Mentally Ill Children, and the Custody Crisis You Never Heard Of
By Michael D. Goldhaber
Originally published in The National Law Journal, May 1, 2000
Elian Gonzalez has inspired endless rhetoric on the sanctity of the bond between parent and child. But in a hidden tragedy that has been going on for 20 years, thousands of children, usually less photogenic than Elian, have been torn from their families by states, as the unintended result of a wrinkle in the Social Security Act.
In a new report, the Bazelon Center for Mental Health Law reports that in about half the states, families of severely disturbed children are routinely forced to choose between retaining custody and obtaining treatment.
"It's extraordinary," says E. Fuller Torrey, president of the Treatment Advocacy Center. "You have to pay $40,000 a year for residential treatment or sign over your kid to the state."
Inpatient treatment for mentally ill children is out of reach for all but the richest families and the very poorest families, who are covered by Medicaid. Many families in the middle, uninsured or underinsured, are pressured to relinquish custody to the states because the states, which offer the care, can then turn around and get reimbursed by the federal government.
Ironically, the federal funds, which originated with a 1980 law, were intended to house abandoned foster children. "The main job of mental health directors is to shift costs from the states to Washington," says Dr. Torrey. "It didn't take them long to figure out how to game the system." He estimates that in 1995, at least 10,000 children in residential treatment were state wards.
Advocates fear that this long-hidden crisis is only getting worse, for two reasons. First, the ranks of the uninsured are swelling. Second, as state mental health programs move to managed care, the pressure to shift costs is mounting.
"I primarily see this as a failure of health care," says Mary Giliberti, the lawyer who co-authored the Bazelon Center report. "Private plans give little or no mental health care. The public system has a strong entitlement that's rarely enforced. A lot of kids end up in child welfare or juvenile justice, and that's a tragedy. The states can stop this."
HOME ON THE RANGE
Dalyn Daily, 61, of Fargo, N.D., raised her granddaughter Erin from the age of 18 months and adopted her at age 4. Erin was the kind of girl who was so negative that she would refuse to eat a bowl of ice cream. She was diagnosed with reactive attachment disorder, and by age 12, in 1996, she was abusing "crank," or methamphetamine, and alcohol.
Desperately worried that Erin would overdose, Daily sought help. But she says that her own $1,100 a month in SSI disability benefits was enough to deprive Erin of Medicaid. Told that the only way to get immediate help was to relinquish custody, Daily consented. To their dismay, the state sent Erin six hours across the state for 18 months to a place called Home on the Range.
"I knew giving up my child was the only way I could save her," says Daily. "That's a terrible feeling. If I had money or funds, I would have placed her in town."
Trina Osher, an advocate at the Federation of Families for Children's Mental Health, surrendered custody of her adopted son 13 years ago, when he was 10. She and her husband are both professionals with insurance, she notes, although their policy was exhausted by their son's three-week psychiatric hospitalization.
"A lot of families across the country tell us similar stories," she says. "These are strong, intact families at wits' end with regard to getting health care. The funding separates you and your child."
Daily and Osher lost custody of their children in markedly different ways, but each voices dismay at the lack of control that she exerted over her child's fate after he entered the state child welfare system and at the lack of respect with which she was treated.
"By the time you get to this place, you need a cooling-off period," says Osher, "but then your kid is stuck in the system. You don't realize you're going to be treated like an abusive parent."
"The system is geared toward a different type of parent," agrees Daily. "It treats you like you don't give a damn about your kids."
Once a health crisis and an insurance mess leads parents to the point of desperation, custody passes to the state because of unhealthy funding incentives. The incentives are magnified when behavioral care is managed for profit.
The number of states with public-sector managed behavioral health care programs has tripled in three years, from 14 in 1996 to 42 in 1999, according to the federal Substance Abuse and Mental Health Services Administration. Tennessee is one state that delegates virtually all its mental health needs to a specialized health maintenance organization, often known as a behavioral health organization (BHO).
INCENTIVE TO SHIFT COSTS
"The incentive to cost-shift is huge," says Michele Johnson, staff attorney at the Tennessee Justice Center, in Nashville. "The BHO is responsible for these kids unless they're in state custody—in which case you still get paid the capitation rate for each child, but you're not responsible for the most expensive long-term services. It's very simple: If you can get these kids off your plate, you make money."
The allegations of Christopher B. vividly illustrate this. Christopher B., represented by the Tennessee Justice Center, suffers from Asperger's syndrome, Tourette's syndrome and depression.
Johnson alleges that on May 27, 1997, when he was 14, Christopher was molested by his hospital mental ward roommate. The next day, the hospital asked Christopher's mother to pick him up. Two days later, the hospital told Ms. B that if she didn't pick him up, the state would take custody.
Repeatedly, the hospital "has told Christopher's mother that they would characterize her demands that her child receive appropriate medical treatment as abandonment of her child," the complaint says. One of the legal claims stated is civil extortion.
Chuck Klusener is president of Advocare of Tennessee, a subsidiary of Magellan Health Services, the national BHO leader. He says that he believes the alleged threats were made by a low-level hospital staffer without authority. The case settled on confidential terms several months ago.
At the macro level, the Tennessee Justice Center filed a class action in 1998 against the state, on behalf of Tennessee children. John B. v. Menke, CA No. 98-0168 (M.D. Tenn.). Among other things, it asked the state to enforce Medicaid's Early Periodic Screening, Diagnosis and Treatment mandate, which guarantees minors what they need to be healthy.
Most of the case settled 18 months ago. Under the amended service contract, the BHO must pay a fine of $1,000 a day if a child is intentionally pushed into custody. Under a second, soon-to-be-entered consent decree, if the BHO denies that a child needed services, the state can offer those services without taking custody and force the BHO to pay.
"Good contracts, like good fences, make good neighbors," says Klusener. "If a state allows us to shift costs, then shame on the state."
Klusener agrees with the advocates only up to a point: "I certainly agree relinquishing custody is a tragedy for the family; I don't know if it happens too much. … Nationally, BHOs and states are working as partners to make sure children are not put into custody when that's not appropriate. Otherwise, we'd be committing societal suicide."
SOLUTIONS
The hidden tragedy of custody relinquishment is at last drawing attention. The Family Opportunity Act of 2000, introduced in the Senate in March, would expand Medicaid coverage to families with severely disabled children if the families earn up to 600 percent of poverty level.
Judith Katz-Leavy, senior policy analyst for the federal Center for Mental Health Services, says that the odds of passage are fair because the program is cheap and the mental health community is unanimous in its support. Meanwhile, the Bazelon Center is weighing potential state solutions.
The most direct approach, taken by 11 states, is to ban custody relinquishment. Most often, parents sign voluntary placement agreements that allow the state to offer residential treatment without taking legal custody. Giliberti concludes, based on a case study of Oregon, that this is inadequate.
The law in Oregon has been poorly publicized, so that relinquishment still occurs. But the more fundamental flaw in this approach, Giliberti thinks, is that it may force families into out-of-home placements.
Bazelon instead encourages families to take maximal advantage of existing law. First, as in Tennessee, advocates may sue to enforce the strong Medicaid guarantee. Second, they may lobby states to expand eligibility for Medicaid through options and waivers.
The "Katie Beckett option," elected by 21 states, lets states discount the parents' income when determining the eligibility of a severely disabled child. A waiver, which three states have obtained so far, may allow a state to offer care to some children without regard to parental income and to make community mental health services available. This works because it gets at the root cause, Giliberti says. The object of community care is to head off problems before they reach the point at which parents beg the state for help, even at the cost of losing custody.
Just ask the people in the trenches. The director of special education for seven school districts in southeastern Kansas, Curtis R. Schmitz, credits Kansas' waiver with reducing expulsions and suspensions in his schools by more than 50 percent. Families now have a greater voice in treatment, he says.
Contrast the frustrating story of Fargo's Erin Daily with Tim B., of Kansas, a 13-year-old schizophrenic. Social security staff suggested to Ms. B. that she quit her job or relinquish custody. It sounds familiar, but this story ends differently. Ms. B learned of Kansas' new waiver at the local mental health center. Tim now receives intensive case management and attendant care. His mother remains employed; her son lives at home and attends class. He has stopped clashing with police and attempting suicide.
Wiser mental health care eases pressure on the educational and welfare systems, advocates say. As parents worried about their kids' future will be the first to tell you, it will also ease the pressure on homeless shelters and jails.
