Department of Health and Human Servces 

OFFICE OF


INSPECTOR GENERAL


STATE CHILD SUPPORT ENFORCEMENT


CRITERIA FOR TARGETING


MEDICAL SUPPORT


VIQ. 

"0 

Richard P. Kusserow 

INSPECTOR GENERA 

d3a OEI-07-9000120 
EXECUTIVE SUMMAR Y


PURPOSE 

The objectives of this study were to determe what criteria have been developed by 

State Child Support Enforcement agencies to target cases with a high potential for 

medical support and to identif the most effective criteria and practices. 

BACKGROUND 

Federal regulations amending the Chid Support Enforcement program went into 

effect on March 10, 1989. These regulations expanded Child Support Enforcement 

mandates to 
 require all State Child Support Enforcement agencies to develop wrtten 

criteria to identify existing cases with a high potential for obtainig medical support. 

Two previous inspections found that the Medicaid program would save more than 

$32 milion annually if employer provided health insurance had been used to pay for 

the medical care of dependent chidren. 

METODOLOGY 

This inspection is based on the analysis of information and targeting criteria collected 

from the 50 States, the District of Columbia, Guam, Puerto Rico and the Virgin 

Islands. 

We asked each State Child Support Enforcement agency to provide us with a copy 

of any targeting criteria they had developed as of June 1, 1990, and for the name 

and telephone number of a person within their agency whom we could contact to 

gather inormation. Following receipt and initial analysis of the targeting criteria 

information, we conducted telephone intervews with the contact persons identifed by 

each State Child Support Enforcement agency. 

In addition, we used regression analysis to analyze inormation collected durig the 

most recent of our first two studies. We conducted this analysis to determe which 

criteria would be most important in identifg cases with potential Medicaid savigs. 

FIINGS 

Only 46 percent of the States had creri in place as of Jun 1990.

'Absent paren employe(' is the creri mot lily to prode availble health 

inance. 
48 peen of th State can mo extig cour ord for On th sole pure inlug meal support 

Th deelopm and appliatin of targetig crer var frm State-to-State

RECOMMATIONS 

Th Admistin for Chilen and Famil (ACF) shoul enforce cuent regtions 

regarding the targetig of mecal support and place adnal empha on it 

importance. 

Among the recommended actions are that the ACF 

enforce current regulations requiring States to develop criteria to target cases 

with a high potential for medical support 

include the review of targeting criteria in the medical support portion of their 

Program Results Audit Guide 

provide technical support to States which have not yet developed targeting 

criteria, and 

provide State Child Support Enforcement agencies with a list of the criteria 

we found most significant in the detection of absent parent health insurance 

and potential medical savings. 

Th ACF shoul reqire States, as a condn of partipatin, to have leglatin which 

woul allw the to moif cour ord for the sole pue of inluing meal 

suport 

Th ACF shoul inlu consation of meal support whe restrtug inentie

payts. 

AGENCY COMMNT 

Both the ACF and the RCF A generally concur with the recommendations presented 

in this report. Their verbatim comments can be found in Appendices E and F. 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 

TABLE OF CONTENTS


EXECUTIVE SUMY


INODUCTION. . 
 . . . . . . . . . 1


Purpose
 . . . . . . . . . . . . . . . 1


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


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


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


Only 46 percent of the States had criteria in place


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


Absent parent employed" is the criterion most likely


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


Only 48 percent of the States can modify existing court


orders for the sole purpose of including medical


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


The development and application of targeting criteria 

varies from State-to-State ................................. 6


RECOMMENDATIONS . . . . . . 9


APPENDICES


State Targeting Criteria Development Report Card. . . . . . . . . . . . . . . . . . ASummary of Regression Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. BTargeting Criteria Selected by States . . . . . . . . . . . . . . . . . . . . . . . . . . .. CCalculation of Per-Case Medicaid Savings. . . . . . . . . . . . . . . . . . . . . . . . . DACF Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. EHCFA Comments . . . . .. F­
INTRODUCTION


PUROSE 

The objectives of this study were to determine what criteria have been developed by 

State Child Support Enforcement agencies to target cases with a high potential for 

medical support and to identify the most effective criteria and practices. 

BACKGROUN 

Federal regulations amending the Child Support Enforcement program were 

published September 16, 1988. These regulations amended 45 CFR 306.51(b) by 

adding a new paragraph at 306.51(b)(3) which expanded Child Support Enforcement 

require all State Child Support Enforcement agencies to develop written 

criteria to identify existing cases with a high potential for obtaining medical support. 

Federal regulations issued March 10, 1989 informed the public that the provisions of 

section 306.51(b )(3) were in effect. 

mandates to 


These regulations require the States to develop criteria based on (1) evidence that 

health insurance may be available to the absent parent at a reasonable cost; and 

(2) facts, as defined by State law, regulations, procedures or other directives which 

are sufficient to warrant modification of the existing support order to include health 

insurance coverage for a dependent child(ren). It further requires State Child 

Support Enforcement agencies to petition the court or administrative authority to 

modify support orders for targeted cases identified to include medical support in the 

form of health insurance coverage, even if no other modification is anticipated. In 

addition, Federal regulations issued May 15, 1991 require each State to establish 

guidelines which "provide for coverage of the child(ren)'s health care needs. 

In two previous inspections conducted by the Offce of Inspector General, we found 

that the Medicaid program would save more than $32 milion annually if employer 

provided health insurance had been used to pay for the medical care of dependent 

children. 

The first inspection report, entitled "Child Support Enforcement/Absent Parent 

Medical Liability," OAI-07-86-00045, was issued in September 1987. That inspection 

reviewed a sample of Child Support Enforcement cases in which a new or amended 

court order was established during a 3-month sample period, and the absent parent 

had made at least one child support payment. In our review, we found that 60 

percent of the absent parents in the sampled cases had dependent health insurance 

available through their employers, and that nationally, the Medicaid program would 

have saved $33 894 507 annually if such employer-provided health insurance had paid 

the dependents' medical expenses. 
The second inspection report, entitled "Coordination of Third-Part Liabilty 

Information Between Child Support Enforcement and Medicaid " OAI-07-88-00860 

was issued in December 1989. That inspection reviewed another sample of Child 

Support Enforcement cases which met the criteria set forth in the 1987 study. In 

this inspection, we determined that health insurance coverage was available to the 

dependent children through the absent parents' employers in 48 percent of the cases 

(compared to 60 percent 2 years before). We projected national Medicaid savings of 

$32 112 270 annually if State Child Support Enforcement agencies adequately detect 

and pursue available dependent health insurance and absent parents had their 

dependents enrolled. We also found that State Child Support Enforcement agencies 

did not routinely collect health insurance information and that the Offce of Child 

Support Enforcement (OCSE) Program Results Audit Guide inadequately addressed 

medical support. 

MEllODOWGY 

This inspection is based on a regression analysis of data collected in the 1989 

inspection, plus the analysis of information and targeting criteria collected from the 

50 States, the District of Columbia, Guam, Puerto Rico and the Virgin Islands. For 

ease in understanding, we will refer to each of these entities as States throughout this 

report. 

We used two separate methods of data collection to obtain information about States 

targeting criteria. We asked each State Child Support Enforcement agency to 

provide us with a copy of any targeting criteria they had developed, as of June 1 

1990, to target child support cases with a high potential for medical support. 

also asked them to provide us with the name and telephone number of a person 

within the Child Support Enforcement agency whom we could contact to gather 

information regarding development and implementation of the criteria. 

Following receipt and initial analysis of the targeting criteria information, we 

conducted telephone intervews with the contact persons identified by each State 

Child Support Enforcement agency. During these intervews we solicited information 

regarding who developed the criteria, the basis for criteria selection, when the 

criteria were developed, and what guidance and/or time frames the Administration 

for Children and Families (ACF), formerly the Family Support Administration, Office 

of Child Support Enforcement (OCSE) provided regarding the development of 

targeting criteria. We also asked: (1) whether or not child support cases in their 

State are reviewed for the sole purpose of identifyng medical support; (2) if they 

modify court orders for the sole purpose of including medical support; (3) for 

information regarding the effectiveness and success rate attached to their criteria; 

and (4) for effective practices regarding the identification and development of 

medical support which could be shared with other State Child Support Enforcement 

agencies. 
, 

In addition, we conducted an analysis of information collected during the 1989 

inspection to determne what criteria would be most important in identifyng cases 

with potential Medicaid savigs. The 1989 inspection data consisted of information 

collected durig our review of a random sample of 214 child support cases in eight 

States. 

We used regression analysis to determine the criteria most indicative of cases with 

savigs. Specifcally, logistic regression analysis was used since the values for savings 

were transformed from a dollar amount to a yes/no variable. 1 This analysis 

considered all independent variables simultaneously to produce the predictive model. 

Ron N. Forthofer and Robert G. Lehnen Public Program Analysis - A New 

Categorical Data Approach " Lifetie Learning Publications, Belmont, California 

1981. 
FINDINGS


peen of th State ha crer in place as of Jun 199. 46 On 

As of June 1, 1990, more than 20 months after publication of the final regulations 

and over 14 months after their effective date, only 25 (46 percent) of the 54 States 

( entities) had implemented criteria to target cases with high potential for medical 

support. Twelve States had developed criteria, but not yet implemented them. The 

remaining 17 States had not developed criteria as of June 1, 1990. 

Of the 29 States which had not implemented criteria: 

12 had developed targeting criteria, but not yet implemented them; 

8 were currently developing targeting criteria; 

3 anticipated developing targeting criteria sometime in the future; and 

6 anticipated no development of targeting criteria. 

The following chart depicts the status of targeting criteria development in all 54 

States (entities). 

Status of Targeting Criteria Development 

(June 1, 1990) 

None Anticipated 

11% 

Future Development 

Developed 

and Being Developed 

Implemented 15% 

46% 

Developed, but


Not Implemented


22% 
, 

A "Development Report Card" depicting the status of targeting criteria development 

by State is shown in Appendix A 

Absent paren emploe4' is the crn mo lily to proe availble healt 

innce. 

Of all the information variables in the 1989 sampled case files (see Appendix B), we 

identified knowledge of "absent parent employment" as the criterion most significantly 

related to the probabilty of obtaining Medicaid savings. We determined that cases 

in which the absent parent is employed are three times as likely to generate savings 

as cases where the absent parent is unemployed or employment is unknown. As 

shown in Appendix C absent parent employed" was also the criteria most often 

selected by the States. 

As shown in the following chart, when all criteria/variables available from the case 

files were considered, six were identified by the regression analysis as statistically 

signficant in terms of their effect on savings. 

Crier Most Likly to Idetify Caes 

wih Medicaid Savigs 

Percent of Percent of 

Cases with Total 

Criteria/Variable Savings Savings 

Absent Parent Employed 

Wage Withholding 

AFDC Application Complete 

Absent Parent Age 

18-24 years 

31-40 years 

Original Court Order 

Although these six variables were identified as significant, only one variable, absent 

parent employed, appeared in the model. This is due to the fact that once absent 

parent employed was identifed, the other variables did not add to the prediction 
model of a case with savings. The full results of the regression model are presented 

in Appendix B. 

48 peen of th States can moif exg cour ord for On th sole purse of inclug meal support 

Less than half (26) of the 54 States can modify court orders for the sole purpose of 

including medical support. Further, only eighteen (72 percent) of the 25 States with 

targeting criteria in effect and only 8 (67 percent) of the 12 States with criteria 

developed and awaiting implementation, can modify court orders for the sole 

purpose of including medical support. That means that in 11 (30 percent) of the 

37 States with criteria already developed, even if medical support is found, the case 

cannot be modified to include it unless some other modification is also taking place. 

This renders the criteria useless in cases where no other modifications are required. 

Th deelopment and applicatin of targetig creri vari frm State-to-State. 

Most States selected absent parent employed and wage assignments, the same top 

two criteria identified in our regression analysis, as the criteria most likely to target 

cases with a high potential for medical support. Absent parent employment was 

selected as a criterion to target cases for medical support by 22 (59 percent) of the 

37 States with criteria in effect, making it the most popular criteria. Eighteen 

(49 percent) selected wage assignments as one of their criteria, making it the second 

most popular criterion. In total, States reported using 21 different criteria (see 

Appendix C). The number of different criteria selected for use varied from 1 to 5 per State. 


State Child Support Enforcement staff developed the criteria in 29 (78 percent) of 

the 37 States. The particular staff named as having been instrumental in the 

development were program administrators, directors, deputy directors, case workers 

case managers, operations staff, policy and procedures staff, planning and program 

development staff. The eight other State Child Support Enforcement agencies also 

enlisted the assistance of other State and county employees in developing their 

criteria. Four of the eight enlisted the assistance of State, district and Child Support 

Enforcement attorneys. Two worked in conjunction with the State Medicaid/medical 

care agency, one received assistance from OCSE, and another worked with State 

employment division staff to develop their criteria. 

Previous experiences and/or Federal regulations were the basis for criteria selection 

in 34 (92 percent) of the 37 States. The States also identified recommendations 

from other State Child Support Enforcement agencies, what their State laws would 

permit, OCSE assistance, and their own research as determining factors in the 

selection of targeting criteria. 
Only 10 (40 percent) of the 25 States that have implemented criteria review child 

support cases for the sole purpose of detecting medical support. The other 15 States 

(60 percent) review for medical support only in conjunction with other reviews. In 

these 15 States, the persons intervewed made the following comments: 

We have not been required to review cases for the sole purpose of medical 

support. 

It would be sily to look at a case just for medical support. 

Child support modification is the big thing. 

A majority (16 of 25) of the States that have implemented targeting criteria use 

automated systems to identify cases which meet their criteria. Eight States 

(32 percent) use a manual review system. The other State uses a combination of 

both manual and automated review. 

Child Support Enforcement caseworkers are responsible for processing targeted cases 

in 17 (68 percent) of the 25 States with targeting criteria in effect. Processing is 

handled by a specialized person or team in four States and the legal division 

three. One State uses a processing method in which their automated system 

automatically generates letters to absent parents and employers in cases which meet 

their criteria. 

Only three States were able to tell us how many cases they have flagged which meet 

their established criteria. One State, which uses a manual system of review to 

identify cases, estimates they have identified less than 20 cases in the 4 months since 

they began using their criteria. The other two States use an automated method of 

case identification. One of those States estimates they have flagged between 5 000 

and 6 000 cases in the 9 months since their criteria became effective. Their 

automated system conducts a monthly match of cases which meet the established 

criteria, as well as conducting its own simulated calculations to identify cases where 

changes have occurred in the absent parent s financial status. The other State is 

involved in a pilot project in which they review cases on a county-by-county basis. 

They reported the identification of 16 absent parents with available dependent health 

insurance in the 6 months since they began using their criteria. None of these States 

had calculated the Medicaid savings for cases targeted by their criteria. 

Even though they had no statistics regarding the success of targeting criteria, one 

State provided us with information regarding a survey they completed in five of their 

offces. Based on this survey, they estimate that in Aid to Familes with Dependent 

Children (AFDC) cases, approxiately 35.8 percent of the absent parents have 

medical insurance available through their employers but do not have their 
dependents enrolled. By applying that percentage to the total number of cases in 

their State, they projected an annual Medicaid savings of $2 827 703. 
RECOMMENDATIONS


ACF shoul enforce cuen regtins regardg th targetig of meical support 

and place adnal empha on it importe. Th 

To accomplish this, we suggest that ACF 

enforce current regulations requiring States to develop criteria to target cases 

with a high potential for medical support 

include the review of targeting criteria in the medical support portion of their 

Program Results Audit Guide 

provide technical support to States which have not yet developed targeting 

criteria, and 

provide State Child Support Enforcement agencies with a list of the criteria 

we found most significant in the detection of absent parent health insurance 

and potential medical savings. 

Th ACF shoul reqire States, as a condn of partcipatin, to hae lelatin which 

woul allw the to moif cour ordrs for th sole pure of inluing meical 

support 

The ACF developed a Notice of Proposed Rulemaking (NPRM) which would add 

the ability to modify for medical support to the conditions for participation in the 

child support enforcement program. This NPRM, published August 15, 1990 

proposes that a States s procedures be required to treat the availability of reasonably 

priced health insurance as adequate grounds to petition for modification of a child 

support order. The ACF should finalize these regulations expeditiously. 

This requirement will address the problem we found in some States, where 

modification of orders is extremely diffcult to initiate because the basis for access to 

the courts for modification is very narrowly defined. We also believe, as stated in 

the NPRM, because of the value of providing medical support for children, the 

States' procedures must define the availabilty of health insurance coverage as 

suffcient to warrant seeking modification of the order. 
Th ACF shoul inlu constin of meal support whe restug inene

pay. 

States receive incentive payments designed to encourage them to develop programs 

emphasizing collections on behalf of all children and improvig program 

effectiveness. These incentive payments range from 6 to 10 percent of all chid 

support collections, based upon each States' individual collection/cost ratio. Directing 

some of these Federal incentive payments toward medical support would reward 

States performing well in the area of medical support.


AGENCY COMM 

The ACF generally concurs with the recommendations presented in this report, and 

has taken several actions to address our concerns. They have developed a legislative 

proposal to change incentive payments to "encourage States to increase the amount 

of servces being provided to familes and...take into account performance areas 

deservng positive recognition." They indicated that "this proposal, in combination 

with the proposed regulation on treating the availabilty of reasonably priced health 

insurance coverage as grounds for petitioning for modification of the support order 

demonstrates (they) are considering medical support in the restructuring of incentive 

payments." The ACF's verbatim comments can be found in Appendix E. 

In general, the HCF A also concurs with the recommendations presented in this 

report. They are particularly interested in the recommendation which encourages the 

ACF to consider medical support when restructuring incentive payments. They 

stated that "the ACF's current incentive structure acts as a disincentive to medical 

support enforcement." They "strongly support efforts to change the method of 

calculating incentive payments for ACF to include medical support. 

In response to the RCFA' s specific comments, we have revised the report to clarify that regulations require all State Child Support Enforcement agencies to develop 

wrtten criteria to identify "existing" cases with a high potential for medical support. 

The RCF A also indicated that it was unclear from this report whether or not the 

$32 milion annual savings reported in two prior reports would be saved if States 

developed and applied wrtten criteria for targeting cases with a high potential for 

medical support. We want to clarify that the $32 millon annual savigs results from 

adequate detection and pursuit of available group health insurance. The 

development and application of targeting criteria would assist States in the realiation 

of such savings. The RCF A's verbatim comments can be found in Appendix F. 
Appendix A 

Targeting Criteria Development Report Card 

DeveloDed/ Deve!o:e: Future 

effec:i'le But c, Under Development Develooment State by )6/01/90 bole!e te: Develooment Anticipated Anticioated tHHtHHHtHtHtHHtHHHHHHtHHHtHfHHHfHfHtHHfHfHHHtHHfHfHfHtHHHHfHHHHHHfHHHH 

AlasKa 

Alabaaa 

ArKansas 

Arizona 

Caiifc!'nia 

Colorado 

Connecticut 

Dist. Coiu


DelaMare 

Florida 

Seor;i a


Sual 

HaHai i 

Iowa 

Ir.di '3r.a 

!linois 

Indiana 

Kansas 

Kentuck' 

Leui 5i ana 

"a5sac u!:et 

arvland 

al 

ichigai1 

innesota 

l'issc!Jri 

l1issi:siopi 

on tana 

North ':aro! ina 

North akota 

NebrasKa 

NeM Halosh i re 

New JerS2Y 

New e;( i:: 

Nevada 

NeM 'fcr 

Ohi 0 

Okl anoIa 

gcn 

Pennsyl vania 

Puerto Ri co


Rhode Island 

South Carol ina 

South Dakota


Tennesse!: 

iexas 

Utah 

Virginia 

Virgin Islands 

Vermont 

Washington 

Wisconsin 

Nest Virginia 

Wyoming 

Total 25 (46: 12 12:1 8 (IS:) 3 16:) 6 1m: 
Appendix B 

Summary of Regression Analysis 

(1989 Inspection Variables) 

MODEL % OF 

UNADJ. ADSTED CASES % OF 

ODDS ODDS FALSE WITH SAVINGS TOTAL 

VARIABLES RATIO RATIO SAVINGS FOUND SAVINGS 

ABSENT PARNT AGE 

UNKNOWN $ 5, 397

18-24 1.66 $ 4, 626 65% 

25-30 1.03 $ 8, 171 17. 05% 

*31-40 1. 95 * 21 * $21, 638 45. 15% 

41 & UP $ 8, 093 16. 89% 

ABSENT PARNT EMPLOYED


NOT EMPLOYED $ 2, 681 

*EMPLOYED 26 * $45 244 94. 41% 

AFDC APPLICATION 

INCOMPLETE $36 954 

COMPLETE 1.09 11 * $10 971 22. 89% 

NOT IN FILE $36 696 

IN FILE $11, 229 23. 43% 

TYPE OF CASE


PATERNITY $19, 822 

DIVORCE 1. 03 1.41 $28, 023 58 . 47% 

MONTHLY SALAY 

..$1, 000 $35, 797 

$1000 1.41 1.24 $12, 178 25. 41% 

NUBER OF CHILDREN 

ONE CHILD $38, 748 

2 , 3 OR 4 CHILDREN 1.05 $ 9, 177 19. 15% 

TYPE OF PAYMNT 

VOLUNTARY $10 803 

*WAGE ASSIGNMNT 1.98 1.97 $27, 588 57. 56% 

MONTHLY SUPPORT AMOUN ORDERED 

..$100 $35, 243 

$100 1.52 $12, 682 26. 46% 

TYPE OF ORDER


AMNDED OR PATERNITY $11, 940


DIVORCE 937 1. 96%


ORIGINAL 1.37 1.94 $35, 048 73. 13% 

* Variables considered significant in the detection of available health 

insurance based on probability of . 1 or less. 
&. 

DEPARTMENT OF HEALTH HUMA SERVICES


Appendix E 

Date: June 24 , 1991 

To:	 Richard P. Kusserow 

Inspector General 

From: Jo Anne. B. Barnhart 

Assistant Secretary 

for children and 

Subj ect :	 Comments on Office nspector General Draft

Report, "State Child Support Enforcement criteria for 

Targeting Medical support " OEI-07-90-00120 

Thank you for forwarding your draft report for our review. We


agree that importance must be attached by the States to the


effective and efficient implementation of criteria for targetin 

cases for medical support modification. Several actions have 

already been taken to address concerns in this particular area. 

Since your report does not portray these endeavors, we will 

discuss them within the context of your specific recommendations. 

Our specific comments concerning the report' s recommendations 

follow: 

IG Recommendation


The ACF should enforce current recrlations reaardina the


taraetina of medical support and place additional emphasis


on its importance


OCSE Comment 

We are taking the first three specific recommended actions:


We are enforcing current regulations requiring


States to d"evelop criteria to target cases with a


high potential for medical support. The


regulation became effective in the middle of FY
 1989. In der to assure equitable treatment of 

all States, the requirement for States to develop 

the criteria is being audited for substantial 

compliance effective with audit periods beginning 

on or after October 1, 1989. These audits are 

currently being conducted. 

The review of targeting criteria is , of course,


now included in the medical support portion of the


Program Resul ts Audit Guide.

... . . .. .

Page 2 - Mr. Richard Kusserow


As we have stated in previous memoranda, we are


invol ved in a concerted effort, wi th the Health 

Care Financing Administration (HCFA) to improve 

overall medical support performance. As part of 

this effort, OCSE and HCFA regional staff are

conducting j oint reviews of the full gamut of the

States ' medical support programs and providing 

reports of problems and recommendations to resolve them. To date, twenty-eight states have been 

reviewed in this manner. A review protocol has 

been developed for national use in the reviews. 

This protocol prominently features the case 

targeting requirement as one of the purposes of 

the review and ensures that the issue is

adequately addressed. 

We will gladly provide the state agencies with a list of the


criteria which you found most significant in the detection


of absent parent health insurance and potential medical


savings. 

IG Recommendation


The ACF should reauire States, as a condition of 

participation, to have leqislation which would allow them to 

modifv court orders for the sole purpose of includinq 

medical support


OCSE Comment 

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


condition for approval of (a) state plan,


guidelines. . . for setting and modifying child support


awards. . . must. . . provide for the child (ren ' s) health care


means. II needs, through health insurance coverage or other 


In addition, OCSE published a proposed regulation which
 states that the " ... availability of reasonably priced health 

insurance coverage.. . of' must be treated " as adequate (support) grounds for petitioning for modification of the


order. II The final regulation is under development. 

IG Recommendation 

The ACF should include consideration of medical support when 

restructurinq incentive pavrents 

OCSE Comment 

We have developed a legislative proposal to change incentive


payments to " encourage states to increase the amount of
 and... take into account services being provided to families 

Page 3 - Mr. Richard Kusserow


performance areas deserving positive recognition. n The 

... for. each proposal provides that payment of a bonusThis proposal, in obligation established or modified... 

combination with the proposed regulation on treatinq the 

availability of reasonably priced health insurance coverage 

as qrounds for petitioning for modification of the support 

order, demonstrates that we are considerinq medical support 

in the restructurinq of incentive payments. 
Health Care 

DEPARTMENT OF HEALTH &. HUMAN SERVICES Finar.cing Administration 

4Ia 

Date 

From 

Subject 

J1 I 9 

Memorandum 199 

Appendix F Gail R. Wilensky, Ph.
 Adminstrator M(\ 

OIG Draf Report: "State Child Support Enforcement Criteria for Targeting 

Medical Support" (OEI-07-90-00120) 

Inspector General 

Offce of the Secreta 

Thank you for the opportunity to review the subject draf report Although the 

report does not contain any direct recommendations for our Agency, we have 

provided comments. 

In general, we are supportive of all the recommendations identifed in the report. 

We are particularly interested in the third recommendation which encourages the 

Adminstration for Children and Families (ACF) to consider medical support when 

restrcturig incentive payments. The ACF's current incentive structure acts as a 

disincentive to medical support enforcement. We strongly support efforts to change 

the method of calculating incentive pavrents for ACF to include medical support. 

Although we are hopeful that the incentive structure could be revised, the 

recommendation may not be strong enough to bring about the desired result. The 

recommendation states that ACF should consider medical support when 

restructurig incentive payments. Restructurig incentive payments would require 

the enactment of Federal legislation to provide ACF with the authority to revise its 

incentive structure. Therefore, we suggest that GIG make its recommendation along 

these lines. 

Weare workig with ACF to improve interaction between our respective 

programs. In June 1990, a joint work group was established to identify policy, 

operational, and systems issues. Varous activties are under way to resolve some of 

the concerns identified by the work group. 

Attached are additional comments. Thank you for the opportunity to comment 

on this report. 

Attchment 
Comments of the Health Care Financing Administration 

on the Draft DIG Report 

State Child Support Enforcement Criteria 

for Targeting Medical Support" 

Specific Comments 

State Child Support Enforcement agencies are required to develop wrtten 

criteria to identify cases with a high potential for obtag medica support 

This report implies that the wrtten criteria applies to new caes as well as to all 

existing cour orders. This is not the intent of the regulations. As set forth in 

45 CF 303.31(b)(1) and (2), unless the custodial parent and the child(ren) have 

satisfactory health insurance other than Medicaid, State Chld Support 

Enforcement agencies are to petition the court for medical support in new court 

orders or modified orders. Therefore, it is not appropriate for the State Chld 

Support Enforcement agency to apply its own wrtten criteria to new cases or 

cases which require modifcation of existing orders for reasons other than 

medical support. 

States should apply the criteria to cases with existing medical support orders 

where no other modification to medical support orders is anticipated. The 

regulations at 45 CFR 303.31(b)(3) require that wrtten criteria be used to 

identify cases with a high potential for obtaining medical support in situations not 

covered under 45 CFR 303.31(b)(1) and (2). 

o Ths report refers to two previous report issued by OIG which indicate that over 

$32 milion annually could be saved if employer provided health insurance had 

been used to pay for the medical care of dependent children. 

It is unclear from this report if OIG is implyig that $32 millon could be saved 

if States develop and apply wrtten criteria for targeting cases with a high 

potential for medical support. Based on our review of the two previous reports 

we understand that the $32 miion applied to savings which could be realized if 

States enforced medical support in all cases included under 45 CFR 303.31(b)(1), 

(2), and (3). If this is the case, the amount of savings to be realied by applying 

wrtten criteria would be less than $32 milion. 

, therefore, recommend that the report be revised to clarify that regulations 

require wrtten criteria be used to identify cases with a high potential for medical 

where a court order exists and there is no other modifcation anticipated. 

We also recommend that the $32 milion estimate be clarified. 

support