Welfare Administrator Tries to Eliminate EPSDT

On February 27, 1976, George Miller sent a letter to Mr. Charles Goady, HEW's regional commissioner. (Nevada is part of HEW region 9, based in San Francisco, in which Mr. Goady is commissioner.) In his February letter, Mr. Miller proposed to eliminate EPSDT entirely from Nevada's SAMI program. Mr. Miller mistakenly thought that eliminating this federally mandated program would only subject Nevada to a loss of 1% of the federal share of the SAMI program. (Medicaid legislation provides for the federal government to match 50% of the state's expenditure on medical services to the poor) Since the federal share for SAMI at the time was approximately $11,440,000, Miller considered the penalty to consist of a loss of $114,400 of federal money a figure Mr. Miller obviously thought expendable. In response to Mr. Miller's EPSDT cutoff attempt, Mr. Goady replied that, lithe elimination of EPSDT services will jeopardize your whole Medicaid program. This becomes a compliance issue and is inescapable because EPSDT is a required service under Title XIX (Medicaid)." It was directly following Mr. Goady's letter, in which Miller found out that he could not unilaterally cut off EPSDT, that Operation Life Community Health Center, the clinic that screens 60% of the state's EPSDT cases, started receiving harassment from NSWD. While the evidence is not 100% fool-proof, the timing of the community clinic's harassment is too much to be put off as a coincidence. It follows most logically, and the chronological evidence certainly points in this direction, that when Mr. Miller was informed that his plan to eliminate EPSDT entirely would not work, he attempted to eliminate the most successful EPSDT clinic in Nevada. By closing Operation Life Community Health Center, Miller could effectively reduce EPSDT services by 60% state-wide and not even be served with a $114,000 penalty, which he was willing to accept by cutting off EPSDT by 100%. With this second goal in mind, Mr. Miller conceivably went to work under the following scenario... Operation Life Community Health Center:   Target of Political Assassination? On April 7, 1976, Minor Kelso of NSWD, wrote a letter advising board member Ruby Duncan (the state has mistakenly contended that Ms. Duncan is chairwoman of the clinic, when, in fact, she is just a board member.) that their existing EPSDT contract with NSWD was to be amended and that a new contract, enclosed in the letter was to be signed and returned to NSWD. OLCHC officials wisely did not sign the new contract that the state was trying to force them in to. After all, their current EPSDT contract was legally sound and good until June 14, 1976. Therefore the clinic ignored this April 7th correspondence and continued to bill the state for $32 under the provisions of their valid, existing contract signed in September 1975. Just because Kelso sent a letter proposing these new changes, didn't mean that the clinic had to go along with them. The following are a list of reasons why the clinic did not sign the proposed new contract: The state was proposing to cut out transportation money. Mr. Kelso stated in his letter, " the 2 dollars per child that had been allowed for transportation may no longer be included, because there is adequate public transportation available in your area." Clinic officials knew that low-income people would be less willing to take their children for free preventive health care when they must pay for transportation to and from the clinic. The fact is that the state has an obligation to provide transportation money to recipients under C.R.F. 249.10 a (S). John Fredenburg, attorney at the Nation Health Law Program in Los Angeles, states that "The existence of public transportation does not relieve the state from this obligation. The state could, where it was reasonable, rely on public transportation, but even then, the state would have to pay the cost to the recipient." The state also was proposing to reimburse the clinic at reduced screening rates, depending on whether a medical doctor or a registered nurse performed the screenings. Under the proposal, the clinic would get 30 dollars for M.D. screenings and 20 dollars for R.N. screenings. Because most screenings at OLCHC were being performed by a R.N., the effect of this new rate schedule would be to cut too-close to the cost to OLCHC for each screening. In other words the new rates would cut out the profit margin OLCHC received under the $32 flat rate. These were poor, ex-welfare mothers providing this service, there was no way that they could subsist providing EPSDT screenings with no money coming in for their salaries. The profits were also used to conduct extensive outreach services. Losing outreach money was unacceptable, afterall, the entire success of OLCHC's EPSDT program resulted from their outreach efforts. Because the clinic was operating under a valid contract providing for $32 a screening, which was good for the next 2 months, there was no reason to sign this new contract that would bring in less money. The state was obviously not trying to negotiate. They were trying to force and bully the clinic into a new contract that had only defects in the eyes of OLCHC officials. An aside to all this, is that for every 32 dollars invoice sent to the state for reimbursement, following the April 7th letter, came back 32 dollars from NSWD with no questions and no flack. In the suit against Operation Life Community Health Center, the state is claiming that, because the state advised the clinic about the new reduced reimbursement schedule in April, the new rates therefore took effect in April. In other words, the state claims that their letter took legal precedence over any valid contract signed previously. Therefore the state is contending that each 32 dollar invoice sent after April 7, 1976, was fraudulently submitted. There were approximately 700 such invoices that the state is claiming fraud on. Instead of 32 dollars, NSWD states that the clinic should have gotten only 20 dollars because only an R.N. was performing screenings at. OLCHC. This constitutes $8,400 of the $10,000 suit against OLCHC.