enlist enough providers so that care and services are available,” recent U.S. Supreme Court cases have narrowed the ability of individuals to challenge Medicaid reimbursement rates.

But alongside those rulings have also been a string of federal cases involving a Medicaid benefit for children called “Early and Periodic Screening, Diagnostic and Treatment” services. EPSDT mandates comprehensive screening and health care services for children under 21 enrolled in Medicaid, guaranteeing them appropriate preventive, dental, mental health and developmental and specialty services. In legal disputes, courts have consistently sided with children and families to ensure they receive the services to which they are entitled.

Lawyers for the plaintiffs in the South Carolina and California suits are leaning on that history in their cases. While both clearly involve the issue of the low Medicaid reimbursement rates, they are mostly leaning on the EPSDT statute, arguing that it requires states to provide “medically necessary” services to children. The suits do not say the states should raise their rates, but if the plaintiffs prevail, that might be the result.

According to an Autism Speaks survey of 33 states earlier this year, South Carolina paid the lowest rate to ABA technicians, $17 an hour. By contrast, Alaska paid $76 an hour.

More relevant to South Carolina is that its neighbors, Georgia and North Carolina, pay more than $70 an hour.

As comparatively low as the South Carolina rate is, it was even lower, less than $14 an hour, until last July. Raising the rate to $17 an hour increased by more than 50 percent the number of providers of autism services willing to accept Medicaid patients, according to the state health department, which responded to e-mailed questions from Stateline.

The state says that now about half of the autism service providers in the state – 166 individual and 24 group providers – accept Medicaid patients.

‘It’s Maddening’

Nevertheless, South Carolina is set to increase its rate again, to $31 an hour July 1. That would still be among the lowest rates in the country. The health department said that it expects the new rates will further increase the number of practices accepting Medicaid patients and spur new practices to open.

Reagan’s mother, Emily Wright, remains doubtful. “It’s wonderful, and I’m grateful they raised the rate, but that won’t help with recruitment,” she said. “If you were just getting out of school, why would you come here instead of Georgia and North Carolina?”

Reagan, the oldest of three children, was diagnosed with autism relatively late, at age 12. Before that, doctors seemed to think she suffered from anxiety, obsessive compulsive disorder, and attention deficit hyperactivity disorder.

She qualified for Medicaid after she got her diagnosis and it was confirmed by the Department of Disability and Special Needs. Last summer, her mother said, the state Medicaid agency approved Reagan for 30 hours of ABA treatment a week.

Reagan’s caseworker provided a list of eight providers in central South Carolina who offered ABA treatment, but Emily discovered that only two of them accept Medicaid. “And the two that do take Medicaid are not accepting new patients,” she said. The wait, she was told, could be years.

Emily said that she and her husband, who own a small construction business, could have bought health insurance for Reagan on the state’s health insurance exchange, but they found that the only carrier on the exchange — Blue Cross Blue Shield — doesn’t cover ABA services. (The rest of the family is on a catastrophic health plan called “Medishare” that is legal under the Affordable Care Act.)

For about two months in the fall, the family paid for ABA services out-of-pocket, but only for 10 to 15 hours a week. Emily said that Reagan’s behavior changed dramatically. “She was more polite. She argued a little less. She was able to accept changes and things that didn’t go her way without so many meltdowns.”

But it was expensive, about $600 a month, so the Wrights were forced to stop the treatments. Since then, Emily said, “I’m seeing regression in her now.”

Emily said she and her husband hope to resume some ABA treatments, but it will be costly and still far less than Reagan needs.

“It’s maddening. There’s this wonderful therapy that would help, but we can’t get it. And every day my child is not improving, even though she’s got so much potential. One day she could live on her own. She could drive a car. It’s possible. Are those things guaranteed without [the treatment]? I just don’t know. I can’t say.”