HLD, v. 32, n. 1 (January 2004)
Seventh Circuit Says State Must Provide Long Term Residential
Psychiatric Treatment Facilities For Children
As part of its compliance with Medicaid, Indiana provides an Early
and Periodic Screening, Diagnosis and Treatment (EPSDT) program for Medicaid-eligible
individuals under the age of twenty-one. Indiana is required by law to provide
treatment to anyone who is found, as a result of the screening, to need treatment
for mental illness. The EPSDT program includes services that are "necessary
to correct or ameliorate defects and physical and mental illnesses and conditions
covered by the screening services." Indiana's Medicaid plan only covers outpatient
treatment of a child diagnosed with a mental illness, and does not cover residential
placement of a child in a psychiatric residential treatment facility (PRTF).
A child with a mental illness is permitted various outpatient and inpatient
treatments under Indiana's Medicaid plan, but long term chronic treatment is
Brandon Collins and Omega McCullagh (plaintiffs), both children
under the age of twenty-one with mental illnesses, filed a class action against
various Indiana officials for failing to provide treatment in PRTFs to children.
Plaintiffs sought declaratory and injunctive relief that Indiana had to provide
residential treatment for children who were found under the EPSDT program to
have a mental illness for which "medically necessary" treatment was needed.
The district court granted summary judgment to plaintiffs and held Indiana's
Medicaid program must cover residential mental illness treatment for Medicaid-eligible
children if the EPSDT screening finds treatment is "medically necessary." Indiana
The Seventh Circuit affirmed the district court's judgment. The
appeals court noted that the issue on appeal was whether Indiana had the discretion
under Medicaid to exclude residential treatment of chronic mental illness in
children. The appeals court looked to the plain language of the Medicaid statute
to determine if the district court was correct in determining that residential
treatment of a child's chronic mental illness at a PRTF is covered under the
statute. The Medicaid statute provides for EPSDT screening of children, and
expressly covers inpatient treatment of children who have been screened and
found to have a mental illness for which treatment is medically necessary. The
Medicaid statute also provides that covered services include inpatient psychiatric
hospital services for children. The Medicaid regulations specifically include
PRTFs within the meaning of "inpatient psychiatric hospital" and "therefore
placement in a PRTF is included within the ambit of covered EPSDT services."
Indiana argued that the Medicaid statute and regulations do not
cover long term residential treatment because the statute was only intended
to cover active treatment, which anticipates the patient will be discharged.
Indiana mistakenly assumes long term care in a residential facility equates
to perpetual responsibility, said the appeals court. The appeals court also
disagreed with Indiana's contention that its current inpatient services were
sufficient. The appeals court held that a PRTF is an inpatient psychiatric hospital
for purposes of the Medicaid statute, and Medicaid must cover a placement of
a mentally ill child in a PRTF that is a result of an EPSDT screening.
Collins v. Hamilton, No. 02-3935, 2003 WL 22511144 (7th
Cir. Nov. 6, 2003).