Children's Monitor Online
A Public Policy Update from the Child Welfare League of America

   
   
Vol. 20, Issue 32: 8/27/2007   
Headlines

New Administration Rules Impose Obstacles for CHIP

New Regulations on Medicaid Rehabilitative Services Await Comment

Ranking Member Recognizes a High School Diploma Is Best for Foster Children

Appropriations to Be Addressed

CWLA Legislative Alerts Available to Subscribers

Key Upcoming Dates for Congress



New Administration Rules Impose Obstacles for CHIP

Having already threatened to veto both the House and Senate bills that would reauthorize the State Children's Health Insurance Program (CHIP), the Administration took action by issuing new policies that place additional, if not impossible, burdens on states covering children in families above 250% of the federal poverty level (FPL). Serving as Medicaid's essential companion, CHIP provides health insurance to over six million low-income children whose families earn too much to qualify for Medicaid and those either not offered or unable to afford private coverage, as well as some lower income adults. As it stands now, states have flexibility to uniquely tailor and administer CHIP, including the discretion to set income eligibility limits. Current law and corresponding regulations accordingly require states to have "reasonable procedures" in place to prevent substitution of public CHIP coverage for private coverage ("crowd-out").

On a Friday evening in the middle of Congress's August recess, the Centers for Medicare and Medicaid Services (CMS) sent letters to state health officials across the country, imposing new, strict standards that seek to further protect against crowd-out. Amongst the new requirements, prior to enrolling them in CHIP, states that set eligibility above 250% FPL (250% FPL for a family of four is $51,625) must prove that the individuals--in this case, children--have been uninsured for at least one year. To go above 250% FPL, such states must also show they have enrolled at least 95% of their children below 200% FPL who are eligible for either CHIP or Medicaid and that the number of children in the target population insured through private coverage has not decreased by more than 2 percentage points in the past five years. The new policies are retroactive and all affected states (those covering above 250% FPL) must amend their CHIP state plan or Section 1115 demonstration waiver to come in full compliance within 12 months or face potential corrective action from CMS.

Many of the states that set eligibility above 250% of poverty have state median incomes that far exceed the poverty level. The federal poverty level is identical for the 48 states, while the state median income standard varies from state to state, based on what families actually earn in that particular state. For example, 2005 data from the Census Bureau indicates the median income for a family of four in the state of Connecticut was approximately $92,000, meaning half the families make more than that figure and half make less. An eligibility level of 250% of poverty ($51,000) in the state of Connecticut would not come close to covering half of these families. At the other end of the income range, the median income for a family of four in Mississippi was approximately $47,000 and an eligibility standard of 250% of poverty would cover a little more than half the families of four. These discrepancies across state lines are why CHIP allows states to designate eligibility. Eighteen states and the District of Columbia already provide coverage to children in families above 250% FPL or are on their way to doing so.

While CMS's letter emphasizes that they do "not expect any effect on current enrollees," state and local leaders are already concerned and some are planning to fight back. Members of Congress have also articulated their disapproval with the new policies. Chairman of the Finance Committee Max Baucus (D-MT), who has helped guide the CHIP reauthorization through the Senate, has said, "this drastic change in policy sets states up to fail and jeopardizes coverage for tens of thousands of children in low-income, working families." The rules are a contradiction of where Congress is headed considering that just before the August recess both houses independently passed bills that would reauthorize CHIP so that more eligible but unenrolled children would be covered (S 1893/HR 3162). The timeline for reauthorization has already been crunched, since CHIP is set to expire this September 30 and President Bush has threatened to veto the bills as they currently stand. Rumors of a short-term extension have circulated, with Leslie Norwalk, Acting Administrator of CMS, most recently hypothesizing that a shorter extension of the program, which would cost less money, would be more acceptable to the President.

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New Regulations on Medicaid Rehabilitative Services Await Comment

On August 13, CMS published a proposed rule in the Federal Register (CMS 2261-P/72 FR 45201) that seeks to "clarify the broad general language of the current regulation." Defined as "any medical or remedial services (provided in a facility, a home, or other setting) recommended by a physician or other licensed practitioner of the healing arts, within the scope of their practice under state law, for maximum reduction of physical or mental disability and restoration of an individual to the best possible functional level," rehabilitative services are implemented by many states for various populations, including children in foster care. Rehabilitative services are critical to improving the well-being of children in foster care, as they offer a realistic opportunity to--in the least restrictive setting possible--reduce or restore the physical or mental disabilities that many children in foster care have, in both a person-centered and evidence-based manner.

CWLA is in the process of thoroughly evaluating the potential impact the proposed regulation would have on children and families, as well as on the agencies and providers who serve them, but as far as the proposed rule's content, some changes should be noted. To ensure the services "are designed and coordinated to lead to the goals set forth in state and regulation" and to ensure transparency, covered rehabilitative services would have to be identified under a written rehabilitation plan that is reasonable and based on the individual's condition and standards of practice. The written plan would have to meet various enumerated requirements including the following: be based on a comprehensive assessment; be developed by a qualified provider; specify individual's rehabilitation goals; indicate frequency, amount, and duration of services; and review whether goals are being met.

The proposed regulation also takes on an "intrinsic elements" test, specifically excluding from Medicaid reimbursement services "furnished through a nonmedical program as either a benefit or administrative activity including services that are intrinsic to elements of programs other than Medicaid, such as foster care, child welfare, education, child care, [and] juvenile justice." The "intrinsic to" test appears to want to ensure that Medicaid does not pay for services that CMS deems are the responsibility of other programs, but no specific guidance is provided on what "intrinsic to" really means. Therapeutic foster care services will surely be affected, with the proposed rule excluding from the definition of "rehabilitative services" therapeutic foster care services, except for medically necessary rehabilitation services that are clearly distinct from packaged therapeutic foster care services. By denying federal financial participation, this appears to effectively revoke the option to bundle rates for therapeutic foster care.

The proposed rule may be viewed in its entirety online. The public has 60 days to submit comments electronically, by mail, or by hand on the proposed rule, making the deadline for submission October 12, 2007, at 5 p.m. Anyone may submit their comments through this link. CWLA will submit its own comments, and as part of that effort we are soliciting comments in response to the proposed rule. Please forward your concerns and how you believe the proposed regulation would impact your agency and the children and families you assist to Laura Weidner, CWLA Government Affairs Associate for Health, at lweidner@cwla.org.

In related news, there has been movement to stall or stop such a regulation. Section 814 of the CHAMP Act (HR 3162), which would reauthorize the CHIP and passed the House before August recess, contains a one-year moratorium on official promulgation of rules or other administrative action that would restrict coverage or payment for services covered under the Medicaid rehabilitative services option. CWLA is working with other concerned mental health and disability groups to garner support in Congress for this provision, with hope that it will be maintained in the CHIP reauthorization conference report.

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Ranking Member Recognizes a High School Diploma Is Best for Foster Children

In a letter to the Capitol Hill publication The Hill on August 2, Congressman Jerry Weller (R-IL) expressed concern for the education needs for children in foster care. Representative Weller is the Ranking Member of the House Ways & Means Subcommittee on Income Security & Family Support. Since the start of the new Congress, the subcommittee has had a series of hearings ranging in topic from poverty, disconnected youth, health care outcomes of children in foster care, and youth transitioning from foster care.

In his letter to the newspaper, Representative Weller wrote, "We must help foster children to graduate from high school.... Part of the reason children do not complete high school is too many bounce from home to home and thus from school to school in today's system.... School stability and high school completion are strongly associated with a better transition to adulthood, and avoiding the negative outcomes...."

CWLA has been working with a coalition of advocates including Casey Family Programs, the Children's Defense Fund, the Center for Law and Social Policy (CLASP), and the National Association for the Education of Homeless Children and Youth (NAEHCY) to assure the next reauthorization of the federal education law addresses the issue of education and children in foster care. CWLA applauds Representative Weller's advocacy in recognizing that youth in care face extreme barriers to placement stability and school stability at alarming rates compared to their same-age counterparts in the general population. In many instances, children in foster care may experience multiple placements in a year and in their lives. The added burden and challenge of multiple school placements can only make it more challenging for these children and make it much harder to succeed at school. CWLA believes that in addition to enacting legislation such as the Kinship Caregiver Support Act (S 661/HR 2188), which would allow more children in care to remain with kin, it is also essential to guarantee certain education rights, including immediate admission to new schools as well as allowing foster children to remain in their current schools. For more on the education issue, visit our website.

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Appropriations to Be Addressed

When Congress returns in September, they will have to address appropriations before the start of the federal fiscal year, which begins October 1. There are 12 appropriations bills. Homeland Security has passed both houses. The Defense Department bill has passed the House but a Senate version has not yet been voted on. Of the remaining 10, all have been debated and passed by the House and all have been passed by the Senate Appropriations Committee. The President has said he would veto 9 of the 12 bills: Labor-HHS, Agriculture, Commerce-Justice, Energy-Water, Financial Services, Homeland Security, Interior-Environment, State-Foreign Operations, and Transportation-Housing. It appears likely there will be some form of continuing resolution that would provide continued federal funding for departments awaiting action after October 1. It also appears likely that there will eventually be an omnibus appropriations bill that would include several appropriations bills into one piece of legislation.

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CWLA Legislative Alerts Available to Subscribers

CWLA's Legislative Alerts provide breaking news, advocacy information, and critically important timely details of legislative battles. In an effort to broaden CWLA's advocacy network on behalf of children, anyone can now subscribe and receive the same information. This effort compliments CWLA's weekly electronic legislative newsletter, the Children's Monitor, which is also available free to any subscriber. We encourage you to register to receive these items directly and to pass on the information to other colleagues, family, and friends.

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Key Upcoming Dates for Congress

  • August 6-September 4: August Summer Break
  • September 24-26: CWLA Mid-Atlantic Regional Conference
  • September 30: SCHIP Reauthorization Expires
  • October 1: 2008 Federal Fiscal Year Begins


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