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. L  DEPARTMENT  OF  HEALTH  & HUMAN  SERVICES  Office  of Inspector  General 
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*4,,4,0 Memorandum 
Nov 
Date  41994 
From	 June Gibbs Brown 
Inspector Genera  8 
UbjecO[I
 G Final Rep  t:  Medicaid Overpayments for Post-Partum  Care 
to Undocumented  iens, 
P  OEI-O7-95-OOO1O
To	 Bruce C. Vladeck 
Administrator 
Health Care Financing Administration 
The purpose of this memorandum is to alert you to information

we uncovered during a review of the Systematic Alien

Verification  for Entitlements  (SAVE) program.  We have found

evidence that some State agencies are making improper payments

for pregnancy  services delivered to undocumented aliens.  This

information has been shared with HCFA staff, who have already

taken some action on the information we have provided.

Backcmound

While a number of sections of Title XIX define eligible

populations  for medical assistance generally, and pregnancy

related services specifically, Section 1902(a) qualifies such

language by stating:

ItNotwithstandingparagraph  (10)(B)  Provision 
or  anY  other 
of this subsection, a State Plan shall provide medical

assistance with respect to an alien who is not lawfully

admitted for permanent residence or otherwise permanently

residing in the United States under color of law only in

accordance with section 1903(v).

Section 1903(v) states that unrestricted Medicaid payments can

be made for those aliens lawfully admitted for permanent

residence  or are permanently residing in the United States

under color of law.  For those aliens who are not lawfully

admitted to the United States, known as undocumented  aliens,

Medicaid payments can be made for an emergency condition only.

The statute defines emergency medical condition~as a medical

condition  (including emergency labor and delivery) which

manifests  itself by acute symptomsof  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 to any bodily organ or part.
 Page  Bruce C. Vladeck 
2 -
Under such a definition, Federal financial participation  (FFP)

is not available for routine prenatal or post-partum care for

undocumented  aliens.

Current Studv

We are currently conducting a review of the cost-effectiveness

of the SAVE program, which is administered by the Immigration

and Naturalization  Service.  States are required to use SAVE to

verify the immigration status of alien applicants for Aid to

Families with Dependent Children and Medicaid.  Our inspection

included a review of SAVE in four States: California, Florida,

Illinois, and Texas.

As part of our review, we analyzed a sample of client case

files in each State to determine if SAVE had identified clients

who had applied for benefits but were not eligible because of

their immigration status.  The results of this review will be

detailed  in a full report on the cost-effectiveness  of SAVE

which will be issued later in the year.

Findinas

During the course of our study, we were informed by county case

workers  in California that the Medi-Cal  (Medicaid) program

covers prenatal and post-partum care for undocumented aliens.

TO follow up on this information, we contacted the California

Department  of Health Services, which administers Medi-Cal.  We

requested  a written response to questions we submitted to them

concerning  coverage of pregnancy related services for

undocumented  aliens.

The Department responded that California does not cover

prenatal  care for undocumented aliens under the Federal/State

portion of the Medi-Cal program.  Prenatal care for eligible

undocumented  aliens is provided under a State only financed

program.  However, the Department stated that California does

cover post-partum  care for undocumented aliens under the

Federal/State  financed program.

Upon receipt of this information from California, we contacted

staff in the HCFA Medicaid Bureau to confirm our conclusion

that the State erred in covering routine post-partum care for

undocumented  aliens under the Medi-Cal program.  We sent HCFA

the response from the California Department of Health Services,

as well as a summary of their Medi-Cal Manual which addresses

coverage of pregnancy related services.  We also forwarded a

copy of the Illinois De~artment of Public Aid Medicaid

. 
instructions  to their counties concerning coverage of pregnancy

related  services, which seemed to represent a similar

interpretation  of the law.
 Page 3 - Bruce C. Vladeck

The HCFA staff responded that it appeared that both California

and Illinois were making incorrect payments based on their

State Medicaid policies.  In subsequent conversations between

HCFA central office staff, regional staff, and State of

California staff, State officials admitted that erroneous

Federal Medicaid costs have been claimed based upon their

incorrect interpretation and issuance of State policy

describing coverage of post-partum care for undocumented

aliens.  The HCFA also contacted its regional staff for the

State of Illinois, where we found evidence of a similar

problem.

We have contacted Florida and Texas, the other two States in

our sample.  It appears they are following the intent of the

law and are not paying for routine pregnancy services for

undocumented  aliens.

Recommendation

The HCFA staff has verbally  informed us they intend to issue a

notice to all of their regional offices to assure that Federal

Medicaid funding is claimed only for emergency labor and

delivery services provided to pregnant undocumented aliens.  We

support this clarification  in procedure and would appreciate

receiving a copy of the notice.

We further suggest, in addition to clarifying policy, that HCFA

systematically contact all States to determine where

overpayments may have been made for pregnancy related care for

undocumented  aliens because of confusion in State policy.

Based on the information collected through this review, HCFA

should initiate recoveries.  We also request that HCFA notify

us of the total overpayments  identified, and the total

recovered.

Should you have any questions or comments concerning this

memorandum or the results of our review, please do not hesitate

to contact me or George Grob, Deputy Inspector General for

Evaluation and Inspections, or have your staff contact Penny

Thompson at (410) 966-3138.