A Twenty-First Century Medicaid Child Health Policy: Modernizing EPSDT

In 1967, the Johnson Administration proposed, and Congress enacted, a series of reforms aimed at improving the health of the nation’s poorest children and youth. The law was a response to devastating evidence about the health of poor children, drawn from the early community health centers and Head Start demonstrations, which showed the impact of entrenched inequity and health care deprivation on infant and child health. In pointing to the long-term effects of deprivation, administration officials referred to a remarkable 1962 Defense Department study that documented the consequences of health inequity among the poorest recruits, finding an astonishing 50% rejection rate of recruits as a result of “pervasive evidence of treatable and correctable physical, mental, and developmental conditions”.

The 1967 legislation did two things. First it authorized grants to public health agencies through the Title V Maternal and Child Health and Crippled Children’s Program (later renamed the MCH Block Grant) to find the poorest, most at-risk children and connect them to health care consisting of screenings followed by diagnosis and treatment to “correct and ameliorate” physical and mental conditions. Children from birth through adolescence were the focus of the effort, termed “early and periodic screening, diagnosis, and treatment,” referred to as EPSDT. Second lawmakers expanded Medicaid to finance screenings and all medically necessary care. Subsequent legislation further directed state Aid to Families With Dependent Children (AFDC) programs (repealed and replaced in 1996 by the Temporary Assistance to Needy Families or TANF Program) to conduct casefinding, a requirement that would become part of Medicaid itself in 1981. HHS and state implementation of EPSDT proceeded slowly, culminating in a rule, issued in 1984, before Medicaid’s child health and managed care transformation.

The policy initiatives that transformed Medicaid for children, as well as health care delivery, began in 1984 and continue today. EPSDT was added when Medicaid was in its infancy. However, children’s enrollment grew exponentially as a result of major policy initiatives that together transformed it into a program capable of meeting the health needs of virtually all low-income children. With its emergence as a powerful and expansive legal entitlement, Medicaid thus became a true engine of change because of expanded eligibility and highly enriched EPSDT coverage.

The EPSDT rule effectively remains preserved in legal amber, 40 years out of date with Medicaid transformation in terms of eligibility, coverage, and access to care. Through a series of landmark reforms beginning in 1984 and continuing to the present, Congress expanded Medicaid to insure all low-income children under age 18 with incomes up to 138%of the federal poverty level (with state options to go even higher and more generous levels for infants), created the Children’s Health Insurance Program (CHIP) that operates as a Medicaid companion, streamlined enrollment and renewal, and mandated annual enrollment periods for children in order to better ensure stability and continuity of coverage and care. Congress also amended EPSDT itself to overcome perceived limitations in its scope; these amendments ensured full coverage of both periodic and as-needed screenings, all immunizations recommended by the Advisory Committee on Immunization Practice (ACIP) , comprehensive vision, dental and hearing care, and all medically necessary care within the comprehensive federal definition of medical assistance, free of cost-sharing, and governed by EPSDT’s unique and expansive definition of medical necessity (i.e., early care that can ameliorate both physical and mental conditions).

These child health reforms occurred as Congress was systematically retooling state Medicaid administration itself. Following incremental steps throughout the 1970s and 1980s, Congress in 1997 enabled states to tie coverage to mandatory enrollment in comprehensive managed care plans contractually obligated to undertake both coverage and service delivery on states’ behalf.

The 1984 rule is completely nonaligned with this massive restructuring—vastly expanded eligibility, a transformed EPSDT benefit, and a total transformation of how beneficiaries receive their care. And the situation is extremely serious: today Medicaid serves over half of all children. Most are directly enrolled in Medicaid (35 million); another 7 million receive Medicaid coverage through CHIP. All of these children are entitled to highly enriched coverage, and 8 in 10 receive this coverage through the managed care plans in which they are enrolled.

Throughout this extraordinary evolution, child health advocates have worked tirelessly to promote efforts to incorporate EPSDT coverage and access guarantees into modern Medicaid. But advocacy, even when combined with litigation to enforce the EPSDT entitlement, cannot overcome the federal regulatory failure to modernize EPSDT to take into account the child health reforms and the transition to managed care.

States, managed care plans, and above all, beneficiaries and providers, need a comprehensive up-to-date federal regulatory framework. This framework needs to address several basic components. First is modernization of EPSDT coverage requirements to capture the full scope of the EPSDT benefit, which is completely missing from the 1984 rule, down to the key developments in what should be covered under the basic EPSDT screening requirements. As things stand, even the language, which emphasizes “screens” without articulating the scope of a screening guarantee in light of developments over the past four decades, is desperately out of date and fails to reflect the federal Bright Futures standards that today guide preventive child health care, causing confusion for providers and families.

Second is modernization of outreach and case management to reflect a world in which private contractors, rather than public health nurses or local “welfare” offices are effectively responsible for outreach, service delivery, ongoing case management, and quality monitoring.

Third are reforms that clarify for states and plans the process for incorporating EPSDT coverage, access, outreach, and care management duties into the massive, detailed contracts that undergird managed care systems. Also needed are regulatory standards for the manuals that families and providers must be given by states and plan contractors so that they have the information they need to make effective use of EPSDT. Reforms aimed at incorporating EPSDT into managed care also should identify minimum performance expectations throughout the child and adolescent development period, standards governing early access to care, standards for the development of pediatric networks, and minimum expectations for EPSDT case management aimed at better ensuring continuity of care as well as connection to needed educational, nutrition, and social services.

Such an undertaking amounts to no less than reinventing child and adolescent health care for Medicaid-insured children to reflect the 21st century conditions under which EPSDT must operate. This is a multi-year effort that would begin with extensive consultation with all stakeholders and experts, followed by development of a comprehensive rule that connects EPSDT to the modern Medicaid health care system, including the complex regulations that define the relationship between state agencies and managed care systems that operate on their behalf. Efforts to protect the intent and scope of the law, rather than curtail or dilute the EPSDT benefit, will be required.

Above all, this effort should be grounded in health equity. Today we know so much more about how Medicaid positively affects the life course of children than was the case when EPSDT emerged as the program’s pediatric coverage standard 56 years ago. With half of children covered by Medicaid and CHIP, ensuring that EPSDT’s unmatched promise flourishes in the modern Medicaid world is a policy imperative.

Note: This Opinion was updated on July 10, 2023 with a historical correction. 

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