December 14, 2006

Fellow Texans:

Today, I am releasing this Texas Health Care Claims Study – Special Report on Foster Children.

Children are our most precious resource and the foster children of Texas need special attention because the state has taken either temporary or permanent guardianship of them in effect making the state and all of its citizens their parent.

This report reveals shocking evidence of the system’s failure regarding the care provided to our foster children. In addition, it raises many red flags pointing to areas of potential fraud and abuse that I am referring to the Office of Inspector General at the Health and Human Services
Commission to investigate. In a separate report, Review and Analysis of The Medicaid and Public Assistance Fraud Oversight Task Force, I am recommending the Office of Inspector General report directly to the Governor and become an independent office.

I am making 48 recommendations to the Medicaid and Public Assistance Fraud Oversight Task Force in this report.

For example, I am urging the Office of Inspector General to fully investigate potential fraud and abuse identified in this report.

The Department of Family and Protective Services should hire a physician to serve as a fulltime medical director responsible for health care for Texas’ foster children.

In April 2004, I recommended DFPS create a “medical passport” for each foster child, which would follow each child as they move from one placement to another. I again call upon DFPS to immediately implement this long-overdue recommendation that would dramatically improve health care for our forgotten children—which could be done by using a simple paper copy system until an electronic version is available.

The medical director should be responsible for ensuring that a foster child’s medical passport be received by the foster child’s caregiver within 48 hours of being placed in a foster home or facility.

HHSC should require prior authorization for prescriptions to address the dispensing of non-FDA approved psychotropic medications for children.
DFPS and the Department of State Health Services should seek lower-cost, less restrictive alternatives to psychiatric hospitalization and immediately develop rules for the psychiatric hospitalization of foster children.

The medical director and the Department of State Health Services should evaluate the case files of all medically fragile foster children and develop best practices for care.

DFPS in coordination with HHSC and the Department of State Health Services should study complementary treatments to psychotropic medications—such as therapy, diet, exercise, therapeutic activities and mentor programs. The Office of Inspector General at HHSC and the State Auditor should review the quality of the physical environments in which foster children live and make recommendations to improve standards for living conditions.

My first investigation into the Texas foster care system in 2004—Forgotten Children—documented the tragic failure of the system. Part of the report focused on psychotropic medications and care prescribed to our foster children. The findings caused me deep concern and led to my decision in November 2004, to look into this aspect of the system more closely.

Out of concern for the foster children of the state of Texas and pursuant to my statutory obligation to review Medicaid claims for fraud under the Government Code Section §403.028, I reviewed the Medicaid claims of foster children in fi scal 2004 in depth. I am disappointed to report that the findings confirmed the conclusions of the Forgotten Children report.

Given the distressing findings contained in this report, I hope that the state will not delay in adopting recommendations, which have been crafted to help mend this broken system. My hope is that the state leadership and the health and human service agencies will work to make things better for our state’s most vulnerable children. This report is available on the Texas Comptroller’s Web site at

Texas is great, but we can do better. We have to—for the sake of our children.

Carole Keeton Strayhorn
Texas Comptroller
Chairman, Medicaid and Public Assistance Fraud Oversight Task Force

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