The opinion of the court was delivered by: HARRY D. LEINENWEBER
Title XIX of the Social Security Act ("Medicaid Act" or "Medicaid"), 42 U.S.C. §§ 1396a et seq. provides for a cooperative federal-state public assistance program that affords payment for "necessary medical services" for eligible children of low income families, described as "categorically needy." A state need not participate but if it chooses to do so it must comply with the requirements imposed by the Medicaid Act and the regulations of the Secretary of the Department of Health and Human Services ("Secretary"). 42 U.S.C. § 1396a. The federal government provides a portion of the cost to the participating states of furnishing such medical services. A participating state must develop a state plan for providing medical assistance, and payment of federal funds is conditioned upon the Secretary's approval of the state plan. 42 U.S.C. § 1396. A participating state must include in its plan certain categories of medical services for qualified recipients. Among the mandatory medical service categories is early and Periodic screening, diagnostic, and treatment services ("EPSDT") as defined in 42 U.S.C. § 1396d(r). 42 U.S.C. § 1396d(a)(4)(B). "Dental services" are included in EPSDT. Dental services must "at a minimum include relief of pain and infections, restoration of teeth, and maintenance of dental health." 42 U.S.C. § 1396d(r)(3). See also 42 C.F.R. § 441.56(c)(2). A state may limit its medical expenditures to those considered "necessary." 42 U.S.C. § 1396d(r)(5).
The state plan must contain "reasonable standards" for determining eligibility for and extent of medical assistance consistent with the objectives of the act (42 U.S.C. § 1396a(a)(17)) and must provide methods and procedures "necessary to safeguard against unnecessary utilization" of care.
Illinois has chosen to participate in the Medicaid program and has adopted a plan for medical assistance which has been approved by the Secretary. The Illinois plan is administered by the Illinois Department of Public Aid ("IDPA"). Ill.Rev.Stat., ch. 23, PP 5-1 et seq. The Illinois plan limits orthodontic services through its medical assistance program to children with "severe handicapping malocclusions" and requires prior approval. State Plan Under Title XIX of the Social Security Act Medical Assistance Program at p. 8. This plan was approved by the Secretary on May 2, 1990. The limitation on orthodontic services was adopted by the IDPA in administrative regulation form effective June 17, 1991. See 89 Ill. Adm. Code Ch.1, § 140.421.
Since July 23, 1989, the IDPA has contracted with Delta Dental Plan of Illinois, Inc. ("Delta") to review all prior approval requests for orthodontic services for eligible children. Under this contract, IDPA pays Delta to review requests for prior services and, if approved, Delta pays the dentist for the services provided. Delta has prepared and published a Criteria Manual ("manual") which it distributes to providers of dental services. This manual sets forth available services and defines limitations, exclusions and lists of documentation requirements. It further provides that a professional judgment decision of one of Delta's dental consultants, if confirmed by Delta's dental director, becomes the final interpretation of the guidelines.
The contract between the IDPA and Delta requires a score of 42 or above on the Salzmann Index to qualify for prior approval. The use of the Salzmann Index in evaluating the severity of malocclusions and the requirement of a score of 42 or above is disclosed to providers in the manual. The requirement of a score of 42 or above has not been adopted by the IDPA as a rule and, thus, the requirements of the Administrative Procedure Act (5ILCS 100/1-1 et seq.) were not followed.
In spite of the required score of 42, Delta has granted requests for prior approval in some cases where an individual has scored less than 42 on the Salzmann Index when in the professional opinion of a Delta dental consultant or dental director a severely handicapping malocclusion was present. According to IDPA statistics, exceptions were granted for approximately 1.7 percent of the individuals who scored less than 42.
If Delta denies a request for prior approval, the recipient has the right to appeal Delta's determination to the IDPA under the state Administrative Review Act. 305 ILCS 5/11-8. Final administrative decisions of the IDPA are subject to judicial review. 305 ILCS 5/11-8.7. Administrative review is required by the Medicaid Act. 42 U.S.C § 1396a(a)(3).
Plaintiff, Willie Chappell ("Chappell"), is a categorically needy child. He requested, through his orthodontist, prior approval for orthodontic treatment. Delta scored his malocclusion a 39 under the Salzmann Index and denied his request for prior approval. Chappell's mother appealed the denial to the IDPA. After an administrative hearing, the director issued a final administrative decision on February 2, 1992 granting prior approval. The approval occurred after this suit was filed.
Plaintiff, Hagar Bey ("Bey"), likewise a categorically needy child, also requested prior approval for orthodontic treatment. Delta scored his malocclusion a 33 under the Salzmann Index and denied his request. As of the date of the briefing of these motions, his administrative review hearing had not been held.
By agreement of the parties, the court certified a plaintiff class pursuant to Fed.R.Civ.P. 23(a) and (b)(2) who, on or after July 23, 1989:
(a) have been, are, or will be eligible for medical assistance under the federally supported Medicaid program established pursuant to 42 U.S.C. §§ 1396 et seq. and administered by the Illinois Department of Public Aid; and (b) whose requests for prior approval for orthodontic treatment have been, are being, or will be denied by the Illinois ...