Medicaid Interim Final Regulation on Targeted Case Management
Centers for Medicare and Medicaid Services
Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016
February 1, 2008
Re: CMS-2237-IFC; Comments on Interim Final Rule Medicaid Program; Optional State Plan Case Management Services
To Whom It May Concern:
The Child Welfare League of America (CWLA), representing hundreds of public and private
child- and family-serving member agencies across the country, respectfully submits these
comments on the Interim Final Rule with Comment Period for the Medicaid Program's Coverage
of Case Management and Targeted Case Management (CMS-2237-IFC) that was published in
the Federal Register on December 4, 2007 (72 Fed. Reg. 68077).
CWLA recognizes and appreciates this interim final rule's attempts to interpret and implement
the policies established by the Congress in the Deficit Reduction Act (DRA, P.L. 109-171) and
supports certain concepts contained in the regulation, but strongly feels that as a whole, the rule
goes well beyond the statutory provisions of the DRA that were authorized by Congress.
Specifically, despite its goal of clarification, the regulation's language often remains vague,
granting inadequate notice to impacted parties regarding exactly what case management and
targeted case management (TCM) services remain reimbursable under Medicaid. In addition,
many portions of the regulation and its Preamble, are overzealous in breadth and greatly exceed
Congressional intent, threatening the continuance of vital case management and targeted case
management services for several vulnerable populations, including children and youth involved
with our nation's child welfare and foster care systems.
In FFY 2005, there were 506,483 children in out-of-home care, with "out-of-home care"
encompassing children and youth living in family foster homes, with kin, in group homes or
residential centers, in independent-living programs, in emergency shelters, and in other settings
in which legal custody of the child or youth remains with the public child welfare agency or the
agency's designee. During that same year, approximately 800,000 children spent at least some
time in a foster care setting. Children and youth come to the attention of the child welfare
system and are placed in out-of-home care for a variety of reasons. Data and reality consistently
show that these youngsters are at an extremely high risk for and experience a disproportionate
amount of physical and mental health issues. These extreme health needs again, have complex
bases, but are thought to stem from one or a combination of the following: biological factors,
maltreatment they were exposed to at home, the life-altering impact of breaking familial ties,
and/or the continued instability from associated factors that often ensues.
In addition to health needs, as the then Chair of the Senate Finance Committee Senator Charles
E. Grassley discussed in an April 5, 2006 letter to your Department, children and youth in foster
care have "multiple social, educational,...and other needs." As Medicaid case management and
TCM services exist to assist Medicaid-eligible individuals with complex cases in gaining access
to all the needed services-medical as well as social, educational, and others-these services are
of invaluable importance to children and youth in foster care, as well as those who come to the
attention of the child welfare system. The immediate and long-term impact of TCM services is
overwhelmingly positive and cost-effective, as studies have shown that children in foster care
who receive TCM services are more likely than non-recipients to receive physician services,
prescription drugs, dental services, rehabilitative services, inpatient services, and clinic services,
potentially restoring them to permanent placements most securely and in a more timely manner.
Simply put, the case management and TCM options as they stand now fulfill their purpose and
place vulnerable members of society, including children and youth involved with the child
welfare and foster care systems, on a healthy trajectory and increase their opportunity for longterm
well-being and success. However, access to case management and TCM services, if they
are defined and reimbursed in the manner suggested by this interim final regulation and even
more alarming, its Preamble, would be severely restricted, in turn shutting off timely intervention
and linkage to needed medical, social, educational, or other services. Because children will not
receive the services they need to become healthy, successful adults, this rule, even if it saves
federal dollars in the short term, will cost society greatly.
The regulation's blanket approach and likely harmful outcome as aforementioned, are also
directly contradictory to Congressional intent. As Senator Grassley's April 5, 2006 letter to HHS
explicitly explains, Congress when enacting the DRA decided not to eliminate case management
services for children in foster care and rather, prominently iterated that many case
management/TCM services remain permissible, legitimate Medicaid expenses for children in
foster care with complex cases.
CWLA strongly urges you to review and significantly revise the interim final regulation so that it
is consistent with Congressional intent and the statutorily-enacted policies of the DRA.
Additional policy restrictions not specifically authorized by Congress in the DRA must be
removed. Considering the very short time period before the regulation's intended date of
implementation, this must be done quickly so that states and the Medicaid beneficiaries they
serve do not suffer undue harm. To assist in this extremely necessary endeavor, we have
provided specific concerns and recommendations below. CWLA sincerely appreciates our
opportunity to comment on this interim final regulation and truly hopes that you will heed our
and others' comments to ensure that the best policies for our nation's children, youth, and
families are put in place.
Provisions of Proposed Rule:
Section 440.169(3), Contact with Non-Eligible Individuals: CWLA commends CMS for
formally acknowledging the vital role of supporting, knowledgeable family members and
caregivers by including in the definition of case management contacts that are directly related to
the management of the eligible individual's care.
Section 441.18(a)(5), Single Case Manager: While CWLA understands the desire to provide
streamlined services and avoid duplication, a blanket mandate that case management services be
furnished by a single case manager is unrealistic given the complexities of many beneficiaries'
situations. For example, imagine a Medicaid-eligible youth in care who is mildly retarded,
suffers from post-traumatic stress as a result of severe sexual abuse as a child, and has been
suicidal at various points in her life. Such an individual has multiple diagnoses and has likely
been navigated over the years through numerous placements, including residential facilities and
hospitals. It is unlikely in complex, multiple condition cases like this that there would be a
single case manager with diverse, cross-system expertise that can sufficiently, expeditiously, and
comprehensively assist the beneficiary. Even with a delayed compliance date and promised
technical assistance to states, without additional financial resources to properly train Medicaid
case managers, this absolute requirement will likely lead to a decreased pool of qualified
providers and thus, restricted access to case management services and in turn, the additional
services that case management leads to.
Rather than a blanket mandate, CMS should require close collaboration among case managers
from different systems. Alternatively, CMS should include an exception whereby states have
discretion for the beneficiary's benefit in complex and diverse cases to determine that it is
impractical to rely on a sole case manager.
Section 441.18(a)(8)(vi), Payment Methodology: Prohibiting fee-for-service payments for case
management services to be billed in increments of over fifteen minutes first, goes against a
primary principle of the Medicaid program-that states have flexibility, within federal
parameters, to establish and duly follow payment policies. The Preamble states that such minute
breakdowns are more efficient because the alternative requires "substantially more Federal
oversight resources to establish the accuracy and reasonableness of State expenditures." Policy
determinations should hinge on the ability to provide quality, effective assistance to Medicaideligible
individuals, rather than on lessening the responsibility and duties involved with program
Case rates, per diem rates, and other currently allowed payment methodologies support many
evidence-based practices and interventions that help some of our most vulnerable Medicaideligible
citizens, including children and youth suffering from intense mental issues. Were this
flexibility to be taken away, CWLA is certain that efficiency would plummet, as case managers
would face significant administrative burdens, ultimately taking time away from the child and
reducing services' impact and the child's progress.
CWLA recommends that CMS rescind these arbitrary and entirely too minute time restraints and
instead, continue to afford states the flexibility to pay for Medicaid services in the most costefficient
manner, contingent on approval from CMS.
Section 441.18(c), Exclusions from Case Management:
Application of Integral Component/Integral To Test: CMS announces that Medicaid FFP is
not available for Medicaid case management services that are deemed to be an integral
component of another Medicaid covered service (Section 441.18(c)(1)), integral to the
administration of foster care (Section 441.18(c)(3)), and perhaps most troubling, integral to the
administration of a sweeping list of non-medical programs, such as child welfare, child
protective services and guardianship (Section 441.18(c)(4)). The word "integral" is
unquestionably vague and because CMS offers no further explanation or guidance, states have no
notice as to what case management activities-if any-remain eligible for federal
Going well beyond Medicaid third party liability rules, such a test also completely and wrongly
shuts off Medicaid beneficiaries' road to case management services if the other targeted
programs (child welfare, etc.) are unable to pay. Medicaid case management and TCM services,
by definition, are the "services furnished to assist individuals, eligible under the State plan…in
gaining access to needed medical, social, educational, and other services." The proper way to
uphold the integrity and effectiveness of the Medicaid program is to continue to assist states in
providing these services to the Medicaid-eligible individuals entitled to receive as long as-
simply, the services meet the statutory definition.
Shrugging obligation and complete financial responsibility on to other public programs through
adoption of an "integral" test is illogical, too, in light of the interim final regulation's
requirement that a State certify in its plan that it will not duplicate payments made to public
agencies or private entities (Section 441.18(a)(4)). If CMS is concerned about fiscal integrity,
rather than putting in place the integral test and possibly cutting off services due to funding
shortages, it should rely on more just approaches like Section 441.18(a)(4) that requires states to
be fiscally accountable, while also permitting needed services to continue.
Finally, adoption of an "integral component" or "integral to" test flies in the face of
Congressional intent, as it is our understanding that while the Administration has repeatedly
proposed it, Congress considered-but explicitly rejected-writing the test into law when
debating the DRA. CWLA urges that Congressional authority be respected and the "integral
component" and "integral to" tests contained in Sections 441.18(c)(1), 441.18(c)(3), and
441.(c)(4) be rescinded in their entirety.
New Exclusions on Foster Care, Child Welfare, and Child Protection: In excluding from the
definition of case management and TCM services the direct delivery of underlying medical,
educational, social, or other services to which an eligible individual has been referred, Section
6052 of the DRA enumerated certain distinct foster care services such as assessing adoption
placements, recruiting or interviewing potential foster care parents, and making placement
arrangements, that would not be reimbursed by the Medicaid program. CWLA accepts these
boundaries and this policy as established by Congress.
Senator Grassley in the April 5, 2006 letter to HHS Secretary Mike Leavitt clarifying
Congressional intent behind the DRA, expressly stated that case management and TCM services
"which the Congress intended would be appropriately considered a Medicaid expense, are
particularly important to children in foster care." Senator Grassley continued that "[t]hese
children require a comprehensive approach that provides for coordination of services" and
cautioned that "the disallowance of reimbursement under Medicaid for services specified in the
DRA for TCM for children in foster care...is in direct contradiction to Congressional intent"
Despite this, the interim final rule, particularly when considered in tandem with its Preamble,
goes substantially farther than the current law and the DRA's statutory provisions, largely
prohibiting Medicaid FFP for case management and TCM services offered by those who contract
with State child welfare and child protective services agencies, as well as child welfare and CPS
workers themselves, even if they are otherwise Medicaid qualified providers. Federal law
explicitly allows Medicaid payment for health care and medical services to children and youth in
foster care, while Title IV-E rules expressly prohibit the use of IV-E funds for medical services.
In a January 21, 2001 letter to State Child Welfare and State Medicaid Directors regarding State
plan case management, CMS recognized this distinction, noting because Title IV-E is "not liable
for the assessment, care planning, and monitoring of medical needs," the cost for such case
management activities "could be billed to the State Medicaid program."
As such, child welfare agencies are permitted and do contract with mental health agencies to
provide eligible children and youth much needed mental health services. Many children and
youth that come into contact with the child welfare system grow up in home environments
characterized by poverty, instability, or parents and caregivers with limited psychological wellbeing
themselves. A large number are also victims of abuse and neglect and then, if separated
from their families, must attempt to make sense of their situations and deal with the ensuing
traumatic emotional roller coaster. Because of this myriad of stressors, it is estimated that 50 to
80% of children and youth involved with our nation's child welfare and foster care systems
suffer from moderate to severe mental health problems. As the status quo stands, however,
despite concerted efforts, the Children's Bureau, within HHS, reported after the first round of
Child and Family Service Reviews that only four states received a "strength" rating for properly
addressing the mental and behavioral health needs of children in care. In sum, some of our most
vulnerable children's needs are already not being met and should this interim final rule be
implemented as drafted, largely prohibiting Medicaid FFP for case management and TCM
services performed by those who contract with child welfare and CPS agencies, as well as the
workers themselves, the already dire situation will only get worse.
Services and systems under the interim final rule will be further fragmented, despite the
President's New Freedom Commission on Mental Health correctly acknowledging that
America's mental health service delivery system is in "shambles" and the recent push for
systems of care and cross-system collaboration to overcome barriers. This outcome is especially
egregious in the complex world of child welfare and foster care, where considering the
population's extreme health needs, the systems' persistent difficulty in securing quality
intervention, and the clock constantly ticking towards the goal of permanency, timely and
effective interventions-such as those currently and properly provided and reimbursed under
Medicaid case management and TCM options-are paramount to ensuring the child or youth's
safety and well-being. If for instance, as the interim final rule's Preamble seems to suggest,
Medicaid will no longer partly reimburse for case management services furnished by a contractor
to the State child welfare agency, a child who through no fault of his own has become seriously
emotionally disturbed may not receive the necessary mental health or other services he needs,
perhaps leading to unnecessary, otherwise avoidable out-of-home or institutional placement.
In addition to the fundamental question of whether Title IV-E is liable and even permitted to
cover these costs, even if it was, CWLA points out that less than 50% of children in foster care
are eligible for federal IV-E foster care assistance due to Title IV-E's outdated eligibility link to
a now non-existent program, Aid to Families with Dependent Children (AFDC). In 1996,
Congress ended the entitlement program AFDC and replaced it with the Temporary Assistance
for Needy Families (TANF), debated whether to change the method by which IV-E eligibility
was determined, and decided in the interim, to keep IV-E eligibility tied to AFDC-as it existed
on July 16, 1996. Congress intended to address this, but the outdated eligibility link-now
commonly referred to as the "look-back provision"-remains. As such, for a child or youth in
foster care to be eligible for federal IV-E assistance, that boy or girl must have been removed
from a family that would have been eligible for the now non-existent AFDC program as it
existed on July 16, 1996. The result is that each year, the number of children eligible for federal
foster care continues to decrease. Tying this extreme problem to the case management rule, even
assuming IV-E could help finance certain similar services-which is questionable-well over
200,000 children and youth in foster care currently do not qualify for IV-E assistance. The real
world and extremely unfortunate impact is that funds may be unavailable to support the services
that these children need.
CWLA strongly urges that Medicaid FFP be determined by the service provided, rather than by
the individual who happens to be providing it. It should not be wholeheartedly assumed-to the
detriment of vulnerable children and youth-that professionals are unable to provide separate,
distinct services. Legitimate case management and TCM services that fall within the statutory
definition and are offered by Medicaid qualified providers should continue to be eligible for
Medicaid. To that end, we recommend that the language in the rule's Preamble placing onerous
restrictions on the foster care, child welfare, and CPS systems and therapeutic foster care
programs be deleted and that Sections 441.18(c)(1) and 441.18(c)(4) be entirely rescinded.
On behalf of CWLA, its members, and the children and families we serve, we thank you for the
opportunity to comment on this rule. We again stress that due to this rule's extremely short
timeframe and expected full implementation on March 3, 2008, significant revisions as suggested
above must be made quickly. Only then can we ensure that children and youth and their physical
and mental health needs are made a national priority.
Child Welfare League of America
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