Child Welfare and Juvenile Justice: Several Factors Influence the
Placement of Children Solely to Obtain Mental Health Services	 
(17-JUL-03, GAO-03-865T).					 
                                                                 
Recent news articles in over 30 states and prominent mental	 
health advocacy organizations have described the difficulty many 
parents have in accessing mental health services for their	 
children. As these reports documented, some parents choose to	 
place their children in the child welfare or juvenile justice	 
systems in order to obtain the mental health services that their 
children need. Senators Susan Collins and Joseph Lieberman of the
Senate Committee on Governmental Affairs asked GAO to testify on:
(1) the number and characteristics of children voluntarily placed
in the child welfare and juvenile justice systems to receive	 
mental health services, (2) the factors that influence such	 
placements, and (3) promising state and local practices that may 
reduce the need for child welfare and juvenile justice		 
placements. This testimony is based on our April 2003 report on  
the results of a study addressing these same objectives. For that
report, we surveyed state child welfare directors in all states  
and the District of Columbia and juvenile justice officials in 33
counties in the 17 states with the largest populations of	 
children under age 18. We surveyed juvenile justice officials at 
the county level because of the decentralized nature of the	 
juvenile justice system. We also researched laws and regulations 
and conducted site visits to 6 states.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-865T					        
    ACCNO:   A07565						        
  TITLE:     Child Welfare and Juvenile Justice: Several Factors      
Influence the Placement of Children Solely to Obtain Mental	 
Health Services 						 
     DATE:   07/17/2003 
  SUBJECT:   Aid for the disabled				 
	     Locally administered programs			 
	     Mental health care services			 
	     Public assistance programs 			 
	     Strategic planning 				 
	     Children with disabilities 			 
	     Foster children					 
	     Arkansas						 
	     California 					 
	     Kansas						 
	     Maryland						 
	     Minnesota						 
	     New Jersey 					 
	     Medicaid Program					 
	     State Children's Health Insurance			 
	     Program						 
                                                                 

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GAO-03-865T

United States General Accounting Office Washington, DC 20548

August 11, 2003 ERRATA

CHILD WELFARE AND JUVENILE JUSTICE: Several Factors Influence the
Placement of Children Solely to Obtain Mental Health Services (GAO- 03-
865T, July 17, 2003)

Page 6, paragraph at bottom of page, last sentence (and carrying over to
page 7) should read:

*Child welfare directors in 6 other states and the District of Columbia
advised us that their states do not allow parents to place children
voluntarily with child welfare agencies to access such services. 7 *

Page 7, footnote 7 should read: *The 6 states are Florida, Hawaii,
Missouri, Montana, New Hampshire, and Texas, based on information received
in response to our survey concerning placements in fiscal year 2001.
However, New Hampshire indicated that the state introduced voluntary
services in state fiscal year 2002 and that it anticipates that some
parents will seek placement for their children.*

Page 11, Table 2, the following states should have only the following
table notes: *Georgia c* *Kansas c* *Montana d*

Page 12, Table 2, table note *d* should read: * d The practice of
voluntary placement or relinquishment is either not legal in the state or
the state generally does not allow parents to place their children solely
to receive mental health services.*

Testimony Before the Committee on Governmental Affairs, U. S. Senate

United States General Accounting Office

GAO For Release on Delivery Expected at 9: 30 a. m. EDT Thursday, July 17,
2003 CHILD WELFARE AND

JUVENILE JUSTICE Several Factors Influence the Placement of Children
Solely to Obtain Mental Health Services

Statement of Cornelia M. Ashby, Director Education, Workforce, and Income
Security Issues

GAO- 03- 865T

Child welfare directors in 19 states and juvenile justice officials in 30
counties estimated that in fiscal year 2001 parents placed over 12,700
children into the child welfare or juvenile justice systems so that these
children could receive mental health services. Nationwide, this number is
likely higher because many state child welfare directors did not provide
data and we had limited coverage of county juvenile justice officials.
Although no agency tracks these children or maintains data on their
characteristics, officials said most are male, adolescent, often have
multiple problems, and many exhibit behaviors that threaten the safety of
themselves and others.

Neither the child welfare nor the juvenile justice system was designed to
serve children who have not been abused or neglected, or who have not
committed a delinquent act. According to officials in the 6 states we
visited, limitations of both public and private health insurance,
inadequate supplies of some mental health services, difficulties accessing
services through mental health agencies and schools, and difficulties
meeting eligibility rules for services influence such placements. Despite
guidance issued by the various federal agencies with responsibilities for
serving children with mental illness, misunderstandings among state and
local officials regarding the roles of the various agencies that provide
such services pose additional

challenges to parents seeking such services for their children. Officials
in the states we visited identified practices that they believe may reduce
the need for some child welfare or juvenile justice placements. These
included finding new ways to reduce the cost of or fund mental health
services, bringing services into a single location to improve access, and
expanding the array of available services. Few of these practices have
been rigorously evaluated. In a related report, we recommended that (1)
the Secretary of Health and

Human Services (HHS) and the Attorney General investigate the feasibility
of tracking these children to identify the extent and outcomes of these
placements, (2) the Secretaries of HHS and Education and the Attorney
General develop an interagency working group to identify the causes of the
misunderstandings and create an action plan to address those causes, and
(3) the agencies continue to encourage states to evaluate the child mental
health programs that states fund or initiate and that they determine the
most effective means of disseminating the results of these and other
available studies to state and local entities. In commenting on a draft of
that report, Education, HHS, and the Department of Justice generally
agreed with our findings but did not fully concur with the
recommendations, particularly related to tracking the children. All three
agencies said they would participate in any interagency working group that
might be established based on our recommendation. Recent news articles in
over 30 states and prominent mental health

advocacy organizations have described the difficulty many parents have in
accessing mental health services for their children. As these reports
documented, some parents choose to place their children in the child
welfare or

juvenile justice systems in order to obtain the mental health services
that their children need. Senators

Susan Collins and Joseph Lieberman of the Senate Committee on Governmental
Affairs asked GAO to testify on: (1) the number and characteristics of

children voluntarily placed in the child welfare and juvenile justice
systems to receive mental health services, (2) the factors that influence
such placements, and (3)

promising state and local practices that may reduce the need for child
welfare and juvenile justice placements. This testimony is based on our
April 2003 report on

the results of a study addressing these same objectives. For that report,
we surveyed state child

welfare directors in all states and the District of Columbia and juvenile
justice officials in 33 counties in the 17 states with the

largest populations of children under age 18. We surveyed juvenile justice
officials at the county level because of the decentralized nature

of the juvenile justice system. We also researched laws and regulations
and conducted site visits to 6 states.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 865T. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Cornelia Ashby at (202) 512- 8403 or ashbyc@ gao.
gov. Highlights of GAO- 03- 865T, a testimony

for the Committee on Governmental Affairs, United States Senate

July 2003

CHILD WELARE AND JUVENILE JUSTICE

Several Factors Influence the Placement of Children Solely to Obtain
Mental Health Services

Page 1 GAO- 03- 865T Madam Chairman and Members of the Committee: Thank
you for inviting me here today to discuss how federal agencies

could do more to help states reduce the number of children placed in child
welfare and juvenile justice systems solely to obtain mental health
services. As recent news articles in over 30 states and prominent mental
health advocacy organizations have reported, many parents have difficulty
accessing mental health services for their children with severe mental
illnesses. 1 In some cases, parents must choose to remove their children
from their homes and seek alternative living arrangements by
inappropriately placing them in the child welfare or juvenile justice
system

to obtain mental health services* two systems not designed to care for
children solely because of their mental health needs. 2 Various federal
laws require that state and local agencies provide services to mentally
ill children in the most integrated setting appropriate to their needs;
that is, children have a right to receive services in their communities
unless their needs can only be met by the state in residential or
institutional placements. My testimony today will focus on three key
issues: (1) the numbers and

characteristics of children voluntarily placed in the child welfare and
juvenile justice systems in order to receive mental health services, (2)
the

1 Federal agencies and states have varying definitions for children with
serious emotional disturbances (SED). For example, the Department of
Health and Human Services* (HHS) Substance Abuse and Mental Health
Services Administration (SAMHSA) defines SED as a diagnosable mental
disorder found in persons from birth to 18 years of age that is so severe
and long lasting that it seriously interferes with functioning in family,
school, community, or other major life activities. Because of these
differences, we use the term *children with severe mental illness* to
describe such children throughout this statement.

2 Child welfare systems are designed to protect children who have been
abused or neglected by, for example, placing children in foster care or
providing family preservation services; and juvenile justice systems are
designed to rehabilitate children who have committed criminal or
delinquent acts or status offenses* that is, according to the Department
of Justice (DOJ), behaviors that are law violations only if committed by
juveniles* and to

prevent such acts from occurring. Consequently, the goals of these systems
and the background and training of their staff reflect these purposes. In
addition, parents cannot voluntarily place their children in the juvenile
justice system. Children are detained in this system as a result of their
delinquent acts or status offenses. However, parents sometimes

request that police arrest their children for behaviors that are related
to or stem from their mental illness when they cannot obtain services
through other means. In this statement, we use the term *placed* to refer
both to children who have been voluntarily placed in the child welfare
system and children who enter the juvenile justice system to receive
mental health services. Because information was not available, we were not
able to report on whether parents relinquished custody of their children
to obtain the services.

Page 2 GAO- 03- 865T factors that influence such placements, and (3) state
and local practices that may reduce the need for some child welfare and
juvenile justice

placements. My comments are based on the findings from our April 2003
report, Child Welfare and Juvenile Justice: Federal Agencies Could Play a
Stronger Role in Helping States Reduce the Number of Children Placed
Solely to Obtain Mental Health Services (GAO- 03- 397, April 21, 2003). In

conducting that study, we analyzed responses to our survey of state child
welfare directors in all states and the District of Columbia and our
survey of juvenile justice officials in 33 counties in the 17 states with
the largest

populations of children under age 18. We surveyed juvenile justice
officials at the county level, rather than at the state level, because of
the decentralized nature of the juvenile justice system. In addition, we
interviewed officials of child- serving agencies, 3 caseworkers, and
parents in 6 states (Arkansas, California, Kansas, Maryland, Minnesota,
and New Jersey) and judges in each state we visited except Minnesota. 4 We
also observed programs that state officials identified as model programs
in those 6 states; interviewed key federal officials and national experts;
and researched state laws and regulations regarding voluntary placement
and relinquishment of parental rights.

In summary, state child welfare officials in 19 states and county juvenile
justice officials in 30 counties estimated that in fiscal year 2001
parents in their jurisdictions placed over 12, 700 children* mostly
adolescent males* into the child welfare or juvenile justice systems so
that these children could receive mental health services. Nationwide, this
number is likely higher because 32 state child welfare officials,
including officials of 5 states with the largest populations of children,
did not provide us with data. However, officials in 11 of those states
indicated that although they did not have an estimate to provide, such
placements occurred in their state. Also, we surveyed juvenile justice
officials in only 33 counties; 30 of which responded with an estimate.
Although no federal or state agency tracks these children or maintains
data on their characteristics, officials said most are male, adolescent,
and often have multiple problems. Many exhibited behavior that threatened
their safety and the safety of others. In addition, these officials said
children who were placed came from families of all financial levels and
that the seriousness of the child*s illness strained the family*s ability
to function.

3 Child- serving agencies include mental health, Medicaid and State
Children*s Health Insurance Program (SCHIP), juvenile justice, education,
and child welfare. 4 We did not interview judges in Minnesota primarily
due to scheduling conflicts.

Page 3 GAO- 03- 865T A variety of factors influenced whether parents
placed their children in the child welfare and juvenile justice systems to
receive mental health services for them; these included limitations in
health insurance coverage,

shortages of mental health services in some localities, difficulties in
accessing services through mental health or education agencies,
eligibility requirements for services provided by different agencies and
programs, and misunderstandings among state and local officials and
service providers regarding the responsibilities of various agencies to
meet children*s mental health needs. For example, despite guidance issued
by various federal agencies with responsibilities for serving children,
state and local officials* views of the roles of their own agency and
other agencies, such as mental health, child welfare, education, and
juvenile justice, showed that they misunderstood those roles and,
therefore, could not effectively give parents complete and accurate
information about available services their agency and other agencies could
provide.

The state officials that we interviewed identified a range of practices in
their states that they believe may help to prevent some child welfare and
juvenile justice placements. These included finding new ways to reduce the
cost of or to fund mental health services, bringing mental health services
into a single location to improve access, and expanding the array of
available services. However, the effectiveness of these practices is
generally unknown because many were new, few were rigorously evaluated,
and many served a small number of children or only children in specific
locations.

To determine the extent to which children may be placed inappropriately in
the child welfare and juvenile justice systems in order to obtain mental
health services, we recommended in our April 2003 report that the
Secretary of Health and Human Services (HHS) and the Attorney General
investigate the feasibility of tracking these children to identify the
extent and outcomes of these placements. To help reduce misunderstandings
at the state and local level, we also recommended that the Secretaries of
HHS and Education and the Attorney General develop an interagency working
group to identify the causes of the misunderstandings and to

create an action plan to address those causes. We further recommended that
these agencies continue to encourage states to evaluate the child mental
health programs that states fund or initiate and that the Secretaries of
HHS and Education and the Attorney General determine the most effective
means of disseminating the results of these and other available studies to
state and local entities. In commenting on a draft of the report, the
Department of Education, HHS, and DOJ generally agreed with our findings
but did not fully concur with the recommendations. Education

Page 4 GAO- 03- 865T said that it did not understand how tracking the
children would increase the likelihood of progressive practices to provide
children*s mental health

services and noted that no recommendations were made for increased grant
spending to duplicate or disseminate the positive features of such
practices. HHS said that asking the agencies to track this population of
children in foster care does not address the larger point of the lack of
mental health resources for families and communities and does not address
the problems of the children or their parents. DOJ agreed that tracking
should occur, but only in the short term, and said that HHS should take
the lead in this activity. All three agencies said they would participate
in any interagency working group that might be established based on our
recommendation.

As defined by the President*s New Freedom Commission on Mental Health, the
mental health system in the United States collectively refers to the full
array of private and public programs for individuals with mental illness
that deliver or pay for treatment and services. The federal government
plays a major role in funding mental health services through public
insurance* Medicaid and SCHIP* and grants to states and local agencies,
and state and local governments play a major role in delivering services.
Most families depend on private and public insurance to pay for mental
health services because such services are expensive, although, as

we discussed in a previous report, children may face certain limitations
in coverage barriers depending on their type of coverage and where they
live. 5 At the federal level, several federal agencies* including HHS*s
SAMHSA,

Centers for Medicare & Medicaid Services (CMS), and the Administration for
Children and Families (ACF); DOJ*s Office of Juvenile Justice and
Delinquency Prevention (OJJDP); and Education*s Office of Special
Education and Rehabilitative Services (OSERS)* have a role in addressing
the mental health needs of children. However, all have individual
mandates, target different but often overlapping populations, and share
responsibilities to varying degrees with state and county agencies. (See
table 1.)

5 U. S. General Accounting Office, Mental Health Services: Effectiveness
of Insurance Coverage and Federal Programs for Children Who Have
Experienced Trauma Largely Unknown, GAO- 02- 813 (Washington, D. C.: Aug.
22, 2002). Background

Page 5 GAO- 03- 865T Table 1: Characteristics of Key Agencies with
Responsibilities for Mentally Ill Children Department and

agency Key activities related to children*s mental health Statute
Population targeted and definition of mental illness

HHS (CMS) Administers the Medicaid and SCHIP programs that provide health
insurance coverage to certain lowincome individuals and disabled children,
including some children with severe mental illness. Awards research
grants. Provides technical assistance to state agencies.

Title XIX of the Social Security Act Certain low- income individuals

and certain disabled individuals. Uses a clinical classification of
diseases to identify children with a mental illness. HHS (ACF) Oversees
the Adoption and Safe Families Act (ASFA) of 1997 that improves the safety
of children and promotes adoption and permanent homes for children who
need them and supports families. Administers Title IV- B of the Social
Security Act that provides funds to states for services that protect the
welfare of children. For example, these services address problems that may
result in the abuse and neglect of children. The funds may also be used to
provide services to families of children with a mental illness.
Administers the Title IV- E Foster Care Funds

Program that provides funds to states to partially cover the costs of room
and board for eligible children from low- income families who are placed
in approved out- of- home living arrangements.

Maintains the Adoption and Foster Care Analysis and Reporting System
(AFCARS), to which states report demographic data on children in foster
care, including diagnoses of mental illness. Awards development, training,
research, and demonstration grants.

Disseminates research. Provides technical assistance. Title IV, Part B and

Part E of the Social Security Act ASFA

Children and families. Uses a clinical classification to identify children
with a mental illness and accepts classifications

used by individual states in identifying children with mental health
needs.

Education (OSERS) Monitors the implementation of the Individuals with

Disabilities Education Act (IDEA). IDEA established the right of disabled
children* including children with mental illness* to receive special
education and related services, such as mental health services, designed
to meet their unique needs and prepare them for employment and independent
living when such services are needed for children to make adequate
progress in school. IDEA requires schools to evaluate children who are
referred for special education services and, if services are required,
develop an individualized education program (IEP) that documents the type
and

intensity of services that will be provided. Funds formula and
discretionary grants. Provides technical assistance. Disseminates
research.

IDEA Promotes improvement in educational results for infants, toddlers,
and children with disabilities.

Under IDEA, the term *child with a disability* means a child, who by
reason of a physical or mental disability, needs special education

and related services.

Page 6 GAO- 03- 865T Department and agency Key activities related to
children*s mental health Statute Population targeted and

definition of mental illness

HHS (SAMHSA) Provides funds to states and local entities to help them
administer, support, or establish programs that specifically target the
mental health needs of children and block grant funding that enables
states to maintain and enhance mental health services. Sponsors the
Systems of Care Initiative to help children and adolescents with serious
mental illnesses and their families receive a variety of services from
schools, community mental health centers, and social services
organizations and facilitate coordination among these service providers.
Awards formula and discretionary development and demonstration grants.
Disseminates research. Provides technical assistance. Public Health
Service

Act Individuals with substance abuse problems, mental illness, or at risk

of substance abuse and mental illness.

Children served meet the following criteria:

age 0 to 18 and

have a diagnosed mental, behavioral, or emotional disorder of sufficient
duration to meet diagnostic criteria that results in impairment that

substantially interferes with or limits the child*s functioning in family,
school, or community activities. DOJ (OJJDP) Helps oversee juvenile
justice programs across the

nation and supports states and local communities in their efforts to
develop and implement effective and coordinated prevention and
intervention programs. Helps improve the juvenile justice system*s ability
to protect public safety, hold offenders accountable, and provide mental
health treatment and rehabilitative services. Funds formula and
discretionary grants. Provides technical assistance. Disseminates
research.

Juvenile Justice and Delinquency Prevention Act

Children who commit crimes or are delinquent and children at risk for
delinquency. Accepts mental illness

classifications used by states to identify children with mental health
needs.

Source: GAO. Note: Other agencies, such as HHS*s Social Security
Administration, DOJ*s Division of Civil Rights, and HHS*s and Education*s
Office for Civil Rights, also have responsibilities for children with
disabilities, including children with a mental illness. Federal law does
not require parents to relinquish their parental rights to

place their children with child welfare agencies. However, after children
are in care for a specific period of time, the law requires that the court
be involved to determine if termination of the parents* rights are in the
best

interest of the child. State laws addressing the ability of parents to
place their children in child welfare systems vary across states.
Nationwide, laws in 11 states allow parents to place children in child
welfare systems on a voluntary basis in order to access mental health
services for as long as necessary without relinquishing custody of the
child to the state. 6 Child

6 The 11 states are: Alaska, Colorado, Connecticut, Iowa, Maine,
Minnesota, North Dakota, Oregon, Rhode Island, Wisconsin, and Vermont.

Page 7 GAO- 03- 865T welfare directors in 6 other states and the District
of Columbia advised us that their states do not allow parents to place
children voluntarily in child

welfare agencies to access such services. 7 Laws in the remaining states
are generally silent regarding voluntary placements for mental health.

Federal agencies with responsibilities for children with mental illness
support interagency collaboration at the federal and local level. For
example, officials at SAMHSA are collaborating with officials at Education
and OJJDP to improve mental health services for children with emotional
and behavioral disorders who are at risk of violent behavior by developing
and implementing a large grant program that targets these children. At the
state and county level, a similar array of agencies provides or funds
services for mentally ill children, and state and federal laws and
policies often determine their roles and responsibilities. Importantly,
federal agencies play a key role in funding research and evaluation
studies and

disseminating the findings of these efforts. For example, SAMSHA, OJJDP,
and OSERS fund research and evaluation studies that target children with
mental illness and disseminate the findings of these efforts, descriptions
of promising practices, and other information through their
clearinghouses, journals, and Web sites. Despite their differences,
programs run by agencies at all levels of

government adhere to the principle of *least restrictive alternative.*
Under this principal, the state has the burden of demonstrating that
state- funded out- of- home placements are necessary for the protection of
the child or society. In 1999, the U. S. Supreme Court established this
principle as a right for disabled children. In Olmstead v L. C., the Court
held that under Title II of the Americans with Disabilities Act, states
may be required to

serve people with disabilities in community settings when such placements
can be reasonably accommodated.

Mental health treatment can be very expensive, and most families rely upon
insurance to help cover the cost of these services. For example, one
outpatient therapy session can cost more than $100, and residential
treatment facilities, which provides 24 hours of care, 7 days a week, can
cost $250, 000 a year or more. Nationwide, about 87 percent of American

7 The 6 states are Florida, Hawaii, Missouri, Montana, New Hampshire, and
Texas, based on information received in response to our survey concerning
placements in fiscal year 2001. However, New Hampshire indicated that the
state introduced voluntary services in state fiscal year 2002 and that it
anticipates that some parents will seek placement for their children.

Page 8 GAO- 03- 865T children are covered by private or public health
insurance plans. Private plans, such as employer- sponsored or
individually purchased plans,

provide health insurance coverage to about 68 percent of American
children, and public programs, such as Medicaid and SCHIP, provide health
insurance coverage to about 19 percent. 8 Most private health insurance
plans offer different coverage for mental

health services than for physical health services. To ensure more
comparable coverage, the federal government passed the federal Mental
Health Parity Act (MHPA) of 1996. MHPA prohibited certain
employersponsored group plans from imposing annual or lifetime
restrictions on mental health benefits that are lower than those imposed
on other benefits. However, the act did not eliminate other restrictions
and limitations on mental health coverage, such as limiting the number of
treatments per year that are reimbursable. In addition, the law does not
apply to plans sponsored by employers with 50 or fewer employees, group
plans that experience an increase in plan claims costs of at least 1
percent because of compliance, and coverage sold in the individual market.
According to the National Council of State Legislatures, as of November
2001, 46 states have passed mental health parity bills. Most of these laws
meet or exceed the federal MHPA standard. However, the Employee Retirement
Income Security Act of 1974 preempts states from directly regulating self-
funded, employer- sponsored health plans; under such circumstances, states
requirements usually do not apply.

For more than 30 years, Medicaid has provided comprehensive health
insurance for children from low- income families. Although individual
states determine many coverage, eligibility, and administrative details,
the federal government sets certain requirements for state Medicaid
programs. These requirements include coverage of screening and necessary
treatment for children. Under Medicaid, states may apply for and receive
approval from the federal government to waive certain provisions of the

Medicaid statute in order to operate a specific program, change the
benefits offered under Medicaid, or make comprehensive changes to their
Medicaid or SCHIP programs. For example, states can use the Home and
Community- Based Services (HCBS) (section 1915( c) of the Social Security
Act) waiver to provide home and community- based long- term care services
to targeted groups of individuals who would otherwise require

8 U. S. General Accounting Office, Health Insurance: States* Protections
and Programs Benefit Some Unemployed Individuals, GAO- 03- 191
(Washington, D. C.: Oct. 25, 2002).

Page 9 GAO- 03- 865T care in a hospital, skilled nursing facility, or
intermediate care facility. To receive the HCBS waiver, states must
demonstrate that the cost of the

services to be provided under the waiver is no more than the cost of
institutionalized care plus any other Medicaid services provided to
institutionalized individuals. Additional flexibility is available to
states under the *Katie Beckett* option, which enables states to use
federal Medicaid funds more flexibly to cover the costs of health care
services in the home and community rather than just in institutional
settings,

regardless of the income and assets of the family. 9 States choosing this
option provide Medicaid coverage for children under age 19 who meet
certain standards for disability, would be eligible for Medicaid if they
were in an institution, and are receiving medical care at home that would
be provided in an institution. Although family income and resources are
not considered in determining eligibility for services under the Katie
Beckett option, states can require families to contribute to the cost of
the program. The Rehabilitation option allows states to provide optional
Medicaid services such as psychiatric rehabilitation and other diagnostic,
screening, and preventive services in nonmedical settings.

States are pursuing a variety of approaches for expanding public health
insurance for uninsured children from low- income families by implementing
SCHIP programs. States have three options in designing SCHIP programs. For
example, 24 states implement SCHIP by expanding Medicaid programs to
include children from low- income families with earnings too high to
qualify for Medicaid. Fourteen have developed a separate or independent
child health insurance program with benefits that differ from those
offered under Medicaid. Others use a combination of

Medicaid and non- Medicaid plans to serve children in families at
different income levels. States operating Medicaid programs* including
SCHIP Medicaidexpansions* must offer the same benefit package to SCHIP
beneficiaries

9 This waiver authority for seriously ill children was inspired by the
case of a ventilator dependent child, Katie Beckett. Katie*s mother
successfully argued that the nursing services her daughter required could
be provided in her home and at a cost less than that of providing the same
care in a hospital. What resulted was the so- called *Katie Beckett

Waiver,* enacted as part of the Tax Equity and Fiscal Responsibility Act
of 1982.

Page 10 GAO- 03- 865T as they do to Medicaid beneficiaries. 10 These
benefits include the Early and Periodic Screening, Diagnostic and
Treatment (EPSDT) provision that

requires states to provide children and adolescents under age 21 with
access to comprehensive, periodic evaluations of physical and mental
health and developmental and nutritional status, as well as vision,
hearing, and dental needs. States must provide all services needed for
conditions discovered through these routine pediatric screenings
regardless of whether the service is covered by the state Medicaid plan
for other beneficiaries. In 2000, more than 1 million children were
enrolled in SCHIP Medicaid expansion programs and were, therefore,
eligible for EPSDT screens.

State child welfare and county juvenile justice officials estimated that
parents in their jurisdictions placed over 12,700 children in fiscal year
2001, generally adolescent males, in child welfare and juvenile justice
agencies so that the children could receive mental health services.
Nationwide, this number is likely higher because officials in 32 states,
including the 5 states with the largest populations of children, did not
provide us with estimates. Moreover, we surveyed juvenile justice
officials in only 33 counties and three did not provide estimates. Only
estimates were available because no federal or state agency tracked
children placed to obtain mental health services in a formal or
comprehensive manner. Officials in the 6 states we visited reported that
placed children came from families of all financial levels and said that
the seriousness of the children*s illnesses strained families* abilities
to function.

State child welfare officials and county juvenile justice officials
estimated that over 12, 700 children entered the child welfare or juvenile
justice systems in order to receive mental health services in fiscal year
2001. Of these children, about 3,700 entered the child welfare system.
State child welfare officials reported estimates that ranged from 0 to
1,071 children,

10 A state that chooses a stand- alone or combination SCHIP program may
introduce limited cost sharing and base its benefit package on one of
several benchmarks specified in the statute, such as the Federal Employees
Health Benefit program, or state coverage. See 42 U. S. C. S:1397cc( a)
and (b) and U. S. General Accounting Office, Children*s Health Insurance
Program: State Implementation Approaches are Evolving, GAO/ HEHS- 99- 65
(Washington, D. C.: May 14, 1999). While No Formal

Tracking Occurs, Available Estimates Indicate That Many Children*
Primarily Adolescent Males* Were Placed with the State to Access Mental
Health Services

Some Officials Estimate That Parents Placed Over 12,700 Children to Access
Mental Health Services

Page 11 GAO- 03- 865T with a median of 71. Table 2 provides detailed
information about the estimated number of children placed in the child
welfare system. County

juvenile justice officials reported estimates that totaled to
approximately 9,000 children and ranged from 0 to 1,750, with a median of
140. Table 3 provides details on the estimated number of children placed
in the juvenile justice system.

Table 2: States* Estimated Number of Children Placed in the Child Welfare
System to Obtain Mental Health Services in Fiscal Year 2001

State Number of children placed Alaska a Alabama 130 Arkansas b Arizona b
California c Colorado c Connecticut 738 District of Columbia d Delaware 0
Florida d Georgia c Hawaii d Iowa b Idaho 123 Illinois a Indiana 0 Kansas
c Kentucky 14 Louisiana a Massachusetts c Maryland 54 Maine b Michigan c
Minnesota 1,071 Missouri d Mississippi 13 Montana d North Carolina 440
North Dakota b Nebraska c New Hampshire d New Jersey c New Mexico c Nevada
20

Page 12 GAO- 03- 865T State Number of children placed New York c Ohio b

Oklahoma 3 Oregon 101 Pennsylvania 71 Rhode Island 279 South Carolina a
South Dakota b Tennessee b Texas d Utah b Virginia b Vermont 60 Washington
423 Wisconsin c West Virginia 135 Wyoming 5

Total 3,680

Source: GAO survey. a State did not respond to our survey.

b State did not provide the data requested, but indicated that voluntary
placement happens. c State did not provide the data requested. d The
practice of voluntary placement or relinquishment is either not legal in
the state or the state generally does not allow parents to place their
children solely to receive mental health services.

Page 13 GAO- 03- 865T Table 3: Estimated Number of Children Placed in the
Juvenile Justice System in 33 Counties to Obtain Mental Health Services in
Fiscal Year 2001

State County Number of children placed

Arizona Maricopa 60 Arizona Pima 1,750 California Los Angeles a California
San Diego 200 Colorado El Paso 40 Colorado Jefferson 100 Florida Broward 0
Florida Miami- Dade 999 Georgia Fulton 172 Georgia Gwinnett 100 Illinois
Cook 0 Illinois DuPage 35 Indiana Lake 600 Indiana Marion 100 Louisiana
Jefferson Parish 50 Michigan Oakland 160 Michigan Wayne 400 New Jersey
Bergen a New Jersey Middlesex 999 New York Brooklyn 74 New York Queens 49
Ohio Cuyahoga a Ohio Franklin 363 Pennsylvania Montgomery 20 Pennsylvania
Philadelphia 500 Texas Dallas 200 Texas Harris 200 Virginia Fairfax 350
Virginia Prince William 840 Washington King 575 Washington Pierce 0
Wisconsin Dane 120 Wisconsin Milwaukee 0 Total 9,056 Source: GAO survey. a
County did not provide an estimate of the number of children.

Nationwide, the number of children placed is likely to be higher. Eleven
states reported that they could not provide us with an estimate of child
welfare placements solely to obtain mental health services even though

Page 14 GAO- 03- 865T they were aware that such placements occurred.
Moreover, officials in 9 additional states that responded to our survey
did not provide an estimate and did not mention whether or not parents
turned to the child welfare

system to access mental health services. However, child welfare workers we
interviewed in 2 of these 9 states* California and New Jersey* told us
that these placements did in fact occur. Although some of the state child
welfare officials that we visited in California said children do not enter
that system to obtain mental health services, county child welfare workers
said that they knew of such placements and explained how the cases were
coded in their system. Four states did not respond to the survey. 11
Information on the prevalence of children present in the juvenile justice

system is also limited in this statement since we surveyed only 33
counties. In 3 of those counties, juvenile justice officials reported that
while they did not have an estimate to provide, they knew that children
were entering the system to obtain mental health services because they
were not able to access such services in other ways.

Federal and state systems that track children in the juvenile justice and
child welfare systems do not formally or comprehensively track children
placed to receive mental health services. For example, ACF*s AFCARS,

which contains data reported by states about children in foster care or
adopted out of foster care, does not have a data element that identifies
this population. Similarly, every 2 years OJJDP conducts the Census of

Juveniles in Residential Placement, which gathers information on children
in juvenile residential facilities and their characteristics but no data
base variable exists to isolate children whose parents sought the help of
the juvenile justice system to meet children*s mental health needs from
other children in the juvenile justice system who may also have mental
health problems. OSERS maintains extensive data about children who receive
special education services, but data are aggregated at the state level and

do not include information about who has custody of the child. According
to our survey of state child welfare directors, placed children are more
likely to be boys than girls and are more likely to be adolescent. Child
welfare directors in 19 states reported that, in fiscal year 2001, 65
percent of placed children were male and 67 percent were between the

ages of 13 and 18. While juvenile justice officials did not provide
information about the gender and ages of children placed in their system,

11 These four states were Alaska, Illinois, Louisiana, and South Carolina.
Officials Said Placed

Children Were Mostly Adolescent Males with Severe Mental Health Problems

Page 15 GAO- 03- 865T children in the juvenile justice population are
mostly male and range in age from 13 to 18. 12 The officials from state
and county child- serving agencies and parents we

interviewed in the 6 states that we visited said that children who were
placed had severe mental illnesses, sometimes in combination with other
disorders, and their parents believed they required intense treatment that
could not be provided in their homes. Many of these children were violent
and had tried to hurt themselves or others, and often prevented their

parents from meeting the needs of the other children in the family. For
example, in Maryland, officials told us about a teenage boy who was
mentally ill, developmentally disabled, autistic, 13 and hospitalized.
Because the boy was both violent and sexually aggressive, the county told
his

mother that if she brought him home from a stay in the hospital, they
would remove her other children from the house. Caring for children with
severe mental illness can also prevent parents from obtaining full- time
work or cause disruptions in their work lives. For example, an Arkansas
parent now raising her grandchild does not work because of the time
necessary to care for her mentally ill granddaughter. State and county
officials from child- serving agencies in 5 of the 6 states that we
visited told us that finding placements for children who were mentally ill
and who also had other developmental disabilities was particularly
difficult. Children who are placed or are at risk of placement come from
families that span a variety of economic levels. However, officials from
state and county childserving agencies in all 6 states that we visited
said children from middle class families are more likely to be placed
because they are not eligible for Medicaid and their families do not have
the funds to pay for treatments not covered by insurance.

Multiple factors influence parents* decisions to place their children in
the child welfare and juvenile justice systems so that they can obtain
mental health services. Private health insurance plans often have gaps and
limitations in the mental health coverage they provide, and not all
children

12 In commenting on a draft of our April 2003 report, DOJ said that, in
the absence of formal tracking and official data, describing with any
certainty the characteristics of youth placed voluntarily by their parents
in the juvenile justice system is impossible. 13 Autism is a developmental
disability typically affecting the processing, integrating, and organizing
of information that significantly impacts communication, social
interaction, functional skills, and educational performance. Multiple
Factors

Influence Decisions to Place Children

Page 16 GAO- 03- 865T covered by Medicaid received needed services. Even
when parents could afford mental health services, some could not access
services at times

when they needed those services because supplies of such services were
inadequate. In other instances, some mental health agencies and schools
have limited resources to provide mental health services and are required
to serve children with a mental illness in the least restrictive
environment

possible* which can limit the alternatives available to parents who
believe their children need residential placements. In other instances,
parents sometimes have difficulty obtaining all needed services for their
children in their communities because eligibility requirements for
services provided by various agencies differ. Furthermore, some officials
and service providers have misunderstood the role of their own and other
agencies and, therefore, gave parents inaccurate or incomplete information
about available services for families. These misunderstandings created
gaps in services for some children.

Almost all state child welfare directors and county juvenile justice
officials who responded to our surveys reported that private health
insurance limitations were increasing the number of child welfare and
juvenile justice placements to obtain mental health services, and well
over half reported Medicaid rules also increased such placements. For
example, according to parents and state and local officials in all 6
states that we visited, many private insurance plans and separate SCHIP
plans offered limited coverage for traditional or clinical treatments,
such as psychotherapy or psychiatric consultations, 14 and did not cover
residential

treatment placements. In addition, state officials in 3 of the 6 states we
visited said that Medicaid rules in some states that require the
preauthorization of services could result in delays and denials of
community- based services.

The legislatures in the 6 states that we visited passed health insurance
parity laws to increase the coverage that was available for mental health
services by requiring insurance companies to provide mental health

coverage that was comparable to what they offered for physical health
care. Although these laws met or exceeded the standard established by the
federal MHPA, they did not require private plans to cover intensive, long
term, and nontraditional services such as respite care and wrap- around

14 These services are generally provided by licensed or certified
psychiatrists, psychologists, or masters- level social workers.
Limitations in Private and

Public Insurance Often Restrict Access to Mental Health Care, and Some
Services are Limited

Page 17 GAO- 03- 865T services. 15 Mental health officials and service
providers in the states that we visited said these services were often
necessary to help families

maintain children with a severe mental illness in their homes.
Furthermore, federal law preempts states from directly regulating
selffunded, employer- sponsored health insurance plans and in doing so
exempted many families from protection under state laws.

In the 6 states that we visited, state and local mental health officials
agreed that Medicaid had far fewer restrictions and limitations than
private health insurance plans. In addition, mental health officials in
Arkansas, California, and Maryland told us that differences between
private insurance and Medicaid programs had created two distinct systems
of child mental health services. Under these systems, children covered by
Medicaid had greater coverage for mental health services than children

covered by private insurance. All 6 of the states that we visited covered
optional Medicaid and SCHIP services by expanding their programs for
children with mental illness who were ineligible for Medicaid on the basis
of their families* income. These included the HCBS waivers, Katie Beckett
option, Rehabilitation option, and SCHIP programs.

For example, states used different approaches to expand Medicaid coverage.
Medicaid officials in Kansas received permission from CMS to implement a
HCBS waiver to expand coverage for community- based mental health services
for a limited number of children who are chronically mentally ill.
Although Medicaid officials in New Jersey financed its new child mental
health system through a Medicaid Rehabilitation option, the option extends
Medicaid coverage to only a limited number of children who have exhausted
benefits under other insurance and who have chronic and severe mental
illness. This option generally provides 60 days of community- based
services and limited hospitalization. 16 Arkansas, Maryland, and Minnesota
used Medicaid*s

15 Respite care refers to the supervision of mentally ill or other
disabled children by a trained caretaker for brief periods of time in
order to provide parents relief from the strain of caring for a child with
serious mental illness. Wrap- around services encompass a variety of
community supports, including counseling, mentoring, tutoring, and
economic services that are designed to meet the individual needs of
children and their families.

16 In commenting on a draft of our April 2003 report, a Kansas official
said that the state had expanded the services the state provides under the
Rehabilitation option and does not limit the services to 60 days, but
bases services on the individual clinical and medical needs of the child.

Page 18 GAO- 03- 865T Katie Beckett option to expand Medicaid coverage to
physically or mentally disabled children who meet CMS*s requirements for
institutional

care. Arkansas* program did not require parents to pay into the program to
receive services, but Minnesota*s program required parents to pay
according to their ability as defined by a sliding scale.

Although Medicaid*s EPSDT provision requires Medicaid coverage for all
necessary physical and mental health services that are identified during
routine periodic screening as long as the treatment is reimbursable under
federal Medicaid guidelines, some state officials said many eligible
children are unable to access necessary services through Medicaid because
practitioners in the states implement EPSDT unevenly. For example, a
Medicaid official in Maryland told us that the implementation of EPSDT
varied from county to county. Medicaid officials in California said
implementation varied from practitioner to practitioner although access to
EPSDT services was increasing as a result of litigation. These officials
explained that some practitioners are reluctant to recommend services if
such services are not available, some do not have the time to question
parents about their child*s mental health, and others are not well
informed about children*s mental health issues. In a July 2001 report, we
recommended that the Administrator of CMS work with states to develop
criteria and timelines for consistently assessing and improving EPSDT

reporting and provision of services. 17 As we stated in that report,
comprehensive national data on the implementation of EPSDT are needed to
judge states* success in implementing EPSDT requirements.

Low Medicaid reimbursement rates may restrict the participation of some
practitioners and thus further restrict services. In all 6 states,
officials from a variety of agencies said Medicaid rates for some services
are lower than the usual and customary rates in their areas and, in some
areas, psychiatrists and psychotherapists will not accept Medicaid
patients or expand the number that they are presently seeing because of
low Medicaid reimbursements. For example, a psychologist in Minnesota told
us that Medicaid reimbursement for a psychotherapy session is about half
the customary rate, and a mental health official in New Jersey said that
Medicaid reimburses only $5 per visit for monitoring the use and effects
of psychotherapeutic medication.

17 U. S. General Accounting Office, Medicaid: Stronger Efforts Needed to
Ensure Children*s Access to Health Screening Services, GAO- 01- 749
(Washington, D. C.: July 13, 2001).

Page 19 GAO- 03- 865T Even when insurance covered the costs of mental
health services, some mental health officials and parents indicated all
parents could not access

services or placements in their community because the supplies of these
services were limited. Fifteen of the 28 child welfare officials and 9 of
the 23 juvenile justice officials who responded to our survey question on
the

relationship between community mental health services and voluntary
placements indicated that the lack of such services increased voluntary
placements. In every site we visited, officials of state and local
childserving agencies and parents reported inadequate supplies of mental
health service providers and specialized mental health placements. Many of
these officials said that shortages of child psychiatrists, child
psychologists, respite care workers, and behavior therapists existed on
statewide levels and were worse in rural areas. Also, specialized, out-
ofhome mental health placements, such as psychiatric in- patient services
and residential treatment facilities, were often not available or had long
waiting lists. For example, Arkansas officials said that the state has no
state- run psychiatric hospital placements for children under age 12, and,
in California, some children have to wait about 8 months for a residential
placement. Officials in 3 states noted that relatively fewer residential
placements are available for girls than are available for boys and that
few placements would accept children with histories of arson and sexual
aggression. Moreover, these officials noted children placed in the child
welfare or juvenile justice systems received preference for services,

particularly when the services were court- ordered. In the 6 states that
we visited, limited resources in mental health agencies and public schools
to fund mental health services and agency officials* attempts to minimize
the use of residential services posed additional challenges for parents
seeking services and placements for their children. In addition, some
children who needed multiple supports experienced gaps in services because
of differences in the eligibility requirements for obtaining such
services. Moreover, some officials and service providers often
misunderstood the responsibilities and resources of their own and other
agencies and communicated the misunderstandings to parents, compounding
service gaps and delays.

According to some mental health and education officials, budgetary
shortfalls in the 6 states that we visited contributed to agencies*
attempts to cut or control costs, including the cost of mental health
services. Mental health agencies used a variety of strategies to control
costs, such as reducing spending, requiring that services covered by
Medicaid be approved before they are provided, and limiting the number of
children Difficulties Accessing

Services through Certain Agencies, Difficulties in Meeting Service
Eligibility Requirements, and Misunderstandings among Officials and
Service Providers Can Influence Placements

Difficulties Accessing Services through Mental Health or Education
Agencies

Page 20 GAO- 03- 865T served. In each state we visited, some parents
believed the strategies affected the quality of the services their
children received and created

unnecessary delays in getting services. In Arkansas, private, nonprofit
mental health providers that contract with the state to provide community
mental health said that state officials cut their funding and, as a
result, they had to reduce the length of treatment sessions and increase
the length of waiting lists. In Arkansas, Maryland, and New Jersey, state
officials said that they contracted with private, nonprofit agencies to
authorize the

medical necessity of mental health services covered by Medicaid. Arkansas
required preauthorization of all Medicaid- financed mental health
services, including those that were legally required, such as the
screening of foster children for mental health services. A variety of
officials in this state and a parent reported that the preauthorization
agency often denied services for children because they had not benefited
from similar services

in the past. For example, this parent said the preauthorization agency
refused her son*s therapist*s request to hospitalize him to treat his
suicidal behavior because past hospitalizations for suicide attempts had
not

reduced the behavior. In New Jersey, state mental health officials reduced
the number of counties that had been targeted to implement the state*s new
child mental health system and limited the number of children served by
the system. For example, officials from a variety of county agencies

reported that the new system of care limited the number of children
receiving the highest level of care in their county to 180 a year,
although juvenile justice officials said that at least 500 children in
their system alone needed such services. Officials from child welfare,
mental health, and juvenile justice agencies said eligible children who
did not receive the highest level of care were placed on waiting lists and
provided less intensive services.

Officials from a variety of county agencies and some parents also reported
that public schools in their county* in order to control costs* were often
reluctant to provide individualized mental health services for special
education children beyond services that are routinely available. For
example, child welfare officials in 3 locations we visited said schools
fit children with a mental illness into preexisting programs, and school
officials in two of these locations agreed, stating that children*s IEPs
could only contain services that were available in the schools. Almost all
the parents that we interviewed said that school officials were reluctant
to evaluate their children to determine eligibility for special education
services or provide specialized services for them. For example, a parent
of a child with a mental illness in Kansas said officials in her
daughter*s school refused to evaluate the child for a year and a half.
After the evaluation, the school recommended that the child work with a
learning

Page 21 GAO- 03- 865T disability specialist for 30 minutes a week, even
though the parent said this service was insufficient and did not address
her daughter*s destructive,

violent, and aggressive behavior. As a result of the difficulties
encountered at both mental health agencies and schools, some parents could
not access the community- based services they needed to care for their
child at home nor place their child in a residential treatment facility.
In 4 of the 6 states that we visited, some teachers and mental health
service providers encouraged parents to refuse to bring their child home
from a hospital or other supervised placement, such as a detention center,
when they were informed their child was being discharged in order to
obtain mental services from child welfare agencies. Although these parents
realized they were abandoning their child and, as a result, could be
arrested and lose custody, they believed that this was the only
alternative that remained to obtain services. Some parents that we
interviewed told child welfare workers they would physically abuse their
child in their presence to force them to place the child in their system
if they could not get help for their child any other way, and juvenile
justice officials told us other parents asked the police to arrest their
children.

However, officials in 2 of the states that we visited said children often
remain hospitalized for months without appropriate services because child
welfare agencies did not have the resources to provide the needed level of
services or specialized placement, could not obtain resources from other
agencies, or could not access appropriate services or placements that had
the capacity to treat another child. In addition, although federal law
does not require custody relinquishment to obtain mental health services,
state child welfare officials in two states that we visited said that
their state required parents to relinquish custody of their child to the
state after the voluntary placement period ends. In one state, these
officials misconstrued federal requirements and believed that they
required relinquishment and in the other state, officials said
relinquishment enabled them to have more control over the child*s care.
Eligibility requirements for obtaining mental health services pose several

challenges for parents. For example, state and local Medicaid officials in
3 states told us that some children lose their eligibility for Medicaid-
funded services because their families* income increased beyond Medicaid*s
threshold or move in and out of eligibility as their families* income
fluctuates. Also, some child welfare officials said some children receive
Medicaid because they are in foster care and lose their eligibility when
they return home if the family is not eligible. Alternatively, juvenile
justice officials in 6 states said that children in juvenile justice
correctional or Difficulties Meeting Eligibility

Requirements for Mental Health Services

Page 22 GAO- 03- 865T detention facilities lose Medicaid eligibility and
have to reapply to resume coverage when they are released from the
facility.

In addition, in all 6 of the school districts we visited, schools used
different eligibility criteria for mental health services than mental
health or other child- serving agencies in their area. For example, school
officials in 4 districts told us that some mentally ill children are not
eligible for mental health services through their special education
programs because they were making adequate educational progress or because
behavior problems* rather than mental illness* prevented them from making
adequate progress. However, mental health officials who work with children
attending some of these schools reported that schools often have a narrow
definition of educational progress and do not recognize that inappropriate
behavior might be a symptom of mental illness. For example, a parent of a
child with attention deficit 18 and bipolar 19 disorders said her son*s
school refused to provide special education services for him because his
lack of educational progress was due to his failure to pay attention and
to get his work done, rather than his mental illness, and a parent of a
bipolar, schizophrenic 20 son said school officials told her that she was
responsible for her son*s behavior and poor school performance.

Although a variety of officials said schools had more restrictive
eligibility requirements for mental health than other child- serving
agencies, school officials in a county in California said that their
county mental health agency used a more restrictive definition than the
schools. In California,

state law required that county mental health agencies treat children
covered by Medicaid and SCHIP who were diagnosed as SED or who were
eligible for special education services. 21 California also requires that
children be evaluated by county mental health agencies and fit a statutory
definition of SED. School officials said that these children get priority
and their services consumed all available county child mental health
resources. According to these officials, other children, including
children

18 Attention deficit disorder is a syndrome characterized by serious and
persistent difficulties in attention span, impulse control, and,
sometimes, hyperactivity. 19 Bipolar disorder is characterized by the
occurrence of one or more major depressive episodes accompanied by at
least one manic episode over a brief time interval. 20 Schizophrenia is a
cluster of disorders characterized by delusions, hallucinations,
disordered thinking, and emotional unresponsiveness. 21 The California
legislature transferred the responsibility for providing mental health

services to children in special education from schools to counties in the
late 1980s.

Page 23 GAO- 03- 865T with dual diagnoses of mental illness and substance
abuse, mental retardation, or autism- related disorders and children
without the required

diagnoses have to wait for county mental health services or might not
receive services at all, although some may receive services through their
school guidance counselors or social workers.

Program officials* and service providers* misunderstandings of agencies*
responsibilities and resources also affect service provision. For example,
misunderstandings about Medicaid coverage created gaps and delays in
services. In 3 states, some state and county officials did not know the
Katie Beckett option could expand Medicaid coverage for children with a
mental illness regardless of family status. In one of these states, a
parent told us that county Medicaid officials incorrectly told her that
her son was ineligible for coverage under this option because he had a
two- parent family. In 2 other states, county mental health officials
erroneously told us that this option applied only to children with very
severe medical conditions. In another state, a Medicaid official did not
know that children enrolled in SCHIP Medicaid expansion programs were
eligible for EPSDT services. Furthermore, state child welfare officials in
2 states and mental health workers in a third did not know Medicaid*s
EPSDT provision includes mental health screenings, diagnosis, and
treatment and thought the provision covered only physical health services.

In all 6 states, some parents, a variety of state and local officials,
mental health service providers, caseworkers, and judges misunderstood the
role and responsibilities of schools in implementing IDEA. For example,
some parents we interviewed in 5 of these states said that their children
waited over a year to receive special education services because they and
the mental health professionals they worked with did not understand the
procedures IDEA required schools to follow. For example, some parents were
told that referrals for special education had to be in writing. Also, some
parents and professionals misunderstood that IDEA gives all eligible
children, including children with a mental illness, the right to a free

appropriate education and parents did not know that they could appeal a
school*s decision about providing special education services. For example,
a parent in Kansas agreed to home- school her 10- year old, sexually
aggressive, child with a mental illness because the school would not put
the child in a setting that would ensure the safety of his classmates.

Despite her long- term involvement with a community mental health agency,
this parent believed home schooling was her child*s only option.
Misunderstandings of Agencies*

Responsibilities and Resources

Page 24 GAO- 03- 865T Although few strategies were developed specifically
to prevent mental health- related child welfare and juvenile justice
placements, state and

local officials identified a range of practices that they believe may
prevent such placements by addressing key issues that have limited access
to child mental health services in their state. State and local practices
focused on three main areas: finding new ways to reduce costs or to fund
services, consolidating services in a single location, and expanding
community mental health services and supporting families. Although some
programs were modeled on practices that had been evaluated in other
settings, the effectiveness of the practices is unknown because many of
them were implemented on a small scale in one location or with a small
target group or were too new to be rigorously evaluated.

According to officials in the 6 states that we visited, one way to reduce
the cost of services is to better match children*s needs to the
appropriate level of service. One goal of some of the programs we reviewed
was to ensure

that children with lower- level needs were served with lower- level and
less expensive services, reserving the more expensive services for
children with more severe mental illnesses. Under New Jersey*s Systems of
Care Initiative, the state contracted with a private, nonprofit
organization for a variety of services, such as mental health screenings
and assessments to determine the level of care needed, authorization of
service, insurance determination, billing, and care coordination across
all agencies involved with the children. When the Initiative is fully
implemented statewide, the

contractor in each county will use standardized tools to assess children*s
mental health and uniform protocols to determine appropriate levels of
care. Children requiring lower levels of care will be referred to
community- based providers, while children requiring a higher level of
care

will be approved to receive services from local Care Management
Organizations specifically created to serve them. Presently, the System of
Care Initiative has been implemented in 5 of the state*s 21 counties.

As another cost- saving method, some programs substituted expensive
traditional mental health providers with nontraditional and less expensive
providers. Many state and local officials we interviewed in 5 of the
states we visited told us that the historic way to treat children with a
mental illness included psychiatrists and residential placements. However,
officials in New Jersey, Kansas, and Minnesota said their states had
switched their focus to using less expensive providers such as using
nurses to distribute medicines instead of psychiatrists or nontraditional
bachelors- level workers for case management instead of masters- level
social workers. For example, Uniting Networks for Youth* a private, States
Have Developed a Range of

Practices That May Reduce the Need for Some Mental HealthRelated Child
Welfare and Juvenile Justice Placements

Finding New Ways to Reduce Costs or to Fund Services May Help Agencies Pay
for Mental Health Treatment

Page 25 GAO- 03- 865T county- based provider in Minnesota* used two
commercially available, highly structured programs that allowed them to
substitute lowercredentialed

bachelor- level staff under the supervision of a masters- level clinician
as the primary service provider instead of using higher- level clinicians.
County officials told us this structured program has many safeguards,
including the collection of extensive data from providers, teachers, and
families that allow masters- level clinicians to review the
appropriateness and effectiveness of provided mental health services.

In addition to reducing the cost of services, state officials in all 6
states identified the blending of funds from multiple sources as another
way to pay for services, thus working around agencies* limitations on the
types of mental health services and placement settings each can fund. For
example, in a county in Maryland, a local Coordinating Council blends
funds from multiple agencies to provide community- based services to
children with a mental illness involved with the judicial, child welfare,
and mental health systems and with district special education programs.
The Council, headed

by a judge, leveraged funding by inviting key decision makers* those who
could commit resources* from a variety of child- serving agencies and
organizations, including the local departments of social services and
juvenile justice, the public defenders office, prosecutors, attorneys, and
Catholic Charities, to serve on the Council.

In addition to blending funds to pay for services, state officials in 4 of
the 6 the states that we visited identified the use of flexible funds,
with few restrictions, to pay for nontraditional services that are not
generally allowable under state guidelines. For example, Arkansas*s
Together We Can Program used flexible funds from a federal Social Services
Block Grant, state general revenue, and the Title IV- B program to provide
a wide array of nontraditional supportive services, such as in- home
counseling, community activities, respite care, mentoring, tutoring,
clothing, and furniture that helped the family care for the child at home
and supported the child in his community.

To improve access to mental health services and bring clarity to a
confusing mental health system, 3 of the states that we visited developed
a facility to be a single point of entry into the mental health system.

Typically, several agencies are represented at the facility and children
are assessed with a common instrument and eligible for the same services
regardless of what agency had primary responsibility. Kansas*s Shawnee
County Child and Family Resource Center is a one- stop facility and,
according to state mental health officials, a model for the rest of the
state. Bringing Mental Health

Services into a Single Location May Improve Access

Page 26 GAO- 03- 865T The center houses workers from 11 social services
agencies, including mental health, child welfare, juvenile justice, and
education. All children

with mental health needs, regardless of which agency first encountered the
child, are referred to the center. Case managers at the Center assess the
child*s psychological, educational, and functional needs, determine
appropriate services and placements, make referrals, provide direct
counseling services, and determine how to pay for services. The facility
includes four bedrooms for children who need to be removed from their
homes for short periods of time and a secure juvenile justice intake suite
that is staffed 24 hours a day.

State officials in all 6 of the states that we visited also identified
colocating services in public facilities such as schools and community
centers as another way to improve access. In Harford County, Maryland, for
example, mental health services are collocated at an elementary school

specifically to improve access to care for students with a mental illness.
Using county health and mental health funds, the school developed an
inhouse mental health clinic that provides mental health services through
a bachelors- level social worker, a nurse practitioner, and consultative
services from a physician and a psychiatrist. In addition, the school has
a variety of internal support staff available to children with a mental
illness, including a guidance counselor, a behavior specialist, a home
visitor who

supports families and assesses the home situation, and a pupil personnel
worker who visits homes and helps with transportation issues. The school
has several programs available to children with a mental illness,
including an intensive, in- school program staffed with a full- time
school psychologist; a mentoring program that is run by paid school staff,
high school students, and volunteer community members; a program that
provides counseling, tutoring, recreation, social skills groups, home
visits, referrals, and some psychiatric rehabilitation services; a program
to identify elementary school children with a mental illness and increase
their access to services; and two collaborative programs with contracted
mental health providers that provide community support and prevention
services and intensive case management services.

Page 27 GAO- 03- 865T Officials from child- serving agencies in all 6
states we visited identified the expansion of the number and range of
community- based services to

provide an entire continuum of care as a way to improve treatment for
children with a mental illness. Some programs we reviewed developed a
complete range of community- based mental health services for children,
including early intervention, diversion, 22 transitional services, and
crisis

intervention. In addition, some programs supported families of children
with a mental illness and encouraged parent involvement in their
children*s care. Examples of these programs follow.

Early Intervention: Working with local hospitals, workers from the Family
Service and Guidance Center in Shawnee County, Kansas, screen newborns in
local hospitals. If babies appear at- risk, social workers conduct home
visits and refer families to health care professionals or others for
support. The Center also developed a therapeutic preschool practice
directed at 3- 5 year old children, with or without a mental illness
diagnosis, who were likely to need special education services when they
entered kindergarten. The program serves 32- 36 children and provides a
half- day of services.

Diversion: Los Angeles* Juvenile Alternative Defense Effort (JADE) was
designed to prevent or reduce the time of expensive juvenile justice
placements for youths with mental illness, by arranging assessments,
providing referrals to mental health providers and advocating for these
youth to ensure they receive the treatment they need. Upon referral to
JADE, a psychiatric social worker performs an extensive psychosocial
evaluation, including a developmental history, family history, and
educational history that includes failures and successes, delinquency
behaviors, and a mental health status exam. Based on the evaluation, the

social worker makes placement and service recommendations to the juvenile
court judge. JADE officials said that the evaluations and recommendations
give the judges the information they need to consider alternatives to
incarceration.

Transitional Services: State and county juvenile justice and mental health
officials in all 6 states we visited stressed the importance of including
transitional services in a continuum of care. These services are typically
provided to a child leaving a residential setting and returning to

22 Diversion programs attempt to prevent or reduce the time children spend
in inappropriate placements. Expanding Community

Mental Health Services and Supporting Families May Improve Treatment for
Children with a Mental Illness

Page 28 GAO- 03- 865T his or her home or community. For example,
Minnesota*s Red Wing facility is a secure juvenile justice facility that
provides in- house mental health

services and places a strong focus on transitional services so youth can
successfully reenter their own community. The transition program is
designed with various levels that allow youth who exhibit good behavior to
move to lower levels of supervision. For instance, at level 4, youth begin
to transition back to the community by making periodic visits to their
homes. At level 5, youth move to a transitional living unit at Red Wing
that focuses on applying new skills to activities in their homes and
communities. After youth leave Red Wing, a county juvenile justice worker
monitors them for 90 days.

Crisis Intervention: Programs we reviewed in 4 states had a mobile crisis
unit consisting of teams of staff that visit homes to stabilize crisis
situations. Funding, staffing, and authority of these teams vary. Some of
the crisis teams can provide direct mental health services; others conduct
assessments and make emergency petitions to psychiatric hospitals on
behalf of the family. One of the difficulties noted by program officials
is determining how to pay for crisis services since these services may not
be covered by insurance and families may not have the ability to pay. In

Harford County, Maryland, the mobile crisis team is not a fee- for-
service provider but is funded by a grant. The team* a psychiatrist, a
psychologist, and a licensed social worker* provide direct mental health
services and are authorized to make emergency petitions to get a child
with a mental illness admitted to a hospital psychiatric unit.

A second way some states improve treatment for children with a mental
illness is to provide services to support families and encourage parental
involvement in their child*s care. State and local officials in all 6
states pointed out that involving parents was a fundamental change in
philosophy. Previously, services were provided solely to the children and

parents were not included in the decisions about their child*s care. Now,
the focus is on providing the services parents need to maintain the child
in the home and helping parents make informed decisions about their
child*s

care. For example, The Sycamores, a residential mental health facility in
Los Angeles County, California, works extensively with parents of children
with severe mental illness at its facility and requires their
participation. The Sycamores also provides a variety of supportive
services, including household items and services such as transportation to
and from the facility. In addition, as part of its transitional program,
The Sycamores uses Therapeutic Behavioral Services (TBS), one- on- one
services provided whenever needed 24 hours a day, 7 days a week to assist
youth in

Page 29 GAO- 03- 865T maintaining their current living situation and in
developing the coping and problem- solving skills needed. Some parents are
placing their children, mostly adolescent boys with

severe mental illness, in the child welfare and juvenile justice systems
to access mental health services. Although these children may not have
been abused or neglected, or may not have committed a criminal or
delinquent

act, parents are turning to these agencies because they see no
alternatives for obtaining comprehensive services for them. Because
federal, state, and local agencies do not systematically track these
children, the extent and outcomes of these placements are not fully known.
To determine the extent to which children may be placed inappropriately in
the child welfare and juvenile justice systems in order to obtain mental
health services, we recommended in our April 2003 report that the
Secretary of HHS and the Attorney General investigate the feasibility of
tracking these children to determine the extent and outcomes of these
placements. In commenting on a draft of that report, DOJ agreed that
tracking should take place, but only in the short term, and that HHS
should take the lead in such an effort. HHS said that asking agencies to
track this population does not address the lack of mental health resources
for families and

communities and does not address the problems of the children and their
families. However, we believe that knowledge of the extent of this
practice is a necessary first step to determine what corrective actions
might be taken and may be useful in identifying which progressive
practices will most benefit these children.

Experts, agency officials, and service providers agree that agencies must
work together to meet the needs of children with severe mental illness
because these children have complex problems and are likely to need
services from multiple agencies if they are to remain in their communities

or if they are to successfully transition from a residential facility back
to their communities. However, in some cases, state and local officials*
misunderstandings of each agency*s service requirements, responsibilities,
and resources prevent the provision of interagency services that have the
potential to address the needs of these children and their families. In
our

April 2003 report, we recommended that the Secretaries of HHS and
Education and the Attorney General develop an interagency working group
(including representatives from CMS, SAMHSA, and ACF) to identify the
causes of these misunderstandings and to create an action plan to address
those causes. All three agencies said they would

participate in any interagency working group that might be established
based on our recommendation and DOJ recommended using the existing
Concluding

Observations

Page 30 GAO- 03- 865T Coordinating Council on Juvenile Justice and
Delinquency Prevention for the purposes we stated. We believe several
organizational entities may be

appropriate and that the member agencies forming this group should
determine the entity that is best suited.

Although states and counties are implementing practices that may reduce
the need for parents to place their children with child welfare or
juvenile justice agencies, many of the programs are new, small, and only
serve children in specific localities. Furthermore, their effectiveness in
achieving their multiple goals* such as reducing the cost of mental health
services,

supporting families, and helping children overcome their mental illnesses*
has not yet been fully evaluated. Given that states and localities are
developing new approaches to meeting the needs of children with mental
illness, it is important that the federal government continue its role in
supporting evaluations of these programs and disseminating the results. To
further such efforts, we recommended in the report that the agencies

continue to encourage states to evaluate the child mental health programs
that the states fund or initiate. In commenting on a draft of our April
2003 report, Education said that no recommendations were made for
increased grant spending to duplicate or disseminate the positive features
of the

practices we highlighted. As a result, we added a recommendation that the
Secretaries of HHS and Education and the Attorney General determine the
most effective means of disseminating the results of these and other
available studies to state and local entities.

Madam Chairman, this concludes my prepared statement. I would be pleased
to respond to any questions that you or other members of the Committee may
have.

For further contacts regarding this testimony, please call Cornelia M.
Ashby at (202) 512- 8403. Individuals making key contributions to this
testimony include Diana Pietrowiak and Kathleen D. White. GAO Contact and

Acknowledgments

Page 31 GAO- 03- 865T Child Welfare and Juvenile Justice: Federal Agencies
Could Play a Stronger Role in Helping States Reduce the Number of Children
Placed

Solely to Obtain Mental Health Services. GAO- 03- 397. Washington, D. C.:
April 21, 2003.

Medicaid and SCHIP: States Use Varying Approaches to Monitor Children*s
Access to Care. GAO- 03- 222. Washington, D. C.: January 14, 2003.

Mental Health Services: Effectiveness of Insurance Coverage and Federal
Programs for Children Who Have Experienced Trauma Largely Unknown. GAO-
02- 813. Washington, D. C.: August 22, 2002.

Medicaid and SCHIP: Recent HHS Approvals of Demonstration Waiver Projects
Raise Concerns. GAO- 02- 817. Washington, D. C.: July 12, 2002.

Foster Care: Recent Legislation Helps States Focus on Finding Permanent
Homes for Children, but Longstanding Barriers Remain.

GAO- 02- 585. Washington, D. C.: June 28, 2002.

Long- term Care: Implications of Supreme Court*s Olmstead Decision Are
Still Unfolding. GAO- 01- 1167T. Washington, D. C.: September 24, 2001.

Medicaid and SCHIP: States* Enrollment and Payment Policies Can Affect
Children*s Access to Care. GAO- 01- 883. Washington, D. C.: September 10,
2001.

Medicaid: Stronger Efforts Needed to Ensure Children*s Access to Health
Screening Services. GAO- 01- 749. Washington, D. C.: July 13, 2001.

Medicaid Managed Care: States* Safeguards for Children With Special Needs
Vary Significantly. GAO/ HEHS- 00- 169. Washington, D. C.: September 29,
2000.

Children with Disabilities: Medicaid Can Offer Important Benefits and
Services. GAO/ T- HEHS- 00- 152. Washington, D. C.: July 12, 2000.

Mental Health Parity Act: Employer*s Mental Health Benefits Remain Limited
Despite New Federal Standards. GAO/ T- HEHS- 00- 113. Washington, D. C.:
May 18, 2000. Related GAO Products

Page 32 GAO- 03- 865T Mental Health Parity Act: Despite New Federal
Standards, Mental Health Benefits Remain Limited. GAO/ HEHS- 00- 95.
Washington, D. C.: May 10, 2000.

Medicaid Managed Care: Challenges in Implementing Safeguards for Children
with Special Needs. GAO/ HEHS- 00- 37. Washington, D. C.: March 3, 2000.

Children*s Health Insurance Program: State Implementation Approaches are
Evolving, GAO/ HEHS- 99- 65. Washington, D. C.: May 14, 1999.

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