Value Options, your days of taking our tax dollars to deny children services are numbered.
Any emphasis is mine.
P.G. BY AND THROUGH HIS MOTHER, )
K.G., AND S.K. BY AND THROUGH HIS )
MOTHER, A.K. )
JULIE HAMOS, IN HER OFFICIAL ) NO. 13-3020
AS DIRECTOR OF THE ILLINOIS DEPARTMENT )
OF HEALTHCARE AND FAMILY SERVICES; )
MICHELLE R.B. SADDLER, IN HER OFFICIAL )
CAPACITY AS SECRETARY OF THE DEPARTMENT )
OF HUMAN SERVICES; AND THE ILLINOIS )
MENTAL HEALTH COLLABORATIVE FOR )
ACCESS AND CHOICE, )
We call your attention to this January 31, 2013 decision granting a TRO against
defendants in the United States District Court for the Central District of Illinois.
This was a suit alleging violation of the Medicaid early and periodic screening, diagnostic
and treatment (“EPSDT”) provisions. The “Collaborative,” as you may know, is operated by
Value Options, Inc. (“VO”) to provide managerial oversight to the Individual Care Grant
program. When VO first took over and created the Collaborative, we predicted that the
number of ICG applications actually granted would fall dramatically. At the time VO came
onboard, there were approximately four hundred ICGs.
Now, there are less than 140 and the
number actually granted during 2012 was only thirteen. VO has steadily received increasing
fees in the millions while more mentally ill children go without services.
The lawsuit involved the Collaborative discontinuing funding for P.G.’s placement at
Kemmerer Village, which is a residential facility. In addition, another minor, S.K., was also
involved and was in the hospital as described below.
P.G. is a sixteen year old Medicaid eligible boy who is psychotic, challenged by Reactive
Attachment Disorder, as well as Oppositional Defiant Disorder, and has been hospitalized
numerous times. He was accepted into the ICG program in July 2011, which is partially
Medicaid funded. The Collaborative, but not Value Options, was sued because they run the
ICG program. In August of 2011, P.G. was placed by ICG, but the Collaborative was planning
to terminate his funding at Kemmerer Village on January 31, 2013, the day of the court’s
decision. The court observed that if this occurs, P.G. would be discharged from Kemmerer
The complaint further stated that if discharge occurred, P.G. would be at risk for further
hospitalization and institutionalization. He would also be unable to attend school while he is
hospitalized or institutionalized, and he has not successfully responded to outpatient services
previously made available.
Essentially, the allegations claim that a discharge, ostensibly because
residential placement is no longer “medically necessary,” violates Medicaid law and further
residential placement is, in fact, medically necessary and appropriate.
A.K. is an eleven year old boy suffering from Mood Disorder; Anxiety Disorder; ADHD;
Oppositional Defiant Disorder; Learning Disorders; and Reactive Attachment Disorder. He is
currently hospitalized at the Methodist Medical Center in Peoria, Illinois, which is a psychiatric
hospital. On January 22, 2013 the attending psychiatrist recommended that A.K. receive
residential treatment. Moreover, according to the complaint, if A.K. does not receive
residential mental health services, he will be at risk for further hospitalization. When he is in
the hospital, he is unable to attend school or leave the hospital. Furthermore, outpatient
services were unsuccessful in maintaining a sufficiently supervised therapeutic setting for this
The complaint states very clearly that both of the plaintiffs need a residential setting for
maximum reduction of their mental disability and for restoration to the best possible functional
level because sufficient intensive home and community based services have not been made
available to them (or been successful).
The plaintiffs seek a temporary restraining order (“TRO”) while the case pends in order
to continue funding for P.G. at Kemmerer Village, and in order to provide A.K. with an
appropriate psychiatric residential facility. Essentially, qualified personnel have recommended
residential mental health treatment for the two young plaintiffs and the Collaborative has
ignored these recommendations. The complaint essentially takes the position that psychiatric
residential care is medically necessary and to deny it for both children would violate EPSDT
provisions of Medicaid. The law mandates that EPSDT services for all persons under age
twenty-one must be provided by states accepting Medicaid, which Illinois does. See 42 USC
1396d(a)(4)B. Moreover, psychiatric residential treatment services have been held to be
included in the EPSDT rubric. See Collins v. Hamilton, 349 F. 3d371, 374-5(7th Cir. 2003).
The plaintiffs were requesting a TRO to enjoin defendants from failing to take
immediate and affirmative steps to arrange and fund the plaintiffs’ medically necessary
residential treatment as required by the EPSDT provisions. The court held that the plaintiffs
have shown that they are reasonably likely to succeed on the merits of the case, that no
adequate remedy at law exists, and that plaintiffs will likely suffer irreparable harm if the TRO is
not entered. Moreover, the harm that the plaintiffs will suffer clearly outweighs the harm
defendants might suffer if the injunction is granted.
Since Medicaid is a cooperative federal-state program that provides federal funding for
state medical services for the poor, if states decide to participate, they must comply with all
federal requirements. One requirement is that every participating state have “early and
periodic screening, diagnostic, and treatment services,” for persons under twenty-one. The 7th
Circuit Appellate Court has interpreted the Medicaid Act to mean that placement in a
psychiatric residential treatment facility, where such placement is determined to be medically
necessarily through EPSDT screening, is included “within the ambit of covered EPSDT
services.” See Collins v. Hamilton. The Collins court was an Indiana case claiming the State of
Indiana failed to provide Medicaid eligible children under the age of twenty-one with psychiatric
residential treatment facility placements in similar circumstances. The Collins court noted that
states are required to provide appropriate psychiatric residential care as a part of EPSDT. In
fact, the Collins court stated that “inpatient psychiatric hospital services for individuals under
age twenty-one” are coverable Medicaid expenses so long as they abide by the directions of
subsection (h) of the Medicaid law. This language, the Collins court found, broadened the
definition of inpatient psychiatric hospitals to include services rendered in psychiatric residential
treatment facilities (“PRTFs”) by expressly incorporating other inpatient settings as specified by
the secretary in regulations. Such regulations were accordingly promulgated to specifically
include psychiatric residential treatment facilities as possible venues for patients under the age
of twenty-one to receive medically necessary and restrictive psychiatric treatment.
THE COURT’S ORDERS
The federal judge granted the defendant’s motion for TRO and ordered defendants
(under pain of contempt) to take affirmative steps to arrange and fund the plaintiffs’ medically
necessary treatment as required by the EPSDT provisions of the Medicaid Act, including
maintaining P.G.’s placement at Kemmerer Village and in addition, maintaining A.K.’s placement
at Methodist Medical Center while continuing to seek an appropriate residential facility and
It should be noted that the Central District (Springfield), Judge Myerscough, U.S. District
Judge, has scheduled a hearing for February 15, 2013 at 10:00 a.m. for entry of a permanent
injunction against the practices of the collaborative and its co-defendants.
This case should be
monitored closely. There is some discussion that the EPSDT issue may eventually reach class
action status in light of the rampant ICG denials last year.