Servces 
Department  of Health  and Human 
OFFICE OF

INSPECTOR GENERAL

STATE CHILD SUPPORT ENFORCEMENT

CRITERIA FOR TARGETING

MEDICAL SUPPORT

VIQ. 
Richard P. Kusserow 
INSPECTOR GENERA 
"0 
d3a  OEI-07-9000120  EXECUTIVE  SUMMAR Y

PURPOSE 
The objectives of this study were to determe what criteria have been developed by 
State Child Support Enforcement 
agencies to target cases with a high potential for 
medical support and to identif the most effective criteria and practices. 
BACKGROUND 
Federal regulations amending the Chid Support Enforcement program went into 
effect on March 10, 1989. These regulations expanded Child Support Enforcement 
require all State Child Support Enforcement agencies to develop wrtten 
mandates to 

criteria to identify existing cases with a high potential for obtainig medical support. 
Two previous inspections found that the Medicaid program would save more than 
$32 milion annually if employer provided health insurance had been used to pay for 
the medical care of dependent chidren. 
METODOLOGY 
This inspection is based on the analysis of information and targeting criteria collected 
from the 50 States, the District of Columbia, Guam, Puerto Rico and the Virgin 
Islands. 
We asked each State Child Support Enforcement agency to provide us with a copy 
of any targeting criteria they had  , and for the name 
developed as of June 1, 1990
and telephone number of a person within their agency whom we could contact to 
gather inormation. Following receipt and initial analysis of the targeting criteria 
information, we conducted telephone intervews with the contact persons identifed by 
each State Child Support Enforcement agency. 
In addition, we used regression analysis to analyze inormation collected durig the 
most recent of our first two studies. We conducted this analysis to determe which 
criteria would be most important in identifg cases with potential Medicaid savigs. 
FIINGS 
creri 
percent of the States had  in place as of  1990.
Only  46  Jun 
prode 
'Absent paren employe(' is the creri mot lily to  availble health 
inance.  mo  ord  th  pure
peen of th State can  extig cour  for  sole 
On  48 
inlug meal support 
deelopm and appliatin of targetig crer var frm State-to-State
Th 
RECOMMATIONS 
Admistin  Famil  cuent regtions 
for Chilen and  (ACF) shoul enforce 
Th 
mecal  adnal empha 
regarding the targetig of  support and place  on it 
importance. 
Among the recommended actions are that the ACF 
enforce current regulations requiring States to develop criteria to target cases 
with a high potential for medical support 
include the review of targeting criteria in the medical support portion of their 
Program Results Audit Guide 
provide technical support to States which have not yet developed targeting 
criteria, and 
provide State Child Support Enforcement agencies with a list of the criteria 
we found most significant in the detection of absent parent health insurance 
and potential medical savings. 
ACF shoul reqire States, as a condn of partipatin, to have leglatin which 
wTh  oul allw the to moif cour ord  pue of inluing meal 
for the sole 
suport 
ACF shoul inlu consation of meal support whe restrtug inentie
Th 
payts. 
AGENCY COMMNT 
Both the ACF and the RCF A generally concur with the recommendations presented 
in this report. Their verbatim comments can be found in Appendices E and F.  . . .. 
. ..  ..  ..  ...   ....    ....    .....     ......      ......      .......       .......       ....... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ...... .      . ..... .     . .... .    . .... .    . .... .    . ... .   . .. .  . .. .  . . .  ..  ..  . . 
TABLE OF CONTENTS

EXECUTIVE SUMY

INODUCTION. . 

. . . . . . . . . 1

Purpose

. . . . . . . . . . . . . . . 1

Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
. . . . . . . . . . . . . . 1

Methodology  . . . . . . . . . . . . 2

FININGS  . . . . . . . . . . . . . . . . 4

Only 46 percent of the States had criteria in place

, 1990 
as of June 1 ...................................... 4

Absent parent employed" is the criterion most likely

to produce available health insurance. . . . . 
. . . . . . . . . . . . . . . . . . . . 5

Only 48 percent of the States can modify existing court

orders for the sole purpose of including medical

support  . . . . . . . . . . . 6

The development and application of targeting criteria 
varies from State-to-State ................................. 6

RECOMMENDATIONS  . . . . . . 9

APPENDICES

State Targeting Criteria Development Report Card. . . . . . . . . . . . . . . . . . A-
Summary of Regression Analysis  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. B-
Targeting Criteria Selected by States  . . . . . . . . . . . . . . . . . . . . . . . . . . .. C-
Calculation of Per-Case Medicaid Savings. . . . . . . . . . . . . . . . . . . . . . . . . D
. . . . . . .. E
ACF Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
HCFA Comments  . . . . .. F INTRODUCTION

PUROSE 
The objectives of this study were to determine what criteria have been developed by 
State Child Support Enforcement agencies to target cases with a high potential for 
medical support and to identify the most effective criteria and practices. 
BACKGROUN 
Federal regulations amending the Child Support Enforcement program were 
published September 16, 1988. These regulations amended 45 CFR 306.51(b) by 
adding a new paragraph at 306.51(b)(3) which expanded Child Support Enforcement 
require all State Child Support Enforcement agencies to develop written 
mandates to 

with a high potential for obtaining medical support. 
criteria to identify existing cases 
Federal regulations issued March 10, 1989 informed the public that the provisions of 
were in effect. 
section 306.51(b )(3) 
These regulations require the States to develop criteria based on (1) evidence that 
health insurance may be available to the absent parent at a reasonable cost; and 
, as defined by State law, regulations, procedures or other directives which 
(2) facts
are sufficient to warrant modification of the existing support order to include health 
It further requires State Child 
insurance coverage for a dependent child(ren). 
Support Enforcement agencies to petition the court or administrative authority to 
modify support orders for targeted cases identified to include medical support in the 
form of health insurance coverage, even if no other modification is anticipated. In 
addition, Federal regulations issued May 15, 1991 require each State to establish 
guidelines which "provide for coverage of the child(ren)'s health care needs. 
In two previous inspections conducted by the Offce of Inspector General, we found 
that the Medicaid program would save more than $32 milion annually if employer 
provided health insurance had been used to pay for the medical care of dependent 
children. 
The first inspection report, entitled "Child Support Enforcement/Absent Parent 
Medical Liability," OAI-07-86-00045, was issued in September 1987. That inspection 
reviewed a sample of Child Support Enforcement cases in which a new or amended 
court order was established during a 3-month sample period, and the absent parent 
had made at least one child support payment. In our review, we found that 60 
percent of the absent parents in the sampled cases had dependent health insurance 
available through their employers, and that nationally, the Medicaid program would 
have saved $33 894 507 annually if such employer-provided health insurance had paid 
the dependents' medical expenses.  The second inspection report, entitled "Coordination of Third-Part Liabilty 
Information Between Child Support Enforcement and Medicaid " OAI-07-88-00860 
was issued in December 1989. That inspection reviewed another sample of Child 
Support Enforcement cases which met the criteria set forth in the 
1987 study. In 
this inspection, we determined that health insurance coverage was available to the 
dependent children through the absent parents' employers in 48 percent of the cases 
(compared to 60 percent 2 years before). We projected national Medicaid savings of 
$32 112 270 annually if State Child Support Enforcement agencies adequately detect 
and pursue available dependent health insurance and absent parents had their 
dependents enrolled. We also found that State Child Support Enforcement agencies 
did not routinely collect health insurance information and that the Offce of Child 
Support Enforcement (OCSE) Program Results Audit Guide inadequately addressed 
medical support. 
MEllODOWGY 
This inspection is based on a regression analysis of data collected in the 1989 
inspection, plus the analysis of information and targeting criteria collected from the 
50 States, the District of Columbia, Guam, Puerto Rico and the Virgin Islands. For 
ease in understanding, we will refer to each of these entities as States throughout this 
report. 
We used two separate methods of data collection to obtain information about States 
targeting criteria. We asked each State Child Support Enforcement agency to 
provide us with a copy of any targeting criteria they had developed, as of June 1 
1990, to target child support cases with a high potential for medical support. 
also asked them to provide us with the name and telephone number of a person 
within the Child Support Enforcement agency whom we could contact 
to gather 
information regarding development and implementation of the criteria. 
Following receipt and initial analysis of the targeting criteria information, we 
conducted telephone intervews with the contact persons identified by each State 
Child Support Enforcement agency. During these intervews we solicited information 
regarding who developed the criteria, the basis for criteria selection, when the 
criteria were developed, and what 
guidance and/or time frames the Administration 
for Children and Families (ACF), formerly the Family Support Administration, Office 
of Child Support Enforcement (OCSE) provided regarding the development of 
targeting criteria. We also asked: (1) whether or not child support cases in their 
State are reviewed for the sole purpose of identifyng medical support; (2) if they 
modify court orders for the sole purpose of including medical support; 
(3) for 
information regarding the effectiveness and success rate attached to their criteria; 
and (4) for effective practices regarding the identification and development of 
medical support which could be shared with other State Child Support Enforcement 
agencies.  , "
In addition, we conducted an analysis of information collected during the 1989 
inspection to determne what criteria would be most important in identifyng cases 
with potential Medicaid savigs. The 1989 inspection data consisted of information 
collected durig our review of a random sample of 214 child support cases in eight 
States. 
We used regression analysis to determine the criteria most indicative of cases with 
savigs. Specifcally, logistic regression analysis was used since the values 
for savings 
were transformed from a dollar amount to a yes/no variable. 1 This analysis 
considered all independent variables simultaneously to produce the predictive model. 
Ron N. Forthofer and Robert G. Lehnen  Public Program Analysis - A New 
Categorical Data Approach " Lifetie Learning Publications, Belmont, California 
1981.  FINDINGS

peen of th State ha crer in place as of  199.
On  46 Jun 
As of June 1, 1990, more than 20 months after publication of the final regulations 
and over 14 months after their effective date, only 25 (46 percent) of the 54 States 
( entities) had implemented criteria to target cases with high potential for medical 
support. Twelve States had developed criteria, but not yet implemented them. The 
remaining 17 States had not developed criteria as of June 1, 1990. 
Of the 29 States which had not implemented criteria: 
12 had developed targeting criteria, but not yet implemented them; 
8 were currently developing targeting criteria; 
3 anticipated developing targeting criteria sometime in the future; and 
6 anticipated no development of targeting criteria. 
The following chart depicts the status of targeting criteria development in all 54 
States (entities). 
Status of Targeting Criteria Development 
(June 1, 1990) 
None Anticipated 
11% 
Future Development 
Developed 
Being Developed 
and 
15% 
Implemented 
46% 
Developed, but

Not Implemented

22%  , "
A "Development Report Card" depicting the status of targeting criteria development 
by State is shown in Appendix A 
proe 
Absent paren emploe4' is the crn mo lily to  availble healt 
innce. 
sampled case files (see Appendix B), we 
Of all the information variables in the 1989 
identified knowledge of "absent parent employment" as the criterion most significantly 
Medicaid savings. We determined that cases 
related to the probabilty of obtaining 
in which the absent parent is employed are three times as likely to generate savings 
as cases where the absent parent is unemployed or employment is unknown. As 
shown in Appendix C  absent parent employed" was also the criteria most often 
selected by the States. 
As shown in the following chart, when all criteria/variables available from the case 
files were considered, six were identified by the regression analysis as statistically 
signficant in terms of their 
effect on savings. 
Likly to Idetify Caes 
Crier Most 
wih Medicaid Savigs 
Percent of  Percent of 
Total 
Cases with 
Criteria/Variable  Savings  Savings 
Absent Parent Employed 
Wage Withholding 
AFDC Application Complete 
Absent Parent Age 
18-24 years 
31-40 years 
Original Court Order 
Although these six variables were identified as significant, only one variable, absent 
parent employed, appeared in the model. This is due to the fact that once absent 
parent employed was identifed, the other variables did not add to the prediction  model of a case with savings. The full results of the regression model are presented 
in Appendix B. 
peen of th States can moif exg cour ord for th sole purse of
iOnn clu48 g meal 
support 
Less than half (26) of the 54 States can modify court orders for the sole purpose of 
including medical support. Further, only eighteen (72 percent) of the 25 States with 
targeting criteria in effect and  criteria 
only 8 (67 percent) of the 12 States with 
developed and awaiting implementation, can modify court orders for the sole 
purpose of including medical support. That means that in 11 (30 percent) of the 
37 States with criteria already developed, even if medical support is found, the case 
cannot be modified to include it unless some other modification is also taking place. 
This renders the criteria useless in cases where no other modifications are required. 
deelopment and applicatin of targetig creri vari frm State-to-State. 
Th 
Most States selected absent parent employed and wage assignments, the same top 
two criteria identified in our  , as the criteria most likely to target 
regression analysis
cases with a high potential for medical support. Absent parent employment was 
selected as a criterion to target cases for medical support by 22 (59 percent) of the 
37 States with criteria in effect, making it the most popular criteria. Eighteen 
(49 percent) selected wage assignments as one of their criteria, making it the second 
most popular criterion. In total, States reported using 21 different criteria (see 
Apppeenrdix  C)S. Thte naumtbeer of. dif fer
ent criteria selected for use varied from 1 to 5
State Child Support Enforcement staff developed the criteria in 29 (78 percent) of 
the 37 States. The particular staff named as having been instrumental in the 
development were program administrators, directors, deputy directors, case workers 
case managers, operations staff, policy and procedures staff, planning and program 
development staff. The eight other State Child Support Enforcement agencies also 
enlisted the assistance of other State and county employees in developing their 
criteria. Four of the eight enlisted the assistance of State, district and Child Support 
Enforcement attorneys. Two worked in conjunction with the State Medicaid/medical 
care agency, one received assistance from OCSE, and another worked with State 
employment division staff to develop their criteria. 
Previous experiences and/or Federal regulations were the basis for criteria selection 
in 34 (92 percent) of the 37 States. The States also identified recommendations 
from other State Child Support Enforcement agencies, what their State laws would 
permit, OCSE assistance, and their own research as determining factors in the 
selection of targeting criteria.  Only 10 (40 percent) of the 25 States that have implemented criteria review child 
support cases for the sole purpose of detecting medical support. The other 15 States 
(60 percent) review for medical support only in conjunction with other reviews. In 
, the persons intervewed made the following comments: 
these 15 States
We have not been required to review cases for the sole purpose of medical 
support. 
It would be sily to look at a case just for medical support. 
Child support modification is the big thing. 
A majority (16 of 25) of the States that have implemented targeting criteria use 
automated systems to identify cases which meet their criteria. Eight States 
(32 percent) use a manual review system. The other State uses a combination of 
both manual and automated review. 
Child Support Enforcement caseworkers are responsible for processing targeted cases 
in 17 (68 percent) of the 25 States with targeting criteria in effect. Processing is 
handled by a specialized person or team in four States and the legal division 
three. One State uses a processing method in which their automated system 
automatically generates letters to absent parents and employers in cases which meet 
their criteria. 
Only three States were able to tell us how many cases they have flagged which meet 
their established criteria. One State, which uses a manual system of review to 
identify cases, estimates they have identified less than 20 cases in the 4 months since 
they began using their criteria. The other two States use an automated method of 
case identification. One of those States estimates they have flagged between 5 000 
000 cases in the 9 months since their criteria became effective. Their 
and 6 
automated system conducts a monthly match of cases which meet the established 
criteria, as well as conducting its own simulated calculations to identify cases where 
changes have occurred in the absent parent s financial status. The other State is 
involved in a pilot project in which they review cases on a county-by-county basis. 
They reported the identification of 16 absent parents with available dependent health 
insurance in the 6 months since they began using their criteria. None of these States 
had calculated the Medicaid savings for cases targeted by their criteria. 
Even though they had no statistics regarding the success of targeting criteria, one 
completed in five of their 
State provided us with information regarding a survey they 
offces. Based on this survey, they estimate that in Aid to Familes with Dependent 
Children (AFDC) cases, approxiately 35.8 percent of the absent parents have 
not have their 
medical insurance available through their employers but do  dependents enrolled. By applying that percentage to the total number of cases in 
, they projected an annual Medicaid savings of $2 827 703. 
their State RECOMMENDATIONS

ACF shoul enforce cuen regtins regardg th targetig of meical support 
Th 
adnal empha  importe. 
and place  on it 
To accomplish this, we suggest that ACF 
enforce current regulations requiring States to develop criteria to target cases 
with a high potential for medical support 
include the review of targeting criteria in the medical support portion of their 
Program Results Audit Guide 
provide technical support to States which have not yet developed targeting 
criteria, and 
provide State Child Support Enforcement agencies with a list of the criteria 
we found most significant in the detection of absent parent health insurance 
and potential medical savings. 
ACF shoul reqire States, as a condn of partcipatin, to hae lelatin which 
wTh  oul allw the to moif cour ordrs for th sole pure of inluing meical 
support 
The ACF developed a Notice of Proposed Rulemaking (NPRM) which would add 
the ability to modify for medical support to the conditions for participation in the 
child support enforcement program. This NPRM, published August 15, 1990 
proposes that a States s procedures be required to treat the availability of reasonably 
priced health insurance as adequate grounds to petition for modification of a child 
support order. The ACF should finalize these regulations expeditiously. 
This requirement will address the problem we found in some States, where 
modification of orders is extremely diffcult to initiate because the basis for access to 
the courts for modification is very narrowly defined. We also believe, as stated in 
the NPRM, because of the value of providing medical support for children, the 
States' procedures must define the availabilty of health insurance coverage as 
suffcient to warrant 
seeking modification of the order.  inlu constin  meal 
pTh  aAyCF.  shoul  of  support whe restug inene
States receive incentive payments designed to encourage them to develop programs 
emphasizing collections on behalf of all children and 
improvig program 
effectiveness. These incentive payments range from 6 to 10 percent of all chid 
support collections, based upon each States' individual collection/cost ratio. Directing 
some of these Federal incentive payments toward medical support would reward 
States performing well in the area of medical support.

COMM 
AGENCY 
The ACF generally concurs with the recommendations presented in this report, and 
has taken several actions to address our concerns. They have 
developed a legislative 
proposal to change incentive payments to "encourage States to increase the amount 
of servces being provided to familes and...take into account performance areas 
deservng positive recognition." They indicated that "this proposal, in combination 
with the proposed regulation on treating the availabilty of 
reasonably priced health 
insurance coverage as grounds for petitioning for modification of the support order 
demonstrates (they) are considering medical support in the restructuring of 
incentive 
payments." The ACF's verbatim comments can be found in Appendix E. 
In general, the HCF A also concurs with the recommendations presented in this 
report. They are particularly interested in the recommendation which encourages the 
ACF to consider medical support when restructuring incentive payments. They 
stated that "the ACF's current incentive structure acts as a disincentive to medical 
support enforcement." They "strongly support efforts to change the method of 
calculating incentive payments for ACF to include medical support. 
In response to the RCFA' s specific comments, we have revised the report to clarify 
that regulations require all State Child Support Enforcement agencies to develop 
wrtten criteria to identify "existing" cases with a high potential for medical support. 
The RCF A also indicated that it was unclear from this report whether or not 
the 
$32 milion annual savings reported in two prior reports would be saved if States 
developed and applied wrtten criteria for targeting cases with a high potential for 
medical support. We want to clarify that the 
$32 millon annual savigs results from 
adequate detection and pursuit of available group health insurance. The 
development and application of targeting criteria would assist States in the realiation 
of such savings. The RCF A's verbatim comments can be found in Appendix F.  Appendix A 
Targeting Criteria 
Development Report Card 
c, 
le Deve!o:e: 
Future 
DeveloDed/  te:  Under 
State  effec:i' But  Development Develooment
by )6/01/90 bole!e Develooment Anticipated Anticioated
tHHtHHHtHtHtHHtHHHHHHtHHHtHfHHHfHfHtHHfHfHHHtHHfHfHfHtHHHHfHHHHHHfHHHH 
AlasKa 
Alabaaa 
ArKansas 
Arizona 
Caiifc!'nia 
Colorado 
Connecticut 
Dist. Coiu

DelaMare 
Florida 
Seor;i a

Sual 
HaHai i 
Iowa 
Ir.di '3r.a 
!linois 
Indiana 
Kansas 
Kentuck' 
Leui 5i ana 
"a5sac u!:et 
arvland 
al 
ichigai1 
innesota 
l'issc!Jri 
l1issi:siopi 
on tana 
North ':aro! ina 
North  akota 
NebrasKa 
NeM Halosh i re 
New JerS2Y 
New  e;( i:: 
Nevada 
NeM 'fcr 
Ohi 0 
Okl anoIa 
gcn 
Pennsyl vania 
Puerto Ri co

Rhode Island 
South Carol ina 
South Dakota

Tennesse!: 
iexas 
Utah 
Virginia 
Virgin Islands 
Vermont 
Washington 
Wisconsin 
Nest Virginia 
Wyoming 
Total  25 (46:  12 12:1  8 (IS:)  3 16:)  6 1m:  Appendix B 
Summary of Regression Analysis 
(1989 Inspection Variables) 
MODEL  % OF 
UNADJ.  ADSTED  CASES  % OF 
ODDS  ODDS  FALSE  WITH  SAVINGS  TOTAL 
VARIABLES  RATIO  RATIO  SAVINGS  FOUND  SAVINGS 
ABSENT PARNT AGE 
$ 5, 397
U1N8K-2NO4W  N  1.66  $ 4, 626  65% 
25-30  1.03  $ 8, 171  17. 05% 
*31-40  1. 95 *  21 *  $21, 638  45. 15% 
41 & UP  $ 8, 093  16. 89% 
ABSENT PARNT EMPLOYED

NOT EMPLOYED  $ 2, 681 
*EMPLOYED  26 *  $45  244  94. 41% 
AFDC APPLICATION 
$36  954 
INCOMPLETE 
COMPLETE  1.09  11 *  $10  971  22. 89% 
NOT IN FILE  $36  696 
IN FILE  $11, 229  23. 43% 
TYPE OF CASE

$19, 822 
PATERNITY 
DIVORCE  1. 03  1.41  $28, 023  58 . 47% 
MONTHLY SALAY 
..$1, 000  $35, 797 
$1000  1.41  1.24  $12, 178  25. 41% 
NUBER OF CHILDREN 
$38, 748 
ONE CHILD 
2 , 3 OR 4 CHILDREN  1.05  $ 9, 177  19. 15% 
TYPE OF PAYMNT 
$10  803 
VOLUNTARY 
*WAGE ASSIGNMNT  1.98  1.97  $27, 588  57. 56% 
MONTHLY  SUPPORT AMOUN  ORDERED 
..$100  $35, 243 
$100  1.52  $12, 682  26. 46% 
TYPE OF ORDER

$11, 940

AMNDED OR PATERNITY 
DIVORCE  937  1. 96%

ORIGINAL  1.37  1.94  $35, 048  73. 13% 
* Variables considered significant in the detection of available health 
. 1 or less. 
insurance based on probability of  &. 
DEPARTMENT OF HEALTH  HUMA SERVICES

Appendix E 
Date:  June 24, 1991 
To:	 Richard P. Kusserow 
Inspector General 
From:  Jo Anne. B. Barnhart 
Assistant Secretary 
for children and 
Subj ect :	 Comments on Office  nspector General Draft
Report, "State Child Support Enforcement criteria for 
Targeting Medical support " OEI-07-90-00120 
our review. We

Thank you for forwarding your draft report for 
States to the

agree that importance must be attached by the 
effective and efficient implementation of criteria for targetin 
modification. 
Several actions have 
cases for medical support 
area. 
concerns in this particular 
already been taken to address 
endeavors, we will 
Since your report does not portray these 
specific recommendations. 
discuss them within the context of your 
the report' 
s recommendations 
Our specific comments concerning 
follow: 
IG Recommendation

recrlations reaardina the

The ACF should enforce current 
place additional emphasis

taraetina of medical support and 
on its importance

OCSE Comment 
We are taking the first three specific recommended actions:

We are enforcing current regulations requiring

States to d"evelop criteria to target cases with a

high potential for medical support. The

regulation became effective in the middle of FY

1989. In 
der to assure equitable treatment of 
all States, the requirement for States to develop 
the criteria is being audited for substantial 
compliance effective with audit periods beginning 
1, 1989. 
on or after October  These audits are 
conducted. 
currently being 
The review of targeting criteria is , of course,

now included in the medical support portion of the

Program Resul ts Audit Guide.
 ... 
. . .  . .
.. .
Page 2 - Mr. Richard Kusserow

As we have stated in previous memoranda, we are

invol ved in a concerted effort, wi th the Health 
(HCFA) to improve 
Care Financing Administration 
overall medical support performance. As part of 
this effort, OCSE and HCFA regional staff are
conducting j oint reviews of the full gamut of the
States ' medical support programs and providing 
reports of problems and recommendations to resolve
them. 
To date, twenty-eight states have been 
manner. A review protocol has 
reviewed in this 
been developed for national use in the reviews. 
This protocol prominently features the case 
targeting requirement as one of the purposes of 
the review and ensures that the issue is
adequately addressed. 
We will gladly provide the state agencies with a list of the

criteria which you found most significant in the detection

of absent parent health insurance and potential medical

savings. 
IG Recommendation

States, as a condition of 
The ACF should reauire 
participation, to have leqislation which would allow them to 
modifv court orders for the sole purpose of includinq 
medical support

OCSE Comment 
Final rules published May 15, 1991, state that, "  as a

condition for approval of (a) state plan,

. for 
guidelines. .  setting and modifying child support

provide for the child (ren ' s) health care

awards. . . must. . . 
means. II
needs, through health insurance coverage or other 

In addition, OCSE published a proposed regulation which

... availability of 
states that the "  reasonably priced health 
insurance coverage.. . of' must be treated "  as adequate
(support)
grounds for petitioning for modification of the

order.  under development. 
II The final regulation  is 
IG Recommendation 
The ACF should include consideration of medical support when 
pavrents 
restructurinq incentive 
OCSE Comment 
proposal to change incentive

We have developed a legislative 
payments to "  encourage states to ainncdr.e.a. stea kteh ei natmoo uanctc ooufn
 t
services being provided to families 
 Page 3 - Mr. Richard Kusserow

The 
recognition. n 
performance areas deserving positive  each
... for. 
proposal provides that payment of a bonus
This proposal, in
obligation established or modified... 
combination with the proposed regulation on treatinq the 
availability of reasonably priced health insurance coverage 
modification of the support 
as qrounds for petitioning for 
order, demonstrates that we are considerinq medical support 
payments. 
in the restructurinq of incentive  Health Care 
DEPARTMENT OF HEALTH &. HUMAN SERVICES  Finar.cing Administration 
Memorandum
J1 
4Ia 
199 
I 9 
Date  Appendix F
Gail R. Wilensky, Ph.

Adminstrator M(\ 
From 
OIG Draf Report: "State Child Support Enforcement Criteria for Targeting 
Subject 
Medical Support" (OEI-07-90-00120) 
Inspector General 
Offce of the Secreta 
Thank you for the opportunity to review the subject draf report Although the 
report does not contain any direct recommendations for our Agency, we have 
provided comments. 
In general, we are supportive of all the recommendations identifed 
in the report. 
We are particularly interested in the third recommendation which encourages the 
Adminstration for Children and Families (ACF) to consider medical support when 
restrcturig incentive payments. The ACF's current incentive structure acts as a 
disincentive to medical support  We strongly support efforts to change 
enforcement. 
the method of calculating incentive pavrents for ACF to include medical support. 
Although we are hopeful that the incentive structure could be revised, the 
recommendation may not be strong enough to bring about the desired result. The 
recommendation states that ACF  consider  when 
should  medical support 
restructurig incentive payments. Restructurig incentive payments would require 
the enactment of Federal legislation to provide ACF with the authority to revise its 
incentive structure. Therefore, we suggest that GIG make its recommendation along 
these lines. 
Weare workig with ACF to improve interaction between our respective 
programs. In June 1990, a joint work group was established to identify policy, 
operational, and  Varous activties are under way to resolve some of 
systems issues. 
the concerns identified by the work group. 
Attached are additional comments. Thank you for the opportunity to comment 
on this report. 
Attchment  Comments of the Health Care Financing Administration 
on the Draft DIG Report 
State Child Support Enforcement Criteria 
for Targeting Medical Support" 
Specific Comments 
State Child Support Enforcement agencies are required to develop wrtten 
obtag 
with a high potential for  medica support 
criteria to identify cases 
This report implies that the wrtten criteria applies to new caes as well as to all 
existing cour orders. This is not the intent of the regulations. As set forth in 
45 CF 303.31(b)(1) and (2), unless the custodial parent and the child(ren) have 
satisfactory health insurance other than Medicaid, State Chld Support 
Enforcement agencies are to petition the court for medical support in new court 
, it is not appropriate for the State Chld 
orders or modified orders. Therefore
Support Enforcement agency to apply its own wrtten criteria to new cases or 
cases which require modifcation of existing orders for reasons other than 
medical support. 
States should apply the criteria to cases with existing medical support orders 
where no other modification to medical support orders is anticipated. The 
regulations at 45 CFR 303.31(b)(3) require that wrtten criteria be used to 
identify cases with a high potential for obtaining medical support in situations not 
covered under 45 CFR 303.31(b)(1) and (2). 
o Ths report refers to two previous report issued by OIG which indicate that over 
$32 milion annually could be saved if employer provided health insurance had 
been used to pay for the medical care of dependent children. 
It is unclear from this report if OIG is implyig that $32 millon could be saved 
if States develop and apply wrtten criteria for targeting cases with a high 
potential for medical support. Based on our review of the two previous reports 
we understand that the $32 miion  which could be realized if 
applied to savings 
States enforced medical support in all cases included under 45 CFR 303.31(b)(1), 
(2), and (3). If this is the case, the amount of savings to be realied by applying 
wrtten criteria would be less than $32 milion. 
, therefore, recommend that the report be revised to clarify that regulations 
require wrtten criteria be used to identify  medical 
cases with a high potential for 
where a court order exists and there is no other modifcation anticipated. 
support 
We also recommend that the $32 milion estimate be clarified.