Recommendations for Medical Support Legislation

LEGISLATIVE RECOMMENDATIONS. ERICSA urges the Department of Health and Human Services, to bring together its Title IV-D, XIX and XXI programs to collaboratively propose, for consideration by Congress, the following key legislative recommendations of the Congressionally-mandated Medical Child Support Working Group (MCSWG)”, as discussed in Attachment 1.

•  Financing: Recommendation 65;

•  Performance Measurement: Recommendations 66 and 67;

•  Order Establishment and Modification: Recommendations 6, 13 and Part B of 19 ;

•  Enrollment of Children in Public Coverage: Recommendation 16.

In addition to these key legislative recommendations, ERICSA supports the additional legislative recommendations specified in Attachment 4. ERICSA requests that ACF/OCSE further examine Recommendation 7 to determine whether Congressional legislation is necessary, especially given that the factor of accessibility must be weighed in the decision-maker's determination of appropriate coverage pursuant to Recommendation 8 (Federal Regulation).

NON-LEGISLATIVE RECOMMENDATIONS: ERICSA underscores that these key legislative recommendations are inextricably linked to the non-legislative recommendations of the Working Group identified on Attachments 2 and 3, especially those recommendations fostering coordination between the child support, Medicaid and SCHIP programs. This coordination is the essential prerequisite to the successful adoption and implementation of all of the recommendations , as stated in our Resolution of May 2001. The most significant non-legislative proposals are the following.

•  Redefining “reasonable cost” Recommendation 9;

•  Priority of withholding Recommendation 49;

•  Coordination between the Title IV-D, XIX and XXI programs Recommendations 72, 51 and 53;

•  Technical assistance for implementation of the notice Recommendations 28, 30, 31.

ERICSA urges ACF/OCSE in conjunction with the Center for Medicaid and Medicare Services and the Department of Labor to expeditiously proceed with the strategic adoption and implementation of the Working Group's non-legislative recommendations to improve the prospect of Congressional enactment of the recommendations cited above, thereby enhancing the contribution the child support program can make in obtaining health care coverage for America's children.

  ATTACHMENT 1

KEY LEGISLATIVE RECOMMENDATIONS SUPPORTED BY ERICSA

•  FINANCING

Recommendation 65. Congress should amend Federal law to provide 90% enhanced Federal Financial Participation to State IV-D agencies for a five-year period to facilitate

the implementation of the Title IV-D medical support requirements, contained in s.401 of the Child Support Performance and Incentives Act (CSPIA) of 1998, and additional Federal requirements that result from the Working Group's recommendations. This funding may be capped.

Rationale: ERICSA believes that enhanced funding of initiatives that are directly related to medical support are critical to ensure that the IV-D program makes a meaningful contribution to expanding health care coverage for children. These activities include but are not limited to: a labor-intensive review of the entire caseloads and systems development to capture data, monitor compliance, issue notices, and communicate with the Title XIX and XXI programs regarding availability of private or public coverage. Legislation adopted in 1998 and 2000 and additional responsibilities that would result from the adoption of the MCSWG's recommendations require additional resources. Two significant program changes were brought on by CSPIA 1998.

•  The first was the new requirement that IV-D agencies not just petition for medical support but also ensure that health care coverage be addressed in every support order. These provisions require review of a State's entire caseload to determine whether health insurance is included in the support order and, if not, to take action to modify or adjust the order to include it.

This caseload review would enhance the reliability of data related to medical support, a problem cited by OCSE's audit division. In turn, the reliability of data is a prerequisite to an informed discussion and the development of a medical support performance measure, another requirement of CSPIA of 1998. The caseload review would be improved substantially if States could conduct data matching of child support files with national health insurance databases. Enhanced funding to contract out for such activity would benefit States that do not have funding and/or staff to accomplish such tasks.

•  The second was the requirement to implement the national medical support notice to enforce health care coverage in an automated way similar to income withholding. Implementation requires systems development solely to accommodate the notice, monitor and identify cases in which it must be issued, facilitate outreach and coordination with employers and plan administrators, develop data exchanges with the Medicaid program and train IV-D staff.

•  In addition, as indicated in OCSE–IM-01-07, Congress adopted the MCSWG's Recommendation 17 in its enactment of The Consolidated Appropriations Act of 2000, including IV-D agencies among the “qualified entities” that may enroll children in Medicaid for a presumptive eligibility period. Funding remains among the unresolved implementation issues.

A demonstration of the cost savings and recoupment associated with IV-D medical support initiatives would further substantiate the need for enhanced Federal funding.

•  PERFORMANCE MEASUREMENT

Recommendation 66. Congress should amend Federal law to require that the medical support incentive measure be developed in conjunction with the implementation of CSPIA 1998 s. 401 requirements and additional requirements that may be imposed by law or regulation, based on the recommendations of the Working Group. This measure should take into account the findings of the research and demonstration grants undertaken by States and funded by HHS.

Recommendation 67. Congress should amend Federal law to require HHS to publish the medical support performance incentive measure in final form within three years of the date the 90% FFP goes into effect. Implementation of the medical support performance incentive measure shall begin upon publication, including the collection and submission by the States to OCSE of all data necessary to calculate the measure. The medical support performance measure shall be included in the calculation of incentive payments due States beginning 2 years after publication. This five-year time period shall run concurrent with that set forth in Recommendation 65 (Federal Legislation.)

Rationale: ERICSA believes that the MCSWG sets forth a reasonable, phased development of a performance measure that will be grounded in reliable data and supported by adequate funding. Furthermore, adoption of the recommendations of the MCSWG may result in a redefinition of the very type of performance to be measured, given the MCSWG's recognition of public coverage. Recommendations 65, 66 and 67 must be read together and, together serve as the foundation upon which all the other recommendations are premised.

CSPIA 1998 requires that a medical support performance measure be developed and included in the IV-D incentive funding scheme in a cost-neutral manner. It is premature to develop and adopt such a measure given the lack of reliable data and adequate funding dedicated specifically to this purpose. In January 2001, OCSE reconvened a Medical Support Incentive Work Group (consisting of OCSE staff, IV-D Directors and other employees of State IV-D agencies, and attorneys from two advocacy groups) to advise OCSE with respect to the development of a performance measure for medical support as required by CSPIA. As indicated in ERICSA's Resolution of May 2001, ERICSA concurs with Recommendation #6 of the “Report of the Medical Support Incentive Workgroup to the Office of Child Support Enforcement” issued September 2001 that

“OCSE should recommend to Congress that the cap on incentive payment to States under the child support performance incentive system be removed.” (p. 21)

•  Order Establishment and Modification

Recommendation 6. If the child is presently enrolled in either parent's private health care coverage and the coverage is accessible to the child, that coverage should be maintained. If, however, one of the parents has more appropriate coverage (as determined in accordance with Recommendations 8 though 11) and either parent requests that the child be enrolled in this plan, the decision-maker shall determine whether or not to maintain the existing coverage based upon the best interests of the child.

Recommendation 13. This recommendation establishes a decision making process whereby, after determining that a child is not enrolled in private health care coverage and that at least one parent could enroll the child in private coverage, the decision maker should determine which plan is most appropriate for the child (as defined in Recommendation 8) by evaluating the plans in the specified manner.

NOTE: An important non-legislative recommendation, Recommendation 38, provides guidance to State IV-D programs in situations where there are multiple health plan options available. Recommendation 38 provides a framework for making a selection among multiple options, effectively responding to a concern articulated by some IV-D agency personnel that the IV-D program is not equipped to make a selection. Importantly, this recommendation recognizes that the IV-D agency does not have the expertise to decide the coverage option by direct that the Medicaid agency decide in a case where support is assigned or that the custodial parent decide in a case where support is not assigned. ERICSA strongly urges a prominent role for the Medicaid
agency when there is a choice of plans and a Medicaid assignment is in effect. The IV-D agency and the Medicaid agency may be able to establish protocols for determining the appropriate plan options.

This recommendation should require amendment to the IV-D regulations governing the national medical support notice and a conforming amendment to 45 CFR 303.32 (c) (8). Department of Labor regulation 29 CFR 2590.609-2 (c) (3) also must be amended. ERICSA recommends that the regulation provide for State flexibility in its language, directing State IV-D and Medicaid programs to establish protocols for making a selection from plan options.

Recommendation 19, Part B. Congress should amend s.467 of the Social Security Act to provide that the amount the noncustodial parent may be ordered to contribute toward the monthly cost of coverage under Medicaid or SCHIP shall be the lesser of: (1) the estimated cost of enrolling the child in Medicaid or SCHIP; (2) 5% of the noncustodial parent's gross income; or (3) the amount indicated by a sliding fee schedule, developed by the State, which takes into account ability to pay and average Medicaid/SCHIP costs for dependent children.

Rationale: Recommendations 6,13 and 19B address two problems that diminish the contribution of the IV-D program in expanding health care coverage for children.

The first is the “lost opportunity” that frequently occurs when parents appear before the decision-maker in a child support proceeding but the issue of the child's health coverage is not on the table. Recommendations 6 and 13 give the issue of a child's health care coverage the prominence it deserves by ensuring that this issue will be addressed by the decision-maker. New York's Governor proposed and the State's Senate has passed legislation based upon Recommendations 6, 13 and 19 Part B of the MCSWG Report, with the endorsement of the State's Office of Court Administration. Although Recommendation 13, which simply sets forth a construct or framework for addressing the issue of health care coverage, appears to lack consensus within the IV-D community, it is unclear what alternative practice or proposal States are currently relying upon to guide decision-makers.

The second problem is the ability of a noncustodial parent to contribute to the cost of coverage under Medicaid or SCHIP. Recommendation 19 Part B provides clear guidance on the amount that a decision-maker may order a noncustodial parent to contribute. The recommendation will provide an avenue for States to defray costs of Medicaid and SCHIP and ensure parental responsibility for their “fair share” while leaving to State selection the option that the State chooses to adopt. While we endorse the flexibility left to the States to choose from among the three options, the 5% standard in conjunction with the phrase “the lesser of” may reduce the obligation of a noncustodial parent whose ability to pay exceeds the 5% standard. Perhaps more flexibility on a case-by-case basis using a set of guiding principles may be a good starting place.  It may be possible to use automation to establish the recommended level of contribution after quantifying the guiding principles.

Recommendation 16. To facilitate enrollment of eligible children in public coverage, Federal law should require State IV-D agencies to: (1) provide parents with information about the Medicaid and SCHIP programs, as well as any other subsidized coverage that may be available to the child; and (2) refer the family to the appropriate program for possible enrollment.

Rationale: ERICSA recognizes that IV-D agencies are well-positioned to provide families with information about health care coverage and refer them to appropriate programs. As indicated in our comments relative to presumptive Medicaid eligibility determinations under the topic of Financing, above, this responsibility would require additional IV-D resources. Connecticut in 1999 passed landmark legislation whereby the decision-maker can order either party to obtain SCHIP coverage if other reasonable coverage is not available. Child support staff provide the information regarding this coverage to the parties, and refer them to the program, as appropriate.

  ATTACHMENT 2

RELATED AND ESSENTIAL NON-LEGISLATIVE RECOMMENDATIONS

SUPPORTED BY ERICSA

ERICSA underscores that the legislative recommendations that we support are inextricably linked to the non-legislative recommendations of the MCSWG identified below. The key non-legislative recommendations are highlighted below and all of the related recommendations are illustrated in the chart in Attachment 3.

Recommendation 9. The Federal regulation that deems all employment related or group based coverage to be reasonable in cost should be replaced with a standard based on the cost of coverage relative to the income of the parent who provides the coverage. If the cost of providing the coverage does not exceed 5% of the gross income of the parent who provides the coverage then the cost should be deemed reasonable.

•  Reasonable cost.

Rationale. This standard, developed in the 1980's when employee cost of coverage was negligible, is no longer valid given the dramatic change in the type of insurance and its relative cost to the employee. While we support the need for rewriting the regulation, we request additional examination of the 5% gross income threshold. ERICSA also asks that consideration be given to requiring a standard based on income but leaving it to State option to define. Perhaps more flexibility on a case-by-case basis using a set of guiding principles may be a good starting place.  It may be possible to use automation to establish the recommended level of contribution after quantifying the guiding principles.

•  Priority of withholding.

Recommendation 49. A Federal policy on the priority of allocation by employers of funds collected through wage withholding should be promulgated. Employers should first attribute withheld funds to current cash support, then to health insurance premiums and other current medical support and then to arrears and then to other obligations. Decision makers should have the flexibility under State law to deviate on a case-by-case basis and provide that health care premiums will be paid first when that is in the best interest of the child.

Rationale. Currently, there is no Federal direction as to the priority of withholding and State law varies considerably on the issue. As a result, employers are faced with a variety of statutes with which they must contend, and the situation is only exacerbated in interstate cases. Establishing a priority will provide uniform direction to employers and assert the priority of health insurance premiums over other obligations (such as arrears) that may be collected over time.

•  Coordination between the IV-D, XIX and XXI programs

Recommendations 72, 51, 52 and 53. Recommendation 72 would provide for improved coordination between the IV-D, XIX and XXI programs by calling for the Administration to convene a national policy and coordination group that will act through the Federal agencies to provide oversight on health care programs that affect children. Recommendations 51, 52 and 53 would amend the title XXI program to allow IV-D children to enroll in SCHIP even though they may be enrolled in private health insurance that is not immediately available to them because of waiting periods, or is not accessible, comprehensive or affordable.

Rationale. Despite good intentions in the creation of the SCHIP program, certain rules bar children from gaining access to such coverage even when private coverage is not, for all practical purposes, available to them.

•  Technical assistance, education and outreach

Recommendations 28, 30 and 31. These recommendations provide for Federal technical assistance, education and outreach to IV-D agencies, employers, plan administrators, payroll agents, courts and administrative authorities and other interested parties with regard to the implementation of the national medical support notice. Recommendation 28 would also provide for technical assistance to develop automated State IV-D systems.

Rationale. The successful implementation of the national medical support notice is dependent on an understanding of the form and cooperation of various constituents in complying with the form's requirements. Outreach to the hundreds of thousands of constituents in this process is essential to success .

  ATTACHMENT 3

This chart illustrates the key LEGISLATIVE RECOMMENDATIONS that ERICSA supports and the RELATED NON-LEGISLATIVE RECOMMENDATIONS, organized by category as they appear in the MCSWG's report, that are directly linked to the legislative recommendations and essential to their success. Note that Recommendations 65, 66 and 67 impact all of the recommendations and thus are not specifically addressed in the chart. ERICSA's response to the remaining recommendations appears in Attachment 4.

Related Non-Legislative Recommendations

  ATTACHMENT 4

  LEGISLATIVE RECOMMENDATIONS

  REGULATORY RECOMMENDATIONS

ERICSA supports the remaining regulatory recommendations: 29, 39, 45, 49, 61, 64.

  FEDERAL GUIDANCE AND TECHNICAL ASSISTANCE RECOMMENDATIONS

ERICSA supports the remaining Federal guidance and technical assistance recommendations: 27, 28, 30, 31, 32, 34, 51 and 53.

  BEST PRACTICES RECOMMENDATIONS

ERICSA supports the following best practices recommendations: 23, 38***, 46, 47.

  RESEARCH AND DEMONSTRATION RECOMMENDATIONS

ERICSA supports the following research and demonstration recommendations: 68 (also related to funding recommendations), 70, 71. ERICSA urges HHS to ensure that all research and demonstration projects address the interstate aspects of the initiatives.

  ADMINISTRATIVE ACTION

ERICSA supports the following recommendations related to administrative action: 73, 76.

*Recommendation 20 calls for a statutory change that would preclude State IV-D agencies from attempting to recover Medicaid related birthing costs. Some States, like New York , have recovered birthing costs in circumstances where noncustodial parents (NCPs) have income but do not pursue recovery if NCPs income is at or below 133% of Federal Poverty Level. For example, New York has collected $7 million for 2001 through June, representing Medicaid reimbursements. Additionally, to the extent in non-Medicaid cases that child support and recovery of birthing costs is pursued, it provides Medicaid cost-avoidance for potentially eligible IV-D custodial parents. We would recommend that States be precluded from pursuing birthing costs for low-income NCPs at a threshold determined by the State.

**Recommendation 44 would require the IV-D agency to enforce medical support obligations against custodial parents. Most members of ERICSA's Board of Directors oppose this requirement as it could dissuade custodial parents who need child support services from seeking them. Recommendation 44 would constitute a significant change from existing law in which the IV-D agency has been required to enforce obligations against NCPs and would require a substantial redesign of State procedure and systems. At least one member of ERICSA's Board, however, supports the MCSWG's Recommendation 44 on the ground that the IV-D agency does not represent the custodial parent but instead represents the interests of the State, the same rationale adopted by the MCSWG.

***See discussion about Recommendation 38 under comments on Recommendation 13.