Law School 101: Federal law trumps state law

The basic tenet is that Federal laws and regulations supercede state laws and regulations, and that the Constitution supercedes Federal Law.

If it's a right that comes from the Constitution, then it's a civil right.  Civil rights laws forbid discrimination on the basis of age, race, religion, sex and disability.  No matter how inconvenient some of these civil rights might be to state governments, they can't take them away from you.

If it's a right that comes from Federal Law, then it's a legal right.  States also cannot legislate to restrict your legal rights. 

EPSDT is a legal right children under the age of 21 have to all the services that are "medically necessary".  These services are listed and mandated under section 1905(a) of the Social Security Act.  You can't get much more Federal that that.   States can spend their EPSDT funds in different ways, such as through the Department of Education in addition to the Department of Human Services (Medicaid).  But if your child's treating provider says something is "medically necessary" for your child, then, regardless of whether it is a normal Medicaid service in your state, the state is supposed to provide it.

The idea that a treating doctor might know more about what is medically necessary for a child than a state bureaucrat in charge of the budget has been the proverbial thorn in the side for states like Hawaii.  States across the country have been spending millions of tax payer dollars fighting and losing legal battles to restrict spending on people with disabilities, children in particular. 

Other states, again like Hawaii, are violating the Constitutional right people with disabilities have to receive the services needed for them to stay at home with their loved ones.  Study after study have shown it's cheaper in the long run than throwing everyone into institutions, not to mention the civil right is not to be forced into an institution because of lack of home services.

It's not like the states don't have the money to do this.  In fact, the states have all received hundreds of millions (if not billions) of stimulus funds that could easily plug any budgetary holes in services for the elderly and disabled.  It's not taking any money away from anyone else, since the Recovery Act states the funds can only be spent on Medicaid.


But back to the issue of "medical necessity".

Back in 2004, a federally funded pamphlet aimed at the parents of kids with disabilities noted that

States have the right to review a provider’s decision, and it is
not uncommon for providers and Medicaid agencies/HMOs to disagree on what
is medically necessary. However, several courts have found that states must
defer to the doctor’s opinion in treating patients.

In August 2009, the CMS (Centers for Medicare and Medicaid, the federal Medicaid regulatory agency) wrote in a letter to Idaho

Any service required as a result of an EPSDT screen and which is currently covered under the scope of the Enhanced Benchmark Benefit Package will not be subject to amount, scope, and duration limitations, but will be subject to prior-authorization. The additional service must be documented by the attending physician as medically necessary and that the service requested is the least costly means of meeting the recipient's medical needs. Preauthorization from the Department or its authorized agent will be required prior to payment. (my emphasis)

Two more federal rulings have just come down in Georgia that state in no uncertain terms that the role the state plays in determining "medical necessity" is limited to ensuring the request isn't fraudulent.  The designated state Medicaid agency representative has the right to review the service and authorize it, but not to decide they know more about medical necessity than the treating provider.

the state may determine whether the physician’s diagnosis or prescribed treatment “was without any basis in fact.” Rush, 625 F.2d at 1157. Thus, the state may review an order of a treating physician for “fraud, abuse of the Medicaid system, and whether the service is within the reasonable standards of medical care.” Hunter v. Medows, Case No. 1:08cv2930-TWT (N.D. Ga. Nov. 3, 2008). See Collins v. Hamilton, 349 F.3d 371, 375 n.8 (7th Cir. 2003) (a state's discretion to exclude services deemed “medically necessary” by an EPSDT provider
has been circumscribed by the express mandate of the statute); Pediatric Specialty
Care, Inc. v. Arkansas Dept. of Human Servs., 293 F.3d 472, 480 (8th Cir. 2002)
(finding that a state must pay for costs of treatment found to ameliorate conditions
discovered by EPSDT screenings if such treatments are listed in section 1396d(a));
and Pereira v. Kozlowski, 996 F.2d 723, 725-26 (4th Cir. 1993) (“In section
1396d(r)(5), the Congress imposed upon the states, as a condition of their participation
in the Medicaid program, the obligation to provide to children under the age of
twenty-one all necessary services, including transplants.”).

The Federal judge in that case went on to say there was a "clear statutory intent that the
1989 amendment adding § 1396d(r)(5) took away a state’s discretion not to provide
necessary treatment for individuals under the age of twenty-one." (my emphasis)

A second Federal decision issued in Georgia determined that cuts in home nursing services for a child violated that child's federal rights mandated by EPSDT. That was another example of the state Medicaid agency trying to say the state had equal decision making power with the treating provider over matters of medical necessity.


Nevertheless, Hawaii sees no reason to learn from any of these other costly trials, and is forging ahead with the old time claim that the state Medicaid agency can over-rule the recommendations of the treating physician.

I was very flattered recently when the Hawaii Medicaid Medical Director handed over the state's official written determination on "medical necessity" and stating there is nowhere "in the Federal and State rules that we can find allowing the treating physicians to be the sole determiners of medical necessity."

Flattered because the legalese document I was given was presumably prepared or edited by someone with a law degree.   It might even have been someone from the DC law/lobbying firm Hawaii has paid $3.5 million to for developing the state's Medicaid policy for the elderly, blind and disabled population.  I, of course, have no law degree, I'm just a mom. 

But I do know when a question is based on a false assumption. 

I can't show them a citation where federal law gives anyone other than the treating provider decision making rights over medical necessity because no where do these federal laws give any rights to anyone except the individual with the disability.  It's the individual with the disability who has the Constitutional rights to services that enable he or she to remain out of an institution, and federal legal rights to receive the medical care their treating providers say is necessary. 

The state can't restrict rights granted under federal law. Federal statutes give the states no more than the right to ensure the request isn't fraudulent, not to make a medical decision on behalf of the individual.

I find it interesting that CMS has been trying to get Hawaii to conform to federal Medicaid regulations since last August, and here the state is, four months later, still trying to justify violating the legal and constitutional rights of our elderly and disabled citizens. 

If the state remains on this course, I have to wonder how much more tax payer money will be spent on private attorneys before the issue is settled.  Meanwhile, the two for-profit insurance companies running the Hawaii Medicaid program for the aged, blind and disabled are slashing services and crying poor to the state.  I've already written about the large profits both companies managed to make while they were apparently losing money providing services in Hawaii. 

So the lawyers and the insurance companies make more money, while the actual population covered by federal Medicaid law suffers.