Rural Counties Lead the State in the Recovery of Birthing Expenses

Preferring Medicaid Cost Recovery over Strengthening Families

October 1, 2006

Author: Susan C. Antos

An analysis of state data confirms what many advocates have long suspected – the odds are that fathers of children born out of wedlock in upstate rural areas are more likely to be sued by a local social services district to recover birthing expenses, also known as confinement costs,  than their counterparts in urban areas, particularly downstate.

The aggressive pursuit of fathers to recover the mothers' "confinement" expenses has proven to be a harsh quid pro quo for the provision of Medicaid funded prenatal health care to low-income pregnant women.  Particularly where the father's income is used to support the entire household, the retroactive imposition of liability for "confinement" expenses on the father can be extremely harmful to the family.

"Confinement" expenses can be considerable, even if there are no costly pregnancy or birth related complications.  The current cost of medical care associated with an uncomplicated pregnancy and birth is typically between $3,000 and $5,000.  In intact households where the parents' income is low, imposing retroactive liability on the father for these expenses deprives the entire family of income that it desperately needs to stave off impoverishment.

As Chart A illustrates, small counties lead the way in gross collections of what are anachronistically known as “confinement costs.”  Chautauqua County has a population of only 137,645, just over half of one percent of the state’s entire population of 18 million, but brought 10% of all of the confinement cost cases in the entire state. Further, Chautauqua recovered over $1.6 million dollars in confinement costs last year - more than the only two large counties with significant confinement recoveries - Erie ($1.1 million in recoveries; population 941,293) and over one million dollars more than only downstate county with significant recoveries - Suffolk ($344,662 in recoveries; population 1,468,037). 

In contrast, as Chart B illustrates, the data shows that for the most part, larger counties – the five boroughs of New York City, Nassau, Ulster and Westchester counties, representing over half of the population in New York State, do not pursue the recovery of confinement costs.  In these counties, low-income mothers can take advantage of prenatal care without worrying that the father of her child will get sued; and low income Dads can use their money to support their children instead of paying back the county and federal governments for the cost of their children’s birthing expenses.  

The collection of confinement costs represents a battleground of conflicting public policy tensions - some local social services districts want to recover Medicaid expenditures at any cost; other districts recognize that suing fathers, particularly young, low income uninsured fathers for the cost of Medicaid, discourages low income mothers from seeking prenatal care and alienates fathers at a time when their relationship with the mother of their child needs to be nurtured rather than blasted apart with litigation.

It is hard to understand why counties devote such energy to the pursuit of confinement costs.  Of the ten million dollars that social services districts collected in confinement costs last year, $5 million of that amount had to be turned over to the federal government, and $2.5 million had to be turned over to the state.1 

The History of Federally Funded Prenatal Medicaid Programs2

In the mid 1980s, national political leaders became increasingly concerned about the strong correlation between the lack of prenatal and birth-related health care for low-income women, the high incidence of low birth weight and other serious disabilities in children born to women who had little or no prenatal care, and the high cost to society of caring for these infants.  From the mid 1980s through 1990, Congress repeatedly amended the federal Medicaid Act to expand and simplify eligibility for prenatal and birth-related health care coverage for low-income pregnant women.3  The "Poverty Level Pregnant Women" Program ["PLPW"], as this federal coverage is called, provides low-income women with access to prenatal and birth-related health care, with more liberal eligibility requirements than the conventional Medicaid program.4  In New York State this program is called the Prenatal Care Assistance Program (PCAP).

In 1990, to further expand participation, Congress exempted Poverty Level Pregnant Women Program Medicaid recipients from having to cooperate with the state to seek support from the father as a condition of eligibility.5  In so doing, Congress expressly observed that the application of these requirements to women seeking prenatal care "discourage[d] many of them from seeking benefits that would give them access to early prenatal care."  The support cooperation requirements, Congress noted, were a "potential barrier to prenatal care for the high-risk, low-income women that would most benefit from it.”6

Despite this federal law, some social services districts sue the new father, after his child is born, to pay for the full cost of the prenatal and birth-related care that the mother received while she was a Medicaid recipient.  Under New York's retroactive recoupment policy, local districts sue fathers even if they live with and financially support the mother and child, even if the father later married the mother, and even if the father's own income would not have affected the mother's eligibility for Medicaid at the time of the child's birth.7

In 1993, advocates sued to bar New York and Allegany County Department of Social Services from suing the father of Jodi Perry's newborn son for $4,656.72 to repay the costs of the PCAP medical care provided to Ms. Perry.  The federal trial judge ruled that when Congress adopted the "support cooperation" exemption in 1990, Congress intended that states could not seek retroactive reimbursement of the cost of prenatal medical care that the state had provided to the mother.8  In 1996, however, the Second Circuit Court of Appeals held that the federal "support cooperation" exemption did not act as a total ban on New York's recoupment proceedings; rather, it merely delayed New York from seeking reimbursement from the father until 60 days after the infant's birth.9

At the same time Perry was being litigated in federal court, advocates brought several actions in state court.  One action contended that it was a violation of constitutional equal protection to require an unwed father -  who was himself a Medicaid recipient - to reimburse the state for the PCAP medical care provided to the mother since a similarly situated father who was married to the mother when she applied for benefits could not be required to do so.  This effort was unsuccessful.10

New York interprets the federal exemption to be merely a temporary delay in, rather than a prohibition against, suing fathers to repay the state for the Medicaid expenses connected to the birth of their children. Local social services districts do not sue the father to recoup pregnancy or birth-related expenses while the woman is still pregnant, or immediately after the child's birth.  However, as early as 60 days after the infant's birth, local districts are directed to sue the fathers to recover, retroactively, the Medicaid funds that paid for the pregnancy and birth related medical expenses.  Consequently, although the pregnant woman is often under the impression that she will receive prenatal and birth related medical coverage without cost to her household, the state forces the father - and potentially his family - to repay New York for these expenses within weeks or months after the child's birth.

New York's restrictive interpretation of the "support cooperation" exemption, and its retroactive recoupment practices, operate in precisely the harmful, counterproductive manner that Congress identified, and tried to prevent, when it adopted the exemption.  PCAP workers throughout New York have found, predictably, that New York's recoupment policy does, in fact, prevent low-income pregnant women who informally learn of New York's recoupment policy from applying for Medicaid coverage to avoid the policy's harsh consequences to their families.  Further, the threat of litigation often works at cross purposes to agency efforts at encouraging involved and responsible fatherhood, by saddling low income fathers with overwhelming debt which can result in garnisheed income, license suspension and frozen bank accounts.

A History of Birthing Cost Recovery in New York State

Under New York Family Court Act 514, known as the "confinement expenses" law, a father is liable to pay:

the reasonable expenses of: the mother's confinement and recovery and such reasonable expenses in connection with pregnancy as the court in its discretion may deem proper.

A father’s obligation to pay the mother's "confinement" expenses has been a component of New York's support statutes for decades.  At common law, the father of a child born out of wedlock had no liability to support the child or its mother, absent a state law.11  However, years before there was a state welfare system, New York State enacted statutes permitting the recovery of the costs of a woman’s pregnancy and confinement.  These laws permitted actions by a county's superintendent of the poor to adjudicate the filiation of the child, “and if the mother be in indigent circumstances, [he is] also to determine the sum to be paid by such putative father for the sustenance of such mother during her confinement and recovery therefrom.”12A major reason local districts rarely sued to recover "confinement" expenses from unwed fathers prior to 1990 was because of the federal rule that for Medicaid an adult is not financially responsible for the medical support of another adult to whom he or she is not legally married.13 

Consequently,  New York State case law held that in Medicaid cases, an unwed father's legal liability was limited to the cost of medical care provided to the child after the child's birth.  Stated differently, the prevailing view was that despite New York State's "confinement expenses" laws, federal Medicaid law did not permit the state to recover the costs associated with the mother's prenatal and birth related care when they were paid for by Medicaid.14

In 1990, the New York State Court of Appeals radically changed the prevailing rule.  In Matter of Steuben County v. Deats, the Court ruled that New York State was entitled to sue the father of a child born out of wedlock to recover the Medicaid expenses that paid for the mother's pregnancy and birth related medical care, as well as for his child's medical care.15

Ironically, the Deats decision was issued the same year that Congress eliminated the "support cooperation" requirement for pregnant women's Medicaid coverage.  Thus, at the same time that Congress was removing support related barriers to prenatal medical care for low-income women; New York State was fortifying them.

Other lawsuits that have attempted to mitigate the harsh implications of the Deats decision have been somewhat more successful.  The Deats Court confirmed that the father's liability for the "confinement" costs attributable to the newborn could be imposed only if the father had sufficient means to pay for the child’s medical care “when [the costs] were incurred.”16  However, Deats left unanswered whether the father's liability for the "confinement" expenses that were attributable to the mother's medical care was absolute, based on an ability to pay when the costs were incurred, or based on an ability to pay at the time of the support hearing.

The New York Court of Appeals partially answered this question in 1995.  In Commissioner of Franklin County v. Bernard B., the court stated that New York's "confinement costs" statute “unambiguously" requires a court to focus on the "unwed father’s present ability to pay,” or “ability to pay at the time of the support hearing” in determining the father's liability for "confinement" costs attributable to the mother's medical care.17  This standard is a far different standard than that applied to determine the father's liability for the cost of his child's medical care, which is based on “his ability to pay at the time the expenses were incurred.”

Some courts have construed Bernard B. to mean that the father's liability for the mother’s birth expenses is absolute, although collection can be deferred until a later date if the father is unable to pay at the time of the hearing.  One appeals court, however, rejected this strict liability standard.  In Matter of Le Page v. Christine L, the court found that where the disabled father received Supplemental Security Income benefits, and had no meaningful earning capacity at the time of the support hearing; he was not liable for the confinement expenses associated with the mother's care.18

In December of 2000, the Office of Temporary and Disability Assistance (OTDA) issued a letter to Local Social Services Commissioners, Directors of Support Collection Units and Medicaid directors regarding the RECOVERY of CONFINEMENT EXPENSES and PREGNANCY RELATED EXPENSES.  The letter advises districts of several instances in which the recovery of pregnancy-related Medicaid costs should not be pursued:

1. When the father is not married to the mother, his liability for the mother’s share of the confinement costs are established at the time of the hearing:  if the unwed father was on Temporary Assistance or Medicaid, or had income and resources at or below the applicable Medicaid standards at the time of the child’s birth, the district should not pursue the mother’s share of confinement costs.
2. When the father is not married to the mother, his liability for the child’s share of the confinement costs is based on the father’s financial situation at the time of the child’s birth.  If the case of an unwed father or husband who is currently on Temporary Assistance or Medicaid, or who has income and resources at or below the applicable Medicaid standards; or if the unwed father’s income and resources were used in determining the mother’s eligibility during pregnancy, the social services district should not pursue confinement costs.

Despite the good intentions of this letter, respondents in confinement proceedings are not entitled to assigned counsel and rarely ask to have the district break down the bill into the mother’s share and the child’s share. Even if they were to ask some districts feel that they can continually return to court for the mother’s share of the expenses, holding the sword of Damocles over the head of the respondent. Further the protective standards in the OTDA letter are too low to be meaningful.  Some mothers  may not have known to report the father’s income and resources when applying for PCAP, even if considering his income would not have made her ineligible

As a state, we allow individuals into subsidized health programs when their income is much higher than the public assistance or Medicaid eligibility level – PCAP eligibility is 200% of poverty; Family Health Plus is at 150% of poverty for parents and 19-20 years olds living with their parents; Healthy New York is at 250% of poverty for sole proprietors and workers whose employers do not offer coverage.  There is no reason to recover confinement costs from a father who might otherwise qualify for any subsidized heath program.

Footnotes

1  Charts showing county by county collections for every county in the state are available on the Empire Justice website at: /issue-areas/child-support/birthing-expenses-confinement-cost-medical-support/

2 A more detailed background of this history can be found in WHAT ONE HAND GIVETH, THE OTHER HAND TAKETH AWAY:  How New York’s Pregnancy-Related Medicaid Recoupment Policy Hurts Low-Income Families by:  Susan C. Antos, Esq. and Ellen M. Yacknin, Esq. which is available on the Empire Justice Center website at www.empirejustice.org.  Portions of this section have been taken from this report.

3  The New York State Court of Appeals for the Second Circuit has described the chronology of Congress’ expansion of prenatal health care coverage in detail in Lewis v. Grinker, 965 F.3d 1206, 1209-11, 1219 (2d Cir. 1992)..

4  See 58 Fed. Reg. 4904, 4905 (column 1) (January 19, 1993).

5  See 42 U.S.C. §1396k(a)(1)(B); 42 C.F.R. §433.145(a)(2), 433.147(a)(1); 58 Fed. Reg. 4904, 4907 (January 19, 1993).

6  See H. Rep. No. 101-881, 101st Cong., 2d Sess. 106-07 (1990), reprinted in 1990 U.S. Code Cong. & Admin. News 2017, 2118-19.

7  A man who is married to and living with his wife when she applies for Medicaid coverage will not be sued because his income and resources are automatically taken into consideration in determining her financial eligibility for Medicaid.  See 42 U.S.C. §1396a(a)(17)(D).

8  See Perry v. Dowling, 888 F. Supp. 485 (W.D.N.Y. 1995).

9  See Perry v. Dowling, 95 F.3d. 231 (2d Cir. 1996).  The Second Circuit observed that New York’s recoupment proceedings were authorized because Ms. Perry had agreed to cooperate with the state in support proceedings when she reapplied for Medicaid coverage for herself two months after her son’s birth.  The Court did not address whether New York could legally sue a father retroactively when a former PCAP recipient does not reapply for Medicaid coverage, and there fore does not subsequently agree to cooperate with the state in support proceedings.  See Perry v. Dowling, 95 F.3d at 235-36.

10  See Commissioner of Social Services of Franklin County on Behalf of Lisa U. v. Steven V., 87 N.Y.2d 61, 637 N.Y.S. 2d 659 (1995).

11  See Prager v. Manowitz, 243 A.D. 284, 276 N.Y.S. 875 (1st Dept. 1935)

12  Reel v. Hicks, 25 N.Y. 289 (1862), citing 1 R.S. sec. 13.  In addition, former N.Y. Domestic Relations Law §127 provided that orders of filiation should include “the payment of the necessary expenses incurred by or for the mother in connection with her confinement and recovery...and such expenses in connection with the pregnancy of the mother as the court may deem proper.”  A subsequent enactment at N.Y. Domestic Relations Law §120 provided that the father is liable to pay the expenses of the mother’s confinement and recovery and is also liable to pay such expenses...in connection with her pregnancy as the court in its discretion may deem proper.)

13  See 42 U.S.C §1396a(a)(17)(D); 42 C.F.R. §435.602.

14  See Matter of Steuben County v. Deats, 147 A.D. 2d 943, 537 N.Y.S. 2d 385 (4th Dept. 1989)

15  76 N.Y. 2d 451. 560 N.Y. 2d 404 (1990).

16  Deats, 76 N.Y. 2d at 458.

17  87 N.Y. 2d 61, 68-69, 71, 637 N.Y.S. 2d 659 (1995).

18  242 A.D. 2d 105 (3rd Dept. 1998).  See also Commissioner of Social Services, County of Franklin, on Behalf of Theresa PP v. Ronald QQ, 86 N.Y. 2d 751, 631 N.Y.S. 2d 597 (1995), affirming 209 A.D. 2d 905, 619 N.Y.S. 2d 364 (3rd Dept. 1994).