Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
Routine  Prenatal  and  Postpartum  Care 
for  Undocumented  Aliens 
JUNE  GIBBS  BROWN 
Inspector  General 
MAY  1998 
OEI-07-96-00310  OFFICE  OF INSPECTOR  GENERAL 
The mission of the Office of Inspector  General (OIG),  as mandated by Public Law  95-452,  is to 
protect  the integrity  of the Department  of Health  and Human  Services programs  as well  as the 
health and welfare  of beneficiaries  served by them.  This statutory  mission is carried out through  a 
nationwide  program  of audits, investigations,  inspections,  sanctions, and fraud alerts.  The 
Inspector  General informs the Secretary of program  and management problems  and recommends 
legislative,  regulatory,  and operational  approaches to correct them. 
Office  of Evaluation  and Inspections 
The Office of Evaluation  and Inspections  (OEI)  is one of several components  of the Office of 
Inspector  General.  It conducts  short-term  management and program  evaluations (called 
inspections)  that focus on issues of concern to the Department,  the Congress, and the public.  The 
inspection  reports  provide  findings  and recommendations  on the efficiency, vulnerability,  and 
effectiveness of departmental  programs. 
OEIs Kansas City Regional  Office  prepared this report  under the direction  of James H. Wolf, 
Regional  Inspector  General.  Principal  OEI  staff included: 
REGION  HEADOUARTERS 
Hugh  Owens, Project  Leader  Wynethea Walker,  Program  Specialist 
Michael  Barrett,  Program  Analyst 
To obtain copies of this report,  please call the Kansas City Regional  Office at (8 16) 426-3697. 
Reports  are also available on the World  Wide Web at our home page address: 
http:llwww.dhhs.gov/progorg/oei  EXECUTIVE  SUMMARY 
PURPOSE 
To determine if States are claiming Federal reimbursement  for routine  prenatal and postpartum 
care for undocumented  alien women. 
BACKGROUND 
The Omnibus Budget  Reconciliation  Act  of 1986 amended the Social Security Act to limit  Federal 
payment for emergency medical services under the Medicaid  program  to undocumented  aliens 
except in certain circumstances.  The amendment explains that an emergency medical condition 
occurs when the patients health would  be in serious jeopardy  caused by serious impairment  to 
bodily  functions,  or serious dysfunction  of any bodily  organ or part without  immediate medical 
attention.  This includes labor and delivery but does not include routine  prenatal  and postpartum 
care, generally referred  to as those periods  preceding  birth  and after childbirth. 
This review  is a follow-up  to a prior  inspection  which  found that two  States covered and claimed 
Federal funds for routine  postpartum  care for undocumented  alien women. 
We surveyed the Health  Care Financing  Administrations  (HCFA)  Central Office and regional 
offices to determine the extent of directives they had released to States covering  specific policies 
on claiming Federal funds for non-emergency  medical treatment.  We also surveyed all Medicaid 
State and territorial  agencies to determine if they cover and claim Federal funds for routine 
prenatal  and postpartum  care.  Further,  we requested copies of their policies  and procedures 
regarding  coverage for undocumented  aliens. 
FINDINGS 
Six States Have  Claimed  Federal  Funds  for  Routine  Prenatal  and  Postpartum  Care  for 
Undocumented  Alien  Women.  Three  Still  Do. 
We found that Nebraska,  New  York,  and West Virginia  cover both routine  prenatal  and 
postpartum  care and claim Federal funds for these services.  Nebraska has a global obstetric 
package that covers prenatal, delivery,  and postpartum  care.  New  York  is claiming Federal funds 
for prenatal  services pursuant  to an order from the United  States District  Court  for the Eastern 
District  of New  York  (reference our third Finding)  and continues to claim postpartum  care as part 
of a Medicaid  benefit package.  West Virginia  covers visits during both the prenatal  and 
postpartum  periods.  These States are presently claiming Federal funds. 
i  We also found that three other  States have covered some of these services.  Minnesota  claimed 
Federal funds only on routine  prenatal care from July 1994 to July 1997.  Oklahoma  and 
Vermont,  although  not routinely  claiming Federal funds for prenatal and postpartum  care, 
indicated  that they have in the past been claimed for undocumented  alien women  in limited 
instances (i.e., citizenship  status of the undocumented  alien was not known  to the provider  at the 
time the services were rendered). 
Survey  Respondents  in 31 States and  Territories  Indicated  They  Were  Not  Aware  of 
HCFAs  Guidance  on this  Subject.  Two  HCFA  Regional  Offices  Did  Not  Send Guidance  to 
States. 
Respondents  in Nebraska,  Vermont,  and West Virginia,  along with  28 other  States and territories 
noted that they were not aware of HCFAs  guidance which  addressed routine  prenatal and 
postpartum  care for alien women.  This was despite HCFAs  various  efforts to make States aware 
of policy  provisions. 
Two  HCFA  Regional  Offices (Denver  and Kansas City)  did not send guidance to the States in 
their region  subsequent to HCFA  Central Offices issuance of the October  12, 1994 memorandum. 
A Federal  Court  Has Ordered  Continuation  of Benefits  in New York 
As noted earlier, New  York  continues to claim, and HCFA  continues to pay, Federal funds 
pursuant  to an order of the United  States District  Court  for the Eastern District  of New  York  in 
Lewis  v. Grinker. 
It is our understanding  that the Department  of Health and Human  Services, acting through  the 
Department  of Justice, has recently petitioned  the New  York  Federal court  to vacate this order 
based on the Personal Responsibility  and Work  Opportunity  Reconciliation  Act,  Public  Law 
104-193 (1996).  In the meantime, and until the order is vacated, HCFA  is authorized  by its own 
regulations  to pay for Medicaid  services provided  pursuant to court  order. 
RECOMMENDATIONS 
In an earlier inspection  we found two  States were improperly  claiming Federal funds for routine 
postpartum  medical care for undocumented  alien women.  Since misinterpretation  or 
misunderstanding  of the law on this matter continues to exist in some States, we recommend  that 
HCFA: 
0 	 identify  and recover Federal funds that Minnesota,  Nebraska,  Oklahoma,  Vermont,  and 
West Virginia  inappropriately  claimed for routine  prenatal and postpartum  care for 
undocumented  alien women; 
ii  0 	 assure States and territories  are aware of and implementing  policy  provisions  applicable to 
claiming Federal funds for routine  prenatal and/or postpartum  services; and 
0 	 continue  to monitor  and support the Justice Departments  efforts to resolve the legal issues 
involving  New  York. 
AGENCY  COMMENTS 
The HCFA  agrees with  our recommendations  in the report  and will  take appropriate  action to 
implement  them. The HCFA  also noted the positive  aspects of our inspection  - that there were 
only six States in which  we detected inappropriate  claims, and that these States have 
comparatively  few undocumented  aliens compared to other States. The full text of the HCFA 
comments are shown in Appendix  D. 
111  TABLE  OF  CONTENTS 
PAGE 
EXECUTIVE  SUMMARY 
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 
FINDINGS  . . . . .  .  .  .............  . 
Claiming  Federal Funds  .......  ............. 
Survey Respondents  ..........  ............. 
Federal Court  Order  ......... 
RECOMMENDATIONS  ......  . .  .......  .6 
AGENCY  COMMENTS  .......  .  .......  .......  .7 
APPENDICES 
A: HCFAs  October  12, 1994 Memorandum  .  .......  . .  ......  .  .  . .  . A-l 
B: States Not  Aware  of HCFA  Policy  Guidance  .  .......  . .  ......  . .  .  .  B-l 
C: HCFA  Regional  Office Guidance Issuances  .......  ......  . .  .  .  . . C-l 
D: Agency  Comments  . .  . . . .  .  . .  . .  .......  . .  ......  .  .  . .  . D-l  INTRODUCTION 

PURPOSE 
To determine if States are claiming Federal reimbursement  for routine  prenatal  and postpartum 
care for undocumented  alien women. 
BACKGROUND 
Definitions 
Prenatal  is defined  as the period  preceding  birth  and postpartum  is defined  as the period 
after  childbirth.    Undocumented  aliens are immigrants  who  entered as temporary  residents 
and overstayed  their  visas or are engaged in activities  forbidden  by their  visas, or who  entered 
illegally  into  this country. 
Guideline  Perspectives 
The Omnibus Budget  Reconciliation  Act  of 1986 (Public Law  99-509,  $9406)  amended the Social 
Security Act,  effective January 1, 1987 by adding 9 1903(v) which  limits Federal payment for 
undocumented  aliens emergency medical care under the Medicaid  program.  The Act  and Federal 
Regulations  define an emergency medical condition  as after sudden onset, manifesting  itself by 
acute symptoms of sufficient  severity (including  severe pain) that the absence of immediate 
medical attention  could reasonably be expected to result in-
(a) placing the patients health in serious jeopardy; 
(b) serious impairment  to bodily  functions;  or 
(c) serious dysfunction  of any bodily  organ or part. 
Under  the Personal Responsibility  and Work  Opportunity  Reconciliation  Act  (Public Law  104-
193) enacted August  22, 1996, Medicaid  eligibility  for aliens is based on whether  they are 
qualified  or non-qualified.  Qualified  aliens include lawful  permanent residents, refugees, asylees, 
aliens whose  deportation  has been withheld,  parolees, aliens granted conditional  entry, and 
battered immigrants.  Qualified  aliens who  are members of certain designated groups  as specified 
in the law are eligible for Medicaid.  Non-qualified  aliens, which  include illegal and also ineligible 
(e.g., temporary  workers  or foreign  exchange visitors)  aliens are eligible only for treatment  of 
emergency medical conditions.  Illegal  aliens either were never legally admitted to the United 
States for any period  of time or were admitted for a limited period  of time and did not leave the 
United  States when that time expired. 
The Health  Care Financing  Administrations  (HCFA)  State Medicaid  Manual  specifically  indicates 
that Federal payment for medical services for qualified  aliens whom  the State has not elected to 
cover or non-qualified  aliens will  be available only for treatment  of emergency medical 
1 
 conditions  (including  emergency labor and delivery),  provided  such care and services are not 
related to routine  prenatal or postpartum  care. 
HCFA  Central  Office  Guidance  Issuances 
HCFA  issued guidance to both the regional  offices and the States which  addressed emergency 
services for undocumented  aliens. 
0  HCFA  Memorandum  to  OIG  Investigation  of Services Provided  to and 
Regional  Offices  FFP Claims for Non-Emergency  Post Partum Care Provided 
to Aliens Eligible  under  1903(v)-ACTION 
issued October  12, 1994 
State Medicaid  Manual:  Revision 29, issued November  1988 
0 
Transmittal  66, issued April  1995 
Transmittal  67, issued February  1997 
0  Federal Regulation:  42 CFR 440.255,  issued September 7, 1990 
Problem  Identijication 
We reviewed  four  States as part of our  1994 inspection  of the Systematic Alien  Verification  for 
Entitlements  program,  a process for the States to validate an aliens immigration  status.  In the 
course of gathering  data for that study we discovered that in two  of those States their Medicaid 
policy  covered routine  postpartum  care for undocumented  alien women  for which  Federal funds 
were  claimed.  In our report  on this, we requested HCFA  to identity  Medicaid  overpayments  and 
to provide  guidance to all States to assure their correct interpretation  of the law. 
Action  Taken  by HCFA  to Correct  the Problem 
The HCFA  indicated  that it issued a policy  memorandum  to all regional  offices October  12, 1994. 
This memorandum  requested regional  offices to advise States that routine  postpartum  services, or 
any other non-emergency  services, provided  to illegal aliens are not eligible for Federal funds 
under Medicaid.  In addition,  HCFA  regions were notified  to monitor  this issue and assure 
compliance with  Federal provisions  (Appendix  A). 
Needless to say, States and local governments  are not precluded  from providing,  at their own 
expense, medical care or financial assistance for prenatal and postpartum  care for undocumented 
aliens. 
Medicaid  Overpayments  for Postpartum  Care to Undocumented  Aliens, 
(OEI-07-95-000  lo),  November  4, 1994. 
2  METHODOLOGY 
We requested copies of coverage and operational  guidelines established by HCFA  (regulations, 
manuals, memoranda,  and letters) that it has provided  to its regional  offices and to the various 
Medicaid  State and territorial  agencies.  We also requested copies of related policy  guidance the 
HCFA  regional  offices have provided  to the States and territories. 
We surveyed all 56 Medicaid  State and territorial  agencies inquiring  about policy  guidance from 
HCFA  on non-emergency  routine  prenatal and postpartum  medical services for undocumented 
alien women.  We requested copies of policies and procedures  covering  emergency labor and 
delivery,  and asked about any action taken upon receipt of HCFA  guidelines. 
We received responses from all Medicaid  State and territorial  agencies.  We analyzed the 
information  received, specifically  evaluating their receipt of HCFA  guidelines,  coverage policies 
and compliance  with  guidelines for claiming Federal funds. 
We conducted  our review  in accordance with  the Quality  Standardsfor  Inspections  issued by 
the Presidents Council  on Integrity  and Efficiency. 
3 
 FINDINGS 
Six States Have  Claimed  Federal  Funds  for  Routine  Prenatal  and  Postpartum  Care  for 
Undocumented  Alien  Women.  Three  Still  Do. 
Six of the 56 State and territorial  agencies surveyed covered routine  prenatal and/or postpartum 
care for undocumented  alien women,  and have claimed Federal funds.  Three of these States 
continue  to pay for routine  prenatal and postpartum  care. 
0 	 Nebraska,  New  York,  and West Virginia  cover both routine  prenatal and postpartum  care 
and continue  to claim Federal funds for these services. 
Nebraska has established a global obstetric package that always covers prenatal 
and postpartum  care when delivery is billed. 
New  York  Medicaid  policy  covers prenatal care as a result of an order from the 
United  States District  Court  for the Eastern District  of New  York  in the Lewis  v. 
Grinker  case and continues to claim postpartum  care as part of a Medicaid  benefit 
package.  New  York  case workers  do not ask applicants for their  status, with  full 
coverage provided  for prenatal and postpartum  care as well  as delivery  (see 
Finding  on page 5). 
West Virginia  limits prenatal visits to 20 for the nine month pregnancy  period 
unless prior  authorization  is obtained for more.  Postpartum  care has a limitation  of 
one visit in six months. 
0 	 Minnesota  does not cover postpartum  care.  However,  it has provided  prenatal coverage 
for undocumented  alien women  and claimed Federal funds for the period  July 1994 to July 
1997. 
0 	 Oklahoma  and Vermont,  although not routinely  claiming Federal funds for such prenatal 
and postpartum  care, indicated  that Federal funds have in the past been claimed for 
undocumented  alien women  in limited instances. (i.e., citizenship  status of the 
undocumented  alien was not known  to the provider  at the time the services were 
rendered). 
Survey  Respondents  in 31 States and  Territories  Indicated  They  Were  Not  Aware  of 
HCFAs  Guidance.  Two  HCFA  Regional  Offkes  Did  Not  Send Guidance  to States. 
Respondents  in Nebraska,  Vermont,  and West Virginia  along with  28 other  States and territories 
noted that they were not aware of HCFAs  guidance which  addressed routine  prenatal and 
postpartum  care for alien women  (see Appendix  B).  States expressed this lack of awareness 
despite HCFAs  various efforts to communicate  policy  provisions,  which  included  release of 
Central  Offrce guidance issuances supplemented by regional  offices instructions  to the States 
4 
 addressing non-emergency  medical services for undocumented  aliens.  Regional  office issuances 
are shown in Appendix  C. 
We found that two  HCFA  regional  offices (Denver  and Kansas City)  did not send out instructions 
to the States in their regions  subsequent to the October  12, 1994 HCFA  Central  Office 
memorandum. 
A Federal  Court  Has Ordered  Continuation  of Benefits  in New York 
New  York  continues to claim, and HCFA  continues to pay, Federal funds pursuant to an order of 
the United  States District  Court  for the Eastern District  of New  York.  In Lewis  v. Grinker,  794 
F. Supp.  1193, 1200 (E.D.N.Y.  1991)  a class action challenging Department  and parallel New 
York  regulations  denying Medicaid-sponsored  prenatal care to undocumented  aliens, the district 
court  held that the Medicaid  statute required  that the unborn  fetuses of these aliens were  entitled 
to prenatal  care.  The district  court thus enjoined the Department  and the State of New  York  from 
denying prenatal  services benetitting  these future American  citizens.  This order was affirmed  on 
appeal by the United  States Court  of Appeals for the Second Circuit.  See Lewis  v. Grinker,  965 
F.2d  1206 (2d Cir.  1992).  The Second Circuit  held that Congress, in enacting the Omnibus 
Budget  Reconciliation  Act  of 1986, did not intend to exclude these future  citizens from Medicaid-
sponsored prenatal care. 
It is our understanding  that the Department  of Health  and Human  Services, acting through  the 
Department  of Justice, has recently petitioned  the New  York  Federal court to vacate its order 
based on the Personal Responsibility  and Work  Opportunity  Reconciliation  Act,  Public  Law 
104-193  (1996).  In the meantime, and until the order is vacated, HCFA  is authorized  by its own 
regulations  to pay for Medicaid  services provided  pursuant to court  order.  See 42 CFR 
3 43 1.250. 
5 
 RECOMMENDATIONS 
In an earlier inspection  we found two  States were improperly  claiming Federal mnds for routine 
postpartum  medical care for undocumented  alien women.  Since misinterpretation  of the law 
and/or its application  continues to exist in States as to the claiming of Federal funds for routine 
prenatal  and postpartum  care for undocumented  alien women,  we recommend  that HCFA: 
0 	 identify  and recover Federal funds that Minnesota,  Nebraska,  Oklahoma,  Vermont,  and 
West Virginia  inappropriately  claimed for routine  prenatal and postpartum  care for 
undocumented  alien women; 
0 	 assure States and territories  are aware of and implementing  policy  provisions  applicable to 
claiming Federal funds for routine  prenatal and/or postpartum  services.  It should also 
assure that States determine Medicaid  applicants citizenship  status to avoid payment for 
other than emergency medical services for undocumented  aliens; and 
0 	 continue  to monitor  and support the Justice Departments  efforts to resolve the legal issues 
involving  New  York. 
6 
 AGENCY  COMMENTS 
The HCFA  agrees with  our recommendations  in the report  and will  take appropriate  action to 
implement  them.  The HCFA  also noted the positive  aspects of our inspection  - that there were 
only six States in which  we detected inappropriate  claims, and that these States have 
comparatively  few undocumented  aliens compared to other States.  The full text of the HCFA 
comments are shown in Appendix  D. 
7 
  APPENDIX  B 
STATES  WHOSE  RESPONDENTS 
SAID  THEY  WERE  NOT  AWARE 
OF HCFA  POLICY  GUIDANCE 
Alaska  No. Mariana  Islands 
California  Nebraska 
Colorado  Nevada 
Connecticut  New  Jersey 
Dist.  of Col.  North  Dakota 
Georgia  Ohio 
Guam  Pennsylvania 
Hawaii  Puerto Rico 
Indiana  South Carolina 
Iowa 
 South Dakota 
Kansas 
 Texas 
Louisiana 
 Vermont 
Massachusetts 
 Virginia 
Mississippi 
 Washington 
Missouri 
 West Virginia 
Montana 

B-l  APPENDIX  C 

HCFA  REGIONAL  OFFICE  GUIDANCE  ISSUANCES 

Boston: 
 State Medicaid  Agency  Regional  Bulletin  No.  95-04, January 13, 1995 
New  York: 
 State Operations  Letter  No.  93-68,  September 27, 1993 
Philadelphia: 
 Medicaid  Letter  No.  94- 112, November  14, 1994 
Atlanta: 
 HCFA  Program  Issuance Transmittal  Notice  MCD-68-94, 
January 19, 1995 
Chicago: 
 Regional  State Letter  No.  38-95,  July 1995 
Dallas: 
 Regional Medical  Services Letter  No.  94-80, November  7, 1994 
Kansas City: 
 No instructions  issued to States 
Denver: 
 No instructions  issued to States 
San Francisco: 
 HCFA  Regional  Memorandum  No.  94-76, November  2, 1994 
Seattle: 
 Title XIX  State Agency  Letter  No.  94-48,  October  27, 1994 
C-l  APPENDIX  D 
AGENCY  COMMENTS 
D-l  DEP.iRTMExT  OF HEALTH  & HUMAN  SERVICES 
Health  Care  Financing  Administration 
The Administrator 
Washington.  D.C.  20201 
DATE:  APR 6 I98 
TO: 	 JuneGibbsBrown 
InspectorGeneral 
FROM: 	 Nancy-Ann Mm DeParle 
Administrator 
SUBJECT: 	 Office of Inspector General (OIG)  Draft Report: Routine Prenataland 
PostpartumCare for Undocumented  Aliens  (OEI-07-96-00310) 
We reviewed the above-referencedreport that  examines if statesare claimingFederal 
reimbursementfor routine prenatal and postpartum  care for undocumentedalien women. 
The OIG inspectionfound that -Minnesota claimed  Federal funds from July 1994to July 
1997. Oklahomaand Vermont claimed Federal  funds in limited instances,andNebraska, 
New York, andWest Vi.r~@.nc.oiantinue to claim  Federal fimds. 
We would like to point out the positive aspect of this inspection - that therewere only six 

states in which OIG detectedinappropriate claims  - and thesestateshaveinsi-&cant 

numbers of undocumentedaliens. OIG did not  report problems in other states,including 

those with the vastmajority of undocumented aliens in which claiming problemscould 

have major financial ramifications. We view  this  as evidenceof the Health Care 

Financing Administrations (HCFAs) and the states successin implementingthe law 

limiting  Medicaid servicesto undocumented aliens to emergencyservices. 

We concur with the report recommendations.  Our detailed commentsfollow. 

OIG Recommendation 

HCFA  shouldidentify andrecover Federal funds  that Minnesota, Nebraska,Oklahoma, 

Vermont, andWest Vi@.ia  inappropriately  claim  for routine prenatal andpostpartum 

care for undocumentedalien women. 

HCFA  Resuonse 

HCFA  concurs. We will askthe regional offi ces to follow  up with the above-citedstates 

to recover the potential overpaymentsof Federal  funds asso$itF,t with the paymentof 

routine prenataland postpartumcare for undocumented  alien women!?: 
 OIG  Recommendation 

HCFA  should ensurestatesand territories are aware of and are implementingpolicy 

provisions applicableto claiming Federal funds for routine prenatal and/orpostpartum 

services. It should also ensurethat states determine Medicaid applicants citizenship 

status to avoid paymentfor other than emergency medical servicesfor undocumented 

aliens. 

HCFA  Resnonse 

HCFA  concurs. We will ask the regional offices  to remind statesand territories of the 

policy  provisions applicableto claiming Federal funds for routine prenataland/or 

postpartum careservicesto undocumented aliens. 

OIG Recommendation 

HCFA  should continueto monitor and support the Justice Departments efforts to resolve 

the legal issuesinvolving New York. 

HCFA  Resnonse 

HCFA  concurs. We will  continue to actively  support the Justice Departmentin resolving 

the issuesraisedby this lawsuit. 

b 
Nancy-Ann  Min  DeParle 
a