Summary and Analysis of
CMS Interim Final Regulation on
Medicaid Case Management and
Targeted Case Management (TCM) Services
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Child Welfare League of America
Government Affairs Associate, Health
Importance of TCM Services for Children in Foster Care
In 2005, there were 506,483 children in out-of-home care and approximately 800,000 children spent at least some time in a foster care setting. 1 Children in the foster care system are at an extremely high risk for and experience a disproportionate amount of physical and mental health issues. These extreme health needs are thought to stem from one or a combination of the following: biological factors, the maltreatment they were exposed to at home, the life-altering impact of breaking familial ties and/or the continued instability that often ensues.
When children are removed from their home base and placed in state custody, Medicaid steps in to provide many of these children with the physical and mental health care that helps them get on the road to recovery. Because Medicaid is a federal and state partnership, to receive federal matching funds, state-administered Medicaid programs must provide beneficiaries with certain mandatory services. Beyond that, however, states can choose to cover and are entitled to receive Medicaid matching funds for approved, optional services. Case management and targeted case management (TCM) are such optional benefits under which Medicaid-eligible individuals on a state-wide or targeted basis receive services that help them access much needed medical, social, educational or other services.
Taking into account the vulnerability and complex needs of children in foster care-including health needs, at least thirty-eight states employ the TCM option to ensure a comprehensive approach and greater coordination of care for foster children. Children in foster care that receive TCM services do, indeed, fare better. Specifically, TCM recipients are more likely to receive physician services (68% compared to 44%); prescription drugs (70% compared to 47%); dental services (44% versus 24%); rehabilitative services (23% versus 11%); inpatient services (8% versus 4%) and clinic services (34% compared to 20%). 2
Impact of the DRA and Interim Final Regulation
CWLA believes that there is a shared mission between Medicaid and the child welfare and foster care systems to not only provide for the basic safety of children, but to work collaboratively towards the wellbeing and healthy development of each child in their care. TCM services embody and make this principle possible and more importantly, yield positive outcomes for children who receive them. Section 6052 of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) contained provisions that greatly impact TCM services and their relation to children in the child welfare and foster care systems. On December 4, 2007, the Centers for Medicare and Medicaid Services (CMS) published an interim final regulation (CMS-2237-IFC/72 Fed. Reg. 68077) that incorporates changes made by Section 6052 of the DRA, thereby clarifying situations in which Medicaid will continue to help fund case management and TCM services. The entire interim final regulation may be viewed here. The following is a brief summary of the DRA and the interim final regulation, with focus on their potential impact on children in the child welfare and foster care systems.
Deficit Reduction Act (P.L. 109-171)
Interim Final Regulation (72 Fed. Reg. 68077)
- Definition of Case Management and TCM: The DRA redefined "case management" as "services which will assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services."
- Case management services, the DRA continued, include: assessment of an eligible individual to determine service needs for any medical, educational, social, or other social service (including taking client history or gathering information from other sources such as family members); development of a specific care plan; referral and related activities to help an individual obtain needed services; and monitoring and follow-up activities.
- The DRA specifically excluded from the definition of case management and thus, clarified that federal Medicaid dollars are not available for "the direct delivery of an underlying medical, educational, social or other service to which an eligible individual has been referred, including, with respect to the direct delivery of foster care services." Such foster care services that cannot receive federal financial participation (FFP) include, but are not limited to: research gathering and completion of documentation required by the foster care program; assessing adoption placements and making the placement arrangements; recruiting or interviewing potential foster care parents; serving legal papers; conducting home investigations; or administering foster care subsidies.
- Third Party Liability: With a few exceptions, the DRA said federal funds are available for case management or TCM services only if there are "no other third parties liable to pay for such services."
Initial Analysis: By drawing such sharp lines, chances and opportunities for the systems to work together will likely be diminished, undermining the efficient and effective coordination of care for children in custody-a result that seems directly contradictory to the very purpose of TCM. As Senator Charles Grassley (R-IA) discussed in an April 5, 2006 letter revealing congressional intent behind Section 6052 of the DRA to the Secretary of Health and Human Services, children in foster care have "multiple social, educational, nutritional, medical, and other needs" and given the "complexity of these cases, it is nearly impossible to isolate which services recommended for a child in foster care are solely medical services" (emphasis added).
- Beyond the specific examples enumerated by the DRA of foster care services excluded from case management services, the interim final regulation states that case management does not include and thus, FFP is not available for case management activities that:
- Are an integral component of another covered Medicaid service [Section 441.18(c)(1)];
- Constitute the direct delivery of underlying medical, educational, social, or other services to which an eligible individual has been referred, including, but not limited to, services under…child welfare/child protective services, and foster care programs [Section 441.18(c)(2)];
- Are integral to the administration of foster care programs and other non-medical programs such as child welfare and child protective services [Section 441.18(c)(3)-(4)].
- The Preamble elaborates that Medicaid case management services do not include and thus, FFP is not available for:
- Services of child welfare/child protective services workers;
- Case management services furnished by contractors to State child welfare/child protective services agencies, even if they otherwise would be qualified Medicaid providers;
- Administrative activities of caseworkers that are deemed integral to the foster care program, including referring a foster child to Medicaid in order to receive needed medical or mental health services; and
- Case management activities included under therapeutic foster care programs.
- The Preamble provides the following seemingly rare examples of when Medicaid would help pay for services to children involved with the child welfare and foster care systems:
- State plan-approved services are provided by a qualified Medicaid provider operating entirely outside of the child welfare system; and
- For the actual medical services to which a child is referred (rather than the referral itself).
- Unbundling: The methodology under which rates are calculated and unit of service for which case management and TCM service providers may be paid cannot exceed 15 minutes. [Section 441.18(a)(8)]
In addition, there is a significant financial impact. CMS estimates that the dramatic adjustments found in the interim final regulation will reduce federal Medicaid spending on TCM by $1.28 billion over five years. In doing so, costs are expected to overwhelmingly shift to the federal IV-E foster care program, increasing federal spending on IV-E by $369 million over five years.
CWLA continues to analyze the interim final regulation and would greatly appreciate your input. Please send any comments or concerns regarding the regulation and the impact it would have on your agency and the children and families it serves to Laura Weidner, CWLA Government Affairs Associate at firstname.lastname@example.org.
Timeline and Submission of Comments to CMS
Effective Date: The DRA's TCM provisions went into effect on January 1, 2006. The interim final regulation incorporating and interpreting the DRA's TCM provisions goes into effect on March 3, 2008.
Comment Period: In the meantime, by law, CMS must provide a 60-day period during which the public may submit comments on the interim final regulation. The deadline for submission of comments on this interim final reg is February 4, 2008 at 5:00 p.m.
Should you wish to submit your own comments to CMS, you may do so in one of the following ways:
- Electronically: Submit comments in MS Word, WordPerfect, or Excel electronically. Click on the link "Submit electronic comments on CMS regulations with an open comment period" and then on the Medicaid Program; Optional State Plan Case Management regulation, "CMS-2237-IFC."
- By Regular Mail: Submit comments by regular mail, including one original and two copies, to: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attn: CMS-2237-IFC, P.O. Box 8016, Baltimore, MD 21244-8016.
- By Express or Overnight Mail: Submit comments by express or overnight mail, including one original and two copies, to: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attn: CMS-2237-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
- By Hand or Courier: Submit comments by hand or courier, including one original and two copies, at either a Washington, DC or Baltimore, MD address. If delivering to the Baltimore, MD address, first call (410) 786-7195 to schedule an appointment and then drop comments off at: 7500 Security Boulevard, Baltimore, MD 21244-1850. If delivering to the Washington, DC address, comments may be dropped off at: Room 445-G, Hubert H. Humphrey Building, 200 Independence Ave., SW, Washington, DC 20201. Because security is restricted in the Hubert Humphrey Building, individuals are encouraged to leave comments in the CMS drop slots located in the main lobby.
- Child Welfare League of America. (2007). Special tabulation of the Adoption and Foster Care Analysis Reporting System. Arlington, VA: Author. back
- Geen, R., Sommers, A. S., & Cohen, M. (2005) Medicaid Spending on Foster Children. Available online. Washington, DC: Urban Institute. back
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