February 1, 2008

Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-2237-IFC
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 notto 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 oversight.

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 reimbursement.

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” (emphasis added).

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.


Christine James-Brown
Child Welfare League of America