Disabled Kids Won’t Get More From Medicare

WASHINGTON (CN) - A federal judge tossed the Kansas Health Policy Authority's bid to get the government to chip in more for institutionalized children with mental disabilities since Medicaid currently covers only their psychiatric treatment.

Beginning in 2006, Kansas began to convert some of its residential treatment facilities for children with mental health needs into broader institutions offering a wider array of services, including medical care, laboratory tests and prescriptions.

Since then, the state has repeatedly argued that the federal government, through Medicaid, should share the cost of these additional services.

But the U.S. Department of Health and Human Services disagreed, arguing that the Medicaid statute and implementing regulations unambiguously state that federal funding is available only for psychiatric services provided in institutions for mental diseases.

In April, the D.C. Circuit decided a similar dispute in Virginia Dept. of Medical Assistance Services v. U.S. Dept. of Health and Human Services.

Health and Human Services succeeded in that suit, with the court saying there was "substantial evidence" that states had ample notice of how the federal agency interpreted the statute.

In deciding the current case, U.S. District Judge Barbara Jacobs Rothstein said would focus on the plaintiff's remaining claim: that the Federal Centers for Medicare and Medicaid Services approved an amendment to Kansas' state Medicaid plan, permitting "add-on" payments for the additional services it was offering.

"Upon review of the administrative record, it is clear that the parties did not have a meeting of the minds with regard to KHPA's proposed add-on per diem rate," Rothstein wrote, referring to the Kansas Health Policy Authority. "KHPA admits as much, stating, that 'seemed' to have received authority for including the additional costs, but admitting that the amendment is 'ambiguous.'"

While the departmental appeals board for Health and Human Services - to which Kansas had previously appealed - generally defers to a state's interpretation of its own plan, "the [state's] interpretation must be reasonable in light of the language of the plan as a whole."

"Such is not the case here," Rothstein said. "To the contrary, KHPA can point to no language in the state plan that clearly supports its position."

"In addition, KHPA did not present any evidence to show that the disallowed health care expenses could reasonably be considered part of the 'inpatient psychiatric facility services,'" provided in and by its facilities, she said.

Based on these facts, Rothstein denied the plaintiff's motion for summary judgment, as well as its request for declaratory and injunctive relief. Instead, she dismissed the case in its entirety.

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