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Education Reporter
Number 135 EDUCATION REPORTER April 1997


Medicaid Ushers in the Nanny State

The following speech was given at a conference entitled What Goals 2000 Means to the States on February 12 on Capitol Hill.

by Samuel E. Rohrer

We are witnessing today what could be described as the grandest expansion of the Nanny State in the history of America. And, I believe this expansion to be one of the most diabolical, intricate, and subversive schemes to plague the landscape of American public policy.

Rep. Samuel E. Rohrer Representative Samuel E. Rohrer - PA House of Representatives

This atrocity is "The Medicalization of the Schools." From a purely educational viewpoint it could be termed "The Destruction of the American Educational System." From a health-care perspective, it could be viewed as "The Subversion of the World's Finest System of Health Care." From a societal vantage point, it could be described as "The Subduing of the American Family."

However, because of the integration of business and labor it could also just as accurately be dubbed "The Collectivization of American Capitalism." And analyzed from a public policy perspective, it could be called "The Demise of Representative Government." All of these titles would be accurate because each of them describes different appendages of the same program.

What is involved in the "Medicalization of the Schools"? At issue is Medicaid. Once the government-sponsored health insurance program for the poor, Medicaid has now moved mainstream into our schools. It is paying salaries, funding multiple programs that boldly intrude into the sanctity of the home, and is the cause of escalating federal and state budgets. If this weren't objectionable enough, the Medicaid component is but one spoke on the wheel of the larger societal restructuring movement that clearly orchestrates a number of large federal entitlement programs to produce what the Clinton administration calls a "safety net." In reality, if left unrestrained, it will become Marc Tucker's "seamless web" through which ultimately no one escapes.

Discovering a Behemoth
What started out as a brief phone call from a local school board member has turned into a behemoth. Over two years ago, I received a simple call asking for information about a program that the Pennsylvania Departments of Welfare and Education were jointly promoting to school districts under the ruse of obtaining "free money" if they would just sign up for their "partial hospitalization provider" status with Medicaid.

After checking with appropriate committee staff and my colleagues in the House and Senate, I found that no one had heard of this initiative. Not surprisingly perhaps, requests for information from the bureaucrats produced limited responses and raised one red flag after another. Particularly disturbing at this point was the realization that our unelected bureaucrats were actively promoting a bold new initiative in the area of Medical Assistance at a time when Medical Assistance was growing faster than any other area in our state budget.

Equally alarming was the apparent combining of Education and Welfare programs into a common thrust that appeared to have bypassed the Pennsylvania Legislature.

The inability to obtain full disclosure prompted me to introduce House Resolution 37. By a wide margin, the Pennsylvania House of Representatives passed this resolution and created a select subcommittee. This subcommittee was chartered to investigate the issues of Medicaid in the schools, how it got there, its fiscal impact, as well as the issues of parental consent violations, pupil privacy invasions, and data collection and security.

As chairman of this committee, I pursued these objectives carefully. The subcommittee completed and circulated its Final Report, known as the H.R. 37 Report, at the end of November. Probably the most documented and researched report to come out of a legislative committee in Pennsylvania, the H.R. 37 Report details these issues and makes specific findings and recommendations. We are now attempting to put these recommendations into legislation.

Realigning Control:
Circumventing Checks and Balances

While many serious problems have been identified, there is one that is most serious because its presence breeds many others. This overarching finding is that dramatic public policy shifts are simultaneously occurring in the areas of health care, education, and workforce development. Almost all are through executive branch initiatives and bureaucratic maneuvering, at times supplemented with questionable court settlements of lawsuits filed by liberal advocates.

These shifts all have one thing in common - the realignment of control. Control is being wrested away from the individual, from the parent, from local school boards, from local health care providers and ultimately from employers. Without dispute, these shifts, if left unaltered, will produce a planned economy, planned not by parents and individuals across this land, but by government fiat.

These monumental changes are for the most part bypassing Congress and the elected state legislatures because there is great urgency to make key structural changes before the year 2000. Congress and the legislatures are simply viewed as impediments that must be avoided.

As such, the necessary constitutional principle of checks and balances is violated and the scrutiny afforded public and legislative debate is pre-empted. The necessary safeguards and protections are not established, and the citizens of this nation, our children, our parents, and ultimately our entire population are victimized by the intruding arm of government. The picture of all that is happening is coming into focus, and the picture is quite ugly.

Historical Review
To properly understand the problem, it is critical to know the genesis of these changes. Certainly these changes are the result of an aggressive liberal philosophy that favors the policies of big government and disdains the American tradition of independence and local control.

However, a quasi-official structure was needed to legitimize these efforts and to placate inquisitive minds. This structure took the form of an initiative adopted at the 1989 National Governors' Conference. Chaired by then Governor Bill Clinton, this group of governors pledged themselves to an initiative called America 2000. Simultaneously, this structure began to be implemented at both the state and federal levels.

This movement, dubbed the "educational restructuring movement," became the umbrella under which other restructuring efforts in health care and the labor force could occur without a great deal of suspicion. And because the strategically chosen object of this restructuring was and is children, it defies criticism by all except protective parents or a few other courageous people.

The six goals of what is now Goals 2000 became the banner under which individual state initiatives were started or consolidated. For instance, Goal #1 states: "By the year 2000, all children will start school ready to learn." In Pennsylvania, our former governor placed Medical Assistance and other health areas under this goal. OBE was advanced as Pennsylvania's unique approach to learning. However, in reality, it conformed in total to the national goals.

It also created further foundational changes within the state on which additional structural changes would occur. In Pennsylvania and in other states, these changes were made regulatorily and went into effect without the sanction of the legislatures. And remarkably, as each state began to implement its version, a common pattern began to emerge.

In fact, a master federal plan did exist. This plan was produced by none other than the U.S. Department of Labor in the form of the Secretary's Commission on Achieving Necessary Skills (SCANS). This detailed document, finished in 1992, tells it all. Produced pursuant to the adoption of America 2000 by the National Governors' Conference, this "blueprint for change" remains the guiding federal document to this day. Combining labor and workforce skills, the SCANS report spelled out the full details of how the labor force, education, and health would combine and how the school room would need to become the location for mental and emotional change in students in order to "prepare them for the 21st century." Considered to be "human capital" by proponents of this approach, children become objects for tinkering and experimentation by social planners. This emphasis assumed the name of School-to-Work and, in its more "adult" form, the CAREERS bill.

Title I and Medicaid:
Vehicles for Federal-Level Restructuring

While it was known some years ago what the structure was going to look like, there appeared to be a shortage of funding in order to make it happen. It was apparent that wholesale structural changes in these areas could not be accomplished without a massive infusion of new dollars which were not available on the state level. But never fear. Funding is as easy as increasing the national debt. Two ready-made programs existed but contained too many restrictions for broad-based use. They were Title I funding and Medicaid. However, these restrictions did not pose formidable obstacles. Simply make changes in Title I. In October of 1994, President Clinton signed into law the "Improving America's Schools Act." In addition to re-authorizing over $7 billion for fiscal year 1995, this legislation rewrote the Elementary and Secondary Education Act.

Although Title I was established in 1965 to provide "extra" educational services to the nation's poorest and lowest achieving students, the re-authorized law provides parents, advocates, and school communities with a new opportunity to use Title I as a tool for broader school reform.

Title I now incorporates the objectives of Goals 2000, and any school that receives Title I funding finds itself being forced into compliance with the mandates of Goals 2000 whether or not they receive money under Goals 2000. Now by law, under Title I, children are determined "at risk" by not meeting state outcomes. Through the ingenious option of "school-wide programs," Title I funds can now be expended on all students as "educationally deprived" as well as "economically deprived."

For example, if just one school building has a student population of 50% that receives Free and Reduced Lunch, then the entire school district can be targeted for a school-wide Title I program. Of course, redistributing and rearranging students within a district to raise the percentage of these qualifying children to 50% could also qualify the entire school population for Title I funds. So much for a poverty-based program, and so much for any type of cost containment.

As for Medicaid, similar changes have occurred. Originally a government-sponsored health insurance program for the poor, poverty guidelines for Medicaid have been dropped entirely for ages 0-21 in Pennsylvania. Through the exploitation of a loophole in the Omnibus Budget Reconciliation Act of 1989 (OBRA 89), terms have been redefined. Disability now includes reading and math deficiencies or such things as "breaking up with one's boyfriend or girlfriend."

Other terms have been expanded like "at risk," which now means "at risk of becoming at risk." This assures that every child can become "identified." This is the point where the child once identified under OBE/Goals 2000 or Title I as "at risk" can now be remediated under Medicaid mental health "wrap-around services." In order to provide these mental health remedial services, the school must apply for the "partial hospitalization provider status" in order to bill for Medicaid. This is what allows the school to provide all health-related services through the vehicle of school-based clinics.

The EPSDT (Early Periodic Screening, Detection, and Treatment) program is cited as the federal mandate to provide diagnosis and treatment under the "Rehabilitation" option available to the states. Medicaid then becomes the funder for all areas of identified "health and mental health remediation and rehabilitation." Not only will EPSDT/Medicaid pay for truly medical services, but it will pay for a long list of subjective mental health diagnoses.

It is this "identification" process fueled by new Title I requirements, EPSDT allowances, and School-to-Work requirements that necessitates the "profiling" of every child. Once the child is identified, the school then either bills Medicaid directly or, as is most common, utilizes a data billing company that bills Medicaid for them.

Schools can either hire their own counselors, therapists, and nurses or, as is most common, allow outside agencies to provide services to these "identified" children, and provide services within the school or wherever the child may be. For instance, mobile therapists can bill $42.00/hour for the time they spend riding the bus home with Johnny if Johnny is "stressed" by a bully on the bus. Since there is no classification for "normal" according to the DSM-IV manual, every child can be found in need of remediation - all paid for by Medicaid.

Pennsylvania boasts two infamous examples of what happens as a result of these initiatives. In both cases, parental rights were violated, pupil privacy was invaded, and sensitive data were collected. In several school-wide Title I schools in the Pittsburgh area, psychological profiling was conducted by an outside psychiatric clinic without parental knowledge or permission on first, second, and third graders. This project sought personal information on both the child and the family. Once caught by parents, the program was halted, but the collected data has still not been turned over to the parents.

The second infamous example occurred in East Stroudsburg, PA, where almost 50 6th-grade girls were given unclothed gynecological exams without the permission of the parents and against the objections of many of the girls. Under Medicaid, EPSDT requires unclothed physicals. This horrendous invasion of privacy is now being litigated in federal court as a major civil rights violation. Under the cloak of "helping the children," children themselves are victimized.

Opening the Door Wider:
Paving the Way for State Participation

But, additional structural changes had to be made in order to allow states to begin providing these expanded health-related services on a state-wide basis. No problem. This authorization was given by one bureaucracy to another. Simply have the state executive branch and Department of Welfare apply to the Health Care Finance Administration, and waivers will be granted. Once granted, these waivers allow for all types of things to occur.

But there is a major problem with waivers. Isn't the very purpose of waivers to allow that which is not permitted by law? Even the Government Accounting Office (GAO), in testimony presented before the Congressional Committee on the Budget on April 4, 1995, testified, "allowing the waiver process to be used to expand coverage to hundreds of thousands of additional individuals without the consultation and concurrence of the Congress appears inappropriate. The result of these waivers could lead to a heavier financial burden on the federal government."

And I would interject, a substantially greater fiscal burden will fall on the states as well. Not only can expanded services be provided as indicated by the GAO, but health care reform is being accomplished through the use of school-based clinics and managed care within the Medicaid population. Orchestrated together as it is in Pennsylvania and many other states, the Clinton health care reform agenda is being accomplished through the back door without express federal or state legislation.

It's not that the Health Security Act did not pass in 1993, it just failed to pass Congress.

Children: Just a Starting Point
As in the 1989 adoption of America 2000, children were the object, and so in the implementing of health care through the back door, children are the object. In a document obtained from the released White House files produced in the Health Care Task Force meetings, school-based clinics were identified as the vehicle for change. Because schools represent the place where most students are housed, they represent a "captive audience" and, as such, are prime targets for social policy change. The school-based clinic concept conveniently enables the screenings to take place under the cloak of "health."

The Pennsylvania back door health reform plan was called "Kids First." According to these same documents, full implementation of government-controlled health care would start with forced managed care of the expanding Medicaid population and would target children first in schools through the use of school-based clinics. Full implementation would then work its way through the general population by age groups and is intended for completion by none other than the year 2000. In Pennsylvania, we are well on our way to meeting this target. Hence, "The Subversion of the World's Finest System of Health Care."

Who or what is the engine behind all this? The answer is private foundations and private foundation money. The largest and most influential foundation avowedly committed to Clinton-style comprehensive health care is the Robert Wood Johnson Foundation in New Jersey.

Extremely successful in influencing bureaucratically-imposed public policy through the providing of grant money to state governments for health-related pilot programs, this foundation has laid and implemented the health care reform component of this bigger equation. It has been and remains the glue, the muscle, and the brains behind the health component of this restructuring. An article in the Dec. 16 edition of Forbes magazine entitled "Trojan Horse Money" speaks eloquently on this matter. By regularly circumventing the elected legislatures in this process, the balance of power is tilted against the elected representatives of the people. If left unbridled, this abuse of the process literally becomes the "Demise of Representative Government."

And finally, what is the ultimate goal? As I alluded to earlier, the ultimate goal is for federal government control of education, labor, and health care. Both the shadowy process by which the changes have been made and the official "blueprint" speak clearly to the veracity of the claim for a "total managed economy."

For the sake of these United States, for the freedom we have enjoyed, and for the children who will replace us, we must put a stop to federal government intrusion into education, health, and the work force. Stop the flow of money. Halt the process by which the state legislatures and Congress can be circumvented. Let us in the states do what we have been elected to do without the imperious demands of Washington. Certainly, the oaths that elected officials have taken to uphold and defend our Constitution demand no less.

Representative Rohrer recommends the following changes at the federal level:
  1. Perform a complete audit of the Medicaid and EPSDT programs.

  2. Pass legislation that prohibits the sharing of data between departments and prohibits the sharing of data between state agencies if federal dollars are involved.

  3. Rewrite parental consent laws demanding "informed written consent" before any type of service billable to any government agency is performed or conducted on any child under parental supervision or guardianship.

  4. Begin the phase-out of federal programs particularly involved in the area of education.

  5. Reduce funding for Title I or at least refocus it to express the original legislative intent.

  6. Eliminate the allowance for "school-wide" programs.

  7. Eliminate the tax exempt status for private foundations that do lobbying.

  8. Congress should conduct an extensive reform of the federal special education program (IDEA) and the EPSDT program, as well as other relevant portions of the Medicaid law, in order to eliminate expensive and unnecessary mandates that are imposing unacceptable costs on state taxpayers and school district taxpayers.

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