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State cannot enforce $1,000 cap on dental services for Medicaid recipients

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The 7th Circuit Court of Appeals has left in place the preliminary injunction granted by Chief Judge Philip Simon last year that prevents the state from capping dental work for Medicaid recipients at $1,000 a year.

Indiana Medicaid covers certain dental procedures that are “medically reasonable and necessary.” The state implemented the cap beginning Jan. 1, 2011, as a cost-cutting measure. Sandra Bontrager, who is on Medicaid, needs extensive dental work that will exceed the $1,000 cap.

In Sandra M. Bontrager, on her own behalf and on behalf of a class of those similarly situated v. Indiana Family and Social Services Administration, Michael A. Gargano and Patricia Casanova, the Circuit judges affirmed that Bontrager has a private right of action under 42 U.S.C. Section 1983 to challenge the cap.

The state claimed the cap does not prevent coverage of any medically necessary dental procedures, but operates as an appropriate limitation authorized by 42 C.F.R. Section 440.230 and I.C. 12-15-21-3(3).

“We agree with the district court that the cap prevents the State from providing coverage for all medically necessary services, and partial payment for such services does not constitute ‘some coverage,’ as the State would have us believe,” Judge Michael Kanne wrote.

The cap denies coverage for medically necessary services outright by functionally excluding certain procedures, the court held, and the cap is not in any way based on degree or consideration of medical necessity. It doesn’t matter, as the state asserts, that more than 99 percent of dental procedures needed by Medicaid recipients would be covered under the $1,000 cap.

The 7th Circuit also rejected the state’s claim that the cap is a “utilization control procedure.”

“Although we are mindful of potential budgetary concerns, these interests do not outweigh Medicaid recipients’ interests in access to medically necessary health care,” Kanne wrote. “The State cautions that it may end coverage of all dental services under its Medicaid plan if the $1,000 cap is no longer in place. Thus, this lawsuit may result only in a pyrrhic victory for the plaintiff. But the State’s likely violation of state and federal law cannot be ignored in order to preserve the status quo. Moreover, there are other avenues by which the State can limit its exposure to significant Medicaid costs.”

 

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