Pediatric Specialty Care, Inc. v. Arkansas Department of Human Services (2002, 2004, 2006)

By Reina Kabbara

Overview

A fundamental Medicaid/Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) case, Pediatric Specialty Care v. Arkansas DHS (8th Cir. 2002, 2004, 2006) arose when parents and providers claimed Arkansas’s Child Health Management Services (CHMS) program changed special needs children’s access to necessary care. The court held that EPSDT rights are enforceable under 42 U.S.C. §1983 and that states may reorganize delivery but must still arrange and pay for doctor-ordered treatment and inform families. It also ruled that prior authorization and payment policies must meet Medicaid’s efficiency, economy, quality, and access standards, that changes are enforced through lawsuits against state officials–not the agency, and that Medicaid peer-review identities/deliberations are confidential [1-4]. 

Summary

Arkansas’s CHMS program delivered multidisciplinary evaluation, therapies, and early-intervention day treatment to Medicaid-eligible children as part of the federal EPSDT mandate. Beginning in late 2001, the Arkansas Department of Human Services (ADHS) attempted to cut or move these services “off-plan,” tighten prior-authorization, and otherwise reduce utilization for budget reasons. Providers and parents sued under 42 U.S.C. § 1983, alleging violations of the Medicaid Act’s EPSDT requirements and due-process protections.

Across a line of Eighth Circuit decisions, the court clarified four core principles: (1) EPSDT confers enforceable federal rights; (2) states retain flexibility to reorganize delivery systems but must still arrange for, inform about, and pay for physician-ordered EPSDT treatment; (3) policy changes that affect access must be evaluated for efficiency, economy, quality, and access; and (4) identities and deliberations of physicians involved in Medicaid prior-authorization peer review are confidential under federal law [1]. 

In 2002, the Eighth Circuit held that Arkansas must cover physician-ordered EPSDT services that “correct or ameliorate” conditions, even if a particular service (such as CHMS day-treatment) is not explicitly listed in the state plan. The court also emphasized that the state may retire the “CHMS” label, provided EPSDT obligations are met and families are adequately informed and assisted in obtaining care [1]. In 2004, the court affirmed an injunction requiring ADHS to assess the impact of proposed changes under Medicaid’s “equal access” clause, 42 U.S.C. § 1396a(a)(30)(A), before altering coverage or payment. It rejected a substantive due-process ruling and reversed an order claiming to bind the federal agency (CMS), which was not a party [2]. In April 2006, the court reaffirmed § 1983 enforceability of EPSDT-related provisions, denied qualified immunity to certain ADHS officials based on evidence that prior-authorization practices were used to obstruct medically necessary care, and dismissed the agency itself under the Eleventh Amendment while allowing Ex parte Young claims for prospective relief to proceed against officials [3]. That same day, in a companion appeal, the court reversed an order compelling disclosure of prior-authorization reviewer identities, holding that federal statutes and regulations protect reviewer identities and peer-review deliberations from disclosure absent the reviewer’s consent [4].

The Supreme Court agreed to hear the case but then determined that some claims, specifically, the cases against certain Arkansas officials in their personal capacities, had become questionable. However, it did not change or reject the Eighth Circuit’s main EPSDT rulings that children can enforce EPSDT rights under § 1983 and that states must arrange and pay for physician-ordered EPSDT care, among other holdings [5].

Impact

The Pediatric Specialty Care line of cases gives Medicaid-enrolled children a clear, privately enforceable right to EPSDT services under § 1983, meaning families can drive coverage and payment for physician-ordered care that “corrects or ameliorates” a child’s condition, regardless of whether a program label like “CHMS” appears in the state plan [1]. States still have room to reorganize delivery, but they must preserve access, inform and assist families, and cannot change coverage or payment without analyzing effects on efficiency, economy, quality, and access under § 1396a(a)(30)(A) [1-2]. Discovery is narrower because physician-reviewer identities and peer-review deliberations are protected by federal confidentiality rules, shaping how parties build their cases. Lastly, the Supreme Court’s limited grant–vacate–remand for questionable personal-capacity claims did not disturb these core EPSDT holdings, leaving the enforcement framework intact for future disputes.

Court Documents

Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Services, 293 F.3d 472 (8th Cir. 2002). [1]Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Services, 364 F.3d 925 (8th Cir. 2004). [2]Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Services, 443 F.3d 1005 (8th Cir. 2006). [3]Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Services, 444 F.3d 991 (8th Cir. 2006). [4]

Selig v. Pediatric Specialty Care, Inc., 551 U.S. 1142 (2007). [5]

Citations

[1] Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Servs., 293 F.3d 472 (8th Cir. 2002). https://law.justia.com/cases/federal/appellate-courts/F3/293/472/521982/

[2] Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Servs., 364 F.3d 925 (8th Cir. 2004). https://case-law.vlex.com/vid/pediatric-specialty-v-ar-891835804

[3] Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Servs., 443 F.3d 1005 (8th Cir. 2006).

https://law.justia.com/cases/federal/appellate-courts/F3/443/1005/515870/

[4] Pediatric Specialty Care, Inc. v. Arkansas Dep’t of Human Servs., 444 F.3d 991 (8th Cir. 2006). https://law.justia.com/cases/federal/appellate-courts/F3/444/991/546239/

[5] Selig v. Pediatric Specialty Care, Inc., 551 U.S. 1142 (2007) (grant, vacate in part as moot, and remand). https://www.supremecourt.gov/orders/courtorders/062507pzor.pdf