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 Enforcement’s 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 President’s 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 President’s Executive Order. It will review the OIG’s 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 Treasury’s 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. 

..* 

III 

0 
�  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 physician’s 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 NIH’s 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 debtor’s 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 Administration’s (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 

Sample Cases bv Program 

Medicare 

NHSC 

NIH 

Total 

Strata 

Under $11,590 to Over 

$11.590 $45,000 $45,000 Total 

49 48 104 201 

0 3 3 6 

2 Q 1 3 

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 employer’s 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 President’s 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 

Arrearage 

Number Amount 

1 $5,394 

2 $62,090 

3 $304,916 

4 $124,324 

5 $22,45 1 

6 $63,188 

7 $12,050 

8 $76,997 

9 $119,968 

10 $72,604 

11 $97,000 

12 $78,167 

13 $1,000 

Totals $1,040,149 

Medicare 

Reimbursement 

in 1995 

$128 

(Unemployed 

Physician) 

No claims 

filed 

$108,447 

$2,543 

$203,441 

(Bench warrant 

for arrest) 

$2,017 

$11,411 

No claims 

filed 

$38 

No claims 

filed 

$58,334 

$386,359 

Offset Potential of 

Reimbursement 

Against the 

Arrearage 

$128 

-O­

-O-

$108,447 

$2,543 

$63,188 

-O-

$2,017 

$11,411 

-O-

$38 

-O-

$1,000 

$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 Department’s 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 nation’s 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 President’s 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 President’s Executive Order. It will review the OIG’s 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 Treasury’s 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 physician’s 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 NM’s comments. 

10 
APPENDK 

AGENCIES’ COIVfbfEm 

11 
DEPARTMENTOFHEALTHBrHUMANSERVICES 

ADMINISTRATION FOR CHILDREN AND FAMILIES 

Office of the Assistant Secretary, Suite 600 

370 L’Enfant PromenadcbZLb!$ 

Washington, D.C. 2044G; E -~ i’,i c --V 

DATE: June 16, 1997 

TO: June Gibbs Brown 

Inspector General 

FROM: Olivia A. Golden 

c, ;-ii r-l .c z 

7 -. f,

:7- s :y 

:;i. ..* -.I. .-.---

.I..- '* w -. 

c

7 s 

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’:,;: .:‘:yj 1-! p lf+Gve are Financing Administration

. 

.-- I .* -- ‘.;a. I. . .,.,IJ:.

Gzi-Js;i ,.L The AdminiQfator 

Washington, D.C. 20201 

TO: 

FROM: 

SUBJECT: 

JUN I6 1997 

June Gibbs Brown 

Inspector General 

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 President’s 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) onOffice 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 President’s 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 physician’s 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 scholarship or 

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 scholarships nor 

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 prevent‘new 

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 scholarship and 

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 NlH’s 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 costbenefit 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