Department of Health and Human Services 
OFFICE  OF 
INSPECTOR  GENERAL 
GRANTEES  AND  PROVIDERS 

DELINQUENT  IN CHILD  SUPPORT 

JUNE GIBBS BROWN 
7 
Inspector  General
/ 
? 	
AUGUST  1997 
OEI-O7-9500390  EXECUTIVE  SUMMARY 
PURPOSE 
To  determine  if physicians  receiving  Medicare  payments  and  other  individuals  directly 
receiving  grants  or payments  from  the  Department  are  current  in their  child  support 
obligations  and  to  assess methods  that  might  be  used  to recover  any  amounts  due 
from  them. 
BACKGROUND 
The  President  signed  an  executive  order  on  September  28, 1996 requiring  government 
agencies  to  offset  Federal  payments  to those  who  owe past  due  child  support 
payments  and  to  deny  them  any Federal  loans  for which  they  would  otherwise  be 
eligible. 
Even  before  the  Executive  Order  was issued,  the  Small  Business  Administration 
required  certification  by all principal  borrowers  that  they  are  not  in arrears  in child 
support  payments  by more  than  60 days.  If any such  arrears  are  not  paid  within  six 
months,  they  will not  be  eligible  for  the  loan. 
In order  to  ascertain  the  extent  of unpaid  child  support  among  Departmental  payees 
or grantees  and  to learn  more  about  the  practical  aspects  of withholding  government 
payments  from  them,  we matched  records  of physicians  who  receive  Medicare 
payments  and  other  health  care  providers  and  individual  Departmental  grantees  with 
the  Office  of Child  Support  Enforcements  Tax Intercept  File.  This  file  is used  to 
intercept  Federal  income  tax refunds  due  to  delinquent  non-custodial  parents  and 
apply  them  towards  their  child  support  obligations.  We selected  three  programs  for 
the  match--Medicare,  the  National  Health  Service  Corps  (NHSC),  and  the  National 
Institutes  of Health  (NIH). 
FINDINGS 
Three Out of Every One Thousand Providers or Grantees In Our Study Universe 
Were in Arrears 
We  found  that  1,184 Medicare  physicians,  NHSC  medical  care  providers,  and  NIH 
principal  research  investigators  were  in arrears  out  of a total  universe  of 422,643 
individuals  who  comprise  a total  of 435,886 records.  Of these,  1,105 were  Medicare 
physicians.  These  are  records  of individuals  who  owed  past  due  child  support  on 
behalf  of at least  1,286 children. 
The Amount of Arrears Owed by These Delinquent Absent Parents Was $21.5 million. 
i  At Least Two Thirds of Absent Parents in Our Sample Were Not Current in Meeting 
Their Child Support Obligations. 
Of 210 non-custodial  parents  in a sample  which  we drew  for  further  analysis,  only  53 
were  current  in making  payments  both  to meet  their  monthly  support  obligations  and 
to reduce  their  arrears.  A total  of  140 were  delinquent  in meeting  their  monthly 
obligations,  in reducing  arrears,  or both.  (The  remaining  17 records  were  incomplete.) 
Computerized Matching of Program and Child Support Enforcement Files Could Help 
In Recovering Delinquent Child Support Payments, But the Amounts Are Relatively 
Small and There Are Limits to This Approach. 
Medicare  payments  to physicians  who  owe child  support  may  be  too  low to  recover 
arrears;  or these  physicians  may  simply  not  be filing  claims  for  Medicare.  For 
example,  thirteen  physicians  for whom  we made  calculations  owed  $1,040,149  in 
arrears,  but  Medicare  payments  to them  in  1995 amounted  to  only  $386,359,  and  the 
total  offset  potential  would  have  been  only  $188,772.  Other  limits  stem  from 
administrative  requirements  imposed  by the  Computer  Matching  Privacy  and 
Protection  Act  of  1988 and  problems  with  missing  or inaccurate  Social  Security 
numbers. 
RECOMMENDATIONS 
The  Administration  for  Children  and  Families  (ACF)  should  work  with  the  Health 

Care  Financing  Administration,  the  Health  Resources  and  Services  Administration, 

NM  and  other  Departmental  agencies  to ensure  that  program  participants  meet  their 

child  support  obligations.  Following  are  several  approaches  that  can  be  used. 

Implementingthe Executive Order 
Hopefully,  the  procedures  established  by the  Presidents  Executive  Order  will succeed 
in recovering  a significant  amount  of the  overdue  support  payments.  Needless  to  say, 
ACF  should  work  with  the  Department  of Treasury  to iron  out  the  details  for  the 
offset  as soon  as possible.  However,  given  the  limits  which  we found  in the  matching 
process,  we also  want  to  recommend  other  approaches  that  could  be  used  in 
connection  with,  or if necessary,  instead  of the  computerized  matching  and  offset. 
Self Cetication  of Program Applicants 
One  approach  would  be  for  Departmental  agencies  to require  physicians  and  other 
health  care  providers  or individual  grantees  to certify  under  penalty  of perjury,  and  as 
a condition  of program  participation,  that  they  are  current  in their  child  support 
obligations.  New legislation  may be  needed  for  this  approach.  If so, we recommend 
that  ACF  develop  it. 
ii  Status Check of Program Applicants 
In addition,  ACF  could  experiment  with  a new  system  whereby  the  status  of grantee 
applicants  and  program  participants  (such  as health  care  providers  applying  for 
participation  in the  Medicare  program)  vis-a-vis  child  support  obligations  can  be 
rapidly  checked  in the  new  child  support  enforcement  data  bases  being  created  under 
the  recently  enacted  Personal  Responsibility  and  Work  Opportunity  Reconciliation  Act 
of  1996.  Under  this  approach,  no  Departmental  grant  would  be  awarded  or program 
participation  certified  for  anyone  not  current  in their  obligations. 
AGENCY  COMMENTS AND OIG RESPONSE 
Office of Child Support Enforcement 
The  OCSE  generally  agrees  with  our  recommendations  and  continues  to work  with 

Treasury  to resolve  program  issues  that  may  prevent  some  States  from  implementing 

the  Presidents  Executive  Order.  It will review  the  OIGs  recommendation  to  establish 

self  certification  of grantees  and  providers  as a condition  of program  participation  and 

work  with  other  departments  to  determine  if legislative  changes  are  necessary  to 

implement  this  process.  Also,  OCSE  will look  into  using  the  child  support 

enforcement  data  bases  but  wants  to wait  until  it has  obtained  a reasonable  amount  of 

operational  experience  with  Treasurys  debt  collection  system. 

Health Care Financing Administration 
HCFA  raises  a number  of concerns  about  implementing  the  options  recommended  in 
our  report.  We  recognize  the  merit  of many  of the  points  raised.  However,  our 
primary  concern  is to insure  that  Departmental  program  participants  meet  their  child 
support  obligations.  We  believe  that  implementation  of this  recommendation  can  be 
achieved  through  a number  of methods,  and  we have  recommended  several  different 
approaches  in this  regard.  In reference  to the  specific  concerns  HCFA  raised,  we 
offer  the  following  observations. 
With  regard  to the  offset  option,  HCFA  believes  that  computerized  matching 
0 
would  not  solve  the  problem  permanently  - that  the  provider  could  incorporate 
as a business  to avoid  withholding  of payment.  We  point  out  that  if a 
delinquent  provider  were  to  incorporate  to  elude  offset  and  become  an 
employee,  then  that  individual  would  become  subject  to wage  withholding,  an 
important  tool  in child  support  compliance. 
Furthermore  OCSE  is proceeding  to implement  an  administrative  offset  of 
Federal  payments  for  past-due  child  support  debts  as part  of their 
implementation  of the  Executive  Order.  This  offset  process  may  result  in 
collection  of child  support  obligations  from  HCFA  physicians.  We  defer  to 
OCSE,  which  is responsible  for  enforcing  the  provisions  of the  Executive  Order, 
as to how  different  HHS  agencies  must  comply. 
..* 
III   	 HCFA  indicates  a concern  that  the  cost  does  not justify  a certification  process. 
However,  we consider  the  physician  self certification  process  valuable  since  it 
would  function  as an incentive  to be in compliance  with  child  support  . 
obligations.  To  insure  validity  of the  self certification,  an  efficient  match  would 
be  possible  through  the  data  bases  being  developed  by OCSE  of individuals  in 
arrears  of ordered  child  support.  We  also  believe  that  adding  a short 
certification  statement  to  the  present  provider  agreement  enrollment  form 
would  not  be  onerous  to  the  physician  or to HCFA. 
 	 HCFA  is also  concerned  that  revoking  a physicians  participation  due  to 
non-payment  of child  support  could  disrupt  patient  services.  We  agree  that  this 
is an  important  issue.  It represents  a clash  of values  not  easily  resolved.  If it is 
decided  that  an  exception  to the  revocation  should  be  made  when  patient  care 
is jeopardized,  we recommend  that  the  exceptions  be  a temporary  one, 
re-evaluated  from  time  to  time.  The  exception  should  be implemented  using 
procedures  similar  to any  such  exceptions  to revocation  of participation  made 
on  other  grounds. 
We  recognize  that  the  percentage  of program  providers  that  we found  in arrears  is 
small.  We  reiterate,  however,  that  this  small  percentage  equates  to  almost  1,300 
children  and  $21.5 million  in past-due  child  support  from  over  1,180 absent  parents,  of 
which  over  1,105 are  physicians. 
Health Resources and Semices Admiqistration 
The HRSA supports  our  recommendation  but  believes  it does  not  have  the  legal 
authority  to  use  child  support  compliance  as a selection  criteria.  It also  noted  that 
neither  NHSC  scholarships  nor  loan  repayment  awards  are  Federal  financial  assistance 
against  which  offsets  can  be made.  While  we agree,  we encourage  HRSA  to initiate  a 
legislative  proposal  which  will provide  for  denial  of awards  to  applicants  who  are 
delinquent  in their  child  support  payments. 
In addition,  HRSA  indicated  that  if child  support  delinquency  becomes  a factor  for 
future  NHSC  funding,  a centralized  data  base  should  be  used  to facilitate  the 
screening  process.  We  agree.  As noted,  under  the  Personal  Responsibility  and  Work 
Opportunity  Act  of  1996, OCSE  is establishing  data  bases  for  child  support 
enforcement  which  could  readily  be  used  for  this  purpose. 
National Institutes of Health 
The  NIH  indicates  that  the  low delinquency  rate  of 0.28 percent  would  not  justify  the 
cost  of imposing  a self certification  process  for  providers  and  contractors.  We  believe, 
however,  the  certification  process  would  impose  little  burden  on  the  agencies, 
providers  and  contractors,  and  the  certification  statement  and  related  penalty  should 
function  as an  incentive  to  assure  compliance. 
NIH  also  notes  that  principal  investigators  do not  receive  direct  research  grant 
payments  from  NIH  as the  grant  award  is made  to  an  institution.  While  direct 
iv  payment  might  not  be made,  the  principal  investigator  plays  a key  role  in the  grant 
process  and  is paid  in their  role  to fulfill  the  terms  of the  contract.  In  this  regard,  we 
believe  the  grant  application  should  include  a provision  for  a self certification  from  the 
principal  investigator.  Although  the  delinquency  is low, it still seems  unacceptable  to 
be making  grant  awards  where  the  primary  investigator  is in arrears  in his or  her  child 
support. 
We  have  made  technical  changes  to reflect  NIHs  comments. 
V  TABLE  OF  CONTENTS 
PAGE 
ExEcuTIvESuMMARY 

INTRODUmON  .................................................  1 

FINDINGS  ......................................................  5 

Delinquent  grantees  .............................................  5 

Amount  owed  .................................................  5 

Status  of payments  ..............................................  5 

Limitations  of computerized  matches  ................................  6 

RECOMMENDATIONS  ............................................  8 

AGENCY  COMMENTS ANDOIGRESPONSE  ..........................  9 

APPENDIX 

Agencies  Comments  ...........................................  11 
 INTRODUCTION 
PURPOSE 
To  determine  if physicians  receiving  Medicare  payments  and  other  individuals  directly 
receiving  grants  or payments  from  the  Department  are  current  in their  child  support 
obligations  and  to  assess  methods  that  might  be  used  to  recover  any  amounts  due 
from  them. 
BACKGROUND 
The  Department  of Health  and  Human  Services  (HHS)  pays  physicians  for  claims 
submitted  for  setices  rendered  to Medicare  patients.  The  Department  also  makes 
payments  to individual  grantees  for research  and  other  activities  as well  as for  loans 
and  scholarships  for  certain  individuals  attending  medical  schools.  As with  all 
groups,  it is possible  that  a percentage  of these  grantees  and  providers  will be 
non-custodial  parents  with  an  established  child  support  order. 
Courts  establish  orders  which  require  non-custodial  parents  to provide  support  to  their 
children.  Despite  such  court  orders,  arrearage  for  support  payments  are  significant. 
For  example,  as of December  1995, they  amounted  to  almost  $30.8 billion  just  for 
those  cases  which  fall  under  the  auspices  of the  Federal  Office  of Child  Support 
Enforcement.  To  address  the  continuing  problem  of child  support  payments  not  being 
made,  various  computer  matching  programs  and  other  efforts  have  been  initiated  by 
the  Federal  government. 
Executive Order to Match Federal Personnel Records 
In February  1995, the  President  issued  Executive  Order  12953, which  establishes  the 

Federal  government  as a model  employer  in promoting  and  facilitating  the 

establishment  and  enforcement  of child  support.  The  Order  requires  that  current  and 

prospective  Federal  employees  be  informed  that  cross  matches  are  routinely  made 

between  Federal  personnel  records  and  State  records  to  identify  individuals  who  are  in 

arrears  in their  child  support  payments  and  to pursue  withholding  of wages.  In 

addition,  employees  are  to be  informed  on  how  to initiate  voluntary  wage withholding 

requests. 

Debt Collection Improvement Act 
The  Debt  Collection  Improvement  Act  of  1996 (Public  Law  104-134) was enacted  on 
April  26, 1996.  This  legislation  is designed  to maximize  the  collections  of delinquent 
debts  owed  to  the  Government  by ensuring  quick  action  to  enforce  recovery  of debts 
and  the  use  of all appropriate  collection  tools.  It permits  the  matching  of debtor 
records  with  HHS  records  to  obtain  names  and  addresses  of employers,  taxpayer 
identification  numbers,  and  dates  of birth.  The  Act  also  provides  for  the  garnishment 
of a debtors  disposable  pay  provided  that  the  amount  does  not  exceed  15 percent  of 
disposable  pay,  but  could  be more  with  the  written  consent  of the  individual. 
1  Executive Order Wetting  Federal Payments to Delinquent Parents 
In line  with  the  Debt  Collection  Improvement  Act,  the  President  issued  Executive 
Order  13019 on  September  28, 1996 requiring  government  agencies  to  offset  Federal 
payments  to  parents  who  are  delinquent  in their  child  support  obligations  and  to deny 
them  any  Federal  loans  for which  they  would  otherwise  be  entitled.  This  Order 
recognizes  the  difficulties  that  States  have  had  in enforcing  child  support  obligations 
once  a parent  has  moved  to another  State.  It also  facilitates  the  collection  of 
delinquent  child  support  obligations  from  persons  who  may be  entitled  or  eligible  to 
receive  certain  Federal  payments  or Federal  assistance. 
Small  Business Administration 
Even  before  the  Executive  Order  was issued,  the  Small  Business  Administration  had 
begun  implementing  legislation  which  is designed  to require  payment  of child  support 
obligations  by those  individuals  who  apply  for  loans  from  the  agency.  Section  612 of 
Public  Law  103-403, implemented  August  31, 1995, requires  certification  by all 
principal  borrowers,  who  own 50 percent  or more  of the  voting  interests  of the 
business,  that  they  are  not  in arrears  in child  support  payments  by more  than  60 days. 
If such  arrearage  applies,  then  one  or more  of the  principals  have  six months  to 
become  current  in their  arrears  if they  want  the  loan.  If they  become  current  in their 
child  support  payments,  and  meet  the  qualifications  for  the  loan,  they  will be  eligible 
for  the  loan.  If at  the  end  of six months  they  are  not  current,  they  will be ineligible 
for  the  loan. 
Match of Internal Revenue Service Income Tax Refunds 
The  Office  of Child  Support  Enforcement  (OCSE)  acts  as an  intermediary  between 
the  States  and  the  Internal  Revenue  Service  in the  operation  of the  Federal  Income 
Tax  Refund  Offset  program  for  the  collection  of past-due  child  support.  The  OCSE 
Tax  Intercept  File  contains  a listing  of all individuals,  by Social  Security  number,  name, 
case  type,  State  and  other  identifiers,  who  are  in arrears  on  their  child  support 
obligations.  The  file  is used  to intercept  and  offset  Federal  income  tax refunds  to 
apply  against  delinquent  child  support. 
METHODOLOGY 
In order  to  ascertain  the  extent  of unpaid  child  support  among  Departmental  payees 
or grantees  and  to learn  more  about  the  practical  aspects  of withholding  government 
payments,  we matched  the  OCSE  Intercept  File  and  files  for  individual  Departmental 
grantees  and  providers  of medical  services. 
We  matched  Departmental  records  of physicians  receiving  Medicare  payments  and 
other  health  care  providers  and  grantees  of certain  Departmental  programs  with  the 
OCSE  1995 Tax  Intercept  File.  We  selected  three  programs  for  the  match--Medicare, 
the  National  Health  Service  Corps  (NHSC),  and  the  National  Institutes  of Health 
(NIH).  We  selected  these  programs  because  their  systems  of records  identified 
2 
 individuals  as grantees  or providers  of services  and  had  Social  Security  numbers  upon 
which  the  match  could  be based. 
Medicare 
We  obtained  data  from  the  Health  Care  Financing  Administrations  (HCFA)  Unique 
Physician  Identification  Number  File.  As of October  1994, physicians  who  apply  for  a 
new  identification  number  have  to include  their  Social  Security  numbers  on  the 
application.  We  used  the  October  1995 update  of the  file.  It included  708,830 
members  of which  391,148 (55 percent)  had  a Social  Security  number  as part  of the 
record. 
National Health Service Corps 
The  NHSC  file  for  individuals  who  have  current  loans  and  scholarships  included 
information  on  4,902 records,  all of which  had  Social  Security  numbers. 
National Institutes of Health 
The  NIH  grantee  file contained  42,913 records  with  39,836 having  Social  Security 
numbers.  Overall,  these  39,836 records  were  for  26,593 different  Social  Security 
numbers. 
Selecting Samples from the Agencies Matched Files 
We  matched  the  records  with  Social  Security  numbers  that  were  included  in the 
Departmental  files named  above  with  the  OCSE  1995 Tax Intercept  File.  This 
became  our  study  universe.  From  it, we extracted  a sample  for  further  analysis. 
We  did  this  by first  dividing  the  study  universe  into  three  strata  based  on  the  dollar 
amounts  in arrearage  for  each  case.  The  highest  was for  cases  over  $45,000  in 
arrears;  the  second  highest  was for  those  with  arrears  from  $11,590  to $45,000;  and 
the  lowest  was for  those  with  arrears  less than  $11,590. 
We  included  all  108 cases  that  met  the  dollar  threshold  for  the  highest  stratum.  We 
randomly  selected  51 cases  from  each  of the  other  two strata,  for  a total  of 210 cases. 
All three  HHS  agencies  had  cases  included  in the  sample.  The  210 sample  cases 
covered  individuals  located  in 38 States  and  Puerto  Rico,  with  4 States  having  over 
half  of the  sample  cases:  55 in California,  21 in Ohio,  18 in Michigan,  and  15 in 
Pennsylvania. 
3 
 SELE~ON  OF SAMPLE  CASES 

Strata 
Under  $11,590 to  Over 
$11.590  $45,000  $45,000  Total 
Sample  Cases  bv Program 

Medicare 
 49  48  104  201 
NHSC 
 0  3  3  6 
NIH 
 2  Q  1  3 
Total 
 51  51  108  210 
Ouestionnaires Sent to the States 
We  requested  information  from  the  States  and  Puerto  Rico  child  support  enforcement 
agencies  to validate  the  data  we had  obtained  for  the  sample  cases.  We asked  if the 
names  of the  non-custodial  parents  were  different  from  those  we furnished  them  from 
the  HHS  agencies.  We  requested  the  date  of birth,  age  (if birth  date  was not 
available),  information  on  employers  name  and  address,  self-employment  name  and 
address,  and  the  date  the  address  was last verified.  We  also  asked  if the  non-custodial 
parents  were  current  in making  payment  on  their  monthly  obligations  and  arrearage. 
We  considered  current  those  situations  where  non-custodial  parents  make  payments 
to fulfill  their  monthly  responsibility  to  meet  their  child  support  obligations  for  current 
support.  We  also  recorded  when  partial  payments  were  made  on  the  arrearage. 
Review of Related Laws 
We  reviewed  provisions  of the  Computer  Matching  Privacy  and  Protection  Act  of  1988 
(Public  Law  100-503) to  determine  what  effect  its provisions  would  have  on  a 
matching  program  such  as the  one  we were  testing. 
We  conducted  our  review  in accordance  with  the  Quality  Standards  for Inspections 
issued  by the  Presidents  Council  on  Integrity  and  Efficiency. 
4 
 FINDINGS 
Three Out of Every One Thousand Providers or Grantees In Our Study Universe 
Were in Arrears 
We  found  that  1,184 Medicare  physicians  or  other  Departmental  grantees  or  service 
providers  were  in arrears  out  of a total  universe  of 422,643 individuals  who  comprise  a 
total  of 435,886 records.  The  distribution  of these  individuals  among  the  three 
programs  we studied  is shown  in the  table  below. 
Individuals  Percent 
APency  Universe  in Arrears  in Arrears 
HCFA  391,148  1,105  0.3 
NHSC  4,902  I  51  1.0 
NIH  26593  28  0.1 
Totals  422,643  1,184  0.28 
These  individuals  owed  past  due  child  support  on behalf  of at least  1,286 children. 
The Amount of Arrears Owed by These Delinquent Absent Parents Was $21.5 million. 
When  compared  to the  general  child  support  population  of non-custodial  parents,  our 
sample  was economically  better  off and  therefore  better  positioned  to make  their 
payments.  At  the  same  time,  they  owed  more. 
We  found  that  16.9 percent  of the  cases  in our  sample  were  public  assistance  cases. 
This  compared  with  49 percent  for  the  total  population  of child  support  cases. 
The  1995 Tax  Intercept  File  had  4,355,239 cases  with  $30,795,640,786  in arrears,  which 
amounted  to  $7,070 per  case.  Individuals  in our  study  universe  had  an  average 
arrearage  of $16,713 per  child. 
At Least Two Thirds of Absent Parents in Our Sample Were Not Current in Meeting 
Their Child Support Obligations 
Of  210 non-custodial  parents  in a sample  which  we drew  for  further  analysis,  only  53 
were  current  in making  payments  both  to meet  their  monthly  support  obligations  and 
to reduce  their  arrears.  A total  of  140 were  delinquent  in meeting  their  monthly 
obligations,  in reducing  arrears,  or both.  (The  remaining  17 records  were  incomplete.) 
5 
 The  following  table  summarizes  the  status  of all the  cases  in our  sample. 
Cases  Status 
3  Case  closed--paid  in full. 
50  Current  in monthly  obligations  and  in reducing  arrears. 
46  Current  in monthly  obligation  but  not  reducing  arrears. 
9  Reducing  arrears,  but  not  current  in monthly  obligations. 
78  Not  making  any payments. 
7  Case  closed--e.g.,  moved,  no  cooperation  from  spouse. 
17  Unable  to  determine--incorrect  Social  Security  number. 
Computerized Matching of Program and Child Support Enforcement Files Could Help 
In Recovering Delinquent Child Support Payments, But the Amounts Are Relatively 
Small and There Are Limits to This Approach. 
Medicare  payments  to physicians  who  owe  child  support  may be  too  low to  recover 
arrears;  or these  physicians  may  avoid  filing  claims  for  Medicare  altogether.  For 
example,  thirteen  physicians  for &horn  we made  calculations  owed  $1,040,149  in 
arrears,  but  Medicare  payments  to them  in  1995 amounted  to  only  $386,359,  and  the 
total  offset  potential  would  have  been  only  $188,772.  The  details  are  found  on  the 
next  page. 
We  also  found  restrictions  imposed  by the  Computer  Matching  and  Privacy  Protection 
Act  of  1988 which  might  make  the  offset  process  administratively  difficult.  This  law 
limits  Federal  agencies  ability  to release  employment  or payment  information  for 
HHS  grantees  or service  providers.  The  Act  regulates  computer  matches  conducted 
by Federal  agencies  and  the  use  of Federal  records  subject  to the  Privacy  Act  of  1974. 
It requires  a written  agreement  between  source  and  recipient  agencies  and  agreement 
conditions  being  met  before  a matching  program  can be  approved.  The  law also 
requires  notification  to  individuals  of the  intent  to use  the  results  of the  matching 
process  for  administrative  purposes  like  offset.  While  these  procedures  are  clearly 
necessary  to  protect  privacy,  the  net  effect  could  well be  that  the  offset  process  which 
might  result  from  computerized  matching  would  be  no  more  effective  or  efficient  than 
the  current  child  support  collection  process.  In any  event,  the  law does  establish 
significant  administrative  burdens  that  could  hamper  the  matching  process. 
Another  limitation  stems  from  problems  with  Social  Security  numbers.  First,  not  all 
records  have  these  numbers.  In fact  we found  them  for  only  58 percent  of the  records 
in the  files we tried  to match  with  the  Tax  Intercept  File.  Medicare  has  Social 
Security  numbers  in only  55 percent  of its records  and  NIH  in 93 percent.  (There 
were  numbers  in  100 percent  of the  NHSC  records,  however.)  Second,  not  all the 
6 
 EXAMPLES  OF POTENTIAL  MEDICARE  OFFSETS  FROM  PHYSICIANS 
WlTH CHILD SUPPORT  ARREARS 
Offset  Potential  of 
Medicare  Reimbursement 
Arrearage  Reimbursement  Against  the 
Number  Amount  in  1995  Arrearage 
1  $5,394  $128  $128 
2  $62,090  (Unemployed 
Physician)  -O
3  $304,916  No  claims 
filed  -O-
4  $124,324  $108,447  $108,447 
5  $22,45 1  $2,543  $2,543 
6  $63,188  $203,441  $63,188 
7  $12,050  (Bench  warrant 
for  arrest)  -O-
8  $76,997  $2,017  $2,017 
9  $119,968  $11,411  $11,411 
10  $72,604  No  claims 
filed  -O-
11  $97,000  $38  $38 
12  $78,167  No claims 
filed  -O-
13  $1,000  $58,334  $1,000 
Totals  $1,040,149  $386,359  $188,772 
Social  Security  numbers  are  accurate.  As noted  previously,  in our  sample  of 210 
cases,  17, or  8 percent,  had  incorrect  numbers. 
Finally,  many  grantees  of the  Departments  programs  are  not  individuals,  but  rather 
universities,  research  laboratories,  and  other  such  entities.  Thus,  no  Social  Security 
number  would  be  recorded  for  these  kinds  of grantees.  RECOMMENDATIONS 
It seems  unacceptable  that  the  Department  of Health  and  Human  Services,  which  is 
responsible  for  overseeing  the  nations  child  support  enforcement  system,  should  be 
making  what  amounts  to  income  payments  to individuals  whom  it knows  are  not 
meeting  their  child  support  obligations.  In some  cases,  the  children  of these 
individuals  are  receiving  public  assistance  benefits  in programs  for which  the 
Department  also  has  oversight  responsibilities. 
The  Administration  for  Children  and  Families  (ACF)  should  work  with  HCFA,  the 
Health  Resources  and  Services  Administration,  NIH  and  other  Departmental  agencies 
to ensure  that  program  participants  meet  their  child  support  obligations.  Following 
are  several  approaches  that  can  be  used. 
Implementingthe Executive Order 
Hopefully,  the  procedures  established  by the  Presidents  Executive  Order  will succeed 
in recovering  a significant  amount  of the  overdue  support  payments.  Needless  to  say, 
ACF should  work  with  the  Department  of Treasury  to iron  out  the  details  for  the 
offset  as soon  as possible.  However,  given  the  limits  which  we found  in the  matching 
process,  we also want  to  recommend  other  approaches  that  could  be  used  in 
connection  with,  or if necessary,  instead  of the  computerized  matching  and  offset. 
Self Certification of Program Applicants 
One  approach  would  be  for  Departmental  agencies  to require  physicians  and  other 
health  care  providers  or individual  grantees  to certify  under  penalty  of perjury,  and  as 
a condition  of program  participation,  that  they  are  current  in their  child  support 
obligations.  New legislation  may  be  needed  for  this  approach.  If so, we recommend 
that  ACF  develop  it. 
Status Check of Program Applicants 
In  addition,  ACF  could  experiment  with  a new system  whereby  the  status  of grantee 
applicants  and  program  participants  (such  as health  care  providers  applying  for 
participation  in the  Medicare  program)  vis-a-vis  child  support  obligations  can  be 
rapidly  checked  in the  new  child  support  enforcement  data  bases  being  created  under 
the  recently  enacted  Personal  Responsibility  and  Work  Opportunity  Reconciliation  Act 
of  1996.  Under  this  approach,  no  Departmental  grant  would  be  awarded  or  program 
participation  certified  for  anyone  not  current  in their  obligations. 
8 
 AGENCY  COMMENTS AND OIG RESPONSE 
Office of Child Support Enforcement 
The  OCSE  generally  agrees  with  our  recommendations  and  continues  to work  with 

Treasury  to resolve  program  issues  that  may  prevent  some  States  from  implementing 

the  Presidents  Executive  Order.  It will review  the  OIGs  recommendation  to  establish 

self  certification  of grantees  and  providers  as a condition  of program  participation  and 

work  with  other  departments  to  determine  if legislative  changes  are  necessary  to 

implement  this  process.  Also,  OCSE  will look  into  using  the  child  support 

enforcement  data  bases  but  wants  to wait  until  it has  obtained  a reasonable  amount  of 

operational  experience  with  Treasurys  debt  collection  system. 

Health Care Financing Administration 
HCFA  raises  a number  of concerns  about  implementing  the  options  recommended  in 
our  report.  We  recognize  the  merit  of many  of the  points  raised.  However,  our 
primary  concern  is to insure  that  Departmental  program  participants  meet  their  child 
support  obligations.  We believe  that  implementation  of this  recommendation  can  be 
achieved  through  a number  of methods,  and  we have  recommended  several  different 
approaches  in this  regard.  In reference  to  the  specific  concerns  HCFA  raised,  we 
offer  the  following  observations. 
 	 With  regard  to the  offset  option,  HCFA  believes  that  computerized  matching 
would  not  solve  the  problem  permanently  - that  the  provider  could  incorporate 
as a business  to  avoid  withholding  of payment.  We  point  out  that  if a 
delinquent  provider  were  to  incorporate  to  elude  offset  and  become  an 
employee,  then  that  individual  would  become  subject  to wage  withholding,  an 
important  tool  in child  support  compliance. 
Furthermore  OCSE  is proceeding  to  implement  an  administrative  offset  of 
Federal  payments  for  past-due  child  support  debts  as part  of their 
implementation  of the  Executive  Order.  This  offset  process  may  result  in 
collection  of child  support  obligations  from  HCFA  physicians.  We  defer  to 
OCSE,  which  is responsible  for  enforcing  the  provisions  of the  Executive  Order, 
as to how  different  HHS  agencies  must  comply. 
 	 HCFA  indicates  a concern  that  the  cost  does  not  justify  a certification  process. 
However,  we consider  the  physician  self certification  process  valuable  since  it 
would  function  as an incentive  to be  in compliance  with  child  support 
obligations.  To  insure  validity  of the  self certification,  an  efficient  match  would 
be  possible  through  the  data  bases  being  developed  by OCSE  of individuals  in 
arrears  of ordered  child  support.  We  also believe  that  adding  a short 
certification  statement  to the  present  provider  agreement  enrollment  form 
would  not  be onerous  to the  physician  or to  HCFA. 
9 
 0 	 HCFA  is also  concerned  that  revoking  a physicians  participation  due  to 
non-payment  of child  support  could  disrupt  patient  services.  We  agree  that  this 
is an  important  issue.  It represents  a clash  of values  not  easily  resolved.  If it is 
decided  that  an  exception  to the  revocation  should  be  made  when  patient  care 
is jeopardized,  we recommend  that  the  exceptions  be  a temporary  one, 
re-evaluated  from  time  to time.  The  exception  should  be  implemented  using 
procedures  similar  to  any  such  exceptions  to revocation  of participation  made 
on  other  grounds. 
We  recognize  that  the  percentage  of program  providers  that  we found  in arrears  is 
small.  We  reiterate,  however,  that  this  small  percentage  equates  to  almost  1,300 
children  and  $21.5 million  in past-due  child  support  from  over  1,180 absent  parents,  of 
which  over  1,105 are  physicians. 
Health Resources and Services Administration 
The  HRSA  supports  our  recommendation  but  believes  it does  not  have  the  legal 
authority  to  use  child  support  compliance  as a selection  criteria.  It also  noted  that 
neither  NHSC  scholarships  nor  loan  repayment  awards  are  Federal  financial  assistance 
against  which  offsets  can  be  made.  While  we agree,  we encourage  HRSA  to  initiate  a 
legislative  proposal  which  will provide  for  denial  of awards  to  applicants  who  are 
delinquent  in their  child  support  payments. 
In addition,  HRSA  indicated  that  if child  support  delinquency  becomes  a factor  for 
future  NHSC  funding,  a centralized  data  base  should  be  used  to facilitate  the 
screening  process.  We  agree.  As noted,  under  the  Personal  Responsibility  and  Work 
Opportunity  Act  of  1996, OCSE  is establishing  data  bases  for  child  support 
enforcement  which  could  readily  be  used  for  this  purpose. 
National Institutes of Health 
The  NIH  indicates  that  the  low delinquency  rate  of 0.28 percent  would  not justify  the 

cost  of imposing  a self certification  process  for  providers  and  contractors.  We  believe, 

however,  the  certification  process  would  impose  little  burden  on  the  agencies, 

providers  and  contractors,  and  the  certification  statement  and  related  penalty  should 

function  as an  incentive  to  assure  compliance. 

NIH  also  notes  that  principal  investigators  do not  receive  direct  research  grant 

payments  from  NIH  as the  grant  award  is made  to an institution.  While  direct 

payment  might  not  be  made,  the  principal  investigator  plays  a key  role  in the  grant 

process  and  is paid  in their  role  to fulfill  the  terms  of the  contract.  In this  regard,  we 

believe,  the  grant  application  should  include  a provision  for  a self certification  from  the 

principal  investigator.  Although  the  delinquency  is low, it still seems  unacceptable  to 

be  making  grant  awards  where  the  primary  investigator  is in arrears  in his or her  child 

support. 

We  have  made  technical  changes  to reflect  NMs  comments. 

10 
 APPENDK 
AGENCIES  COIVfbfEm 
11 
 DEPARTMENTOFHEALTHBrHUMANSERVICES 

ADMINISTRATION  FOR CHILDREN  AND  FAMILIES 

Office  of the Assistant  Secretary,  Suite  600 

370 LEnfant  PromenadcbZLb!$ 

Washington,  D.C.  2044G;  E  -~ 

i,i  c  --V 
c,  z  ;-ii
r-l .c 
7 -.  s  :f,y 

:7-
DATE: 
 :;i.  ..* 

June 16, 1997 
 -.I.

.--

.--

.I

..-

'* w

TO:  June Gibbs Brown 
 -. 

c

Inspector General 
 7  s 

FROM:  Olivia A. Golden 

Principal Deputy Assistant Secretary  - * 

for Children and Families  @@Jw. 

SUBJECT: 	 OIG Draft Report "Grantees and Providers Delinquent in 

Child Support," (OEI-07-95-00390) 

We appreciate:the opportunity to comment on the draft report 

"Grantees and Providers Delinquent in Child Support."  If you 

have questions regarding this response, please contact David Ross 

of my staff at (202) 401-9370. 

Comments: 

Recommendation 1:  Implementing the Executive Order:  ACF should 

work with the Department of Treasury to iron out the details for 

the offset as soon as possible.  However, given the limits which 

we found in the matching process, we also want to recommend other 

approaches that could be used in connection with, or if 

necessary, instead of the computerized matching and offset. 

ACF Response:  We ire making progress with the Department Of 

the Treasury regarding implementation of the Executive 

Order.  At this point, Il.states have certified their debts 

for the administrative offset program and the Office of 

Child Support Enforcement (OCSE) has 'forwardedthe debts of 

5 states (approximately 178,000 cases) to Treasury's 

Financial Management Service (FMS) for offset. other states 

are tentatively scheduled to implement on a flow-in basis 

throughout the year. 

OCSE continues to work with FMS to resolve program iSSUeS 

that may prevent some states from implementing the order. 

Key to implementing the order for some states is.having the 

option of excluding certain payment types from offset, i.e., 

debt is eligible for administrative offset but not federal 

tax refund offset, or vice versa.  OCSE is also working with 

FMS on language in Treasury's child support regulations. 
 Page 2 - June Gibbs Brown 

Recommendatiqn 2:  One approach would be for Departmental 

agencies to require physicians and other health care providers or 

individual grantees to certify under penalty of perjury, and as a 

condition of program participation, that they are current in 

their child support obligations.  New legislation may be needed 

for this approach.  If so, we recommend that ACF develop it. 

ACF Response: IGiven that this cross-program recommendation 

would require change in legislation that goes well beyond 

the authority of ACF, OCSE will look carefully at the 

recommendation and work with other Departmental divisions 

(such as the Public Health Service and the Health Care  . 

Financing Administration) to see whether legislative changes 

are in order. 

Recommendation 3:  ACF could experiment with a new system whereby 

-

the status of grantee applicants and program participants (such 

as health care providers applying for participation in the 

Medicare program) vis-a-vis child support obligations can be 

rapidly checked in the new child support enforcement data bases 

being created under the recently enacted Personal Responsibility 

and Work Opportunity Reconciliation Act  (PRWORA) of 1996.  Under 

this approach, no Departmental grant would be awarded or program 

participation certified for anyone not current in their 

obligations. 

ACF Response:  We believe the potential for increasing the 

collection of child support owed through our efforts with 

the Department of Treasury under the Debt Collection Act 

(DW  f is likely to surpass the ability of a limited-scope 

system as recommended.  We will consider this recommendation 

when the data base is fully operational and when we have a 

reasonable amount of operational experience with Treasury's 

debt collection system. 
 DEPARTMENT  OF HEALTH & HUMAN  SERVICES  I:,.;:: :1y-j!  p lf+Gvaer e Financing  Administration
. 
.I -.-* -- .;a.  I.  .  .,.,IJ:.
Gzi-Js;i  ,.L  The AdminiQfator 
Washington,  D.C.  20201 
JUN I6 1997 
TO:  June Gibbs Brown 
Inspector General 
FROM: 
SUBJECT:  Office of Inspector-General  (OIG)  Draft  Report: Grantees and Providers 
Delinquent in Child Suppo&  (OEI-07-95-003  90) 
We  reviewed  the above-referenced report  regarding  the Presidents  Executive Order 
requiring  government  agencies to offset Federal  payments  to physicians  who owe past 
due  child  support payments and to deny them  any  Federal  loans for which they would 
otherwise  be eligible. 
Our  detailed  comments on the report recommendations~are  attached for your 
consideration.  Thank you for the opportuniv  to review  and comment  on this report. 
Attachment  Comments  of the Health  Care  Financing  Administration4HCFA)  on-
Office  of Inspector  General  (OIG)  Draft  Report: 
Grantees  and Providers  DeIinquent  in Child  SUPPOSE,(031-07-95-00390) 
The Administration  for Children and Families  (ACF)  should work with HCFA, the Health 
Resources  and Services Administration,  National  Institutes  of Health,  and other 
Departmental  agencies to ensure that program  participants  meet their child support 
.-
obligations. 
OIG  Recommendation  1 
Implement  the Presidents September 28,  1996, Executive  Order (E.O.), requiring 
government  agencies to offset Federal payments  to those who owe past due child support 
payments. 
HCFA  Response 
We concur  with the intent of the E.O.  However,  we do not believe  computerized 
matching  and offsets are a feasible  approach  to enforce  child support payments.  We are 
concerned  that implementation  of these activities  would  not solve the problem 
permanently;  e.g., what provision would there be to prevent  a provider  identified as 
delinguent  fi-om becoming incorporated  to avoid the withholding  of payment?  Ifthiswas 
pursued,  an inter-agency  agreement would  be needed  to ensure operational  costs incurred 
were  charged back to ACF. 
OIG  Recommendation  2 
Develop  legislation  to require physicians  and other health  care providers  or individual 
grantees  to certify under penalty  of perjury,  and as a condition  of participation,  that they 
are current  in their child support obligation. 
HCFA  Response 
We do not concur.  The Medicare program  is trying  to stop using the approach of separate 

certifications  for each specific situation.  This type  of effort would involve an 

administrative  burden on all Medicare  physicians  to &y to catch the one fVth of one 

percent  who are in violation.  We believe  this effort  wouldhave  a poor co&benefit  ratio 

and be resented  by physicians.  Further, physicians  in arrears may well sign any 

certification,  and investigation  is likely to be costly. 
 2 

OIG-Recommendation  3 
Use new child support enforcement  data bases  to determine  applicants/participants  status 
vis-a-vis  child support obligations. 
HCFA  Response 
We do not concur.  Medicare physicians  program  participation  generally  continues 
automatically.  Terminating participation  for non-payment  of child support would require 
legislation  and could disrupt patient  service  when  a physicians  participation  is revoked.  DEPARTMENTOFHEALTH  &HUhQINS~VXES  Public Health  Service 
Health  Resources  and 
Services  Administration 
Rc&ville  MD  20857 
APR I  1  1997 
TO:  Inspector General, DHHS 

FROM:  Acting Deputy Administrator 

SUBJECT: 	 OIG Draft Report: "Grantees  and  Providers  Delinquent 

In Child  Support, w OEI-07-95-00390 

This is in response to your January  29 memorandum to the HRSA 

Administrator, requesting comments  to the subject report.  We 

have  reviewed the subject draft report  and have the following 

comments.  >  -. 

We agree with the premise that individuals who are delinquent on 

their child support obligations should  not receive Federal 

funding and we therefore support the objectives of Executive 

Orders 12953 and 13019.  However,  in their present form, these 

Executive Orders are not applicable  to the NHSC scholarshipor 

loan repayment programs.  Executive  Order 12953, issued on 

February 29, &992;,:addresseswage withholding.of.Federal 

employees.  "Executive'order13019,  issued September 29, 1996, 

authorizes the denial of "Federal financial assistance,t'which is 

defined as  "any  Federal loan (other than a disaster loan), loan 

guarantee, or loan insurance."  Neither  NHSC scholarshipsnor 

loan repayment awards fall within  the definition of "Federal 

financial assistance" as contained  in Executive Order 13019. 

Hence, legislation would be needed  before the NHSC scholarship 

and loan  repayment  programs could deny awards  to  applicants.who 

are  delinquent in their child support  payments. 

The OIG recommendations are designed  not only to preventnew 

Federal awards/grants to "deadbeat parents," but also to recover 

a  significant amount of the overdue  support payments.  With. 

respect to the latter goal, we note  that NHSC scholarshipand 

loan repayment funds can only be used  for the purposes set forth 

in the authorizing statutes (i.e., payment of tuition, qualifying 

loans, etc.).  Therefore, scholarship  and loan  repayment  funds 

already awarded to individuals delinquent  on child support may 

not be offset for payment of the delinquent  obligation; 
 Page  2 - Inspector General, DHHS 

Assuming  that the Department  obtains  the necessary statutory 

authorization  to make child support  delinquency  a selection 

factor  for NHSC funding, HRSA agrees  that  screening  applicants 

would  be facilitated by the creation  of a centralized  child 

support  enforcement data base.  We also agree that the 

Administration  for Children  and Families  should develop a new 

system  that would eliminate  the need  for agencies  to query 

individual  States concerning  applicants'  compliance  with child 

support  orders issued by State courts. 

Thomas G. Morford 
 DEPARTMENT  OF HEALTH  &aHUMAN  SERVICES  Public  Health  Service 
National  Institutes  of  Health 
Bethesda,  Maryland  20892 
TO: 	 Mr. George Grob 
Deputy Inspector  General for Evaluation  and Inspections 
FROM:  Deputy Director for Management,  NIH 
SUBJECT: 	 Comments on OIG Drti  Report  Grantees  & Providers Delinquent  in Child 
Support (OEI-07-95-00390. 
Thank  you for the opprtunity to comment  on the subject  report.  Our comments will follow the 
format  of the report. 
Page  3 of the report states that of 42,913 NIH records,  39,836 had Social Security numbers, of 
which 26,593 were for different social security numbers.  There are two reasons that NIH does 
not have social security numbers in 100 percent  of the records.  First, provision of the Social 
Security  number is voluntary  and thus some principal  investigators  elect not to provide this 
information.  Second, a small percentage  of principal  investigators  are foreign citizens and thus do 
not  have Social Security numbers.  Moreover  a large percentage  of our records reflect the same 
Social  Security number as other records because many of our principal investigators  serve in that 
capacity  on more than one NTHgrant. Therefore,  we believe that the statement on page 6 of the 
report  should be corrected to indicate that 93 percent  of NlHs  records have Social Security 
numbers  inasmuch as 39,836 is 93 percent of 42,9 13. 
On page 5 of the report it states that  I, 184 or 0.28 percent  of a total universe of 422,643 
individuals  were in arrears in their child support  obligations.  Of all Health Care Financing 
Administration  (HCFA), National Health Service Corps  (NHSC),  and NIH providers or principal 
investigators  on grants, 99.72 percent of them have no delinquency  in child support payments. 
This is an extremely high compliance rate, one which  we would be pleased to achieve in other 
areas of compliance.  The low percentage  in arrears  does not suggest that there is sufkient  cost-
benefit  to warrant imposing additional  administrative  burden  (such as a self-certification 
requirement)  aimed at individuals delinquent  in their  child support payments. 
NIH  investigators  under research grants do not receive  direct payment from NTH. The grant 
award is made to a research institution,  which pays the salaries of personnel working on the grant 
fkom institutional  .tinds.  Thus, grant tinds  do not constitute  federal payments which could be 
offset  against their child support obligations.  The only awards that NIH makes to an individual  Page  2 - Mr. George Grob 
are individual  research fellowship  awards, which  constitute  only 7.3 percent of all NIH awards. 
Consequently  we do not believe that it is necessary  to implement  a compliance  intervention  in 
this  area. 
Thank  you again for the opportunity  to comment  on this  document. 
7e 
Anth  ny L. Itte 
. 
;.  Baldwin,  OER 

Dr. Skirboll,  OSP 

Dr. Lee, OA   

Ms. Wax, OLPA