Children with mental health conditions can be treated with psychotropic medications, psychosocial therapies, or a combination of both. Psychotropic medications can be very effective in treating children with mental health conditions, but they may also produce side effects, some of which can be serious. For example, according to the American Academy of Child & Adolescent Psychiatry (AACAP), medications used to treat ADHD can reduce symptoms such as hyperactivity in children, as well as improve their attention and increase their ability to get along with others. These medications have been widely tested in children and are generally considered safe; however, ADHD medications have also been associated with side effects ranging from mild to serious, such as sleeplessness, loss of appetite, tics, agitation, hallucinations, liver problems, and suicidal thoughts. Research has shown that foster children take psychotropic medications at much higher rates than other children covered by Medicaid. For example, we previously reported that while about 5 to 10 percent of nonfoster children in five states’ Medicaid programs took a psychotropic medication in 2008, rates among children in foster care were about 20 to 39 percent. The use of five or more medications concomitantly (that is, at the same time), while rare, was also higher among children in foster care. We reported that several factors may have contributed to the higher utilization rates among foster children, such as the increased prevalence and greater severity of mental health conditions among these children. Studies have shown that rates of psychotropic medication use among all children have increased. For example, one study found that the percentage of children’s doctor visits involving psychotropic medications increased by 75 percent from 1996 to 2007—from 6 percent to about 11 percent. Among these visits, those involving two or more medications rose from about 14 percent to about 20 percent. Experts have identified a number of potential factors that could account for the increased use of psychotropic medications. For example, AACAP’s guidelines on the use of psychotropic medications for children identified explanations such as the expanding evidence base demonstrating the efficacy of these medications for children and the efforts of pharmaceutical companies to market drugs to prescribers and consumers. Pharmacy benefit managers are firms that administer prescription drug benefits on behalf of health insurance plans. Furthermore, some studies found that the prescribing of antipsychotics was higher among publicly insured children than among privately insured children, and even higher among foster children. One study found that children enrolled in Medicaid were prescribed antipsychotic medications at over four times the rate of children with private insurance in 2004. In addition, AHRQ funded a study of antipsychotic prescribing based on Medicaid claims from 13 states, which found that utilization of antipsychotics in 2007 was much higher among foster children than among nonfoster children in Medicaid—12.4 percent on average versus 1.4 percent, respectively. Prescribing of antipsychotics is a concern for CMS and state Medicaid programs not only because of safety issues, but also because these medications are costly. They represented the single largest drug expenditure category for Medicaid in 2007—over $2.8 billion. One reason for particular concern about growing use of antipsychotics and other psychotropic medications in children is that manufacturers do not always test medications for use in children. Manufacturers are responsible for conducting clinical trials and demonstrating their products’ safety and efficacy to FDA, which is responsible for making decisions about whether and how medications can be marketed for children and for ensuring that manufacturers incorporate information from pediatric clinical trials into medication labels when required. However, because children are a small part of the overall population and physicians can prescribe medications off-label to children even if the medications have been tested only in adults, manufacturers may lack economic incentives to conduct trials with children. According to a recent analysis by FDA scientists, fewer than half of all medications were adequately labeled for pediatric use in 2009. The Best Pharmaceuticals for Children Act (BPCA) and the Pediatric Research Equity Act (PREA) address testing of medications in children by authorizing FDA to provide incentives for or require manufacturers to conduct pediatric studies in certain circumstances. (For more information on BPCA and PREA and label changes for psychotropic medications resulting from these laws, see app. III.) Psychosocial therapies are mental health treatments that generally involve sessions with a mental health professional that are designed to reduce patients’ emotional or behavioral symptoms. Such therapies may be used instead of, or in combination with, psychotropic medications to Psychosocial therapies that treat children with mental health conditions.have been shown to be effective in treating mental health conditions may be referred to as evidence-based therapies (EBT). While there is no standard definition of what constitutes “evidence-based,” some federal agencies and provider organizations evaluate and compile information on available therapies. For example, SAMHSA maintains the National Registry of Evidence-based Programs and Practices, a list of treatments that have been assessed by independent evaluators and rated on the strength of the evidence showing their effectiveness. Provider organizations may also make recommendations to providers on which treatments to use. For example, AACAP publishes practice parameters that contain recommendations for treating specific disorders, with each recommendation labeled to indicate the strength of the evidence underlying it. Although psychosocial therapies may be effective for many children, the Institute of Medicine and others have reported that a shortage of mental health providers in general is a major factor affecting access to services, especially for children. Furthermore, finding a mental health professional who has been trained to provide a specific EBT can be a challenge because training in EBTs is not uniformly required in medical and professional schools. Children enter foster care when they have been removed from their parents or guardians and placed under the responsibility of a state child welfare agency, often because of maltreatment at home. Removal from the home can occur for multiple reasons, including parental violence, substance abuse, severe depression, or incarceration. According to ACF, 46 percent of children investigated by child welfare services came to a state’s attention primarily because of a report of neglect, and 27 percent had experienced physical abuse as the most serious form of recorded maltreatment. Other children are referred when their own behaviors or conditions are beyond the control of their families or they pose a threat to themselves or the community. Children in foster care can experience traumatic stress due to maltreatment experienced at home as well as the trauma of being removed from their homes. Trauma significantly increases the risk of mental health problems, difficulties with social relationships and behavior, physical illness, and poor school performance. Furthermore, child mental health experts have stated that the traumatic stress symptoms foster children may experience are often the same as symptoms that can indicate other mental health conditions, which may lead to misdiagnosis and inappropriate treatments. When children are taken into foster care, the state’s child welfare agency becomes responsible for determining where the child should live and providing the child with needed supports. The agency may place the foster child in the home of a relative, with unrelated foster parents, or in a group home or residential treatment center, depending on the child’s needs. The agency is responsible for arranging needed services, including mental health services. Federal officials, providers, and child and mental health advocacy groups have identified several factors that create challenges for foster children in receiving appropriate mental health services. Foster children can experience frequent changes in their living placements, which can lead to a lack of continuity in mental health care, and new providers may not have the medical history of the patient.This lack of stability can lead to treatment disruptions and can increase the number of medications prescribed. Coordinating mental health care for foster children may be difficult for both the medical provider and the case worker because multiple people are making decisions on the child’s behalf. In addition, caseworkers in child welfare agencies may have large caseloads, making it difficult for them to ensure that foster children’s mental health needs are being met. As a condition of receiving federal child welfare grant funding, state child welfare agencies must annually submit plans to ACF that, among other things, address the mental and other health needs of foster children. In 2011, the Child and Family Services Improvement and Innovation Act (Child Improvement Act) required states, as part of these plans, to identify protocols for monitoring foster children’s use of psychotropic medications and to address how emotional trauma associated with children’s maltreatment and removal from their home will be monitored and treated. As part of their June 2012 Annual Progress and Service Reports to ACF, states provided information on their plans for monitoring psychotropic medication prescribing and treatment of emotional trauma for foster children. Prior to the Child Improvement Act, many states had already implemented policies and practices regarding prescribing psychotropic medications for foster children, such as issuing written guidelines for prescribers, collecting data to monitor prescribing, requiring informed consent from relevant parties before filling a prescription, and requiring consultation with a mental health specialist for prescriptions exceeding certain dosage thresholds. On average, 6.2 percent of noninstitutionalized children in Medicaid nationwide took psychotropic medications during a calendar year from 2007 through 2009, and 21 percent of those children took an antipsychotic medication. The estimates for privately insured children were lower. About 14 percent of children in Medicaid had a potential need for mental health services, and over two-thirds of them did not receive any services. CMS and states have made efforts to ensure that children receive appropriate mental health services, but CMS’s ability to monitor their receipt of services for which they were referred is limited because CMS does not collect information from states on whether children in Medicaid have received services for which they were referred. Our analysis of MEPS data from 2007 through 2009 found that, on average, 6.2 percent of children in Medicaid nationwide—those who were not in institutions or in foster care and were ages 0 through 20—took at least one psychotropic medication during a calendar year. The comparable rate for privately insured children was lower—4.8 percent. The utilization rate was over twice as high for boys as for girls in Medicaid—8.4 percent versus 3.9 percent.