From the Alliance for Children

New Report Finds Bush-era Medicaid Policies on Children’s Mental Health Continue Despite Obama’s Rollback

Children Lose Access to Vital Mental Health Care as Restrictions on Therapeutic Programs Continue

WASHINGTON, D.C. – States have continued to implement Bush-era Medicaid policies on children’s mental health despite a decision by the Obama administration to reverse those policies, according to a new report released today by the Alliance for Children and Families, a coalition of nonprofit health care providers for children in the child welfare system.  The Alliance estimates that left unaddressed, the ongoing implementation of the Bush policies could reduce needed mental health care for tens of thousands of children across the nation.

The report found that states are continuing to implement Bush administration policies that limited funding for mental health services for foster children with serious emotional disturbances.  These services, including therapeutic foster care (TFC), rely heavily on Medicaid funding. 

The Bush administration began restricting these services in some states in 2003 and continued the restrictions throughout the 2000s, even after Congress blocked their implementation.  When President Obama entered office, he rolled back regulations limiting these Medicaid services.  However, due to a combination of state momentum and incomplete reversals of the Bush policies by the Centers for Medicare and Medicaid Services (CMS), their implementation has continued. 

Nonprofit child welfare providers report that the continuation of the Bush-era restrictions has resulted in serious harm to foster children and to state child welfare systems.  Normer Adams, Executive Director of the Georgia Association of Homes and Services for Children, described the implementation of the policies in Georgia as “like a bomb was set off in our child welfare system.“ 

In Colorado, “our state system is crippled right now.  It is in fiscal crisis,” stated Dr. Skip Barber, Executive Director of the Colorado Association of Family and Children’s Agencies.

Ongoing implementation of the Bush policies has also resulted in poorer health outcomes for children and increases in community violence.  “The continuation of these Bush Medicaid policies is harming vulnerable children’s health,“ said Patrick Lester, Senior Vice President of Public Policy for the Alliance.  “We understand that policy changes take time for any new administration to implement, but it is far past time for CMS to act.”

The report compiled information on nineteen states from 2003 to the present.  During this period, twelve of the states had implemented the Bush policies or had begun doing so, even after Congress passed a law in 2007 blocking the restrictions from taking effect.  States report that without a clear reversal of policy from CMS, they feel compelled to continue with the changes or risk being found to be out of compliance with federal Medicaid law.  The result has been widespread funding cuts to therapeutic services.

The report describes several policy options for CMS and Congress to halt the ongoing implementation of the Bush policies.  These include written guidance from CMS approving therapeutic foster care as a Medicaid-reimbursable service, which would give states immediate relief from the Bush policies.  To permanently ensure states’ ability to cover such services, Congress could consider including them in health reform as Medicaid-reimbursable services.  Congress may also opt to enact the Medicaid Services Restoration Act (S. 1217), which creates a new category of Medicaid funding for therapeutic foster care and expressly permits states to use “reasonable” payment methodologies (including daily bundled payments) for rehabilitative services.

A short summary of the report is available online at:  

http://www.alliance1.org/Public_Policy/Continuation.pdf

The full report is available online at:

http://www.alliance1.org/Public_Policy/Health/Bush_era.pdf