DEPARTMENT OF HEALTH AND HUMAN SERVICES 
__________________________________________________________________ 
 
 
 
July 11, 2013 
Dear State Director, 
We deeply appreciate the work you do to help vulnerable children, youth and families.  At the 
federal level, we strive to collaborate and provide resources to support you and your colleagues 
in that critical work.  This guidance letter is intended to encourage the integrated use of trauma-
focused screening, functional assessments and evidence-based practices (EBPs) in child-serving 
settings for the purpose of improving child well-being.  The Department of Health and Human 
Services (HHS) Administration for Children and Families (ACF), Centers for Medicare & 
Medicaid Services (CMS) and Substance Abuse and Mental Health Services Administration 
(SAMHSA) are engaged in an ongoing partnership to address complex, interpersonal trauma and 
improve social-emotional health among children known to child welfare systems.  We look to 
state and tribal governments to further this important work.    
  
I. Background 
Complex trauma is a common yet serious concern for children, especially those referred to child 
welfare services.  Rates of trauma exposure are approximately 90 percent among children in 
foster care.1  These high rates of trauma have far-reaching consequences.  The term complex 
trauma describes children's exposure to multiple or prolonged traumatic events, which are often 
invasive and interpersonal in nature.  Complex trauma exposure involves the simultaneous or 
sequential occurrence of child maltreatment, including psychological maltreatment, neglect, 
exposure to violence and physical and sexual abuse.  In addition to these traumatic events, a 
childs experience of these events can create wide-ranging and lasting adverse effects on 
developmental functioning, and physical, social, emotional or spiritual well-being.  These 
adverse effects can include a childs physiological responses; emotional responses; ability to 
think, learn, and concentrate; impulse control; self-image; and relationships with others.  Across 
the life span, complex trauma is linked to a wide range of problems, including addiction, chronic 
                                                           
1 Stein, B., Zima, B., Elliott, M., Burnam, M., Shahinfar, A., Fox, N., et al. (2001). Violence exposure among 
school-age children in foster care: Relationship to distress symptoms. Journal of the American Academy of Child 
and Adolescent Psychiatry, 40(5), 588594.   
 
physical conditions, depression and anxiety, self-harming behaviors and other psychiatric 
disorders.2  
A focus on complex trauma has important implications for how screening, functional assessment 
and effective treatments are essential to improve child outcomes.  Medicaid is an important 
source of reimbursement for services and support to children and youth who have experienced 
complex trauma and have behavioral health needs requiring treatment.3  The Early and Periodic 
Screening, Diagnostic and Treatment (EPSDT) benefit is Medicaids comprehensive preventive 
child health service designed to make health care services available and accessible and to assist 
eligible children and their families in effectively using their health care resources.  The 
preventive thrust of EPSDT helps to ensure that health problems, including behavioral health 
issues, are identified and treated early, before problems become more complex and their 
treatment more costly.  EPSDT benefit requirements apply to Medicaid-eligible children under 
age 21, and include Medicaid reimbursement for covered services.4  
 
Complex trauma affects a childs sense of safety, ability to regulate emotions and capacity to 
relate well to others.  Since complex trauma often occurs in the context of the childs relationship 
with a caregiver, it interferes with the childs ability to form a secure attachment.  Consequently, 
an important aim of service delivery is to help children and youth develop positive social-
emotional functioning, restore appropriate developmental functioning and reestablish healthy 
relationships.  New legislation, the Child and Family Services Improvement and Innovation Act 
of 2011, requires states to include details of how trauma associated with maltreatment and 
removal from home will be monitored and treated in their Child and Family Services Plans. 
The landmark Adverse Childhood Experiences (ACE) Study demonstrated long-term 
consequences in adulthood of multiple adverse experiences that occur in childhood,5 including 
increased likelihood of stroke, diabetes, cardiovascular disease, cancer, and early death, as well 
as lower job performance and employment.6  ACEs are quite common.  In this study, half of the 
over 17,000 participants had been exposed to at least one adverse childhood experience.  
However, when multiple ACEs were experienced, the results are compounded.  Adults who 
experienced six or more ACEs were likely to die 20 years sooner than those with no ACEs.7  
These consequences represent unfulfilled human potential and significant costs to public 
systems.  
                                                           
2 National Child Traumatic Stress Network. (n.d.). Types of traumatic stress. Retrieved from 
http://www.nctsn.org/trauma-types#q2 
3 Teich, J.L., Buck, J.A., Graver, L. and Zheng, D. (2003). Utilization of public mental health services by children 
with serious emotional disturbances. Administration and Policy in Mental Health 30(6): 523-534. 
4 Section 1905(a)(4)(b) of the Social Security Act. http://www.ssa.gov/OP_Home/ssact/title19/1905.htm  
5 Ten ACEs were identified: emotional abuse, physical abuse, sexual abuse, emotional neglect, physical neglect, 
witnessing mother being treated violently, growing up with someone in the household abusing alcohol or drugs, 
growing up with a mentally ill person in the household, losing a parent due to separation or divorce, and growing up 
with a household member in prison. 
6 Anda, R.F., Fleisher, V.I., Felitti, V.J., Edwards, V.J., Whitfield, C.L., Dube, S.R., and Williamson, D.F. (2004). 
Childhood abuse, household dysfunction, and indicators of impaired adult worker performance. The Permanente 
Journal, 8(1):30.  
7 Brown, D.W. et al. (2009). Adverse childhood experiences and the risk of premature mortality. American Journal 
of Preventive Medicine. 37(5):389-396 
2 
   
 
Without regard to foster care status, children with disabilities comprise approximately one-third 
of maltreated children between the ages of birth to nine years, almost one-fourth in the middle 
school years, and around one-sixth in the high school years.  Furthermore, studies indicate that 
children with communication or sensory impairments and learning disabilities are at increased 
risk for abuse.8  These studies underscore the need for a collaborative response to identify and 
meet the treatment needs of all children who have experienced trauma. 
Many of these children will demonstrate complex symptoms and/or behaviors that may not map 
directly to the Diagnostic and Statistical Manual of Mental Disorders (DSM) or the International 
Classification of Diseases (ICD).  For example, there is currently no DSM diagnosis that 
adequately captures the range of child trauma effects.9  Many children who have experienced 
complex trauma will not meet the criteria for a diagnosis of Post-Traumatic Stress Disorder 
(PTSD).  Yet, trauma-related symptoms are identifiable, can be clinically significant and can be 
addressed with appropriate interventions.  For these children, appropriate screening, assessment 
and referral to evidence-based practices are clearly indicated.  To this end, ACF released an 
Information Memorandum (ACYF-CB-IM-12-04 
http://www.acf.hhs.gov/programs/cb/resource/im1204) to encourage child welfare agencies to 
focus on improving the behavioral and social-emotional outcomes for children who have 
experienced abuse and/or neglect. 
 
II. The Interplay between Child Trauma and Psychotropic Medications:  HHS Response 
The focus on improving child well-being through screening, assessment and evidence-based 
practices cannot be achieved without a discussion of the use of psychotropic medications with 
this population.  Children and youth in foster care are far more likely than their peers to receive 
psychotropic medications, including atypical antipsychotic medications, which carry a high risk 
of side effects.10  There is reason to believe that such widespread and at times problematic use of 
these drugs is a reaction to the clinical complexity of symptoms among children exposed to 
complex trauma and the lack of appropriate screening, assessment and treatment.11 
There has been increasing concern at HHS and among stakeholders, families and youth about the 
safe, appropriate and effective use of psychotropic medications among children in foster care.  
Multiple divisions within HHS, including ACF, CMS, Food and Drug Administration (FDA), 
and SAMHSA, have been working together for nearly two years to strengthen oversight and 
monitoring of psychotropic medications with this population.  
                                                           
8 Stalker, K., & McArthur, K. (2012). Child abuse, child protection and disabled children: A review of recent 
research. Child Abuse Review, 21(1), 24-40. 
9 Griffin, G. (2010). Illinois Childhood Trauma Coalition White Paper: Child Trauma as a Lens for the Public 
Sector. Chicago, IL: ICTC.  
10 Medicaid Medical Directors Learning Network and Rutgers Center for Education and Research on Mental Health 
Therapeutics. Antipsychotic Medication Use in Medicaid Children and Adolescents: Report and Resource Guide 
from a 16-State Study. MMDLN/Rutgers CERTs Publication #1. July 2010. Distributed by Rutgers CERTs at 
http://rci.rutgers.edu/~cseap/MMDLNAPKIDS.html. 
11 Raghavan, R., Inoue, M., Ettner, S.L., Hamilton, B.H. and Landsverk, J. (2010). A preliminary analysis of the 
receipt of mental health services consistent with national standards among children in the child welfare system. 
American Journal of Public Health. 100(4): 742 
3 
   
 
A Dear State Director letter to directors of state child welfare, Medicaid and mental health 
authorities (November 2011) and an ACF Information Memorandum12 were released concerning 
the safe, appropriate and effective use of these medications among children in foster care.  In 
August 2012, a two day state summit, Because Minds Matter: Collaborating to Strengthen 
Psychotropic Medication Management for Children and Youth in Foster Care, brought together 
child welfare, mental health and Medicaid leaders from across the country to address the issue.  
Additionally, child welfare agencies are now required to submit information on how 
psychotropic medications will be overseen and monitored as part of their Child and Family 
Services Plan (CFSP) and provide updates in the Annual Progress and Services Report 
(ASPR).13        
The Center for Medicaid and CHIP Services (CMCS) in CMS issued an Informational Bulletin 
(http://www.medicaid.gov/Federal-Policy-Guidance/downloads/CIB-08-24-12.pdf) encouraging 
states to use drug utilization review to address the use of psychotropic medications in 
vulnerable populations.  The technical assistance resources provided states with additional tools 
to promote the appropriate use and enhanced oversight of psychotropic medications for children 
in foster care.   
This letter describes the importance of making research-based, psychosocial interventions readily 
available to meet the needs of children who have experienced complex trauma.  
 
III. Components of a Cross-system Approach for Promoting Child Well-being:  Integrating 
Screening, Assessment, Referrals, and Interventions 
Achieving well-being among children and youth who have experienced complex trauma requires 
tools and practices to identify service needs, an array of effective interventions to meet those 
needs, and periodic data on outcomes to track whether interventions are effective in helping 
young people.  This section describes the essential components of an approach for promoting the 
health and well-being of children served by child-welfare systems, mental-health systems and 
Medicaid.  These components include functional assessment, trauma screening, mental-health 
assessment, evidence-based practices and individual outcome measurement: 
  Functional assessment involves periodic evaluation of a childs well-being using 
standardized, valid and reliable measurement tools.  These tools are not diagnostic; 
rather, they provide individual-level data on child strengths and needs to inform case 
planning.  Functional assessment is used to determine outcomes for children regardless of 
the specific referrals or treatments they receive.  These assessments allow for 
standardized monitoring by child welfare personnel and the treatment team of child 
outcomes over time and across service experiences.  Functional assessment tools can be 
administered by a range of professionals, depending on the requirements of the particular 
                                                           
12 Dear State Director letter: 
https://www.childwelfare.gov/systemwide/mentalhealth/effectiveness/jointlettermeds.pdf  and ACF Information 
Memorandum ACYF-CB-IM-12-03: http://www.acf.hhs.gov/programs/cb/resource/im1203 
13 ACF Information Memorandum  ACYF-CB-IM-11-06 - The Child and Family Services Improvement and 
Innovation Act (Public Law (Pub. L.) 112-34: http://www.acf.hhs.gov/programs/cb/resource/im1106   
4 
   
 
tool, and they can involve child, caregiver and/or professional reporters.  Functional 
assessment data can inform broader outcomes monitoring and system-level decisions 
about service array planning and contracts.  Examples of functional assessment tools for 
young children and adolescents can be found at the following ACF links:  
http://www.acf.hhs.gov/programs/cb/resource/well-being-instruments-early-childhood 
and 
http://www.acf.hhs.gov/programs/cb/resource/well-being-instruments-adolescence.  
  Trauma screening involves brief evaluation of potential trauma symptoms and/or history.  
Such screening can indicate a potential need for further assessment and treatment.  
Trauma screening instruments can be administered quickly by a range of professionals 
and can be conducted independently or as part of a broader screening and/or assessment 
process.  Information on trauma screening tools can be found at SAMHSAs National 
Child Traumatic Stress Networks Measures Review Database:  
http://www.nctsn.org/resources/online-research/measures-review.  
  Mental health assessment involves an in-depth clinical evaluation of an individuals 
mental health status.  These more intensive assessments may include a diagnostic 
interview in combination with standardized mental emotional and behavioral assessment 
tools.  Mental health assessments allow for evaluation of symptoms and the possible 
determination of a mental diagnosis or condition.  A mental health assessment may also 
take into consideration experiences of traumatic events, previous and current risk factors, 
and emotional strengths and needs.  A mental health assessment includes an evaluation of 
symptoms and is the basis for treatment planning.  Mental health assessments can more 
deeply inform the use of evidence-based practices (EBPs) for trauma-related needs and 
mental, emotional, or behavioral disorders or conditions.  The ACF Information 
Memorandum (ACYF-CB-IM-12-04 
http://www.acf.hhs.gov/programs/cb/resource/im1204) on social-emotional well-being 
identifies a number of EBPs, including Trauma-Focused Cognitive Behavioral Therapy, 
Multi-Systemic Therapy and Parent-Child Interaction Therapy, among others.  Many of 
the EBPs designed to address child trauma include parents as part of the treatment in 
order to provide parenting strategies and supports that improve outcomes for their 
children.  More information on trauma-related EBPs can be found through SAMHSAs 
National Child Traumatic Stress Network (www.nctsn.org) and the National Registry of 
Evidence-based Programs and Practices (http://www.nrepp.samhsa.gov/) websites. 
  Outcome Measurement and Progress Monitoring:  Measuring success by tracking child-
level well-being outcomes allows systems to ensure that services are achieving desired 
improvements in childrens health and functioning.  Using data from screening and 
assessments, systems can gauge the effectiveness of interventions with both individual 
children and the population served.  At the child level, these data allow for the matching 
of specific characteristics and needs of individual children with appropriate, responsive 
interventions.  At the system level, an iterative process of reviewing aggregated data can 
be used to tailor and refine an array of services to address the needs of the population.  
 
One cross-systems example that includes the core components described above is the 
Comprehensive Community Mental Health Services for Children and Their Families Program 
(Childrens Mental Health Initiative, or CMHI) administered by SAMHSA.  CMHI is based on 
the System of Care (SOC) approach, which is an organizing philosophy and framework designed 
5 
   
 
to create a coordinated array of effective community-based services and supports.  The SOC 
approach builds meaningful partnerships between families and youth who have or are at risk of 
serious mental health conditions and community-based providers and supports.  Developing an 
individualized treatment plan and a wraparound approach, the SOC approach uses evidence-
based practices to help children, youth, and families function better at home, in school, and in the 
community.  This work is highlighted in SAMHSAs 2012 Short Report Promoting Recovery 
and Resilience for Children and Youth Involved in Juvenile Justice and Child Welfare Systems 
(http://www.samhsa.gov/children/SAMHSA_ShortReport_2012.pdf).  
 
IV. Financial Resources for Addressing Child Trauma 
Children who have experienced complex trauma are served by numerous systems through a 
number of funding sources.  A trauma-informed approach also recognizes that children are best 
served when services meet individual needs, gaps and duplication are eliminated, and funders 
communicate effectively to coordinate and reimburse providers for the right services and 
treatments.  The following describes how comprehensive approaches for serving children who 
have experienced trauma can be funded or reimbursed by three federal sources:  Child Welfare, 
Mental Health and Medicaid. 
Child Welfare 
National child welfare policy focuses on three general outcomes for children:  safety, 
permanency and well-being.  Although significant progress has been made on advancing the 
safety and permanency of children known to child-welfare systems, their well-being outcomes 
lag behind.14  Through legislative actions by Congress and through recent HHS actions described 
below, the federal government has increased its efforts to better integrate safety, permanency and 
well-being, including more of a focus on the impact of trauma on children who have been 
maltreated and strategies to improve social-emotional well-being outcomes.  
Child Welfare IV-B and IV-E Legislative Authority and Financing 
Title IV-B and title IV-E of the Social Security Act (SSA) are the primary sources of federal 
child welfare funding.  For the purposes of this letter, the distinction between titles IV-B and IV-
E relates to how the funds may be used in the provision of services.  
Title IV-B funds may be used for family or individual counseling, and, to this end, states can use 
these funds to provide counseling that delivers evidence-based interventions to meet the trauma-
related needs of its population.  Title IV-B funds are primarily distributed via two formula grant 
programs, the Stephanie Tubbs Jones Child Welfare Services (CWS) program and the Promoting 
Safe and Stable Families (PSSF) program.  The CWS and PSSF programs have overlapping 
purposes and can be used to fund similar types of services, including scaling up EBPs for 
children with complex trauma.  However, each program has its own set of federal requirements.  
Through the CWS funds, states may provide services to support, preserve, and/or reunite 
                                                           
14 Childrens Bureau, Administration on Children, Youth and Families, Administration for Children and Families, 
U.S. Department of Health and Human Services. (2011). Child and Family Services Reviews: Aggregate Report: 
Findings for Round 2 Fiscal Years 2007-2010. Washington, DC: Author 
6 
   
 
children and their families.  States, territories, and tribes may provide training, professional 
development, and support to ensure a well-qualified child-welfare workforce.  The approach 
encouraged in this letter is consistent with the requirement that states must describe, in their 
CFSPs, their efforts to provide child-welfare services on a statewide basis, to expand and 
strengthen the range of services available, and to develop and implement services that improve 
child outcomes (SSA section 422(b)(4)(A)) in order to receive title IV-B funding.  
Through the PSSF program, states are required to spend 90 percent or more of the funding they 
receive on four specified categories of services:  community-based family support, family 
preservation, time-limited reunification and adoption promotion and support.  These services 
prevent maltreatment among at-risk families, address problems in a timely manner with families 
whose children have been placed in foster care so reunification can occur and support adoptive 
families to enable them to make a lifetime commitment to children. 
Title IV-E funding use is limited to certain costs of providing for the care of children whom the 
title IV-E agency determines to be eligible.  Funds are available for monthly maintenance 
payments for the daily care and supervision of eligible children and administrative costs to 
manage the program, such as recruiting foster parents and costs related to designing, 
implementing, and operating a statewide data collection system. 
Under the title IV-E Foster Care and Adoption and Guardianship Assistance Programs, title IV-E 
agencies can also use title IV-E funding to support targeted child welfare training activities. 
Relevant allowable training topics can include referral to services, placement of the child, 
development of the case plan, case reviews and case management and supervision.  Title IV-E 
agencies may offer training on the nature and consequences of child trauma, the use of screening 
and assessment tools and practices, and the array of EBPs to address trauma, including when 
they might best be applied.  
Although these funds can be used to provide training to title IV-E child welfare staff, 
foster/adoptive parents, employees of private child placing and child care agencies, and other 
individuals listed in section 474(a)(3)(B) of the SSA, these dollars cannot be used to train 
individuals to treat child or family problems or behaviors.  That type of training would support 
the delivery of social services rather than the administration of the title IV-E plan.  More details 
on opportunities and limitations for using this authority to support training needs are provided in 
the Child Welfare Policy Manual (http://www.acf.hhs.gov/cwpm/programs/cb/laws_policies/
laws/cwpm/policy_dsp.jsp?citID=116#2541).   
New Child Welfare Legislative Authority  
New child welfare legislative authority was provided through the Child and Family Services 
Improvement and Innovation Act (P.L. 112-34), which allows HHS to approve up to ten waiver 
demonstration projects in each of federal fiscal years (FFYs) 2012, 2013 and 2014.  These 
demonstration projects, while providing no additional funding, allow child welfare agencies 
greater flexibility in using titles IV-E and IV-B funding to implement services that are likely to 
improve outcomes for children and families involved in the child welfare system.  
States can choose to use this flexibility to build capacity related to training, screening, 
assessment and EBPs to improve the well-being of children who have experienced complex 
7 
   
 
trauma.  The development and implementation of these demonstration projects can be 
strengthened through partnerships with state Medicaid programs and by leveraging other federal, 
state, and local resources in order to effectively and efficiently serve children.  In its guidance 
inviting proposals under the renewed waiver authority, ACF encouraged child welfare agencies 
to explore partnerships with state mental health authorities and Medicaid to improve outcomes 
for children and families.  Read ACFs Information Memorandum (ACYF-CB-IM-12-05 
http://www.acf.hhs.gov/programs/cb/resource/im1205) that announces the child welfare waiver 
demonstration projects for FFYs 2012  2014 and includes information about applying.  
Proposals and summaries of projects that were approved in FFY 2012, along with technical 
assistance documents can be found at:  http://www.acf.hhs.gov/programs/cb/programs/child-
welfare-waivers.   
Additionally, the Child and Family Services Improvement and Innovation Act includes new 
requirements concerning the social-emotional and mental health of children who have 
experienced maltreatment.  State CFSP, five-year strategic plans setting forth goals to strengthen 
each states child welfare system, must now include details about how the agency will monitor 
and treat emotional trauma associated with a childs maltreatment and removal, as well as a 
description of how the use of psychotropic medications will be monitored.  Read ACFs recent 
Information Memorandum (ACYF-CB-IM-11-06 
http://www.acf.hhs.gov/programs/cb/resource/im1106) on the new law.  
Discretionary Funding Awards 
ACF is aligning its discretionary grant making to advance the guidance in this letter:  building 
capacity to deliver screening, assessment, and EBPs related to trauma and social-emotional well-
being.  Examples of grants made in 2011 include five new discretionary awards for projects to 
integrate trauma-informed practice in child protective service delivery with a focus on 
strengthening capacity to deliver EBPs.  
In 2012, ACF announced nine new discretionary awards to improve childrens access to an 
evidence-based service array to meet behavioral health needs identified through screening and 
assessment.  In addition, ACF released new funding opportunity announcements in the late 
spring and early summer, which can be accessed through the HHS Grants Forecast. 
Links to resources: 
Summary of FFY 2011 discretionary grants related to trauma-informed practice:  
Integrating Trauma-Informed and Trauma-Focused Practice in Child Protective Services 
(http://www.acf.hhs.gov/grants/open/foa/view/HHS-2011-ACF-ACYF-CO-0169)   
 
Summary of all FFY 2012 grants: 
Integrating Safety, Permanency and Well-being for Children and Families in Foster Care:  A 
Summary of Administration on Children, Youth and Families Projects in FY 2012 
(https://www.acf.hhs.gov/sites/default/files/cb/acyf_fy2012_projects_summary.pdf)  
 
New funding opportunities:   
HHS Grants Forecast  
8 
   
 
(http://www.acf.hhs.gov/hhsgrantsforecast/index.cfm). 
 
Mental Health and Substance Abuse 
In 2011, SAMHSA designated trauma as one of its key strategic initiatives, recognizing the 
central role that traumatic experiences play in mental health, physical health, and substance use 
disorders.  During the past decade, SAMHSA has made significant investments in understanding 
different types of trauma across the life span, developing trauma-specific therapeutic 
interventions, and developing and implementing the concept of trauma-informed care in care-
giving organizations.  SAMHSA is continuing to develop and refine its working concept of 
trauma and guidance for a trauma-informed approach, which will be the foundation for 
establishing measures for population surveillance, clinical encounters, quality measures and a 
standardized approach to training on trauma.  
Since 2001, SAMHSA has funded the National Child Traumatic Stress Initiative (NCTSI) to 
develop, disseminate, implement, and evaluate screening, assessment, and treatments for 
children, adolescents, and families experiencing a wide range of traumas. These include child 
physical and sexual abuse, community violence, homelessness, disaster, and medical and war-
time and refugee related traumas.  The NCTSI has brought improved access and availability of 
trauma screening, assessment and treatment interventions across the child age range for states 
and local communities and to children in multiple service sectors, including mental health, child 
welfare, juvenile justice, education, primary care and homeless/runaway settings.  
SAMHSAs National Center for Trauma Informed Care (NCTIC) has promoted the 
implementation of a trauma-informed approach to care that prevents the re-traumatizing of 
individuals who enter treatment systems and recognizes the pervasiveness of trauma in lives of 
individuals in care-giving systems, whether health, human services, criminal justice, or primary 
care.    
While SAMHSA does not have specific authorities or funding mechanisms focusing on children 
in the child-welfare system, it has significant funding efforts that focus on children with mental 
health needs that are inclusive of children who may be child-welfare connected.  Children who 
have experienced trauma often have complex clinical presentations and thus qualify for mental 
health-funded programs and practices.  Relevant SAMHSA funds are described below in the 
categories of State Block Grants funds and Discretionary Funding Awards.     
SAMHSA Block Grants 
SAMHSA awards formula-driven Mental Health Block Grants and Substance Abuse Block 
Grants to states and territories.  The parameters for funding are established by law. However, 
there has been significant flexibility for states to determine how these funds are used.  States use 
the Block Grant funding for treatment, recovery supports, prevention and other services that are 
not covered by Medicaid, Medicare or private insurance, or for services for individuals who are 
not insured.  Specifically, the Block Grant funds priority treatment and support services for 
individuals without insurance or for whom coverage is terminated for short periods of time; and, 
priority treatment and support services not covered by Medicaid, Medicare, or private insurance 
for low-income individuals and that demonstrate success in improving outcomes and/or 
supporting recovery.  
9 
   
 
The revised Mental Health SAMHSA Block Grant Application 
(http://www.samhsa.gov/grants/blockgrant/) for 2014-2015 prioritizes trauma, children, and 
expanded SOC approaches for children and youth with mental health and substance use 
disorders.  Through the Block Grant applications, SAMHSA encourages states to leverage 
mental health funds to develop and identify strategies that will build state and provider capacity 
to provide evidence-based trauma-specific interventions in the context of a trauma-informed 
delivery system. 
Discretionary Funding Awards 
SAMHSA has multiple funding opportunities well positioned to address the trauma and mental 
health needs of children in the child welfare system.  SAMHSAs Childrens Mental Health 
Initiative (http://www.samhsa.gov/children/) supports states, jurisdictions, the District of 
Columbia, territories, tribes and tribal organizations, in developing integrated home and 
community-based services and supports for children and youth with serious emotional 
disturbances and their families by encouraging the development and expansion of effective and 
enduring SOC.  In 2012, in addition to the ongoing CMHI grants, SAMHSA developed the 
System of Care Expansion Grants aimed at state recipients with the intent to take the SOC 
approach statewide.  A subset of these state grantees were then awarded SOC Implementation 
Grants to implement state plans developed in the SOC-Expansion grants. Information regarding 
System of Care Expansion Implementation Cooperative Agreements grants can be found at: 
http://www.samhsa.gov/grants/2012/sm_12_003.aspx.  These grant programs focus on 
developing and implementing cross-systems infrastructure and services and providing support to 
states for EBPs for children and youth, including programs focused on trauma.  The SOC 
framework inherently involves cross-sector collaboration, of which child welfare is a critical and 
consistently named partner by many of the state grantees.  
As described earlier, the NCTSI is a significant part of SAMHSAs effort to address and treat 
trauma experienced by children and adolescents and to further a public health approach to trauma 
that strengthens surveillance, prevention, screening and treatment and supports trauma-informed 
systems.  The initiative is designed to address child trauma by supporting a national network of 
grantees, the National Child Traumatic Stress Network (NCTSN), which works collaboratively 
to develop and disseminate effective community-based practices for children and adolescents 
exposed to a wide array of traumatic events.  Grantees provide an extensive array of trauma-
specific interventions in community-based provider settings and a comprehensive series of 
trainings in trauma and trauma treatments to build the provider capacity in states and 
communities.  Historically, many of these grantees have focused on youth in the child-welfare 
system.  
The 2012 NCTSI funding awards continue to address the trauma-related needs of children and 
youth involved with child welfare and juvenile justice systems.  These new grantees support 
increased capacity to address the complex trauma issues of youth in these systems.  The list of 
2012 NCTSI awardees is available online at: http://www.samhsa.gov/grants/2012/index.aspx. 
Future SAMHSA grant announcements will be posted on the HHS Grants Forecast online 
(http://www.acf.hhs.gov/hhsgrantsforecast/index.cfm). 
 
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Medicaid  
CMS is committed to working in partnership with states to ensure coverage of needed benefits 
and establish effective service delivery options for children and youth who have experienced 
complex trauma.  CMS is prepared to offer technical assistance to states pursuing the 
opportunities described below and throughout this letter.  
 
Under the EPSDT benefit, eligible individuals are entitled to periodic screening services (well-
child exams) as defined by the statute.  One required element of such screening services under 
section 1905(r) of the Social Security Act (the Act) is a comprehensive health and 
developmental history (including assessment of both physical and mental health development).  
CMS expects that part of this assessment should include an age-appropriate behavioral health 
screening.  Early detection and treatment of behavioral health issues, including mental illness 
and substance use disorders, is important in the overall health of a child and may reduce or 
eliminate the effects of a condition when identified and treated early.  Additionally, as the statute 
specifies, other necessary health care, diagnostic services, treatment and other measures 
coverable under section 1905(a) of the Act must be made available to correct or ameliorate any 
physical and mental illnesses or conditions discovered by the screening services, whether or not 
the services are covered under the state plan.  
 
In addition to the required periodic screenings, Medicaid-eligible children are entitled to inter-
periodic screenings in order to identify a suspected illness or condition not present or discovered 
during the periodic exam.15  An inter-periodic screening may also trigger the need for further 
diagnostic or treatment services, including services related to behavioral health issues.  A change 
in living circumstance (like a foster care placement move), a change or presentation of acute 
behavioral health needs (like a school suspension due to behavior, an inpatient psychiatric 
admission, or a referral to residential psychiatric care), and entry into the foster care system are 
all events that may elicit the need for an inter-periodic screening.  
 
We describe below a variety of authorities and service-delivery approaches.  Under some of 
these authorities, enhanced Federal Financial Participation (FFP) is available.  
 
State Plan Services Described in Section 1905(a) of the Act 
 
Services to meet childrens behavioral health needs may be covered under several service 
categories described under section 1905(a) of the Act.  For example, certain behavioral health 
services may be covered under rehabilitative services at 42 CFR 440.130(d), including 
interventions such as cognitive behavioral therapy, crisis management services, peer supports, or 
family therapy.  Other service categories support reimbursement for targeted case management 
or services provided by licensed practitioners such as psychiatrists, psychologists, or clinical 
social workers.  
 
Beginning in 2013, enhanced FFP is authorized under section 1905(b) of the Act, as amended by 
section 4106 of the Affordable Care Act, if states elect to provide coverage of preventive 
                                                           
15 Section 5140(B), State Medicaid Manual. 
11 
   
 
services that are assigned a grade of A or B by the U.S. Preventive Services Task Force 
(USPSTF). Coverage includes adult vaccines recommended by the Advisory Committee on 
Immunization Practices (ACIP). Cost sharing for such services must not be imposed on 
beneficiaries.  Included among clinical preventive health care services are a broad variety of 
mental health services and supports.  
(http://www.uspreventiveservicestaskforce.org/3rduspstf/behavior/behsum1.htm). 
 
Alternative Benefit Plans 
 
Section 1937 of the Act provides states with significant flexibility to design Medicaid 
Alternative Benefit Plans (ABP) to provide specially designed benefit packages.   ABPs must 
include coverage of EPSDT and must comply with the Paul Wellstone and Pete Domenici 
Mental Health Parity and Addictions Equity Act of 2008 in the same manner as group health 
plans. 16  Beginning January 1, 2014, ABPs must also include essential health benefits, including 
mental health and substance use disorder benefits. States can design ABPs that are based on 
certain public employee or commercially available health care coverage plans, or are based on 
the standard Medicaid package, supplemented as necessary to provide coverage of essential 
health benefits and EPSDT.  States can add services to meet the needs of certain populations or 
residents of certain geographic areas.  While there are some populations who may not be 
required to enroll in an ABP, they can still be enrolled in an ABP on a voluntary basis.  For 
example, children in foster care or children who have serious emotional disturbances as a result 
of trauma may participate in ABPs designed to comprehensively meet their unique needs. This 
link provides a description of a state serving children in foster care through section 1937 
authority:  http://www.dhs.wisconsin.gov/mareform/foster/FosterCareMedicalHome.pdf. 
Home and Community-Based Services 
 
In addition to the EPSDT benefit covered under section 1905(a) of the Act, other Medicaid 
authorities provide states with opportunities to further meet individuals behavioral health needs.   
Section 1915(i) of the Act, State Plan Home and Community-Based Services, permits states to 
provide a full array of home and community-based services to individuals whether or not they 
qualify for an institutional level of care, as long as they have significant need.  This can include 
individuals with mental health or substance use disorders.  This link provides a description of a 
states program for serving children in foster care through section 1915(i) authority:  
http://www.dphhs.mt.gov/mentalhealth/children/i-home/PolicyManual.pdf 
 
A state can also use section 1915(c) home and community-based services waiver programs to 
cover similar services and serve individuals with significant needs who meet institutional level of 
care criteria.  Examples of services and supports beyond those covered under EPSDT may 
include psychosocial rehabilitation, respite care, transition services and social skill development. 
 
 
                                                           
16 State Health Official/State Medicaid Director Letter describing the application of the Mental Health Parity and 
Addiction Equity Act of 2008 to Alternative Benefit Plans, http://www.medicaid.gov/Federal-Policy-
Guidance/downloads/SHO-13-001.pdf. 
12 
   
 
Health Homes 
 
Section 2703 of the Affordable Care Act provides states with the option to cover health home 
services for beneficiaries.  Health homes provide comprehensive care management; care 
coordination; health promotion; comprehensive transitional care from inpatient to other settings, 
including appropriate follow-up care; individual and family support; referral to community and 
support services; and the use of health information technology to link services.  States can target 
health home models to specific populations based on specified chronic conditions, including 
serious or persistent mental health conditions.  While age is not an allowable targeting criteria for 
health home participation, CMS recognizes that the available providers and the treatment 
modalities and protocols may involve different approaches for children as compared to adults for 
key health home activities such as coordinating, managing, and monitoring services; therefore, 
states may develop different qualifications and protocols for health home providers that serve 
different age groups based on distinctions between the health home needs of the population.  
 
To assist states in the development of health homes, health home services receive enhanced FFP 
of 90 percent for the first eight quarters following establishment of a specific health home model.  
States have significant flexibility in the design of health home models, including in the 
development of payment methodologies.  For example, states may structure a tiered payment 
methodology that accounts for the severity of each individuals chronic conditions and the 
capabilities of the designated providers.  States may submit alternative models that are designed 
to improve service delivery, provide for quality health outcomes for participants and help 
document evaluative measures. 
  
In collaboration with SAMHSA, CMS has developed a guiding document 
(http://www.samhsa.gov/healthreform/docs/Guidance_Doc_Health_Homes_Consultation_Proces
s.pdf) to assist states to prepare for implementing health homes for individuals with behavioral 
health needs. 
 
Links to states with health homes include the following:  http://www.medicaid.gov/State-
Resource-Center/Medicaid-State-Technical-Assistance/Health-Homes-Technical-
Assistance/Approved-Health-Home-State-Plan-Amendments.html. 
 
Managed Care  
 
States may deliver Medicaid-covered services through managed care plans.  States must continue 
to assure access to the full set of state plan services, including EPSDT.  In addition, managed 
care plans may be required by contract to provide care management and coordination activities.  
States receive approval from CMS to operate a managed care delivery system through a variety 
of authorities, including under a state plan option, section 1915 waivers, and section 1115 
demonstration projects.  While 42 CFR Part 438 provides that children in foster care out-of-
home placements and children receiving foster care adoption assistance cannot be mandated into 
managed care under the state plan option, some states have used waiver authority to mandate 
enrollment for this population.  Currently, states are using three managed care models to serve 
children in foster care: plans that serve the general Medicaid population; plans with special 
13 
   
 
networks qualified to meet the behavioral health needs of children; and plans that serve only 
individuals with special needs.  
 
The following is a link to a state using managed care authority for children in foster care: 
http://www.dhs.wisconsin.gov/badgercareplus/faq.htm  
 
Integrated Care Models  
Integrated care models (ICMs) can be adopted to promote coordinated, person-centered and 
comprehensive care.  Section 1905(a)(25) and, by reference, 1905(t)(1) of the Act allow states to 
provide coverage and payment for case management services that coordinate, locate and monitor 
health care services.  Payment methods include fee-for-service; per-member per-month rates; 
incentive payments for meeting certain goals; and shared savings based on the total cost of care 
measured against performance periods.  ICM providers include individual practitioners, 
physicians, nurse practitioners, certified nurse-midwives, or physician assistants.  Providers may 
also include physician group practices, or entities employing or having arrangements with 
physicians to provide such services. 
State Medicaid Directors Letters on Integrated Care Models can be found at 
http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SMD-12-001.pdf and 
http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SMD-12-002.pdf. 
Section 1115 Research and Demonstration Programs 
States seeking to implement an experimental Medicaid pilot or demonstration project may use 
the authority of section 1115(a) of the SSA.  To promote the purpose of the Medicaid program, 
certain sections of Medicaid statute may be waived or federal financial participation may be 
made available for costs not otherwise within the scope of the Medicaid program.  Through 
section 1115 demonstrations, many states have been approved to implement innovative, budget-
neutral concepts for expanding who may be served, covering new services or other approaches 
for improving their Medicaid programs.  
A State Health Official Letter concerning the section 1115 application process can be found at 
the following link:  http://www.medicaid.gov/Federal-Policy-Guidance/Downloads/SHO-12-
001.pdf. 
Moving forward, CMS is releasing a series of Informational Bulletins to provide additional 
information regarding services and supports to meet the health, behavioral health, and long-term 
services and support needs of individuals with mental health or substance use disorders.  Of 
particular note are the recently released bulletins regarding services and good practices for 
individuals with behavioral and mental health disorders:  Coverage and Service Design 
Opportunities for Individuals with Mental Illness and Substance Use Disorders, 
(http://content.govdelivery.com/attachments/USCMS/2012/12/03/file_attachments/178580/CIB-
12-03-2012.pdf) and Coverage of Behavioral Health Services for Children, Youth, and Young 
Adults with Significant Mental Health Conditions (http://www.medicaid.gov/Federal-Policy-
Guidance/Downloads/CIB-05-07-2013.pdf ).  
14 
   
 
CMS also recently released the Center for Medicaid and CHIP Services CMCS Informational 
Bulletin on Prevention and Early Identification of Mental Health and Substance Use Conditions, 
which addresses prevention of and early intervention for mental health conditions in children, 
youth, and adults; see (http://www.medicaid.gov/federal-policy-guidance/downloads/CIB-03-27-
2013.pdf).  This bulletin includes information regarding screens that can be used to identify the 
early onset of mental illness (encompassing conditions related to trauma and suicide), or 
substance use, including strategies for enhancing states efforts to comply with EPSDT 
requirements.   
 
V.  Quality Impact of Addressing Child Trauma 
For children and youth exposed to adverse events and involved with the child welfare system, 
integrated use of trauma-focused screening, functional assessments, and EBPs in child-serving 
settings will likely result in improved social, emotional and health outcomes.  When care 
coordination is optimal, mechanisms for seamless information sharing and assessment-driven 
treatment planning create a system in which youth are regularly screened and assessed for needs 
and receive high-quality, efficacious interventions that improve social and emotional well-being.   
 
Key to success is measuring outcomes and using on-going progress monitoring to determine the 
extent to which the approach taken is making a difference.  Quality improvements may include: 
 
  Reduction in the number of children with a clinical level of need receiving no services; 
  Increase in the number of children receiving evidence-based screening, assessment and 
treatment; 
  Reduction in the use of deep-end services, including emergency department visits for acute 
crisis stabilization and residential treatment for extended periods; 
  Reduction in the use of psychotropic medication prescribing practices that do not conform 
with the American Academy of Child and Adolescent Psychiatrists Practice Parameters; 
  Reduction in the number of psychotropic medications prescribed and a reduction in the total 
number of youth with prescriptions for psychotropic medications;  
  Reduction in the use of foster home placements to include re-entries into care; 
  Net increase of Medicaid-participating EBP-trained clinicians; and 
  Improvements in child functioning across well-being domains and reductions in trauma 
symptoms.  
 
Integrated approaches in the area of child behavioral health have had success in reducing costs 
while improving care.  The following link describes a states cost-effective innovations based on 
collaboration among agencies serving children in foster care who have experienced complex 
trauma:  http://www.wsipp.wa.gov/rptfiles/12-04-1201.pdf.  
 
VI. Conclusion  
The impact of complex trauma for children who have experienced maltreatment can be profound, 
derailing them from healthy development, impairing social and emotional functioning, and 
compromising health.  These effects can be addressed, however, and children can heal and 
recover.  CMS, SAMHSA, and ACF are committed to improving the life outcomes for children 
15 
   
 
who have experienced the complex trauma associated with child abuse and neglect and exposure 
to violence and are prepared to offer technical assistance as needed.  
We are encouraged by the growing interest and action in states, territories, and tribes to 
implement effective approaches to address the specific needs of this vulnerable group of children 
and their families.  This letter has been provided in an effort to help further that work, and we 
hope the information is both helpful in your current efforts and spurs new thinking, new 
partnerships, and increased capacity to deliver the screening, assessment, and evidence-based 
practices that can help children and youth get back on track developmentally.  
Sincerely, 
 
 
/s/                       /s/ 
 
George H. Sheldon, Acting Assistant Secretary  Marilyn Tavenner, Administrator 
Administration for Children and Families  Centers for Medicare and Medicaid Services 
 
 
/s/ 
 
Pamela S. Hyde, J.D., Administrator 
Substance Abuse and Mental Health Services 
   Administration 
 
cc:   CMS Regional Administrators  
 
CMS Associate Regional Administrators  
Division of Medicaid and Childrens Health Operations 
 
Ron Smith 
Director  
Legislative Affairs  
American Public Human Services Association 
1133 Nineteenth Street, NW  
 Suite 400 
Washington, D.C. 20036 
 
 
Matt Salo 
Executive Director 
National Association of Medicaid Directors  
444 North Capitol Street, #309 
Washington, D.C. 20001 
 
16 
   
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
Hall of the States 
Suite 515 
444 N. Capitol Street, NW 
Washington, D.C. 20001 
 
Heather E. Hogsett 
Director, Committee on Health & Homeland Security 
National Governors Association 
444 North Capitol Street, NW, Suite 267 
Washington, DC 20001-1512 
 
Debra Miller 
Director for Health Policy 
Council of State Governments 
2670 Research Park Drive 
P.O. Box 11910 
Lexington, KY 40578-1910 
 
Christopher Gould 
Director, Government Relations  
Association of State and Territorial Health Officials 
2231 Crystal Drive 
Suite 450 
Arlington, VA 22202 
 
Alan R. Weil, J.D., M.P.P. 
Executive Director 
National Academy for State Health Policy 
1233 20th Street NW, Suite 303 
Washington, DC 20036-230 
 
17