Pediatric Specialty Care, Inc. v. Arkansas Department of Human Services

Under the Medicaid Act (act), a state Medicaid plan must include the provision of early and periodic screening, diagnosis, and treatment (EPSDT) services. The Child Health Management Services program (child program) was provided under the Arkansas State Medicaid Plan (state plan) as part of the EPSDT mandate. The child program provided early-intervention services to Medicaid-eligible children between the ages of six months and six years and was designed to help children who had chronic physical, developmental, behavioral, or emotional conditions prepare for school. The child program provided diagnostic and evaluation services, therapies, and other treatments, including early-intervention day-treatment services. Early-intervention day treatment was a daycare program run by medical and early-childhood specialists that was designed to help ameliorate each child’s condition. In 2001, Arkansas announced its intention to cut the early-intervention day-treatment services from the child program due to a budget shortfall. These services were not available elsewhere in the state plan. Subsequently, Pediatric Specialty Care, Inc., a provider of services in the child program, and other child-program providers, along with the parents of three recipients of child-program services (plaintiffs) filed suit in federal district court against the Arkansas Department of Human Services (department) (defendant) to prevent the proposed cutbacks, asserting that the cutbacks would violate the EPSDT mandate. The evidence presented at trial established that the early-intervention day-treatment services helped achieve the maximum reduction of the children’s physical and mental disabilities and restoration of their best possible functional level. The district court enjoined the cutbacks in the child program. The department appealed.