Appeals court strikes down Indiana’s Medicaid dental cap

Indiana's social services agency can't set a cap on the amount of money the state pays people on Medicaid for dental services if the treatment is medically necessary, a federal appeals court has ruled.

The 7th U.S. Circuit Court of Appeals in Chicago this week upheld a preliminary injunction granted by a federal judge in South Bend that blocked the Indiana Family and Social Services Administration from enforcing a $1,000 annual limit on dental coverage. The agency had established it as a cost-cutting measure in 2011.

The appellate court agreed with U.S. District Judge Philip Simon that the cap constituted a $1,000 deductible that stuck recipients with the rest of the bill, a violation of state and federal Medicaid law. People who couldn't afford the remainder of the cost would have to go without treatment, the court said, and the state would end up paying nothing.

The court quoted Simon's previous order, which called the state plan "a bizarro-world notion of insurance coverage" and said there were other ways in which the state could limit Medicaid costs, such as requiring prior authorization for care. The state's budgetary interests, the 7th Circuit said, aren't as important as providing people on Medicaid with dental care when they really need it.

"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," the appellate court said. "But the State's likely violation of state and federal law cannot be ignored in order to preserve the status quo."

FSSA spokeswoman Marni Lemons told The Associated Press in an email Friday that any decision to eliminate Medicaid dental coverage would have to be made by the General Assembly.

The class action lawsuit over dental coverage was filed by an Elkhart County woman who needed a series of four implant procedures, three of which had costs exceeding the $1,000 cap. The state denied Sandra Bontrager's claim, saying the treatments were not covered dental services. She was unable to pay for the treatments on her own, the lawsuit said.

"It was clear the treatments her doctors ordered were both medically necessary and covered under the program," said Jacquelyn Bowie Suess, the American Civil Liberties Union of Indiana attorney who handled the case.

Lemons said the FSSA was reviewing this week's ruling and had not decided yet whether to appeal. The agency has abided by Simon's November 2011 court order and currently does not cap Medicaid dental coverage, she said.

"The $1,000 cap was patterned after the dental coverage that is currently available to Indiana state employees," Lemons said in her email.

Lemons said about 300,000 adult Medicaid recipients are eligible for the dental program. There is no cap for children.