By Laura Tobler
Updated: August 1999

State legislatures across the country have been busy enacting legislation to create, monitor and fund the new State Children's Health Insurance Program (SCHIP). The Balanced Budget Act of 1997 authorized more than $20 billion over five years to help states cover uninsured low-income children (see appendix A for details). As legislators deliberated about the benefits that the newly insured children should receive, a critical unmet need of poor children discussed was oral health.

This report briefly outlines the oral health status of America's children; highlights the two publicly funded programs that provide the most money for dental coverage for children living in poor to moderate income households; offers lessons learned from years of Medicaid experience; describes a few state programs to improve access to care; and lists additional federal programs that relate to pediatric oral health. The appendices provide a brief summary of SCHIP, and list SCHIP programs and SCHIP dental health services.

Tooth decay is the most prevalent preventable chronic disease of childhood. Despite the improvements in children's oral health care in the last few decades, many American children still suffer the pain of untreated dental disease. It can lead to poor nutrition and growth in young children and missed school days, needless pain, poor self-esteem and medical complications in older children. More than one-half of all children ages 6 to 8 experience tooth decay and about one-third of these cavities are not repaired. The National Institute of Dental Research reports that 80 percent of tooth decay is found in just 25 percent of children. The amount of tooth decay in a child is inversely related to income level-kids from poor and moderate-income families have more tooth decay and a large percentage of these kids go untreated. Many of these children are eligible for publicly funded health programs such as the state's Medicaid program and SCHIP.

The Balanced Budget Act of 1997 (P.L. 105-33) added a new Title XXI to the Social Security Act, creating the State Children's Health Insurance Program (see appendix A). The program is designed to help states cover more uninsured children with new federal money that must be matched with state dollars. By June 1999, 52 state and territorial SCHIP plans had been approved by the Health Care Financing Administration (HCFA).

Generally, states can extend coverage to uninsured children under age 19 if they do not qualify for Medicaid and their family income is below 200 percent of federal poverty guidelines ($27,760 for a family of three in 1999)-or 50 percentage points higher than the existing Medicaid eligibility level if the threshold already exceeds 150 percent. State plans to cover these kids can expand Medicaid, create a new state insurance program or combine the two approaches.

If a state chooses to expand Medicaid, it must provide Medicaid's full package of services, including dental services that are described in the following section. If a state elects to create a state insurance program, it is free to decide if dental services should be included in the benefit package.

Two state SCHIP programs do not presently include dental health services in the approved benefit package-Colorado and Delaware. Dental services in Florida are covered on a county-by-county basis. New York's original benefit package did not include dental services but the Legislature passed a law in 1998 requiring dental services that are now provided. In Colorado, the board that governs SCHIP requested that the year 2001 budget include dental benefits, which requires endorsement from the governor's office and approval by the General Assembly. Montana did not include dental benefits in the original program design but passed legislation in 1999 (SB 81) that requires dental health benefits for SCHIP, by October 1999-the benefit is limited to $200 annually per enrollee. The 48 remaining SCHIP programs provide some type of dental services (see appendix B for more details).

Research shows that almost 30 percent of our nation's child health expenditures, including both public and private payers, are attributable to dental care. Less than 1 percent of Medicaid's total budget and about 2.3 percent of the money spent on children's health care goes for dental services. If SCHIP programs aspire to provide better access to dental services for children, policymakers need to understand how to budget for them.

According to costing models developed independently by the American Academy of Pediatrics and the Reforming States Group of the Milbank Memorial Fund, SCHIP dental services will require $16 to $20 per child monthly to provide discounted but market based payments for dental services.

States have learned from their experience in providing dental health services to low-income children enrolled in Medicaid. The research and lessons learned over the years of confronting obstacles and barriers to delivering dental services in Medicaid can be used to design and improve the SCHIP programs.

But being entitled to services and actually receiving them are two different things. In 1996, only about 17 percent of Medicaid-enrolled children received the required EPSDT dental services, down from 18 percent in 1994 and 1995. Only one in five children eligible for a dental screening actually gets it. When children do not receive the appropriate dental screenings, Medicaid pays the higher price of treating advanced dental disease in children-5 percent of the kids eligible for services consume 30 percent of the dollars spent on dental care. For example:

Understanding these known Medicaid barriers and the potential solutions is an important step in creating SCHIP dental plans that will work.

Only one in six dentists participating in Medicaid receive $10,000 or more in Medicaid payments per year. This statistic indicates that few dentists substantially participate in the Medicaid program. "What good does a Medicaid card do if you can't find a dentist who will accept it?" asks Owen McCusker, executive director of Community Living Alliance in Madison, Wisconsin. State legislators are asking the same question.

Reimbursement rates. Dentists claim that the Medicaid reimbursement rates for dental care are too low. "The fees paid by the Medicaid program in many states do not meet the aggregate cost of delivering the services," asserts Burton Edelstein, a dentist and director of the Children's Dental Health Project. Medicaid reimbursement rates to dentists range widely among states and typically are significantly lower than non-Medicaid payments. Colorado reimburses dentists about 68 percent of their usual fee for caring for Medicaid patients. Tom Oberle, spokesman for the Colorado Dental Association, says that it takes 70 percent of a dentist's income just to cover operating costs.

Increasing provider reimbursement rates may be necessary but it is not sufficient for increasing dentist participation or increasing service delivery. Maine increased reimbursement rates and found that it had very little impact on the number of dentists in their tight dental market. In Connecticut, an increase in reimbursement rates did lead to an increased number of procedures by the same participating dentists.

Red tape. Complex enrollment forms, nonstandard billing forms, excessive prior authorization requirements, slow payments, inefficient eligibility determination and other administrative problems can discourage dentist participation. The states of Washington and Indiana do everything possible to mimic the private sector insurer in an effort to streamline the administrative work of the participating dentists, with resultant positive response from dentists.

Vermont has a good track record of dentists participating in Medicaid-77 percent of dentists participate. According to George Richardson, a Vermont dentist, the number one reason for this high participation is good, ongoing, responsive communication between dentists, health officials and legislators. He claims that the Medicaid department's full-time dental director, who understands and facilitates resolutions to problems, is a positive force in effecting dentist participation. Also, the state has made an effort to streamline claims processing and payment by allowing dentists to use the standard American Dental Association billing form, reducing the number of services that require prior approval, and creating a rapid electronic payment system. But Vermont is not free of problems. According to Richardson, the state's recent expansion of Medicaid to children in families up to 300 percent of poverty has increased the number of patients seeking services without increasing the number of dentists willing to take on more clients.

States have also used continuous eligibility and swift and simple eligibility verification (electronic or "800" telephone number) to significantly reduce wasted time and frustration in the offices of the providers, including participating dentists.

Broken appointments. According to the American Dental Association, one-third of Medicaid dental appointments result in "no-shows". Broken appointments are common and profoundly problematic for dentists, says Dr. Edelstein. The families of children eligible for Medicaid may not be familiar with or honor the common behavioral structures of the dental delivery system. They may lack reliable transportation to the dental office, have difficulty with child care or lack leave from work, all which can lead to broken appointments. "Broken appointments cause dentists near hysteria and the reason for that is that dentists bear the ongoing operating cost of their facilities-facilities that are extremely expensive to run. So a broken appointment really means significant down time and a financial loss," warns Edelstein.

An estimated 152,000 dentists practice in the United States-that is about one dentist for every 1,750 citizens. The dentist-to-population ratio is declining as fewer dentists graduate and the population grows. Only about 4,000 specialize in pediatric dentistry, a specialty prepared to address the extreme needs of many low-income children. Clearly a tight dental market exists in this country. According to Richardson, not only is there competition for patients to get appointments with the short supply of dentists, but there is competition among states and communities to keep dentists practicing in their locale. And practicing dentists are not evenly distributed among the population. Dr. Edelstein says dentists tend to be concentrated in "affluent" rings around cities. The traditionally underserved areas-rural and low-income neighborhoods-have particular scarcity. Of the rural counties in the United States, 38 percent have no dentist.

"I am the only dentist in La Plata County, Colorado, who accepts Medicaid," states Dr. Larry Suazo, a pediatric dentist in this rural county. "Several times during the past year I've gotten so ridiculously booked up that I couldn't take new patients," Suazo says, which means that the Medicaid patients just wait.

According to Richardson, a part of the problem is the motivation and background of the parents. In Vermont recently, the families of 40 school-age children identified to need dental services were sent letters indicating that their child could receive free dental care if the family responded to the letter-the state received only four responses.

The families whose children are eligible for Medicaid and SCHIP may not be familiar with the dental delivery system, which makes navigation of the system a challenge. They also may not realize the value of preventive dental care because of their own history of poor dental care. Also, parents with inflexible workplaces may find it difficult to take time off from work to take their children to the dentist.

The movement of Medicaid clients into managed care also affects access to dental services. According to Edelstein, about 20 states have moved their Medicaid dental services, in whole or part, to managed care. Less than half of all practicing dentists in the United States participate in a managed care network, which significantly reduces the number of dentists willing to take Medicaid clients. Edelstein believes that the infrastructure necessary to make managed oral health services a success is inadequate, particularly if states attempt to capitate payments.

States are slowly gaining expertise in contracting with managed care organizations. An early survey of Medicaid managed care contracts showed that many states failed to explicitly transfer the full range of EPSDT requirements to managed care companies. This leads to confusion and controversy among the Medicaid client, Medicaid program and the HMO, while leaving the state with legal responsibility for care. As states become more savvy purchasers of managed care, these contracting problems will be resolved.

However, managed care could hold great promise for improving services. Truly managing a child's oral health care-providing a "dental home"-could open the door to preventive services, which in the long run will improve the child's health and save the state money. But many unanswered questions remain about the dental managed care delivery system and experience with medical managed care cannot be directly extrapolated to dental care.

A number of states recently took action to improve access to dental care for children eligible for Medicaid and SCHIP. The reforms-which include increasing reimbursement rates, simplifying administrative tasks, expanding the scope of practice for dental hygienists, creating school-based dental clinics, and forgiving loans for new dentists-show the commitment and creativity of the states in dealing with this problem. The following are a few examples of these initiatives.

Many states have also enacted laws to encourage dentists to volunteer their services to free or subsidized dental clinics and to protect these volunteers from liability.

More than 37,000 Head Start centers provide nutrition education, dental examinations and oral hygiene efforts for three to five year-olds. A 1993 Department of Health and Human Services inspector general's report on a sampling of Head Start programs noted that EPSDT screening and treatment rates were higher for Head Start enrollees than for the general pediatric Medicaid population. In some states that use a managed care system for Medicaid, the Head Start programs are assuring that the children are receiving the dental services contracted for by the state with the HMO and collaborating with the HMO to better the health of the child.

These grants support state health departments and contractors to improve the health of mothers and children. Block grants can be used for infrastructure building such as oral health needs assessments, policy development, quality assurance, information systems, community fluoridation, public information and resource referral and other services. In Nebraska, the Title V block grant funds a successful community-based dental health care program for low-income children, which includes a school-based dental sealant program. The program uses volunteer dentists and dental hygienists to provide dental care to communities and schools in rural Nebraska, especially those without a dentist.

The Maternal and Child Health Bureau also funds infant oral health training programs for dental students and a small number of pediatric dentistry training programs.

This program reaches low-income mothers and their children under age 5. WIC supports nutrition and feeding practices as well as education and health promotion including necessary referrals for dental treatment. WIC also provides beneficiaries with educational information on fluoride supplementation and preventing baby-bottle tooth decay.

The federal Health Resources and Services Administration's direct care programs provide dental services to subgroups with high levels of early childhood dental disease including rural, migrant and homeless children. These programs provide preventive and restorative care and they fund infrastructure development and demonstration projects.

The Centers for Disease Control and Prevention's Division of Oral Health is involved with community-based programs to prevent oral disease and promote oral health.

The children eligible for Medicaid and SCHIP have the highest incidence of dental disease and the least access to dental care. SCHIP and Medicaid have the potential to ensure necessary dental care for children from low-income families. States are creatively examining, evaluating and modifying their programs in an effort to improve the oral health of our nation's children but there are still too few dentists willing to participate in the programs and many challenges.

Title XXI defines eligibility for "targeted low-income children," meaning children who meet all of the following criteria:

Children of public agency employees eligible for a state employee benefit plan or children in institutions may not qualify for assistance under the state plan option, but may qualify for Medicaid if they meet the state's Medicaid eligibility criteria.

States must submit a plan to the U.S. Department of Health and Human Services (DHHS) that specifies objectives and performance goals; benefits; the service delivery method, such as managed care; cost-sharing requirements; data collection and reporting mechanisms; the program budget; utilization control systems; and the process used to involve the public. State plans must be reviewed within 90 days, or they become effective without approval. However, HCFA has implemented a "stop the clock" provision that puts the 90-day review period on hold when it refers questions or a request for additional information to a state. Washington and Wyoming are the only states that have not submitted a state plan. States may begin with a modest initial plan to cover more uninsured children and then build incrementally to a more comprehensive plan as they have more time to study their own situations and also learn from other states. A state may submit an amendment to its plan at any time. An amendment that restricts or eliminates eligibility may not take effect unless the state certifies that it has provided prior public notice of the change. A plan amendment is deemed approved unless HCFA notifies the state in writing within 90 days after receiving the amendment that it is not approved or that additional information is needed.

Federal allotments require a state match, which is about 30 percent less than a state's normal Medicaid match. Of the total $23.9 billion authorized over five years, about $20 billion is available for state grants to implement new Title XXI initiatives; an estimated $3.9 billion will be needed for Medicaid changes (described in appendix C); and $300 million is earmarked for diabetes grant programs.

If a state chooses to expand Medicaid under Title XXI, Medicaid's usual benefit requirements must be met. If a state chooses the "state plan option," benefits under the state plan must be consistent with any of the following:

Benefits must include inpatient and outpatient hospital services, physicians' surgical and medical services, laboratory and x-ray services, and well-baby and well-child care, including immunizations. In addition, a state-designed plan must cover prescription drugs, mental health services, and vision and hearing services at a level equal to at least 75 percent of the actuarial value of a selected benchmark plan. States may include additional benefits, including many of the services that benefit children with special health care needs, such as medical equipment, home health nursing, physical and occupational therapy, dental services and many others.

States may not impose cost-sharing requirements on preventive services, including well-child care and immunizations. For other services, if a state chooses to expand Medicaid, normal Medicaid rules on cost-sharing apply. Under the state plan option, a state can impose nominal cost-sharing amounts based on family income at or below 150 percent of poverty. For families with higher incomes, states can impose cost-sharing (e.g., premiums and deductibles) on a sliding fee scale, not to exceed 5 percent of family income.

Source: National Conference of State Legislatures, 1999.

Updated September 13, 1999

States choosing a Medicaid expansion under SCHIP (including the Medicaid portion of a combination plan) must provide standard Medicaid dental benefits for children. Those states and territories are Alaska, Arkansas, American Samoa, the District of Columbia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maryland, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, the Northern Mariana Islands, Ohio, Oklahoma, Puerto Rico, Rhode Island, South Carolina, South Dakota, Texas, the U.S. Virgin Islands and Wisconsin. Tennessee is anticipating a Medicaid expansion.

For the purpose of this chart, dental services have been categorized into two groups: 1) preventive, diagnostic, basic and restorative services; and 2) advanced treatment services. In the first category, services may include topical fluoride treatment, x-rays, fillings, sealants and acute emergency dental services. In the latter category, services may include crowns, bridges and surgery such as root canals. Copayments for advanced treatment services vary from state to state.

DCO = Dental care organization
FFS = fee for service
HMO = health maintenance organization
PPO = preferred provider organization

NA = not applicable

Source: Health Care Financing Administration (HCFA) state SCHIP fact sheets, National Conference of State Legislatures and National Governors' Association State Children's Health Insurance Program Annual Report, and personal communication with state SCHIP program contacts. Information is based on plans that have been approved.

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Edelstein, Burton L. Public Financing of Dental Coverage for Children: Medicaid, Medicaid Managed Care and State Programs. Washington, D.C.: The Children's Dental Health Project and The Milbank Memorial Fund, November 1997.

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__________. The Cost of Caring: Emergency Oral Health Services. Washington, D.C.: National Center for Education in Maternal and Child Health, May 1998.

__________. "Policy Issues in Early Childhood Caries." Presented at the Early Childhood Caries Conference at the National Institutes of Health, October 1997.

__________. Oral Health Services in the Child Health Insurance Program. Washington, D.C.: The Children's Dental Health Project and the American Dental Association, April 1998.

Ivey, Tommy. Interview by author. Burlington, Vermont, May 1999.

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McFarland, Kim. Interview by author. Lincoln, Nebraska, June 1999.

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Milgrom, Peter. Interview by author. Seattle, Washington, June 1999.

Milgrom, Peter; Philippe Hujoel; David Grembowski; and Romona Fong. A Community Strategy for Child Dental Services Under Medicaid. Seattle, Wash.: Department of Dental Public Health Sciences, University of Washington, 1999.

Milo, Sara, and C. Scott Litch. Legislation, Regulation, and Interpretations Governing Children's Medicaid Dental Services. Washington, D.C.: Children's Dental Health Project, June 1998.

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Richardson, George. Interview by author. South Burlington, Vermont, May 1999.

Solomon, Judy. Interview by author. Hartford, Connecticut, June 1999.