Department of Health, Education, and Welfare's administration of health programs, shortchanging children

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Department of Health, Education, and Welfare's administration of health programs, shortchanging children
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Table of Contents
    Front Cover
        Page i
        Page ii
    Letter of transmittal
        Page iii
        Page iv
    Table of Contents
        Page v
        Page vi
    1. Introduction
        Page 1
        Page 2
    2. Methodology
        Page 3
    3. Summary of findings
        Page 4
        Page 5
    4. Recommendations
        Page 6
        Page 7
    5. Current situation
        Page 8
        Page 9
    6. Medical care significance
        Page 10
        Page 11
        Page 12
    7. Administrative and legal shortcomings
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
    8. EPSDT goals
        Page 20
        Page 21
        Page 22
        Page 23
    9. Public health issues
        Page 24
        Page 25
        Page 26
    10. Conclusion
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
    Back Cover
        Page 33
        Page 34
Full Text

[SUBCOMMITTEE PRINT]





DEPARTMENT OF HEALTH, EDUCATION,
AND WELFARE'S ADMINISTRATION OF
HEALTH PROGRAMS: SHORTCHANGING
CHILDREN



REPORT
BY TE
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS

OF THE

COMMITTEE ON INTERSTATE AND
FOREIGN COMMERCE
HOUSE OF- REPRESENTATIVES
NINETY-FOURTH CONGRESS
SECOND SESSION

/ I'./i/Pf'%




SEPTEMUBER -1976
I o r b'I






U.S. GOVERNMENT PRINTING OFFICE
77-306 WASHINGTON : 1976













COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE


HARLEY 0. STAGGERS, West Virginia, Chairman


JOHN E. MOSS, California
JOHN D. DIN GELL, Michigan
PAUL 0. ROGERS, Florida
LIONEL VAN DEE RLIN, California
FRED B. ROONEY, Pennsylvania
JOHN M. MURPHY, New York
DAVID E. SATTERFIELD 111, Virginia
B ROCK ADAMS, Washington
W. S. (BILL) STUCKEY, JR., Georgia
BOB ECKHARDT, Texas
RICHARDSON PREYER, North Carolina
JAMES W. SYMINGTON, Missouri
CHARLES 1. CARNEY, Ohio
RALPH H. METCALFE, Illinois
GOODLOE E. BYRON, Maryland
JAMES H. SCHEUER, New York
RICHARD L. OTTINGER, New York
HENRY A. WAXMAN, California
ROBERT (BOB) KRUEGER, Texas
TIMOTHY E. WIRTH, Colorado
PHILIP R. SHARP, Indiana
WILLIAM M. BRODHEAD, Michiga
JAMES 3. FLORIO, New Jersey
ANTHONY TOBY MOFFETT, Connecticut
11M SANTINI, Nevada
ANDREW MAGUIRE, New Jersey
MARTIN A. RUSSO, Illinois


SAMUEL L. DEVINE, Ohio
JAMES T. BROYHILL, North Carolina
TIM LEE CARTER, Kentucky
CLARENCE J. BROWN, Ohio
JOE SKUBITZ, Kansas
JAMES M. COLLINS, Texas
LOUIS FREY, JR., Florida
JOHN Y. McCOLLISTER, Nebraska
NORMAN F. LENT, New York
H. JOHN HEINZ III, Pennsylvania
EDWARD R. MADIQAN, Illinois
CA RLOS J. MOO READ, California
MATTHEW J. RINALDO, New Jersey
W. HENSON MOORE, Louisiana


W. E. WmLmMSON, Ckrk
KMNZNm1 PAiTER, A istatACkrk


hJCmMITuI 01 OVEIONXT AND INVEITIGATIONS
JOHN E. MOSS, California, Chairman


RICHARD L. OTTINGER, New York
ROBERT (BOB) KRUEGER, Texas
ANTHONY TOBY MOFFETT, Connecticut
JIM SANTINI. Nevada
W. S. (BILL) STUCKEY, Si., Georgia
JAMES H. 8CHEUER, New York
HENRY A. WAXMAN, California
PHILIP R. SHARP, Indiana
ANDREW MAG UI RE, New Jersey
HARLEY 0. STAGGERS, West Virginia
(Ex Officio)


JAMES M.COLLIN8,'Texas "
NORMAN F. LENT, New York
MATTHEW J. RINALDO, New Jersey
W. HENSONIMOORE, Louisiana
8AMUELL. DEVINE,&Ohio (Ez Ofck4


SUROOMMITTM STAFF
MICHAEL R. LEmov, Chief Coumael"g
JAmzS L. NELLIOAN, Operations Director
FRw xs WHTE, Deputy Chief Couuld
ELLIOT A. SEGAL, Special Asustant
PATRICK M. McLAYN, Counsel
LtsTER 0. BROWN, Special Auietant
KATHERINE C. MEYERS, Staff Amtfavt
J. TuomAs GREENE, Cuueel to the Chairman
BERNARD WUNrER, AMfllOitY Couvsuel







LETTER OF TRANSMITTAL


HousE OF REPRESENTATIVES,
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,
COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,
Washington, D.C., October 1, 1976.
Hion. HARLEY 0. STAGGERS,
airmana, Committee on Interstate and Foreign Commerce,
Washington, D.C.
DEAR HARLEY: I am transmitting herewith a report of the Sub,
committee on Oversight and Investigations entitled "The Department
of Health, Education, and Welfare's Administration of Health
Programs: Shortchanging Children." The report focuses primarily on
the Department's administration of the early periodic screening diag-
nosis and treatment (EPSDT) program under Title XIX of the Social
Security Act (Medicaid).
The report concludes that EPSDT has the potential for being the
most important long term, cost effective health care program currently
in existence. The Social Security Act requires the provision of screen-
ing, outreach, followup, and treatment services for children up to
age 21.
Nonetheless, the report concludes that the Department of Health,
Education, and Welfare has failed to adequately implement the
requirements of the Social Security Act or provide care for children
most in need of health services. The Subcommittee finds that mis-
management by HEW of this program has caused unnecessary crip-
pling, retardation, or even death of thousands of children.
The report makes clear that Congress intended the program to be
mandatory for children under the age of 21 and that the Department
was up to 4 years late in issuing regulations required by the law. In
addition, the Department has neglected to properly administer the
penalties for the failure of nine states to comply with the requirements
of the program.
The report concludes that there is a lack of information on the
incidence and prevalence of diseases found, the costs of health care
financed under Medicaid, and a serious lag in measuring the nature
and scope"Of improvements that may result from more than 3.5 billion
dollars expended in Federal health programs for children.
The report finds that for the fiscal year 1975 approximately 10.9
million children, out of an estimated 12.9 million children, were not
screened. Of the 10.9 million children who were eligible for the EPSDT
program and were not screened, the Subcommittee estimates that
approximately 1 million would be diagnosed and found to need treat-
ment for a perceptual deficiency, such as of the auditory or central
nervous system; 650,000 would be diagnosed and found to need treat-
ment for a vision defect, such as amblyopia; 770,000 would be diag-
nosed and found to be mildly or severely retarded or to have some kind
of learning disability; and 435,000 would be diagnosed and found to
need treatment for iron deficiency anemia.
Sincerely,
JOHN E. Moss, Gh airman.
(HI)



















CONTENTS

Page
1. Introduction_- 1
II. Methodology 3
III. Summary of findings--4
IV. Recommendations- 6
V. Current situation ---------------------------------------------S
A. Scope of Government programs --------------------------
B. Case studies_-9
VI. Medical care significance__-1(
A. Screening newborns-10
B. Communication disorders-11
C. Vison-- 11
D. Other health disorders-11
E. Environmental hazards--12
F. Immunizations-13
VII. Administrative and legal shortcomings-13
A. Mandatory nature of the law_-13
B. Timeliness_-14
C. Compliance-- 1
D. Inadequate informationY16,
E. Penalty assessment17
F. Public accountability: Inadequate information collection-- 19
VIII. EPSDT goals-20,
A. EPSDT functions ----------------------------------- 2
B. Scope of health problems-21
1. Not screened_-21
2. Vision ----------------------------------------- 21
3. Institutionalization--22
4. Anemia--22
C. Scope of treatment--------------------------------- 23
IX. Public health issues--24
A. Coordination of care-24
B. Outreach and followup activities -------------------------25
C. Cost-benefit relationships--26
D. Alternative approach-26
X. CclusionCC27
V)

















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I. INTRODUCTION


Public and private expenditures for health care are estimated to be
$118.5 billion for 1975, up from $69.2 billion in 1970 and $42.1 billion
in 1966.
This explosive rise in costs significantly affects the Federal budget.
The Federal Government is the Nation's largest purchaser of personal
health services. Medicaid and Medicare, administered by the Depart-
ment of Health, Education, and Welfare, serve respectively the medi-
cally indigent and the population older than 65. Expenditures for these
two programs, now almost equal, are expected to climb from $25
billion in fiscal year 1976 to $30.4 billion in fiscal year 1977, a 20 per-
cent increase. These programs, now more than 10 years old, are
costing far more than anticipated. The Subcommittee on Oversight
and Investigations has examined both the cost and quality provisions
that currently exist in the social security laws.'
We gave particular attention to the status of child health programs,
including the Public Health Service Act, with special emphasis upon
the Early Periodic Screening Diagnosis and Treatment Program
(EPSDT) created under title XIX of the Social Security Act.2 We
attempted to determine the scope and effect of Federal efforts as well
as the degree of their success in meeting the health needs of children.
The Social Security Amendments of 1967 (Public Law 90-248),
which added the EPSDT requirements to title XIX (Medicaid),
ordered EPSDT services to begin by July 1, 1969 to screen children of
medically indigent families and provide treatment as needed.
In evaluating the role of the Department in EPSDT programs, we
gave close attention to the response to the Social Security Amendments
of 1972:
OF Security Act is amended byradding at the end thereof
the following:
(g) Notwithstanding any other provision of this section, the amount payal le to
any State under this part for quarters in a fiscal year shall with respect to quarters
in fiscal years beginning after June 30, 1974, be reduced by 1 per centum (calcu-
lated without regard to any reduction under section 403(f)) of such amount f
such State fails to-
(1) inform all families in the State receiving aid to families with dependent
children under the plan of the State approved under this part of the availability
of child health screening services under the plan of such State approved under
title XIX,
(2) provide or arrange for the provision of such screening services in all cases
where they are requested, or
(3) arrange for (directly or through referral to appropriate agencies, organiza-
tions, or individuals) corrective treatment the need for which is disclosed by such
child health screening service.3
1 Staff of the Subcommittee on Oversight and Investigations, "Preliminary Report of the
Results of a Questionnaire Sent to State Medicaid Agencies Concerning Early and Periodic
Screening, Diagnosis, and Treatment (EPSDT)," Appendix of this report.
2 42 U.S.C. 1396(a) (4).
a Public Law 92-603, 1972 Amendments to the Social Security Act, section 299F.
(1)








In effect, the Congre, acknowledging that many States had failed
to Meet the statlltory reqhiiirement s, enacted a penalty provision. The
Amendment (Iirecte(l the I)epartrment to reduce the Fie(deral matching
fun(ds for th1e Aid to Families W it 1Depen(ent Children program in
State that fail to inform and arrange for "creenilg and treatment of
ell~ilbl( uhiddreu.
Information developed by the General Accounting Office (GAO)
and the statistics develope(l by the Center for Disease Control (CDC)
of the Department of 1 ealth, Education, and Welfare gave impetus
to our InqIiries.
A General Accounting Office (GAO) study I concerning child health
care, request ed by the HIonorable Ralph 11. Metcalfe, a member of the
Committee on Interstate and Foreign Commerce, and containing a
number of recommendations to the Department, was released in
January of 1975. The study included the following recommendations:
The Department should-
(1) take more aggressive action, including formal compliance
hearing<, to make States comply with the law and SRS regulations;
(2) develop criteria for determining which children do not need
EPSDT screening because, they are receiving regular, adequate medi-
cal care equivalent to screening and disseminate the criteria to all
States so that screening efforts are directed toward children who need
it;
(3) encourage States to use outreach techniques, such as personal
contacts in addition to the required annual written notification;
(4) encourage and help States to use allied health professionals
for screening, especially in those areas that have a shortage of
physician;
(5) encourage and help States to increase their screening efforts to
insure that all eligible children are screened;
(6) encourage and help States to establish procedures to insure that
screening- are periodically updated;
(7) monitor States' progress in meeting their screening schedules;
and
(8) require States to establish procedures to follow up on children
with problems identified during the screening process to insure that
needed treatment is provided.5
Subsequent to receiving this report, Congressman Metcalfe urged
the Subcommittee to examine the response of the Department to
those recom mend ations.
In January, 1973, the United States Center for Disease Control 6
released the disturbing information that approximately 5 million of the
Nation's 1- to 4-year-old children, one out of three preschool children,
are not receiving full immunization against common infections: diph-
theria, pertussis, measles, and poliomyelitis.
Questions were raised by many members of the Congress about the
early periodic screening diagnosis and( treatment programs (EPSDT),
particularly application of the amendments.
'"TmTrovernents Needed to Speed Implementation of Medicaid's Early and Periodle
Screening, i)iavnozs, and Treatment Program," Report of the Comptroller General of the
United States, MWD-75-13, January 9, 1975.
5Id. at p. ii.
I "Immunization A,-ainst Disease: 1972," Department of Iealth, Education, and Welfare,
Center for D-isease Control, 1973.
Committee on Ai)proprlations, U.S. Senate, 94th Cong., 1st sess., Sept. 10, 1975,
Senate Report 94-366, p. 79.







The Subcommittee determined to hold hearing.-; on the operations
of the EPSDT program as part of a broader study that will provide
information on the cost and quality of health care and t),-opo,;ed
health insurance legislation.
1I. METHODOLOGY
As a basis for this evaluation, the Subcommittee requested infor-
mation from the Department concerning treatment of children under
EPSDT and the status of child health in the Nation. Requests for
information and data were forwarded to Federal officials, State
officials, the Department's regional staff, and Medicaid fiscal agents.
We also used telephone interviews and site visits to gather data.
The Subcommittee also conducted a survey of officials of the
EPSDT program." Fifty-three commissioners of St ate Medicaid pro-
grams were asked to furnish annual information concerning: (1) the
eligible popMlation: (2) the general screening requirements of the
individual Medicaid programs; (3) the number of children screened,
(4) specific medical problems discovered; (5) the number of children
identified as needing follow-up treatment; and (6) the number of
children determined to need treatment who were actually treated. A
total of 35 states responded with useful information in a usable
form."
The Subcommittee hearings on October 7 and 8, 1975, supplemented
the information previously obtained and discussed flaws in current
health care for children, particularlv those eligible for the EPSDT
program.10 Department of Health, Education, and Welfare witnesses
responsible for Federal child health programs including James F.
Dickson, M.D., Acting Deputy As.,istn Secretarv for Health;
Robert Van Hock, M.D., Acting Adininistrator, Health Services
Administration; Norman Kretschmer, M.D., National Institute of
Child Health and Human Development, National Institutes of Health;
M. Keith Weikel, Ph. D., Commissioner, Medical Services Adminis-
tration; and Charles V. Lowe, M.D., Special Assistant for Child Health
Affairs, Office of the Assistant Secretary for Health, testified. Subse-
quent hearings with Secretary of the Department F. David Mathews
were held on January 26, 1976.11
Among other issues, the Subcommittee sought information on the
following:
Gaps in health care for children.
Performance by the Department of Iieldth, Education, and
Welfare of duties for children's health specified in the Soel Security
Act and the Public Health Service Act.
Effect of the EPSDT program on child health.
The Department's application and the effect of san(tions for failure
by States to meet statutory obligations for child health.
Extent of the Departnient's emphasis on services to prevent
disease.
e See n. 1. supra.
9 Id. The States' responses are shown in Appendix.
10 ,Getting Ready for National Health Insurance: Shortchanging Children," Hearings
Before the Subcommittee on Oversight and Invest! nations, Committee on Interstate and
Foreign Commerce. U.S. House of Representatives, 94th Con-., 1st sess., Oct. 7 and 8, 1975.
""Oversight-HEW Activities," Hearings Before the Subcommittee on Overs!gh t and
Investigations, Committee on Interstate and Foreign Commerce, U.S. House of Representa-
tives, 94th Cong., 2d sess., Jan. 26, 1976.
77-306-76-2







III. SUMMARY OF FINDINGS
A. HEALTH CARE OF CHILDREN
The children of our Nation are its greatest potential resource.
The purpose of the EPSDT program is to find low income children
with medical problems and treat them early in order to prevent or
1niiiiinize long term chronic ailments.
Proper execution of this program would achieve significant savings
by reducing future costs of health care and improving the overall
health and productivity of our citizens.
The Department of Health, Educetion, and Welfare in the adminis-
tration of EPSDT has failed to mobilize parents, physicians, and
State officials to manifest adequate concern for the health of the
defenseless children most in need of care.
This maladministration by the Department leads to unnecessary
crippling, retardation, and even death of hundreds of thousands of
children.
B. COST-BENEFIT
The Subcommittee finds this program has extraordinary potential
in cost benefit terms. The Department's failure to faithfully execute
the EPSDT program results in a waste of dollars as well as human
potential. The confinement of a single child may cost as much as
$20,000 each year. It has been estimated that a complete preventive
child health care program to the time a child is 16 years old (approxi-
mately $1,000) would be comparable to a two week confinement at a
hospital at today's prices.

C. MANDATORY NATURE OF THE LAW
The Social Security Act requires that each state must provide a
minimum set of care and services.
Section 1902(a) (13) (B) in the case of individuals receiving aid or assistance
under any plan of the State approved under Title I, X, XIV, or part A of Title IV,
or with respect to whom supplemental security income benefits are being paid
under Title XVI, for the inclusion of at least the care and services listed in clauses
(1) through (5) of section 1905(a),* *
Section 1905(a) (4), one of the mandatory provisions discussed
above, states:
(B) effective July 1, 1969, such early and periodic screening and diagnosis of
individuals who are eligible under the plan and are under the age of 21 to ascertain
their physical or mental defects, and such health care, treatment, and other
measures to correct or ameliorate defects and chronic conditions discovered there-
by, as may be provided in regulations of the Secretary;
This provision requires all Medicaid programs to screen, diagnose'
and treat the medical ailments of eligible children after July 1, 1969"
The Subcommittee finds that the Department has to a large degree
ignored this Congressional mandate.

D. TIMELINESS
The Department was tardy from July 1, 1969 to July 1, 1973 in
issuing regulations for full coverage under the EPSDT program.
Further, the Department has not taken adequate steps to implement
the regulations which it ultimately issued.





5

E. PENALTY ASSESSMENT
The Department has neglected to administer properly the penalties
for failure to comply with provisions of the EPSDT program. It is
more than 15 months behind schedule in assessing the performance of
State EPSDT programs. Further, the Department has not yet ruled on
appeals of the penalties assessed on nine states for the quarter
beginning July 1, 1974.
F. ADMINISTRATION
The Department has not undertaken actions including initiation
of formal compliance hearings in order to bring states into conform-
ity with the EPSDT provisions of the law. The Department does
not compile data sufficient to allow for effective evaluation or moni-
toring of the program and does not know how many children are being
treated under this program or what illnesses accounted for the more
than $3 billion of Federal expenditures for all child health programs.

G. PUBLIC ACCOUNTABILITY
Specific deficiencies in public accountability, widespread within
the program, include:
(1) A lack of information on the incidence and prevalence of diseases
and costs of child health care financed under Medicaid: this lack of
information impedes efforts to assess child health status, to measure
improvements, or to determine whether the $7.8 billion in Federal
Medicaid programs are spent well; and
(2) Excessive lag in acquiring and collating State data: for example,
at the beginning of fiscal year 1977, the most recent detailed ann ual
statistical report available was for fiscal year 1973.

H. CHILD HEALTH SCREENINGS
Between July 1, 1969 and July 1, 1974, EPSDT programs cumula-
tively failed to screen approximately 10 million children out of the
eligible population of approximately 13 million children. Specifically,
in fiscal year 1975, approximately 10.9 million children out of an
estimated 12.8 million were not screened.2
I. PERCEPTUAL DISORDERS
Of the 10.9 million children who in fiscal year 1975 were eligible
for the EPSDT program and were not screened, the Subcommittee
estimates that approximately 1,000,000 would be diagnosed and found
to need treatment for a perceptual deficiency such as of the auditory
or central nervous system.13
J. VISION
Of the 10.9 million children who in fiscal year 1975 were eligible for
the EPSDT program and were not screened, the Subcommittee
estimates that approximately 650,000 would be diagnosed and found
to need treatment for a vision defect such as amblyopia.14
2 See n. 1, supra.
2 See no. 10, supra at p. 5.
1" See n. 1, supra.






K. RETARDATION AND LEARNING DISABILITIES
Of the 10.9 million children who in fiscal year 1975 were eligible
for the EPSI)T program and were not scre(ened, the Subcommittee
estimates that aJpproxinately 770.000 would be diagnosed and found
to be mildly or severely retarded or to have some kind of learning

L. ANEMIA
Of the 10.9 million children who in i-.cal \ear 975 were eligible
for the EtSDh program and were ot crePne(d, the %-Iihbcoinittee
estimates approximately 435,000 would be diagnosed Wn found to
nIee(d treatment for iron deficiency anemia.

M. TREATMENT
Only nine states with Medicaid program were able to report the
number of chili(ren treated as a result of sIIreening programs in that
state. Ihese states were Colorado, Delaware. Iawii, I(aho, North
Carolina, Penn-ylvvania, South Carolina, Verrnut and V irginia.
These 9 states reported that 80.454 children (60.4 percent) out of
133,117 who were found to need medical treatment avt ally received
such treatment. Conversely, this means that 52,661 children (39.6
percent) were determined by states to need medical treatment but
were apparently not treated.
Further, 32 states reported that of 1,098,400 children screened,
495,471 (45.1 percent) were found to need medical treatment. Based
upon the 39.6 percent non-treated figure cited above, it is estimated
that approximately 195,000 children identified by screening progars
as needing medical treatment apparently were not treated.
We have no reason to believe that the health care needs of the 10,-
900,000 medielily indigent children who were not screened are
different from the 1,098,400 who were. Since 45.1 prcent of those
screened were found to need treatment, we estimate that approxi-
mately 4,900,000 eligible children who were not screened would
have been found to need medical treatment.

N. COORDINATED COMPREHENSIVE CARE
EPSDT was enacted to provide screening, diagnosis, aid treatment
of medical needs, in effect a coordinated a TA comprehen-ive approach
to medical care. currently there is a disproportionte emphasis on
screening and a (istinct neglect of follow-up and treatment. However
the Subconi-itIte finis tle number of children r ereni is much too
low and the j)IWT11)m coordination totally inadequate.

11'. RECOMMENDATIONS
On the baois of the above findings, the Subcommittee recommends:
(1) 'That the Secretary of the DeIartmnet proce( inimnediately to
fulfill the EPSDT stattory requirements for screening, diagnosis ,
and treatment under Sections 1902 and 1903 of the Social Security
Act.
MId.
Id.








(2) That the Department utilize the broad power-- available under
the law, including compliance hearings, to apply the EPSDT sanc-
tions to the State Medicaid plans, and determine the reasons for less
than total compliance by the States. The Subconmittee recognizes
that stringent imposition of sanctions will, for that immediate quarter
or half year, reduce the amount of federal dollars available for patient
care. However, the fact that states will take steps to bring their pro-
grams quickly into compliance will more than compensate for the short,
term dip in federal funds. In fact, the reduction in treatment of chil-
dren will be minimal because of the small number currently bene-
fiting from EPSDT care.
(3) That the appropriate legislative committees consider positive
incentives for Medicaid programs to (1) screen an(d (2) treat all
eligible children, such as Federal financial coverage for all child
health care costs. Such an expansion could serve as a building block
for an increase of national health insurance coverage, with a focus
upon prevention and early treatment. Such a program would be of
relatively moderate cost and would create a positive incentive for
states to provide health care to children.
(4) That the Department eliminate fragmentation of services within
the EPSDT program, a situation which deprives patients of complete
treatment and raises costs to the government, and that the Depart-
ment consider the use of grants to demonstrate models of continuity
of care, elimination of procedures that divorce screening and diag-
nosis from treatment, and strong regulations requirim tg that treatment
be available with screening and diagnosis.
(5) That the Department improve iUs diat-a gathering to increase
public awareness of and to account for the legitimacy of the more
than $3 billion of Federal money spent on chiid health care in order
to determine what benefits are gained by such great expenditures.
(6) That the Department simplify and shorten its procedures, for
determining penalties, inform states of their res.ponsibilities, and en-
force the penalties promptly. Currently, the loing time delay-, by the
Department to determine whether a state is in compliance puts a state
and its children in a diffictilt position. (urrent slow (Ieral determina-
tion can lead to 0 4ate's learning irUS procyram is ot of compliance several
quarters later, jeopardizing millions of dollars, for the intervening
(jilarters. For example, states in September 1978 dto not know if they
met !)rograni stiandards for January 1975.
(7) That the Department promptly require eat .ltate to make
screeninm oand Pre'eribed treatment avflable to childnruIf in the manner
intended by Congress by such means as a vouIfr -Vstemn for all es-
sential screening and treatment. Because of the, high administrative
costs under the current approach it is likely that a voucher type
program will provide more patient care for the same expenditure of
dollars.
(8) That the Department consider employment of increased use of
qualified allied health professionals, such as nurse practitioners, to
expand screening services for eligible children. This approach wil
serve as another cost effective method of maximizing limited health
care dollars.








With respect to treatment, the Subcommittee recommends:
(9) That the Department promptly require each State to provide
opportunities for coordinated comprehensive care to eligible children,
such as neighborhood health centers.
(10) That the Department immediately ascertain why 39.6 percent
of children requiring treatment apparently are not receiving it, and
that the explanation be reported to the appropriate Congressional
Committees.
(11) That the Department immediately begin collecting data con-
cerning its expenditure on screenings, diagnoses, and the number of
children treated.
With respect to comprehensive care, the Subcommittee recommends:
(12) That the Department focus additional attention and resources
on coordinating the treatment aspects of the EPSDT program. A
system of comprehensive care can increase treatment with insignificant
co-t- increases.
The Subcommittee is concerned with the evidence of excessive
spending on efforts to determine EPSDT eligibility. The Subcommittee
recommends that the Congressional Budget Office undertake a compre-
hensive study to determine the fiscal impact of extending EPSDT to
all children under 21 years of age, including the administrative cost
savings that could be achieved from using a universal voucher system
for children's health care.
V. EPSDT: THE CURRENT SITUATION
In 1967, Congress directed the Department of Health, Education,
and Welfare, through new provisions of the Social Security Act, to
develop a plan for finding low income children with medical problems
and providing treatment for them.7 Although there have been other
programs undertaken by the Federal Government to deal with
children's health, EPSDT is potentially the most comprehensive
preventive health program for children ever undertaken by the Federal
Government.8 The program was intended to strike at the cause of
disability and dependence among the less privileged children. It aims
at preventing remediable physical defects through early detection,
diagnosis, and treatment. The total annual cost of all federal children's
programs is $3.5 billion.
A. SCOPE OF GOVERNMENT PROGRAM
The EPSDT program calls for screening services that include: (1)
taking a medical history and providing a physical examination; (2)
assessing immunization status; (3) screening for dental, hearing, and
vision problems; and (4) screening for anemia, lead poisoning, sickle
cell disease, bacteriuria, and tuberculosis.9 The Medical Services
Administration (MSA) guidelines provide that:
At a minimum, screening should include: a health and developmental history
(physical and mental); an assessment of physical growth; developmental assess-
ment; inspection for obvious physical defects; ear, nose, mouth and throat
inspection (including inspection of teeth and gums); screening tests for cardiac
abnormalities, aneniia, sickle cell trait, lead poisoning, tuberculosis, diabetes,
17 Public Law 90-248, 1967 amendments to the Social Sectrity Act.
Is See n. 10, supra at p..
Is 45 C.F.R. 205 and 45 C.F.R. 249.








infection and other urinary tract conditions; and assessment of nutritional status
and immunization status.2"
Screening, however, does not necessarily provide a precise diag-
nosis, nor does diagnosis assure effective treatment. In the absence
of treatment, the value of screening is virtually zero.

B. CASE STUDIES
At the Subcommittee's hearings, public witnesses described genetic
and familial diseases that could be remedied if detected by general
screening procedures if treated in time by competent practitioners and
subsequently treated.
Mrs. Ann Maguire discussed the case of her son John, a victim of
phenylketonuria (PKU). John is now 18 years old and is retarded as
a result of undiagnosed PKU disease.21 A second son, William, was
born in 1959. Another victim of PKU, he is profoundly retarded and
has been institutionalized for the past 11 years.22 The cost of institu-
tional care in the State of Pennsylvania, the 'Iaguires' residence, cur-
rently is $20,000 per child per year.23
The Maguire family had a third child, Christine, born in 1967. By
this time, Pennsylvania had a mandatory requirement for PKU test-
ing.24 Although a test was performed to determine the presence of
PKU, the test failed to detect the disease, and Christine continues to
display all of the symptoms of retardation displayed by her brothers.25
There is well documented scientific evidence that early detection and
diet can prevent retardation in PKU cases.28
Other case studies-presented by a panel of children and their
mothers-described complications which might have been avoided
had early screening, diagnosis and treatment been available.
Mrs. Irene Driver discussed the case of her daughter, Judy, who had
a chronic renal disability which eventually required dialysis and ulti-
mately a transplant, the direct result of an undetected and persistent
urinary tract infection.27 This illness was first detected when Judy was
about 5 years old, but, as proper care was not provided, she required
renal dialysis and a kidney transplant 2 years later.
Dr. Frederick C. Green, Associate Director, Children's Hospital
National Medical Center, in testimony before the Subcommittee,
indicated that Judy's disease could have been detected by a urine
test costing 35-40 cents.3 This case pointed up, he said, the "need
for continuity, ongoing evaluation, rather than haphazard episodic
kind of care, and this is what EPSDT is to do." 219
Mrs. Pat.ricia Young appeared with her son Eddie, who has a
serious hearing impairment. When her son was 6 months of age,
Mrs. Young suspected that he had a hearing impairment, but he was
not diagnosed or treated until much later.30 Dr. Green testified that a
21) "Understanding Medicaid: An Introduction to the Medical Services Administration
(MSA)," Department of Health, Education, and Welfare, May 1975, p. 278.
2 See n. 10, supra at p. 14.
Id. at p. 18.
2 Id. at p. 40.
24 Id. at p. 38.
2 Id. at p. 19.
2 "Dietary Treatment of Inborn Errors of Metabolism," N. A. Holtzman, A.nnual Revtew
of Medicine, 1970, No. 21, pp. 335-336.
2f See n. 10, supra at p. 10.
Id. at p. 13.
2 Id.
0rd. at p. 10.






rscrening for t1earig ( 1iabilitie- can be done by audiometry at a
juoolest c'st
Mrs. Iamela SpIeaks has two children, Yvette n(I Ella, suffering
from lead IIoi5eling1d T el y were identifie d through a screening
)roedulre for lCaeI)(soning which cost roughly about $8.00 each in
a private liboratorv.:" Tp IN'lly lead pOiLsoming is associated with
)i(Ia, a tendenc In ,hil1ren to e ingeti ant,ing at hand, in this in-
)I woC, lead pa. j o I Iw prohil)itIed fmr internal household use. Ir,
occurs inainly' in chlildlren of lpOe families living in oldhouse.
\-I. '1 1 o u ses
)r. Green tesified th1at lt ionall 600,000 children still carry
undue body loads of lead absorbed from a polluted environ3tent"
v year 0 o 400 ,lidien d ie of lead po()is(ing and an additional
6t00 suffer irreversible itital ret ardation and damage to the central
nerFVouIs systen2.
MIrs. Jovita Fon(tanez brought lier (laughter Melina to a South
End (minrunity health: ( 'enter in Boston, Massachusetts, after a
vision ch ck- found M elina had auublyopia. )r. Gerald ilass described
tle scrceing and treat lIent which, corrected Meilna's vision.6
)r. Iliss testified that if she had not been treated, she would have
lost viin 111 01)ne CVe. Ile described this illness as "a sure-fire disease
to pick up early with a Sulerb cure rate.' 37

VT M EDICAI, CARE SIGNIFICANCE
X. SCREENING NEWBORNS
Tie S1Ihconinitee believe es the case studies selected are illustrative
of a series of major national public health problems. Phenylketonuria
(PKU) is illustrative of several hereditary. amino acid diseases that
can be detected with a very simple screening test. According to Dr.
Robert Guthrie, PKU screening has "proved itself not merely a
medical but also an economic success, figured in the most hardnosed
budgetary terms- the ounce of prevention that saves an expensive
pound of amelioration.' Guthrie estimated that in 1972, 90 percent
of the 3.5 million infants born annually in this country were covered
b)y the PKU test. This would mean that alp)roximately 350,000 in-
fants did not receive such a test.
According to Dr. Jean H. Dussault of Laval University in Quebec,
Canada, a 25 cent test of a pinprick of blood from a newborn's heel
is sufficient to diagnose PKtT, galactoselia, and tyrosinemiaa
For ypothyroid il, nts, irreversible brain damage begins at birth;
life becomes progressively more difficult ; and their l)o)peets, without
t reatnient, for achieving full pottetial are imorI' According to Dr.
I)u.s:llt, neonatal hythyroidism (cretinism) s Ibout one in
12,000 Quebec babies. lie reported that the frequeency of neonatal
hypothyroidism appears to be about, 1:7,000.2
:, Id. at p. 1:.
'2I d. a t p. 1 "
a Id. at p. 13.
~AId. at p. 6.
>tatlsties and Epidemiologty of Lend Poisoning." Department of Health, Education,
ani W lfare. Olie(W ot w Clid l)evelop nrit, February 1972.
Seen 10, supra atl p 41.
T d. at P. 43.
S as Scrooninff for Genelic Disease." Robert Guthrie, Hospital Practice, June 1972.
Me&tiia \ rld News, Oct. I 1, 1!)74, p. 19.
++ I d.
41 1(
Ahninmunioassay Used to Screen Newborns for Ttypothyroidism," Pediatric News, March
1nr; 5,





11

In discussing this general issue, the British medical journal Lancet
reported the "(C)retinism is a rare cause of mental retardation but a
treatable one." 13 In a series of tests in the United States. "Klein and
others used a thyroid-stimulating hormone (T.S.H.) screening pro-
cedure and found an incidence of 1 in 500, which they compare with
the incidence of phenylketonuria in the United States-1 in 14,300.
These figures present a serious case for routine screening." 1) 4 Routine
screening clearly is cost-beneficial when costs are low, incidence high,
and the prospect of remedial treatment good.

B. COMMUNICATION DISORDERS
The hearing impairment denlonstrated by Eddie Young is an
affliction suffered by laroe numbers of children. Dr. Green testified
that 1 out of every 10 children in the United States staffers from some
form of communication disordr.4G More than 50 percent of these
children have some speech disorder, 33 p( rcent have severe hearing
impairments, and the remainder are totally deaf.47 "(U)ntreated
communication disorders literally isolate a child from his environment
and render him unable to carry out the myriad learning tasks of
childhood."
He described the grim consequences of neglected hearing defects:
An undetected hearing problem may delay normal language development as
well as eventually lead to a perceptual disorder that will reflect itself in the
child's capacity to work in school. Once they are labeled "dull" or EMR (educably
mentally retarded) on the basis of a perceptual deficit, which is all too common, 90
percent of the children so labeled and put in so-called slow learning classes are
doomed to stay in such classes.49
C. VISION
The experience of Melina Fontanez demonstrates the value of co-
ordinatitg treatment services with screening. Eve testing can be
accomplished easily at minor cost. When N lelina's defect w\ as first
noted in a school vision screening program, shn was referred to a
hospital eye department."
Dr. Hass testified that "at least 6 percent of childhood population"
could be expected to have vision disorders such as the amblyopia
problem demonstrated by Melina Fontanez.5' He stated that in his
health center the percentage is somewhat higher than that, "probably
around 8 to 10 percent." ?

D. OTHER HEALTH DISORDERS
Judy Driver's chronic renal disability was the result of an unde-
tected persistent urinary tract infection."3 Though the prevalence of
symptomatic bacterial infection of the urinary tract is substantially
4 "Mass Screening for Cretinism," Lancet, Aug. 23, 1975, p. 356.
4Id.
4 A. H. Klein, A. V. Agustin, T. P. Foley, Lancet, 1974, p. it, 77.
40 See n. 10. supra at p. 5.
47 "Learning to Talk: Speech, Hearing, and Language Problems in the Preschool Child,"
Department of Health, Education, and Welfare, National Institutes of Health, 1970.
48 See n. 10, supra at p. 5.
49 Id. at p. 11.
0 Id. at p. 41.
5 Id. at p. 43.
52 Id.
53 Id. at p. 10.
77-1306_7&---3







lo cN\v il t ii i at for aIIInia, su(I infect ions carry tie serious risk of
pertilanent kid, da (lnge. At least 5 Per(ent of all girls experience
! 1 ate\riiiria U urin ,i til' eh nt ar a nd sec(-onidar v s(hoo v ears.",
N,)rilai l[re'ts'-lliinr, 1[.)., 1)irector of the Nat1ioal Institute of
(1hihI d ealtli am! 1 luinqii 1evelopment, i)resent(1 screening data
('(I i (n I I II t I 'I t ar at io I. lIe testiid TiIe (, l I a on mental
rtardlatioii, which hav, be(n patlert primarily by the National
~oulndattiou as vell zv (Ither luln(lfltio>, woul indicate that about 7
1P(ce(,nt of th ( i \ oul f1ll into an area from unihtlly to severely

Ira liii, "\I.lI). foI I tie National l1Lntit1Ite of M"\ental health did
iwt provide a *p(filifigure1W 1)11t 1et ied that 'given1 proper SCreenIng
i1i thw area o4 mental heal thI ard behavioral disorders, a certain per-
it'itavle ()f tlwo(> iitcr' Xvi)l(I hot b)e in- iTtitutions.' In other
Xor(ik, earyI (lt (tion (of treatable ph.\sicWal defects can salvage the
ch~ildlren wui) 1iglht I(iei be found to require conflinement under
()()!i t f 1 lI)elTVll()l1.
Anen1ia, ( 1 thlogical deficienc-v in red blood cells, is another
childho)(d disorderr that m11ay be readily treated. The 1970 White House
conference on children n repor-ted that the incidence of anemia was
1ihiest among cliildrei, in deprived cireiuistaices. Almost half of all
2-vezr-()lds ill the lowest income quartile in(d over a third of those in
the lower nii(llle quartile wrelv fotnd to be a.neiic. For children be-
tween the ages of 2 and 6, the prevalence rates were somewhat lower,
but the fact retains that ieirly 1 out of every 5 of these children
was diagnosed as as nelic.7
( 'alolyn alk Snow, Rcseacrch Coordinator, National Academy of
science, testified regarding a study entitled "Assessment of Medical
Care for Children." This study examined the prevalence of anemia
among preschool children and found that "more than one fourth were
anemic." Ms. Snow testified that "although 72 percent of their
preschool patients had been screened for anemia" . and "36
percent had laboratory test re- ults below normal limits, yet 2 in 3 of
those below normal limits were neither diagnosed as anemic nor given
simple iron therapy."

E. ENVIRONMENTAL HAZARDS
Yvette and Ella Speaks were victims of lead poisoning, an all too
prevalent environmental condition. This condition can be screened
for, detected, and treated before irreversible damage occurs.0 At the
hearings, Dr. Green presented results of a program underway at the
Children's Hospital National Medical Center. He testified that, "na-
tionally, 600,000 children still carry undue body loads of lead absorbed
from a polluted environment.'' 61
A Department of Health, Education, and Welfare Office of Child
Development report stated that "each year 300 to 400 children die of
"A 10-Year Study f Jact irilna iii Si oolgirls Final Report of Bacteriologi Urologic,
I Elid~emiologic Filudi igs, ('. M. K nin, .Iwirnui of Infectious I)iseases, 1)70, No. 122,
:,, See n. 10, sIpra at 1 80.
m Id. a t p. 1:L i
Profiles of Children The 1.!70 White Ioue Conference (n Children and Youth, U.S.
(;overninent Printing Olice, 1 970
: See a1. 10, supirla at p 91,
ce Id. at )p. ill 92
SId. at 1). 1:2
Id, at p. (.






13

lead poisoning, and an additional 6,000 suffer irreversible inent l
retardation and damage to the central ner-vous system."

F. IMMUNIZATIONS
Representative Richard Ottinger (D.-N.Y.), presiding at the first
day of hearings, stated:
We hope to find out why approximately 5 million of the Nation's 1 to 4 year
old children are insufficiently immunized. Why is it, that of 14 million preschool
children in this country, one out of every three is insufficiently immunized?
I find it inexcusable that in 1973, 50 children died and more than 40,000
youngsters developed complications finding brain due to
Dr. James Dickson, the Dcparment's Aoiiig Deputy Assistant
Secretary for Health testified that "one of the inost dramatic achieve-
ments in child health has been the reduction and in some cases the
near elimination of childhood diseases such as measles, rubella, polio,
whooping cough and diphtheria throi igh vaccination program -.' 64
The Department recognizes the need for early imuninizat ions. I
Forward Plan for Health states:
In spite of the success in recent years iii thi control and prevention of measles,
poliomyelitis, and rubella, there J- one area of concern which will require special
attention: the immunization of preschoolers in low income families. Communi-
cable Disease Control iimnizaoion programs will focus on Head Start, EPSDT,
Day Care, and Neighborhood Health Center populations.65
A Center for Disease Control immunization survey for 197-4 reported
that in 1963, 84.1 percent of preschoolers were protected with three
or more doses of oral polio vaccine from poliomyelitis, but that by
1973 this percentage had declined to 60.4. rhe 1974 figures show that
the level has risen slightly to 63.1 percent.66
Among nonwhite preschool children in the central cities of major
metropolitan areas, only 47 percent had received three or more doses
of polio vaccine. Regarding this population group, Dr. John J. Witte,
Director of Immunization for the Department, said: "The point is
that if polio virus were introduced, there would be ample opportunity
for spread among these highly vulnerable infants and young children." 7

VII. ADMINISTRATIVE AND LEGAL SHORTCOM INGS
A. MANDJATORY NATURE OF THE LAW
The Social Securitv Amendments of 1967 (Piublic Law 90-24S.
section 302) required that EPSDT be implemented by July 1, 1969 in
every state that had a MNIedicaid program. Section 1905 of the Act
requires:
* effective July 1, 1969, stLCth early and periodic screening and diagnosis u
individuals who are eligible under the plan and are under the age of 21 to ascertai-
their physical or mental defects, and such health care, treatment, and other
measures to correct or ameliorate defects and chronic conditions discovcret1
thereby, as may be provided in regulations of the Secretary
,12 See n. 35, supra.
(;3 See n. 10, supra at p. 1.
a' Id. at p. 113.
';:"Forward Plan for Health: Fiscal year 1977-81." Department of Heal1h, Etcatiwi.
and Welfare, Public Health Service. June 1975, p. 228.
( Medical World News, Sept. 22, 1976, p. 86.
67 Id.
142 U.S.C. 1396d(a) (4) (B).








President Johnson articulated the program goals in a message to
(Mon1re-s on February ,. 1967: to "expand our programs for early
4 liu~ii i l and treItniewt of children with hlan(icaps."' 6 lie said, "The
problem is to lisc()ver, a early as possible, the ills that handicap our
chilliren. Tb ire must be a conti ining follow-up :1l(1 treatment so that
b indicat.. (14) not o negle(te(d." 71)
T'11 IlI1'-d' Was. w ,Id(,ln (ommittee on August 17, 1967 passed
I 1i it w i I Sec! rit v Anindment of 1967 which included a provision
requiring stte to reen, diadoe, arl treat the medical ailments of
1iidren of low income families tarting Jul 1, 196971
'eSnte Finance Conliittee approved similar 1 gislation and the
program~ cleared ( no(re-s on D(,clnber 15, 1967. President Johnson
-i7U(d th, bil! into law on JTamarv 2, 1968 (Public Law 90-248).
The law )-se in 1967 is mandatory, i.e., as of July 1, 1969, all
1tatc hving an acce)taleC Me(licalidl plan must screen, diagiose,
an1111 "coiTect or ameliorate effectss and chronic conditions'" of eligible
(lil(lren 1in"de tlhe age of 21.7

B. TIMELINESS
Following passage of this legislation, the Department was authorized
to promullgate imin plementing regulations. To be effective, regulations
hold have been issued before the July 1, 1969 implementation date.
GAO found "IIEW was >low in developing EPSDT regulations." 73
From 196> to 1971, Department officials developed program regula-
tion- after consulting with experts in the field of health care for young
ep()pie, other Ilepartent agencies, the Office of Management and
Biu(lget, and the States.7 The Secretary referred to this period as
* an embATrasn-inngy long period of delay and debate, occasioned
mainly b a concern over the impact on Federal and state budgets and
on states' medical resources * 7
The Adminis published propo-ed regulations in the Federal Register on November 9,
1971. These regulations becarne effective on February 7, 1972, two and
o1e half rears after the effective date of the law. The regulations
required >Lt('s to begin to provide EPSD'T at least for children under
:ge, 6. b)t allowed[ them until July 1, 1973, 4 years after the July 1,
196i9 (,adine to extend the services to all eligible children.""
'I'le Genieral Accounting Office (GAO) examined eight states to
(letermine their EPSDT performance as of June 30, 1973, 4 years after
tl, (ongrl'-ional re(uirelnent that EPSDT be fully in force.
GA() concluded in a report dated January, 1975: "* * None of
tll ei.ht ha(l done so for eligible children under 21 years old. tHowever,
R ioe Iland was in compliance with SRS regulations in force on
Jme 3 0, 1 97. which required providing EPSDT to children under 6." z
It is clear that the Department has been lax in promulgating regu-
l1tions to carry ouHt the requirements of the EPSDT program.
' !r,- idwn ial MI<.a Le Iu Coigre>'s, Feb. 81 V97.
-" ld.
Tho IIou-, Ways and Means Committee passed title III of H.R. 12080 (1967 Amend-
menis to the 4cial Security Act) on Aug. 17, 1967.
2 U.S.C. 1396(a) (4) (B).
S ii 4, supra at 1). 4.
Id.
45 C.F.R". 24910fa) 3) (iv).
7 S#,e n. 4. 4upra nt p. 8,








C. COMPLIANCE
The Department is required to insure that screening, diagnosis.
and treatment aspects of EPSDT are carried ott as provided by law.
The GAO reviewed the implementation up to July 1973: 'S
Illinois had not informed the families of all eligible children about EPSDT, and
Alabama, had not provided transportation to and from medical services, and Wis-
consin, Oregon, and Massachusctts had not began implementation. Regional
staff had reported these problems, which in 2 cases had also been noted in several
quarterly reports. Nevertheless, the Department has not held formal compliance
hearings involving these seven states.79
GAO concluded that the states lhave bleel slow in establishing
EPSDT as a result of the Department's delay on cont)liance issues,s
For example, on July 1, 1973, Oregon officials told GAO that they
would do only what the Departnient required in providing EPSDT.
GAO reported that the SRS iecionl conifis-Bioter recommended to
the administrator of SRS that formal action be taken to require Oregon
to comply. As of May 1974, SRS had not called a hearing.8'
In its 1975 report, GAO stated thtt under Title XIX of the Social
Security Act, the Secretary of ttealtl, Education, and Welfare has
authority to withhold Mledicaid payments ift a state's plan for admin-
istering its Medicaid program (toes not meet mandatory Federal
requirements or if an approved plan is not, carried out. Withholding
would lower the dollars available for health for a particular quarter,
but would also serve as an impetus for the state to come into com-
pliance; a situation that would increase significantly the number of
children receiving treatment. GAO found that as of June :30, 1973,
none of the eight states had fully executed th EPSDT program.
Federal regulations reqiure that when Fed(ral.-State issues cannot
be informally resolved through negotiations, the ES regional com-
missioner will recommend that the S RS adiinstrator hold formal
hearings to determine thle state's compliance with Federal require-
ments. These hearings serve as a basis for deciding whether to with-
hold Medicaid payments to the state for noncoinplance.
GAO found that:
* in December 1973, the Director of the Division of Program Monitoring
(MSA) reported to the Commissioner that MSA had discontinued analysis of
the quarterly compliance reports and did not plan to follow-up on compliance
issues with the states. An SRS representative told us that SRS had not pursued
compliance issues because of the difficulty of documenting the problems and
going through compliance hearings.s2
In addition to determining compliance, the Department must now
also judge quarterly whether a penalty is to be ass-ssed. The Depart-
ment is also tardy in meeting this requirement. Asked when the Decem-
ber 31, 1975 review of the adequacy of state programs would be
completed, Mr. Weikel replied, "We are running roughly about nine
months behind." -3
In oversight hearings before the Subcommittee on January 26,
1976, Secretary of the Department, F. David Mathews, was asled to
explain the Department', statement that 3.5 million children would
78 Id. at p. i.
79Id. at p. 9.
SO Id.
8'Id.
82 Id.
See n. 11, supra at p. 82.








be screened in fiscal vtears 7 1971 and 1976 and how t hat could be iec-
oncle d with the stat t e that st ate that all children, a totl population
of 13 million eligible-, should have ani opportunity to be screened.
Dr. Weikel replied, "'There i _o S quarrel wit the i'; million. Nine
million are eligilble at any one tine. The law loe n(t require that
every child be 'reened every year. M(iicaliv, it i not vindicated." '"
I)r. Weikel failed to poillt o. tlat th1e rciilati'os1 C(quirt'e that every
eli(g-ble family be in1forw(l of the '.-rcenin1g ()pp)ortunit.
Ru'le Si, w"ittee recogize thlat ther'e is presently limited in-
formitiwl oncerning optillal scrce In reh" uremen ts for children.
I)r. Weikel's si atmeint, however, coitra( it W W of the Delpartfents
own screening1 iiiuiiua1' l)ri)arc(d by t11 American Academy of
Pediatrc-%. 'ltli manual, prepared,(Tnde Department grant, hs
(leterluin (l t l t e veI) complete 1)h1 A;\ l ,xtii atiois are needed
in the first 25 itmitltms ()f i chil's lif ,r :oipl tl effective pre-
ventive health care, a fre(! itecy ,ven 1iiglier t han once, a year for
young clihlren.
The Sul)coinmit t(c finds tv I )cpatrt I Ion t did no( take timely
action, including the i nitiztion of fOrmal compl iaceII he-arings, in
order to bring st ates ilt() conforinit v1ith1 EP YI provisins of the
law. Compliance will increase substantially the nml)er of children
receiving care under EPSDT.
The Subcommittee hIearin- on October 8S, 1975 focused on the
number of children treated. ( n Jini n a member of
the Subcommittee, asked why the Department does not, Ittempt to
seek an answer to the question of how many chil(lren are being treated.
Dr. Weikel replied that new regulations were then being proposed.
However, these regulations till are not final. When asked how many
of the 11 million children eligible to be screeched but were not screened,
were treated nevertheless; Dr. Weikel testified "We do not have a
system available in all the states at this time to trace the children
through to treatment. This is a critical weakness.
The Subcommittee agrees. The Department should have developed
a system tracing children through to treatment. To screen children
without then providing appropriate treatment, a situation which has
existed since July, 1969, defeats the long term cost-benefit features
of the EPSDT program.

D. INAI)EQUATE INFORMAkTION
Along with being unable to report the nitn ber of children treated,
the Department also was unable to supply basic information concern-
ing the expenditure of 3.5 billion dollars for 1975 for services to children
under the age of 21. When asked for an analysis of expenditures, in-
cluding the amounts spent for polio, vision, hearing, disorders, and
mental retardation, Assistant Secretary Stephen Kurzman replied by
letter to Chairman John E. Moss that "The National Center for
Social Statistics reporting system does not include disease specific
information." 88
Id. at p. 75.
1-Z 45 C.F.R. 249.10(a) (3) (ii).
1 "A Guide to Screening- EI'SJI)T Mediua id," Social and IR*1hbilit:tton Service. Depart-
11enit of Health, Education, ml Welfare. ii cooperation with the Aminerican Academny of
Pediatrics, June 1974.
Sep n. 11, supra at p. 76.
Soo n. 10, supra at p. 151.








Congressman Metcalfe (D.-I.) testified that:
HEW for the first years of the program's existence acted as if the program wasn't
even there. Whether this was a deliberate flouting of the law or simple incom-
petence I do not know.
I do know that during the previous administration, the deliberate sabotage of
social welfare programs was a common and often stated policy. I would not be at
all surprised if HEW attempted to do to this program what was done to OEO during
those same years.
Deliberate sabotage or not, HEW clearly did not provide the states the necessary
guidance for implementing EPS1)T. It was not until 1975 that HEW provided
the states with screening manuals to assist them with the technical aspects of
the program."9
Congressman Santini suiiimed up the Subcoimittee assessment:
* from 1969 to 1974, * there was an apparent attitude of benign
indifference with respect to the -.gency's approach to its responsibility in these
areas. It seems now that some positive initiatives have been taken that can rectify
that woeful gap of information and allow us to make an accurate determination on
the success of these programs.9

E. PENALTY ASSESSMENT

The Senate Finance Committee, in its report on the Social Security
Amendments of 1972, notted that new legislation was necessary to
increase early detection and treatment of illness in children. The
Finance Committee Report stated:
The committee recognizes the significance of early detection and treatment of
illness in children-both in human and economic terms-and therefore believes
that the possibility of a reduction in Federal matching AFDC funds would serve
to assure that States implement the title XIX requirements for health, screening,
diagnosis, and treatment for eligible children. MNoreover, it would underline the
committee's intent that the health screening programs should be fully implemented
by the States.9"
It was this concern that led to the introduction of a penalty provision
in the Social Securitv Amendments of 1972. Under these amendments,
the Secretary of Health, Education, and Welfare is required to reduce
Federal aid to families with dependent children (AFDC) payments to
the States by 1 percent starting in Fiscal Year 1975 if a state fails to:
(1) Inform AFDC families of the availability of child health
screening services, 92
(2) Actually provide or arrange for such services, or
(3) Arrange for or refer to appropriate personnel for corrective
treatment those children disclosed by stuch screening as suffering
from illness or impairment.C3
At the Subcommittee hearings, the Df'partinent testified that nine
states were out of compliance for the first quarter of fiscal year 1975.
These states failed to meet basic criteria under the penalty statute.94
At the January 26, 1976 HiEW oversight bearing, Mr. Weikel said
that the Department was processing second quarter penalty reports
and that one state, Pennsylvania, was out of compliance.9 5 For the
states determined to be out of compliance for the quarter beginning
July 1, 1974, all have appealed assessment of their penalties. The

69 Id. at p. 46.
11 See n. 11, supra at pp. 89-90.
93 Senate Rept. No. 92-1230. 92d Cong., 2d sess.. 1972, p. 217.
92 Public Law 92-603, 1972 amendments to the Social Security Act, section 403.
93 Id.
% See n. 11, supra at p. 77.
Id. at p. 79.






18


I)ePa 't111ic t- n& \(It resolved that appeal process for any of these
states and is therefore iiore than '21 months behind on that' aspect of
program c o nip li alw(' .
Under thc >oeial >eeiirit x Axiie ndients of 1972, the Departmnit
must assess a l)enalt> oT state wnich are IIot in compliance ith
45 (.F.R. 2O .I46() for the EPSD1 progam. Once the penalty has
Ient se.J(l, I r i li 1) onst -'ifv\ tlw Iproves- for recoidcration of
a disallowance. te regh I tiuI speciets the procedures and sets time
limits for reconsideration.
Ten disallowvances wer'e initiated against various state,. Seven
were initiated in June 1975, 1 in Augt 1975, 1 i1 Otob
1 in January of 1976. Of the 10 states penalized, 9 requested recon-
sideration of the disallowallce within 3() days of notification. Pur-
suant to the regulation, the Administrator of SRS must promptly
acknowledge such a request. Pennsylvania was the only state to
receive this acknowledged t in le I than '0 days. The average
acknowledgment time was 2 to months. Minnesota waited 7 months,.
The next step in the reconsideration process is for the Regional Com-
missioner to send all pertinent materials on the case to the Adminis-
trator within 30 (lays of the request. This procedure took the Regional
Commissioners an average of 6 months. Region I submitted the
New York records in 2 months. Region Ill submitted Pennsylvania's
two disallowalnce in 1I month and in 3.5 months respectively, Region
V submitted Mhuiesotas report in 6 months; and Indiana's in 11
months. Other Regions were equally delinquent in filing reports;
Region VI for New Mexico in 10 months, Region VIII for Montana
in 7 and for North Dakota in 8, Region IX for California in 6 and
for Hawaii in 8.7
The next procedural step specified by the regulation is that the
Administrator must "promptly" forward to the state a list of all
items in the record currently in question. This step took the Admimis-
trator an average of 2.2 months from the time the Regional Com-
missioner submitted the record. Region II states received their list
in 4 months and Region III states received their list in 6 months.
The reconsideration process has five additional procedural steps
scheduled. The Department has not yet processed these additional
five steps for any state."'
Congressman -Metcalfe commented on the penalty assessments:
ttEW did penalize eight states a total of more than 3 million dollars. These
penalties were asessed in the satme inept manner as the rest of the program had
been administered. However, n recipients were even interviewed by the HEW
regional office staffs charged with monitoring the program. No accurate statistics
were ever compiled. In fact, there seems to be no rhyme or reason for the asess-
ment of many of these penalties.O
Congressman Metealfe's statement that "there seems to be no
rhyme or reason for the assessment of many of these penalties" is
amply supported by the facts. The Department looked at the states'
compliance with te EPSDT program's provisions for informing,
screening, and treating eligible children. It assessed nine states (New
945 C.F.R. 201.14.
I "Status of Requests for Reconsideration of Disallowance," Social and Rehabilitation
Service, Department of Health, Educatlon. and Welfare, June 1, 1976.
Id.
"See n. 10, supra at p. 47.








York, Montana, North Dakota, Pennsylvania, New Mexico, Min-
nesota, Indiana, Hawaii, and California) with penalties for non-
compliance. Hawaii, New Mexico, and Pennsylvaiua were cited a-
noncompliant in only one respect Tihe remaining slates were cited
as noncompliant in screening, diagnosis, and treatment. Illinois,
Colorado, Wyoming, Ohio, and [assachsetts, also cited, were
recommended for penalties by the edial services3 Administration'
Central Office, but the penalties were not assessed.
Furthermore, the geographic distribution of the penalized states
left 4 of the 10 HEW regions untouched by any EPSDT penalty.
Such arbitriary use of the penalty provisions denionstrates that
44 **no rhyme or reason . was applied by the Department in its
enforcement.
The Subcommittee finds that the sanctions of the Act have not
been properly administered by the Department. If the provision of
sanctions itself is not useful, consideration can be given to creating
new incentives. Currently, however, the Department hall a responsi-
bilitv to resolve outstanding state appeals. SLates de-erve the oppor-
tunity to know if their program is deemed to be acceptable. Without
resolution of these appeals, an evaluation of the sanctions approach
cannot be made.

F. PUBLIC ACCOUNTABILITY: INADEQUATE INFORMATION COLLECTION
BY THE DEPARTMENT
Despite the size and importance of EPSDT, the Department ad-
ministers Medicaid with serious gaps of information, especially with
regard for program management operations and long-range planning.
These gaps impede efforts to evaluate the Medicaid program in rela-
tion to proposals for national health insurance, particularly the re-
quirements for child care.
The Department does not know how many persons are eligible for
Medicaid, as cited by the Subcommittee in its Report on Unnecessary
Surgery.'" Furthermore, on July 1, 1975, it was not known by the
Department how many persons at what cost were treated as a result
of EPSDT programs.'
The Department's inability to account for the dollars expended
under these programs is equally shocking. The Medicaid program in
fiscal year 1972 paid out $4.6 billion. In 1976, it will pay ouit an esti-
mated $8.3 billion.2 These are only the Federal su "s: they do not
include State and local outlays.
The duty of collecting national data on Medicaid lies with the
National Center for Social Stati>tics (NCSS) and comes primarily
from two sources: the grant award procedure, and statistical reports
from the States.'03
Data on the numbers screened and numbers needing treatment for
specific conditions appear sufficient but other (Lata on EDSPT, such
as information on the eligible population, has gross mnau'qaacies.
"' ,Cost and Quality of Health Care: Unnecessary Surgery." Report of the Su,7ibcommitt(e
on Oversight and Investigations, Committee on Interstate and Foreign Commerce, U.S.
House of Representatives, 94th Cong., 2d soss., January 197G.
See 1. 10, supra at p. 128.
l(i See n. 11, supra at p. SS.
103 See n. 20, supra.






20


The Subcommittee staff encountered similar defects in data on the
population eligible for surgery under Medicaid. The Department of
Health, Education, and Welfare must develop suitable information on
Medicaid eligibles.
The Subcommittee survey requested information on the number
of those informed of the availability of screening services and the
number requesting or declining such services. A number of States were
unable to identify those informed: most States were unable to identify
the numbers requesting or declining services.04 Such information,
to be useful to the Federal agency, must be provided by the States.
Public accountability requires also that the data system report
treatment linked to screening.
The Subcommittee finds tle Department's failure to account suf-
ficently for money spent for Medicaid is irresponsible. Equally dis-
turbing is the lack of data sufficient to evaluate the Medicaid program.
VIII. EPSDT GOALS
A. EPSDT FUNCTIONS
Given the potential of early detection and treatment to reduce
future health burdens, the Social Security Amendments of 1967 re-
quired that the Early Periodic Screening Diagnosis and Treatment
(EPSDT) program begin by July 1, 1969 in every state with a Medic-
aid program, as noted above.'5 The purpose is to identify and
treat handicapping or potentially handicapping conditions at a low
cost before they become severe or irreversible and before they require
future costly treatment.106 Many children, served by the program,
have not received previous health services. EPSDT generally provides
their first experience with preventive medicine, often their first with
health care other than emergency service.1'0
The EPSDT statute requires that states provide in their Medicaid
plans for periodic health screening for all eligible children under 21
and for follow-up treatment of conditions discovered through screen-
ing.08 The screening process must assess a child's physical health,
growth, and development. The state plan determines what treatment
is required for defects found through screening, except for hearing,
vision, and dental defects which must be treated whether or not
covered by the state plan.'0 Furthermore, states mustinform all families
receiving payment under the aid to families with dependent children
program (AFDC) of the availability of EPSDT services, tell them
where and how these services can be obtained, and provide transporta-
tion services, if requested."10
In describing the General Accounting Office (GAO) analysis of
EPSDT programs, Congressman Ralph Metcalfe testified:
Their findings and conclusions made clear that, despite the law and despite the
obvious human need that the program could serve, HEW all but ignored the exist-
ence of EPSDT for more than 5 years."'
104 See n. 1, supra.
I' Public Law 90-248, 1967 amendments to the Social Security Act.
106 See n. 10, supra at p. 114.
107 Id.
108 42 U.S.C. 1396d(a) (4).
109 Id.
110 45 C.F.R. 249.10.
ul See n. 10, supra at p. 45.






21

GAO reported that by the end of fiscal year 1973, of the more than 1.8 million
eligible children living in eight sample states, less than 58,000 had received even
the minimum screening as required by the law. This was a screening rate of about
3 percent . Hence, more than 97 % of the eligible children in these eight states
examined by GAO did not receive the preventive care mandated more than 6
years before.11'
B. SCOPE OF HEALTH PROBLEMS
The Subcommittee sought to determine the extent of unmet
health needs within the EPSDT program. M. Keith Weikel, Commis-
sioner, Medical Services Administration, testified on October 8, 1975:
"there is a total of 3 million children screened to date." 113 Dr. Dick-
son, Acting Deputy Assistant Secretary for Health for the Department,
acknowledged that "as an indication of the potential size of the
program, there are approximately 13,000,000 cliidren eligible for
EPSDT." 114 Therefore, since the mandated implementation date of
the program (July 1, 1969) through Ju!y 1, 1975, at least 10 million
children out of an annual average eligible population of approximately
13 million children were not screened.
To gain further insight into this deficit, the Subcommittee asked
State Medicaid agencies to fill out a questionnaire on fiscal year
1975 EPSDT activities. (See Appendix) Thirty-four states provided
information in a usable form. Responses from_ the 34 states extrap-
olated to the Medicaid programs in 53 jurisdictiorIs provided the basis
for estimating that 10.9 million children out of an estimated 12.8
million were not screened during fiscal year 1975.
1. Those not screened
Using this 10.9 million figure, the Subcommittee attempted to
calculate the adverse health effects of failure to expand EPSDT
programs.
Questioned during the hearings concerning auditory, visual, or
central nervous system disorders, Dr. Green testified that close to 1
million EPSDT children having these perceptual disorders could be
treated earlier if screened appropriately under this (EPSDT) pro-
gram.115 Dr. Green testified that:
* when perceptual deficits are not recognized early on, not only the hearing
but the visually impaired as well as those suffering moderate or mild brain damage
it impacts negatively on their capacity to take full advantage of the educational
system to prepare them for a productive role as an adult.1G
2. Vision
Dr. Hass testified that at least 6% of the childhood population
might be expected to have amblyopia or lazy eye problems 17 if they
were screened and that in the South End Community Health Center
the figure "is probably around 8 to 10 percent." Is Using Dr. Hass'
estimate of 6 percent, then 600,000 or 700,000 children could be ex-
pected to have this disease among the unscreened 10.9 million EPSDT
children.9"
12 Id. at pp. 45-46.
n Id. at p. 125.
14 Id. at p. 115.
1 2 Id. at p. 11.
u" Id.
ITT Id. at p. 43.
Id.
Id.









The Subcommittee survey, based oni answers to this question from
32 States, found that 133,5S9 of 1,113,261 children screened (12%)
needed treatment for vision problems. Extrapolated 120 to the entire
eligible population, that woN11d f10111 over one million children need
treatment for vision problem ." ) Even using the most conservative
estimate, that of 6 percent by Dr. Ilass, there are approximately
G50,000 eligible hclidren out of the unscreened 10.9 million in need of
treatment for vision problems>.'2
3. IastitutinaIzato
Congressman Jim Santini tried to determine what proportion of
children are institutionalized who might not need to be there if their
disease were detected and treated earlier.
Mr. ,ANTIN. Prior witnesses indicated that as a consequence of at least in
part the failure of H XW to give any substantive reinforcement of program and
direction of the program that Congresss instituted * that there would not
now be 21,000, who would not be there had there been adequate screening at the
time?
Mr. COHEN (former Secretary of Health, Education, and Welfare, Wilbur
Cohen) I don't know what the exact figure is. I think it is much larger than 10
percent myself. I can't prove that by any immediate statistics I have * I
have always in my previous studies on this-there is something in the neighborhood
of 5 to 7 percent of the children born with some kind of physical, mental, or learn-
ing handicap which could be prevented or cause less trauma or difficulty for
parents of the children if there were early screening and treatment before the
age of 6.12
Dennis Hagertv, Counsel for the M aguire family at the EPSDT
hearing told the Subcommittee:
The population of State institutions, the facilities for retarded, epileptic, or
cerebral, is approximately 210,000 throughout this country * You have
210,000. Ten percent of those would probably not have occurred and would not
be permanent if early screening were used.23
Dr. Kretschmer, Director of the National Institute of Child Health
and Human Development, testified that information, gathered pri-
marily by the National Foundation as well as other foundations,
indicated that about 7 percent of the children would fall into an area
from mildly to severely retarded. Asked whether he would expect that
out of a population of 11 million unscreened children that 770,000 of
them might well be mildly to severely, retarded, Dr. Kretschmer
replied, "Yes, or with some kind of learning disability. That is right,"'14
4. Anemia
Carolyn Kalk Snow, Research Coordinator of the Institute of
Medicine, National Academy of Sciences, presented assessments of
iron deficiency anemia for children between the ages of 6 months and
11 years among families in three areas of Washington, D.C. Although
more than one fourth of the preschool children were anemic, there

11' See n. 1, supra.
121-,Characteristios of Persons with Corrective Lenses: United States- 1971." Depart
ment of Health. Education, arid Welfare, National ('enter for Soeial Statistics. No. (HRA)
75-1,520, September 1974, p. 19. Thie 1974 N(CSS study used o iy the data for persons using
corrective lens. The !ercekiltage of children aged :1 th rough it; who have a visual impair-
mnifIlt requiring corrective lirs is !6.(;.
"Prevalence of Selected Irnpairrients- Inited States 1 971 ." I)epurTment of Htealth. E.1,-
cation, and Welfare. National C(enter for Social sttitics No i ") 51526. May 7),
p, 24. The 1975 N(SS sttidy useid omly datal for visaij inmipaimiments delined a1 blinwness
in one or both eyes, cataracts, gli uco olor lin-)nss. (dela(,hd retina. Fven limiting
quantified impairments to thee cod(ltions, i he 1wrc.n tm-e of children under 17 y ears of
age is 9.4.
:!t! See n. 10. supra at pp s 79.
'21 Id. at nj. 4,;
124 Id. at p. 130.






23


were "frequent failures to follow-up abnormal screening test results
with treatment," 125 according to the study. Of the children screened
for anemia, 36 percent had laboratory test results below normal
limits. Yet 2 out of 3 were neither diagnosed as anemic nor given
simple iron therapy.
In response to the Subcommittee's survey, 20 states reported 887,000
screenings for iron deficiency anemia. In 13 reporting states, those
needing treatment for iron deficiency anemia totaled 24,417, out of
609,000 screened. Extrapolated to the eligible population of 12.8
million, that would mean over 500,000 children need treatment for
iron deficiency anemia among the EPSDT population. Of the 10.9
million not screened in fiscal year 1975, approximately 435,000 could
be expected to need treatment.

C. SCOPE OF TREATMENT
The EPSDT program is to provide the corrective treament foi-
children judged necessary by the screening programs.
Senate Report 92-1230 provides some insight into Congressional
intent in this regard:16
The Medicaid health screening and treatment regulation requires states to
assure that eligible children receive early and periodic screening and diagnosis
to ascertain physical and mental defects and treatment of conditions discovered
within the limits of the state plan.
In 1972, Congress enacted Public Law 92-603 which amended
section 403 (g) (3) of the Social Security Act to:
* * arrange for (directly or through referral to appropriate agencies, organiza-
tions, or individuals) corrective treatment the need for which is disclosed by such
child health screening services.
Thus, corrective treatment was clearly the intent of Congress when
this legislation became law in 1972.
Congressman Santini questioned Department officials at the Sub-
committee hearing:
Mr. SANTINI. * the value of this program was in the number of children
treated * (but we) don't have any information on the number of children
treated, so we don't have any basis for judging the value of the program at this
point. Why not include a question in the multitude of forms that asks the question,
"Was there any treatment?", which is the basis on which we value the program.
(Were) there any treatment (questions) in the forms the States received and
doctors received?
Dr. DIcKSON. I don't know the answer to that.'27
The Subcommittee survey found 32 states supplied information in-
dicating that 495,000 children out of 1.1 million screened needed
some form of treatment.28
Only 9 states were able to report the number treated as a result of
screening. These 9 states reported a cumulative total of 80,454 chil-
dren, or 60.4 percent of 133,117 needing treatment, actually received
treatment.
For the 32 States, by projection, of 495,000 children needing treat-
ment, approximately 300,000 were treated: 195,000 children were not.
'2 Id. at p. 91.
li See n. 91, supra.
127 See n. 10, supra at p. 138.
'm See n. 1, supra.





24


These estimates 0do not account for the 10.9 million children who
were not screened during fiscal year 1975 under the EPSDT program.
Of the children screened under the EPSDT program, 45.1 percent
were found to need treatment (see Appendix). On that basis, ap-
proximately 4.9 million children out of the 10.9 million not screened
would need treatment. Presumably, few were treated early enough
to prevent the diseases discussed earlier.

IX. PUBLIC HEALTH ISSUES
Evidence presented to the Subcommittee indicated sizeable gaps in
the EPSDT program, a need for improvements in legislation, and a
need for stronger regulations.129 There were also suggestions, that the
administrative aspects of the EPSDT program were too expensive
and that more cost-effective ways to deal with child health care such
as expanding the program to the entire population should be considered

A. COORDINATION OF CARE
Dr. Alfred Yankauer, Professor of Community Medicine at the
University of Massachusetts, testified before the Subcommittee that,
good public health practices and principles were not followed in the
EPSDT program. "Detection, counseling, follow-up, and treatment
were not under control of the same source," he said.30
Dr. Yankauer stated that:
* the special needs of children** are not only the early widespread appli-
cation of known preventive measures-immunizations are the best known-not
only the early detection of handicaps such as hearing loss, but also their follow-up
and care.131
He pointed out that the often chronic continuing conditions of
physical and mental handicaps do not lend themselves to simple
medical solutions. Often these illnesses cannot be considered as cured
but require continuing care.132
Dr. A. Frederick North, a pediatrician, testified as follows:
The Committee has already heard testimony yesterday that early and periodic
screening when followed by diagnoses and treatment is one very important com-
ponent of the health care of children.
You have also heard that when screening is not followed by diagnosis and
treatment it is costly and meaningless and sometimes dangerous and demeaning.39
He testified that:
* * screening, diagnoses, and treatment is most effective and economical when
it is provided in the direct context of comprehensive health supervision-the
"medical home" which includes preventive services, including immunization,
counseling, and guidance.1'3
Dr. North said also that-
* any separation of screening from this direct context of comprehensive care
multiplies the cost and difficulties of providing preventive services and of in-
suring appropriate diagnoses and treatment.135
10 See n. 10, supra.
Id. at p. 101.
'n Id.
3" Id.
I Id. at p. 95.
Id. at pp. 95-96.
Id.





25


Dean Wilbur Cohen of the University of Michigan testified that
while he was Secretary of Health, Education, and Welfare, he de-
veloped a comprehensive program for children, youth, and the
family.136 This program included prenatal and postnatal care for
women as well as comprehensive medical care for all children, including
correction of any disabilities.
Dr. George Lamb, Professor of Preventive Medicine at Harvard
University, urged even stronger measures. He stated: "* * In some
instances the prevalence of problems is so high that screening itself
should be dispensed with completely and direct therapeutic services
instituted." 137 He described one group of sixty plus children, thirty-
one of these had urgent problems with their teeth and said that any
further screening for teeth problems would be inappropriate.138
The Department has acknowledged that a requirement of the
EPSDT program is comprehensive treatment of the entire patient,
not merely the disease. In testimony before the Subcommittee, Dr.
Dickson stated: "The basic concept underlying the EPSDT program
is one of preventive and comprehensive care." 139 Section 1905(a)(4)
of the Act mandated:
* early and periodic screening and diagnosis *** to ascertain their physical
or mental defects, and such health care, treatment, and other measures to correct
or ameliorate defects and chronic conditions discovered thereby, as may be pro-
vided in regulations of the Secretary.'10
The law provides that sound public health principles of compre-
hensive and coordinated care be followed in implementing the EPSDT
program. The Subcommittee finds, however, that coordinated compre-
hensive care is generally not being provided.

B. OUTREACH AND FOLLOW-UP ACTIVITIES
The Department of Health, Education, and Welfare's regulations
require states to actively seek eligible children by informing parents
that these services are available and where and when they can be
obtained, helping parents understand the nature and purpose of the
screening program, enlisting community agencies to help locate
children eligible for EPSDT services and providing necessary trans-
portation to the services.41
The GAO report found "a wide variety of outreach methods."
They reported that states with the most aggressive methods had
higher screening rates.142 For example, GAO indicated that most
of the areas in Idaho and Alabama were using a variety of outreach
methods and statewide had higher screening rates than Illinois and
Washington which had done little more than mail EPSDT inserts to
families with eligible children.43
Dr. Yankauer testified that outreach activities are often not pro-
vided for because such activities are usually more expensive than
the screening itself.'" Outreach activities by the States are certainly
m Id. at p. 55.
3 Id. at p. 99.
2W Id.
m Id. at p. 114.
40 42 U.S.C. 1396d (a) (4).
"'45 C.F.R. 249.10(a) and 205.146(c).
I" See n. 4, supra at p. 9.
2Q Id.
W See n. 10, supra at p. 101.






26


not extensive since tie Subcommittee questionnaire found that 10.9
million children during fiscal year 1975 were not screened.
FolloW-u1) is an important health issue. Dr. Weikel indicated that
when the program was originally implemented, there was:
to ~() 11111 (fl i~as I be~live sT)iaking as a professional, on the screening
component. The only data required from the states was oriented around the
number screened and the number that are referred.
We have changed our reporting requirements. We are in the process of getting
that cleared through the Office of Management and Budget and we are requiring
them not only to report screening data but to develop some mechanism for
following up to make sure that the children are treated.1'5
The need for providing follow-up treatment for medical needs
which have been uncovered by screening is another specific require-
ment under the regulations. Section, 205.146(c)(v)(3) states that
alrr'angeIiienits mnust assurtie
* th'it such services are provided or initiated within 60 days of a screening
finding that indicated a need for such services except in cases where the State
can show that fLilure to do so is not 'he result Of State inaction.

C. COST-BENEFIT RELATIONSHIPS
Several witnesesl- offered evidence of health and economic benefits
in undertaking an early prevention and treatment program for
chil(iren. ()tiers questioned the large administrative costs associated
with the EPSDT approach and suggested program changes that would
load to reduced spending on adiministrative aspects. For example,
Dr. North testified: "EPSDT is also linked to the special problems of
iiedicaid with its; compie eligibility requirements, on and off eligi-
bility, its endless fo1'ms, and its late and inequitable i)ayments.''147
Congressman M etcalfe focused specifically on the cost benefit
advantages from a public health standploint:
Dr. Eli Newberger of (hildrens Hospital in Boston and one of the Nation's
most distinguished experts in the field of child health care, has estimated that
complete preventive child health care, from the time a mother is six months
pregnant to the time the child is 16 years old would cost about $1,000 per child.
"Compare that with the current rate of hospital care and the current
cost of drug;," Congressnian Metcalfe urged. "That $1,000, which
could go a long way toward keeping a child healthy for his entire life,
woUld not even pay for 2 weeks confinement at a hospital at today's
prices." 148
D. ALTEI{NATIVE APPROACH
Dr. North testified that EPSDT as currently defined and adminis-
tered "has been ,iiid will continue to be a costly and ineffective
a))roach to getting thce -neee( health services to the Nation's
chiuldr'en."' 149
lie suggested that money now sp-ent on EPSDT be relocated to
prolde a t)aiic rniniinum tiograi for all children by issuing a set of
Vouchers to all Iarenit5. 'N()uccl.rs would eliminate complex and
co-4 v billing and payment proceduIres," lie said. Moreover, this ap-
proach could cover all i5 million ci,dren below the age of 21 at a
'4 Id. nt p. 123.
311145 C.F.U. 205.146(e) (V) (3).
1 See n. 10, supra at 1). !)6(
"s Id. at p. 48.
Id. at 1). 96.







cost that "would approximate $750 million a year, well within the
order of magnitude of what is being spent now in attempting ineffectively
to get such services for only a small proportion of the poorest children
in the country." 1"0 Costs for comprehensive child and maternal care
are low, predictable and controllable. Becaut;e a child may be able
to avoid expensive hospitalization, and because healt h profe .sionals
other than doctors can be used, it has been estimated that the costs
of comprehensive child care from birth to age 19 would be about two-
fifths of the amount needed by the average adult."'
The Subcommittee is impressed with this concept and believes
further exploration of this approach should be undertaken. Considera-
tion should also be given to creating i-centives, such as increased
federal financial participation to those states utilizing a positive
approach to the EPSDT program.
In examining other alternatives, it may be instructive to examine
demonstration programs such as that in effect in Cambridge, Massa-
chusetts. That program has shown that a reorganization of existing
child health services, often disjointed and duplicative, can provide
comprehensive care to an entire community. In the case of Cambridge,
a reorganization, in addition to the establishment of neighborhood
health centers in population centers, and the use of nurse practi-
tioners as the primary provider was accomplished without the ex-
penditures of any new funds, but significantly improved child
health services.52
There are other legislative alternatives to the EPSDT approach
currently being proposed. The Maternal and Child Health Care bill
sponsored by Congressman James H. Scheuer embodies one such
alternative. The comprehensive health insurance proposed by Senator
Edward M. Kennedy and Congressman James Corman and others,
if enacted, would serve to envelop the EPSDT program.
Since such alternatives require new legislative authority and are
currently being analyzed and evaluated by the appropriate legislative
Subcommittees, they were considered beyond the purview of this
report.
X. CONCLUSION
EPSDT is expected to provide screening, diagnoSIs, and treat-
ment of medical needs to children in a coordinated and comprehensive
manner consistent with good public health principles. EPSDT has
the potential for being the most important long term cost effective
health care program currently in existence. These principles include
outreach, follow-up activities, and treatment when necessary.
The Subcommittee found that the Department of Health, Educa-
tion, and Welfare was delinquent in faithfully implementing all as-
pects of the program. The Department focused its activities on moni-
toring the screening aspects. Even here, however, the results are far
below expectations. In fiscal year 1975, only approximately 1,900,000
out of an estimated 12,800,000 eligible children were screened.
Of particular concern is the lack of treatment mandated by the law,
but not being provided by the program. When children were deter-
1o Id. at p. 97.
151 Id. at p. 54.
152 "Doctors and Dollars Are Not Enough," Children's Defense Fund, Washington Research
Project, Inc., April 1976, p. 88.





28


mined in nine states to need treatment, these states reported that
only 60.4 percent actually received such treatment.
Of equal concern to the Subcommittee is the fact that only nine
states were able to supply data concerning the treatment of children.
The remaining states were neither able to account for the number of
children treated nor to account for how the public funds were expended
under the Medicaid program.
The Department of Health, Education, and Welfare has not moni-
tored the implementation of this program with diligence. It has been
tardy in promulgating regulations and has not undertaken formal
compliance hearings in order to bring states into conformity. Further,
it has failed to properly administer the penalty provisions.
The Subcommittee recommends that the Department immediately
and fully implement the EPSDT requirements for screening, diag-
nosis, and treatment of children, and that it utilize the broad powers
under the law to secure implementation.
The Subcommittee recommends that the Department initiate steps
to eliminate fragmentation, improve its data gathering, and streamline
its cumbersome penalty procedures. The Subcommittee also suggests
that the appropriate legislative committees consider providing posi-
tive program incentives to screen and treat low income children, and
to consider new legislative coverage or inclusion of the EPSDT pro-
gram into a national health insurance program.







29


APPENDIX


PRELIMINARY REPORT OF THE RESULTS OF A QUESTIONNAIRE SENT TO STATZ
MEDICAID AGENCIES CONCERNING EARLY AND PERIODIC SCREENING, DIAG-
NOSIS, AND TREATMENT (EPSDT)
(Prepared by the Staff of Oversight and Investigations Subcommittee, Committee
on Interstate and Foreign Commerce)
EPSDT FY 1975


PROGRAM
ACCOM-PL ISH.rE NTS


PROGRAM .
FAiLUZES


Total Eligibles
(12.8 million)
II J I,, t i, "L 0 -I j


Screened
(1.9 million
14.8%)


N\


I
eed Treatment
Total
(45.1%)


Not Screened
(10.9 million
85.2%)


(850,000) *


I
Treated
(60.4%)
(S,10000)*


I
Not Treated
(39.61)
(340,000)*


Need Treatment
Vision
(12.00)


Treated
(67.6%)
(150,000) *


(230 ,000)*


Not "Tr'ea'ted
(32.4%)
(78,000)*


Need Treatment
Hearing
(51)


Treated
(28.5%)
(29,000)*


Treated
(9.5%)
(75vOO0)*


(100,000)*


Not Treated
(71,00)*


Need Treatment
iron-deficiency Anemia-
(4.0%) (76,000)-*

Not Treated
(1.s')
(1,000)4


*Staff estimates


I ILl,


e







30

i \RIY AND PERIODIC S(tRIENING, DIAGNOSIS, AND TREATMENT
On Septemlr 10, 197), the Subcommittee on Oversight and Investigations of
the lIIe (ommitt(e on Interstate and Foreign Comerce surveyed the ,tates
for c ertain baie statistical information on the Early amd Periodic Screening,
I )jaiL'11 1s, and Trea,:tmnt program (1,:P5I)T) required under Title 19 [Medicaid
o-f the Social Secrity Act. A total ()f 35 States responded. The results of that
surv(,y from the basis for this preliminary report on LPI)T.
The f,. I\\ ing Mct ions examine the number of children eligible for screening,
and the imti,,i r sirne(1, needing treatment, and treated for general conditions
and fu-r sp.cifi(,d visual, hearing, and anemia 'Irohles. The report focus( on
children recciving such services, and more importantly, on children who are not
receiving such services when they should be.
hliqible population
Wised on the responses of 31 States providing information on the eligible
))pul.atitn, an esinated 1'2.8 million children were eligible for EPSI)T at some
time during fi"cal year 1975. The methodology used in arriving at this estimate
is as follows:
1)at:t on quarterly eligibles was provided by 30 States, indicating a quarterly
garage of 4,084,545 eligibles during fiscal year 1975. These States included approx-
imatelv 45 percent of Medicaid recipients under 21 years of age during May, 1975
(excluding N ew York for the reasons noted below). Assuming that the same ratio
holds true, 4,084,545 would be 45 percent of eligibles in fiscal year 1975, yielding
n ve qarte rl estimate of 9.1 million eligible children
Eight States provided information on both the quarterly eligibles and the
total yearl nunber of eligibles. in these States, the yearly total was 1.28 times
higher than the quarterly average. Multiplying this 1.28 yearly turnover factor
tines the 9.1 million average quarterly number of eligibles yields an estimated
11.6 million eligibles at some time during fiscal year 1975; and
New York reported 1.2 million eligibles during the year, and no quarterly num-
ber, and thus has been excluded from the above computations, Adding the 1.2
million New York eligibles to the 1l.6 million yields an nationwide estrrinate of
12.8 million children eligible at some time during fiscal year 1975.
Gticral screening package
)ata on the general screening package was reported by 34 States, with a total of
S,1)62,5S) screenings reported in those States. These 34 States included approxi-
1 G2-,;rp re nto tI
mately 61 i)ercent of Medicaid recipients under 21 in May of 1975. Assuming
that the same ratio holds true for the entire fiscal year, an estimated total of 1.9
million children were screened during fiscal year 1975.
States were also requested to provide information on the number screened
specifically for visual, hearing, and iron-deficiency anemia problems. In general,
for most States, vision and hearing screens reported were the same as total general
screening. Fewer States reported screening for iron-deficiency anemia. The results
of screening for these specific problems are as follows:
33 States reported 1,115,223 screenings for vision;
33 States reported 1,111,060 screenings for hearing; and
20 States reported 886,971 screenings for iron-deficiency anemia.
I public accountability questions
Since the total eligible population was estimated to be 12.8 million, approxi-
mately 10.9 million children were eligible for screening services but were not
screened during fiscal year 1975.
What are the consequences of 10.9 million children not receiving this basic
preventive health care?
How many of these children were screened in previous years? For example, if 3
million children were screened in all previous years, does that mean almost &
million eligible children have never been screened under this program?
Can one expect a greater proportion of eligibles to be screened in the future
years? tlow many?
What is the Department of Ilealth, Education, and Welfare doing to increase
the pace of screening?






31

Number needing treatment
States were asked to provide the number screened who were identified as needing
treatment.
32 States reported the total number needing some form of treatment -s a result
of the general screening package. Of the 1,098,400 screened in those States, 495,471,
or 45.1 percent needed treatment.
32 States rel)orted the number needing treatment for vision problems, with 12
percent (133,589 of 1,113,261 screened) needing such treatment.
32 States also reported those needing treatment for hearing problems, with 5.1
percent (56,747 of 1, 110,778 screened) needing such treatment.
13 States reported those needing treatment for iron-deficiency anemia, with 4
percent (24,417 of 608,821 screened) needing such treatment.
Assuming that the percentages of those needing treatment would apply to the
entire eligible population of 12.8 million, the following can be derived:
45.1 percent, or 5.8 million children, need some form of medical treatment;
12 percent, or 1.5 million children, need treatment for vision problems;
5. 1 percent, or 650,000 children, need treatment for hearing problems; and
4 percent, or 510,000 children, need treatment for iron-deficiency anemia.
Public accountability questions
What are the consequences of as many as 5.8 million children actually needing
some form of medical treatment when only 1.9 million are being screened each
year?
How can the Department of Health, Education, and Welfare justify its actions
in implementing EPSDT when the program falls so far short of the need?
Number treated I
A small number of States were able to report the number of those needing
treatment who were actually treated.
9 States reported all treatments as a result of the general screening package,
with 60.4 percent (80,454 of 133,117 needing treatment) actually receiving
treatment.
5 States reported the number receiving treatment for vision problems, with
67.6 percent (8,357 of 12,368 needing treatment) actually receiving treatment.
5 States reported the number receiving treatment for hearing problems, with
28.5 percent (622 of 2,186 needing treatment) actually receiving treatment.
3 States reported the number receiving treatment for iron-deficiency anemia,
with 98.5 percent (8,401 of 8,527 needing treatment) actually receiving treatment.
Applying these percentages to the total number of children reported as needing
treatment in this survey yields the following:
60.4 percent of the 495,471 children reported as needing treatment, or approxi-
mately 299,000 children, actually received such treatment. Approximately
196,000 were identified as needing medical treatment but were not treated;
67.6 percent of the 133,589 children reported as needing treatment for vision
problems, or approximately 90,000 children, actually received such treatment.
Approximately 43,000 children were identified as needing treatment for vision
problems but were not treated;
28.5 percent of the 56,747 children needing treatment for hearing problems,
or approximately 16,000 children, actually received such treatment. Approxi-
mately 50,000 were identified as needing treatment for hearing problems but
were not treated; and
98.5 percent of the 24,417 children needing treatment for iron-deficiency anemia,
or about 24,000 children, actually received such treatment, while approximately
400 did not.
Public accountability questions
How can one justify identifying medical problems and then not treating them?
Why are so few States able to report important link between screening and
treatment? Do the other States not know how many were treated?
How can the Department of Health, Education, and Welfare assure that the
treatment component of EPSDT is being carried out, when most States cannot
even provide information on treatment, and those that do provide such infor-
mation indicate that only 60.4 percent of the total problems identified are actually
being treated?

IBecause of the limited number of States responding these figures must be used with
caution in considering national extrapolation.






32

Additional data needed
Data on the numbers screened, and numbers needing treatment for specified
conditions appear to be adequate at the present time. However, the remainder
of the data on EPSDT needs marked improvement.
Information on the eligible population can only be described as grossly in-
adequate. The subcommittee staff encountered similar problems on the eligible
population in the survey of surgery under Medicaid. It is imperative that the
Department of Health, Education, and Welfare develop accurate information
on the number of Medicaid eligibles.
The survey rujuested information on the number of those informed of the
availability of screening services, and the number requesting and decline
such services. A number of States were unable to identify those informed, and
most States were unable to identify those requesting and declining such services.
Such information should be kept up to date at the Federal level, and must be
kept at the State level since States are required to inform eligibles, and must
be able to identify requests for screening in order to provide service.
Public accountability requires that a data collection system be available that
will link treatment to screening.








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