Introduction

To be effective and binding, adoption assistance agreements under Title IV-E of the Social Security Act must be signed by adopting parents and the authorized agent of the state "at the time of, or prior to the final decree of adoption" (45 CFR 1356.40(b)(1)). The written agreement specifies the "amount of adoption assistance payments (if any) and the nature and amount of any other payments, services and assistance to be provided "including non-recurring adoption expenses..." (ACYF-PA-87-03, 7/23/87). The terms of the agreement also may indicate limits on the aid available or identify medical treatments for conditions (e.g., orthodontia) that may not be covered through the state's Medicaid program. And, agreements generally include language about states' policies and practices when the needs or circumstances of the children or the family change and adjustments in assistance are needed.

With increasing frequency adoption specialists report that adoptive parents are returning to the state for assistance in meeting newly identified or discovered special needs of their children. For the parents of Title IV-E adopted children the goal is to augment or enhance the adoption assistance already provided; or to access the assistance promised in the agreement (e.g., Title XX Social Services). The more difficult situation involves adopted children who would have met the Title IV-E eligibility criteria but were not made the subject of an adoption assistance agreement at the time a final decree of adoption was entered. In such situations there would be no prior special needs determination nor an existing agreement subject to re-negotiation.

From the state's perspective, law and policy require an effort to examine the needs of particular children. The adoption assistance agreement is a means of addressing their unique and identifiable needs. Increasingly, however, this job may demand the skills of the psychic or detective. The number of children entering the child welfare system who are the products of drug and alcohol exposed pregnancies is growing. Sometimes the detrimental effect of mothers' substance abuse on their children may not be apparent until school age. This also may be the case with special needs of a biologic origin often due to genetic or chromosomal disorders. When the existence of an impairment and/or its source are unknown prior to finalization of the adoption there would be little if any basis for reasonable and prudent adopting parents to demand, request, or agree to make their children the subjects of adoption assistance agreements.

It is not uncommon for adoption specialists to encounter resistance on the part of adoptive parents to the idea of an assistance agreement for their children. This is often the case in the absence of particularly serious handicaps that could operate as a drain on family resources. Further, Section 473(c)(2)(B) of Title IV-E stipulates that one of the qualifying criteria in the special needs determination is that "a reasonable, but unsuccessful effort has been made to place the child with appropriate adoptive parents without providing adoption assistance..." Clearly the law does not require the state to insist that adoptive parents accept assistance. If circumstances change, however, the decision to forego the Title IV-E program benefits including Medicaid and Title XX Social Services is not easily or readily reversed.

In the absence of a pre-finalization adoption assistance agreement, aid may still be possible. The state could offer to provide a subsidy funded exclusively through state money. Medical assistance, however, in the form of Medicaid may or may not be available. Help through the Title IV-E adoption assistance program also would be a possibility in some limited circumstances. This Issue Brief reports on a federal district court decision ordering the State of Rhode Island to provide federally funded adoption assistance more than a year after finalization. Federal policies concerning reconsideration of a request for adoption assistance through the fair hearing process also are discussed.

Rose Ferdinand v. Department for Children and Their Families and Robert L. Carl, Director

In March 1983, Rose Ferdinand and her husband (residents of Massachusetts), adopted a daughter, Nia, through a private adoption agency in Rhode Island. At the time of the adoption, Nia appeared to be a healthy African-American infant, who met the definition of a "needy and dependent child." Prior to finalization of the adoption, the Ferdinand's engaged in "some minimal discussion about subsidies" with the agency (C.A. 90-0538P at 5). Seeing no need for a subsidy, they declined the offer. Seven years later, the parents are divorced and Mrs. Ferdinand was not receiving child support for Nia. Mrs. Ferdinand approached the Rhode Island Department for Children and Their Families (DCF) requesting adoption assistance. The basis for the claim was Nia's minority child status, dyslexia, learning disabilities and some behavior disorders. The department denied the requested aid on the grounds that adoption assistance agreements must be entered into prior to finalization of adoption, and the Ferdinands were offered and declined such aid at the time of the adoption. Mrs. Ferdinand filed suit in federal district court seeking a preliminary injunction claiming entitlement to assistance pursuant to 42 U.S.C. Section 673. She disputed the department's assertion that her rejection of a subsidy in 1983 was valid. Instead, her suit alleged that the availability of assistance and the necessity of accepting it before finalization were not adequately explained. On December 15, 1990, the court found the plaintiff demonstrated a likelihood of success on the merits and ordered the state to provide financial and medical benefits to Nia. A permanent injunction was granted May 13, 1991, which provided that Nia would receive the assistance and benefits available through the Title IV-E program.

Affirmative Duty

The court concluded that the failure of the defendant, the private agency acting for DCF, to adequately explain the adoption assistance program constituted a violation of the agency's "affirmative duty to inform clients of the program and provided the extenuating circumstances necessary to allow the reopening of the plaintiff's case and, finally, the grant of adoption assistance." In reaching this conclusion, the court took note of a 1983 Children's Bureau policy announcement concerning concurrent receipt of payments under Supplemental Security Income and Title IV-E. In that statement (ACYF-PA-83-5), the Bureau advised states that an adopted child would not meet program eligibility requirements if adoption assistance had been offered and declined, and an agreement had not been executed prior to finalization. The department relied on that policy when it told Mrs. Ferdinand the lack of a prior agreement would foreclose discussion about benefits in the absence of extenuating circumstances. For the court, the pivotal question was whether Nia Ferdinand was eligible for adoption assistance given the prior waiver of program participation by the adopting parents. The answer to that question turns, in part, on whether the nature of the discussions around the adoption of Nia provided grounds to waive the requirement for a prior agreement.

The parties agreed there had been minimal discussion about adoption subsidy. (Please note that the court used the terms adoption subsidy and adoption assistance interchangeably.) The fact that records could not be produced to document the agency's offer and the adopting parents' refusal served to buttress the characterization of the discussions about assistance as minimal. Further, the court took note of a February 1990 letter from the DCF Administrator. In that letter the administrator said that extenuating circumstances were necessary prerequisites to review the prior agreement requirement. Examples of such circumstances were identified in the letter from the DCF Administration -- i.e., a failure to offer assistance or to properly explain available benefits at the time of the adoption.

Do minimal discussions about the availability of adoption assistance satisfy the requirement that adoptive parents receive a proper explanation of available benefits? The court looked to federal regulations and policy to answer this question and found that states are mandated to "actively seek ways to promote" the program (42 C.F.R. 1356.40(f)). While the department offered the Children's Bureau policy (PA 83-5) as a basis for precluding eligibility for assistance after finalization of an adoption, the court noted an additional requirement was necessary, i.e., full program explanation. The following portion of the PA 83-5 was quoted in the opinion (C.A. 90-0538P at 7):

Because there are many complexities and financial implications for the States as well as the adoptive families, it is important for all parties to discuss all aspects of a combination of SSI and adoption assistance at the time the adoption assistance agreement is negotiated.

With full knowledge of the SSI and Adoption Assistance programs, the adoptive parents can then make an informed decision about application for or receipt of benefits from either or both programs for which they or the child are eligible. They should be advised, however, that if they decline title IV-E adoption assistance and choose to receive only SSI for the child, and that if they do not execute an adoption assistance agreement before the adoption is finalized and do not receive adoption assistance payments pursuant to such an agreement, they may not later receive title IV-E adoption assistance payments, the child should no longer meet all of the eligibility requirements as a child with special needs (section 473(c)(2)).

The court reasoned that in order for adopting parents to make an informed decision that could result in waiving the rights to aid of their children, the state must fully explain program options and consequences. Mrs. Ferdinand should have been made to understand that the availability of future benefits (should the need arise) could only be safeguarded by an adoption assistance agreement executed prior to finalization. Thus, minimal discussion about assistance did not satisfy the state's affirmative duty of explanation to Nia's adoptive parents. Failure to properly perform this duty created the extenuating circumstances necessary to overcome the prohibition against entering into a Title IV-E adoption assistance after the final legal decree of an adoption.

The court also disposed of two other arguments disputing Nia's eligibility for Title IV-E assistance. The first concerned the out-of-state residence of Mr. and Mrs. Ferdinand. The court noted that nothing in federal or state regulations at that time would have prohibited adoption assistance flowing from one state to the residents of another. Second, neither the state nor the parents were aware of Nia's present need for special education in 1983. However, federal and state program criteria at that time recognized minority status as a factor making children eligible for adoption assistance.

Fair Hearing

In accordance with Section 471 (a)(12) of the Social Security Act and regulations at 45 CFR 1355.30(k) states must provide affected individuals an opportunity for a fair hearing concerning claims for financial assistance and services that are denied or are not acted upon in a timely manner. With specific reference to the Title IV-E program, regulations at 45 CFR 1356.40(b)(1) require the existence of a properly executed adoption assistance agreement in order to obtain benefits for adopted children. However, (and connected to the issue at hand) the Children's Bureau has indicated that adoption assistance may be granted after finalization of an adoption without benefit of a Title IV-E agreement in some instances. The fair hearing process would be the Bureau's recommended vehicle to assist families in obtaining assistance when their adopted children exhibit special needs that were not apparent prior to finalization. The extent to which states use hearings for that purpose is generally unknown. Some hearing officers indicate the limited guidance on how to employ the process to address the question of post-finalization eligibility is cause for caution.

A 1988 policy interpretation question, ACYF-PIQ-88-06, (see attachment) issued by the Children's Bureau concerned circumstances that would allow states to reconsider eligibility for Title IV-E adoption assistance. The problem at issue concerned adopting parents in Tennessee who requested adoption assistance for a child they were in the process of adopting. The state denied their pre-finalization request because the child did not meet the definition of special needs. Doctors had been unable to diagnose the cause of neck and back pains that plagued the child. Sometime after the child was legally adopted, the pre-existing physical problem was diagnosed as junior rheumatoid arthritis. Armed with this information the parents asked the state to reconsider the earlier adverse decision. However, like Mrs. Ferdinand, the Tennessee parents finalized the adoption of their child without an adoption assistance agreement.

The state denied the requested reconsideration because regulations as noted above (45 CFR 1356.40(b)(1)) stipulate that a signed adoption assistance agreement must exist prior to the final adoption decree in order to obtain benefits. The PIQ, however, states that under "certain specified conditions," parents have the right to a fair hearing that would in turn permit the department to review the question of eligibility for adoption assistance given a previous denial.

According to the PIQ, the existence of "extenuating circumstances" would provide the parents with the grounds to request a fair hearing; and through the fair hearing it would be determined whether "all of the facts relevant to the child's eligibility were not presented at the time of the request for assistance...." Thus, whether or not the information (e.g., new or revised diagnosis) would provide the basis for providing Title IV-E aid would be a matter for the department to decide. The Children's Bureau has not issued any guidance or directives that would serve to define the nature of the facts concerning eligibility that would be offered at the hearing. It may be argued that to do so would serve to prospectively restrict and confine the reach of a policy that is meant to add a measure of flexibility to the program rules. It should be noted that the PIQ does not concern the validity of the Tennessee family's claim. Instead, it simply states the general nature of the evidence that should be offered by adoptive parents in order to result in a favorable decision.

Nia Ferdinand's case does not readily conform to the conditions outlined in the PIQ. Conceivably the "extenuating circumstances" would be the claimed inadequate explanation of program requirements. "Relevant facts" would surely include Nia Ferdinand's undetected learning disabilities and behavior disorders. Missing from the equation would be an initial request for and denial of assistance.

In 1990, DCF responded to Mrs. Ferdinand's unwritten post-adoption request for assistance. Department officials did not believe the (informal) 1990 solicitation was covered by the guarantees and requirements of Section 471(a)(12) of the Act and 45 CFR 1356.40(b)(1). Nonetheless, DCF acted upon the oral communications with Mrs. Ferdinand, who was represented by counsel, and granted her an opportunity for an administrative hearing to determine what if any support might be provided. As a result of that (first level) hearing, she was offered and refused state subsidy (non Title IV-E) for Nia. The department's interpretation of the law and regulations indicated there were no grounds upon which to provide Title IV-E benefits after finalization of the adoption. DCF viewed the Ferdinand's 1983 refusal of help as proffered by the private adoption agency as a waiver of rights and eligibility under the program. Dissatisfied with the offer of non-Title (IV-E) aid, Mrs. Ferdinand decided to take the matter to court. (Rhode Island does not require the exhaustion of administrative remedies before proceeding to court to challenge an adverse decision.)

The case of Nia Ferdinand appears to be distinguishable from the Bureau's policy in regard to the pre-finalization request for assistance. While all the facts concerning her daughter's eligibility had not been presented -- in fact were not known -- Mrs. Ferdinand declined the offer of aid. Hence, there was no departmental decision to reverse.

The Request for Assistance

The adoption assistance program does not include an application process involving a financial and resources means test. Generally, an agency with custody of children will be in a position of proactively seeking adoptive parents. Aware of the current and potential future needs of children, the state would offer adoption subsidy. At that point the parents, presumably armed with all the necessary information about the program, exercise the right to accept or reject the offer. Problems arise that would be resolved through reliance on the PIQ or Ferdinand case when the children do not exhibit any special needs that may be properly recognized by the state and there is (a) no reason for the state to make an offer of aid and (b) no reason for the adopting parents to make a request. Parents would be helped by the PIQ, if the Bureau's intent includes those situations in which a request for assistance should have and would have been made by reasonable people had the risk of future problems been known at the time of adoption. Another problematic situation involves families who intentionally refuse assistance in favor of benefits under the Supplemental Security Income (SSI) program and later become income ineligible for that means tested program. Here again, neither the PIQ nor the Ferdinand decision appear to offer any help if the state properly and adequately explained program requirements and options when the choice was made to receive SSI in lieu of adoption assistance.

Clearly, documentation of a request for adoption assistance would benefit both the adopting parents and the agency. First, the parents would have proof of their request which appears to be a prerequisite to obtaining a hearing under the terms of the PIQ. Absent a showing of interest or need for assistance, it may be argued the state had found a family interested in adoption without benefit of adoption assistance. Second, the state should have documentation that would indicate it fulfilled its duty to properly inform parents of all available aid and the possible adverse consequences if an agreement for assistance is not accepted. Even though there may be no apparent reason to assume a special need exists or may manifest itself in the future, the PIQ suggests and the Ferdinand decision states a full discussion of available options should be standard operating procedure.

Legislative Remedy

While the facts differ, the Tennessee and Ferdinand cases concern the same fundamental issue -- a request for adoption assistance after finalization of the adoption based on preexisting conditions or factors. When voiced by advocates and state agency adoption specialists, this issue is frequently coupled with an observation about the limitation of the current law definition of a child with special needs. Many would contend that the Section 473(c) definition is short-sighted in its failure to permit anticipation of problems likely to befall certain children given their pre-adoption background and experiences. Legislative proposals presently pending would respond to these concerns. Rep. Thomas J. Downey (D-NY) introduced H.R. 2571, the Family Preservation Act of 1991 in June. The bill would make major changes in child welfare, foster care, and special needs programs.

Under current law, a child is one with special needs and thus eligible for Title IV-E adoption assistance if (as provided under Section 473(c):

1) the state has determined that the child cannot or should not be returned to the home of his parents; and

2) the state had first determined (A) that there exists with respect to the child a specific factor or condition (such as his ethnic background, age or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) because of which it is reasonable to conclude this child cannot be placed with adoptive parents without providing adoption assistance under this section or medical assistance under Title XIX, and (B) that, except where it would be against the best interests of the child because of such factors as the existence of significant emotional ties with prospective adoptive parents while in the care of such agents as a foster child, a reasonable, but unsuccessful, effort has been made to place the child with appropriate adoptive parents without providing adoption assistance under this section or medical assistance under Title XIX.

H.R. 2571 would expand the definition of special needs to include acknowledgement of the likelihood that certain children may require assistance in the future. The fact that a "specific factor or condition" does not currently exist would not be a bar to entering into an adoption assistance agreement under particular circumstances. Specifically, information about the genetic or social history of children would be admissible as evidence of a barrier to adoption in the absence of adoption assistance. To qualify under this provision, the information must be available and known during the adoption process. In addition, the reach of the provision would be limited to those adoptions involving a "high risk" of causing or resulting in special needs.

Rep. Downey's bill also would address situations that would in effect result in retrospective eligibility for assistance. Eligible children in all instances would be those for whom the state was legally responsible prior to finalization. First, as in the case of Nia Ferdinand, the special need could be a mental, physical, or emotional handicap that existed but was not diagnosed until sometime following the adoption. Alternatively, the handicaps that are either congenital in nature or caused before adoption and are identified after adoption would be the basis for awarding program benefits.

Concluding Comments

DCF did not appeal the Ferdinand case ruling. DCF asked Region I of the Department of Health and Human Services for input on the question of "whether or not this child, from a federal standpoint, is eligible for a IV-E subsidy based on" the court order. In response, Region I took note of the fact that the court mandated DCF to provide benefits. There would be "no need to enter an appeal on the case" given the court's determination of Nia's eligibility.

The issue of providing Title IV-E adoption assistance after finalization was a subject that generated considerable discussion at the 1991 Annual Meeting of the Association of Administrators of the ICAMA. No solutions were offered but many questions and concerns were raised. This Issue Brief is in large part a response to the request of administrators to publicize the facts and outcome of the Ferdinand case.

As mentioned earlier, officials of the Children's Bureau consider the fair hearing process an appropriate vehicle to help families obtain federal assistance after finalization. The Secretariat would welcome information on state experiences in this regard, i.e., what were the facts of the case(s) and how the situation was resolved.

ISSUE BRIEF XIX

© December 1991