Section 02

EPSDT

What is EPSDT?

A cornerstone of the Medicaid program, EPSDT establishes federal standards to ensure that children and youth under age 21 have access to a comprehensive array of prevention, diagnostic, and treatment services.^* The goal of EPSDT is to assure that children and youth get the health care services they need when they need it and in the most appropriate setting. This section provides a comprehensive review of the scope of behavioral health services that must be covered under EPSDT, focusing on what this means for the advocacy opportunities available to hospitals and other stakeholders. It highlights federal EPSDT guidance included in CMS’s 2024 Best Practices for Adhering to EPSDT Requirements state health official letter and the 2026 State Medicaid & CHIP Toolkit for Children’s Behavioral Health Services and the EPSDT Requirements.^*

As explained below, the EPSDT benefit requires states to cover a broad range of services for children and youth even if those services are not otherwise available to adults enrolled in Medicaid or included in the Medicaid state plan (the agreement between the state and CMS describing how the state will administer its Medicaid program; see Box 4 for more details). In practice, this means that states must assess the availability of Medicaid-coverable services across the behavioral health continuum of care and ensure that there are necessary services available to meet the individualized needs of children and youth.

Necessity Standard for EPSDT

Under EPSDT, a service is necessary if it would “correct or ameliorate” a child’s physical, mental or developmental condition. Services do not need to cure a condition or restore a child to a prior level of functioning to be deemed “necessary.” Services only need to make a child’s condition better or prevent it from worsening. For example, autism-related services for children can focus on improving physical and mental development through a combination of therapies and modalities to lessen the impact Autism Spectrum Disorder has on a child’s daily functioning and quality of life even if they do not “cure” the condition.^* The way “necessity” is defined by EPSDT is broader than what is typically used in commercial insurance or for adults in Medicaid.

Coverage Requirements

Required Coverage of Otherwise “Optional” Medicaid Services

EPSDT requires states to cover any Medicaid-coverable service listed in Section 1905(a) of the Social Security Act that is necessary for the child.^* Section 1905(a) of the Social Security Act is the primary section of the statute that outlines a set of “mandatory” services that every state must provide to certain groups of Medicaid beneficiaries, as well as “optional” services that can be provided at their discretion. The mandatory services include items such as hospital services and physician services while the optional services include dental services and prescription drugs.^* While states may choose which optional services to cover for adults, children are entitled to all mandatory and optional Medicaid services if they are necessary to meet the child’s needs. A state cannot limit EPSDT services to what is written in their Medicaid state plan nor deny a child a service simply because adults do not receive it.

Similarly, states can impose caps and limits on the covered services that they offer adults, but those limits cannot be imposed on services for children if they would prevent access to necessary care. For example, several states place utilization caps or restrict the level of care on individual and group therapy for adults, but a child who requires additional or high-level outpatient therapy services must be able to access that care when necessary. For example, twelve states cap the number of hours of individual therapy available to adults, but these caps do not apply to children when a service is necessary for an individual child due to EPSDT’s obligation.^*

States and their managed care organizations (MCOs) are allowed to use prior authorization for certain EPSDT services, but prior authorizations must be conducted on a case-by-case basis, evaluating each child’s individual needs and cannot delay necessary care. States and MCOs must also ensure that their appeals processes take into account EPSDT standards. Additionally, under the Mental Health Parity and Addiction Equity Act of 2008 (MPHAEA), states and MCOs cannot impose treatment limitations or financial requirements on mental health and substance use disorder services that are more restrictive than the predominant treatment limitation or financial requirement applied to substantially all medical/surgical services in the same benefit classification.^*

While states must cover key categories of services for children and youth, states are not necessarily obligated to cover specific treatment models for a particular service. For example, courts have found repeatedly that EPSDT requires states to cover intensive home-based services (IHBS) as a service type, but states generally can decide the specific types of IHBS that they think are appropriate. For example, they could cover Multisystemic Therapy as an IHBS treatment model, but they are not necessarily obligated to do so as long as they provide one or more forms of IHBS that can meet the needs of children and youth. One exception is that states that enter into settlement agreements with the Department of Justice or consent decrees may find that they are subject to relatively specific requirements. For example, some of these documents stipulate that states must provide Wraparound Facilitation using providers trained in the practices set forth by the National Wraparound Initiative.^*

Promoting Access to Care

States must do more than cover EPSDT services – they must help children, youth and their families actually get care. Federal Medicaid rules require states to:^*

• Inform children and families about EPSDT and the services available to them;
• Offer assistance with scheduling appointments for EPSDT services;
• Ensure access to Non-Emergency Medical Transportation (NEMT) for children who do not otherwise have transportation to EPSDT services;
• Maintain sufficient pediatric provider networks with appropriate pediatric expertise;
• Ensure providers receive EPSDT training; and
• Ensure children can access EPSDT services in a timely manner.^*

As such, some of the strategies in the toolkit focus on how states can address access issues that otherwise would leave them at risk of not meeting EPSDT requirements.

Role of Managed Care Plans in EPSDT

MCOs are the primary way children and families access Medicaid-covered behavioral health services: approximately 86 percent of Medicaid-covered youth are enrolled in comprehensive MCOs,^* and as of 2022, 30 states leverage MCOs for behavioral health service delivery.^* Even if a state delegates some or all EPSDT responsibilities to its Medicaid MCOs, the state remains responsible for ensuring compliance with all EPSDT requirements. States can leverage their MCO contracts to ensure MCOs are effectively implementing EPSDT. States must actively monitor, oversee, and hold MCOs accountable for meeting EPSDT obligations. States are required to clearly define EPSDT responsibilities in managed care contracts and ensure MCOs cover all necessary services required under EPSDT.

Some states are establishing specialty MCOs for children and youth with complex behavioral health needs or children involved in the child welfare or juvenile justice systems, at times in response to EPSDT-related litigation. By aligning medical, behavioral health, and social services, these plans aim to improve continuity of care, reduce service gaps, and support stability, safety, and long-term well-being. For example, Ohio launched OhioRISE (Resilience through Integrated Systems and Excellence) in July 2022 to coordinate individualized supports for children and youth with complex behavioral health and multisystem involvement (e.g., juvenile justice, child protection, developmental disabilities, education, mental health, and addiction service systems).^* North Carolina launched its Children and Families Specialty Plan in December 2025, focusing on children, youth and young adults currently and formerly served by the child welfare system.^* Nevada also plans to launch a specialty plan by January 2027 for children and youth with or at risk for significant behavioral health conditions and children and youth in foster care. ^*

Behavioral Health Diagnosis and Provision of EPSDT Services

As CMS reiterated in a children’s behavioral health EPSDT toolkit released in February of 2026, states can provide necessary services to a child or youth under 21 even if they do not have a diagnosed behavioral health condition.^* Consistent with EPSDT’s focus on prevention and early intervention, this allows states to cover services that help prevent a behavioral health condition from developing or to provide services while a child is undergoing an assessment, a process that can require a significant wait until a provider is available and then multiple sessions with the provider. For example, dyadic services, which treat a child and their parent or caregiver together as a single unit and for which there are a range of treatment models (e.g., Parent-Child Interaction Therapy) can be useful for a young child who does not have a behavioral health diagnosis but is exhibiting challenging behaviors; it may even prevent escalation into a diagnosable disorder over time.

EPSDT and Coverage of Facility-Based Care

EPSDT requires states to cover inpatient and residential care for children and youth under 21 when necessary. At the same time, federal laws on disability rights – the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act (Section 504) – and the Supreme Court’s 1999 decision in Olmstead v. L.C., requires states to ensure that services are provided in the most integrated setting appropriate for a child, such as clinics, schools, or at home in order to avoid facility-based care when it is not necessary.^{* * *}

In other words, as CMS emphasized in its 2026 children’s behavioral health EPSDT toolkit, inpatient and residential levels of care must be reserved for children for whom they are necessary and should be used only on a short-term basis.^* States cannot rely on institutional care if a child’s needs can be met at home or in the community. Across EPSDT, the ADA and Section 504, this means that inpatient and residential treatment cannot be used as default treatment settings because a state lacks adequate home and community-based services or, as often occurs, it cannot find appropriate foster care placements. As numerous courts now have upheld, states must ensure that home and community-based services are available and accessible, ensuring inpatient and residential care is used only for those children and youth from whom they are necessary and when less-restrictive interventions are not effective.

Caveats Regarding EPSDT Requirements

Even though “hard” caps are not allowed under EPSDT, states still can deploy utilization management strategies to ensure appropriate care. Apart from EPSDT preventive screenings, states and MCOs can have “soft” limits on EPSDT services to safeguard against unnecessary use of services, but it must be possible to override them when necessary. Specifically, while a state or MCO may establish tentative limits on the amount of a service children can receive and/or require prior authorization for coverage above those limits when necessary for an individual child, a hard cap on services is not allowed. As noted above, MHPAEA also prohibits states and MCOs from imposing limits for behavioral health services that are more restrictive than limitations applied to substantially all medical/surgical services in the same benefit classification.^*

Under EPSDT, states are also not obligated to cover specific treatment models or approaches for a particular service as long as they provide necessary care. For example, CMS has clarified that states must cover all necessary services to treat or ameliorate autism for children under 21. As a result, states generally now cover Applied Behavior Analysis, but they are not obligated to cover this particular form of rehabilitative and community support.^*

While EPSDT requires states to cover any Medicaid service that could be covered via a state plan amendment (SPA) under Section 1905(a) when necessary for the child, this leaves out some services that may be needed by children and youth with significant behavioral health issues. Specifically, EPSDT does not require states to provide services that are not coverable under Section 1905(a), and are therefore available only through other federal Medicaid authorities, such as Section 1115 demonstration waivers for services to address health-related social needs, among other things, 1915(c) waivers for home and community-based services (e.g., personal care services, habilitative services, and other supports aimed to be an alternative to care in nursing homes or other institutional settings) or 1915(i) SPAs, which also authorize home and community-based services for individuals who are not at risk for institutionalization,. For example, respite services provide parents, families and caregivers with temporary relief from the intensive care that children and youth with complex behavioral health needs require. While respite services are an important component of a robust continuum of behavioral health care for young people and families and can help a family keep their child out of residential treatment, they are not a benefit included in Section 1905(a). As discussed in Strategy 3, states still may want to cover such services (e.g., respite care, flex funds) using other federal Medicaid authorities as part of building a comprehensive continuum of care. While not required to do so by EPSDT alone, these services can contribute to better outcomes for children,^* and, at times, have been required as part of settlement agreements and consent decrees.

Issues and Challenges

Even with the strong foundation of EPSDT, challenges remain. State Medicaid programs often do not provide the full spectrum of behavioral health services a child or family may need.^* A growing number of states have faced litigation alleging they do not meet their EPSDT, ADA and/or Section 504 obligations to cover intensive home- and community-based behavioral health services. In other places, a full continuum of services is covered but is not accessible in practice by the children and families who need them, due to insufficient provider networks, long wait times, low provider reimbursement rates, or other systemic barriers.^* There may also be a wide variation in quality of available services and supports, due to limited providers, high staff turnover, or staff without the specialized skills needed to serve children with complex conditions.^*

Next section Section 03 Continuum of care