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Interstate Placements and Adoption Subsidies

April 22, 2015 in Domestic Adoption by Stephen Gardner  |  No Comments

Interstate Placements and Adoption Subsidies

A few years ago, it was relatively uncommon for a foster child from Los Angeles to be placed for adoption with a family in Albuquerque or a Minneapolis teen to find his forever family in Atlanta. These placements typically happened only because relatives were living in other states. Today, with the increasing use of the Internet, plus increasing numbers of children going into out-of-home care, agencies are listing more waiting children on regional and national web sites. As a result, prospective families are using their computers to locate children and interstate placements are now more common in adoption.

When children move across state lines, families often wonder “Who pays for the adoption subsidy?” “How does the child get a new Medicaid card?” These questions are addressed below.


The Association of Administrators of the Interstate Compact on the Placement of Children (AAICPC) was established in 1974 and consists of members from all 50 states, the District of Columbia, and the U.S. Virgin Islands. The Interstate Compact on the Placement of Children (ICPC) is not only statutory law in all 52 jurisdictions, it is also a binding contract between all parties. The ICPC establishes uniform legal and administrative procedures governing the interstate placement of children.

Placements must generally go through the ICPC when children move across state lines, regardless of the type of placement—foster, adoptive, etc. When the child has special needs and qualifies for state- or federally-funded adoption assistance, the Interstate Compact on Adoption and Medical Assistance (ICAMA) comes into play.


ICAMA was established to protect the interstate interests of children adopted pursuant to adoption assistance agreements. The Compact creates a framework for formalized interstate cooperation for ensuring that children with special needs receive medical and other benefits when they are adopted by a family in another state, or their adoptive family moves to another state. As of June 2006, 47 states and the District of Columbia have signed the Compact.*

In our earlier example of a child moving from Minneapolis to Atlanta, both states are members of the Compact, so the process is made easier. Each state has a designated person who manages the paperwork for interstate placements (see attached). As soon as this person receives the appropriate paperwork, the process is put in motion.

Monthly Subsidy Payments

To determine the appropriate rate of the subsidy payment, the purpose of the placement is important. Parents and workers should look to the state regulations, laws and policies (of both states) for guidance. Generally, however, if a California child moves to New Mexico for the purpose of foster care, the California county pays the New Mexico family the New Mexico rate. (California is a state-supervised/county-administered state, while in New Mexico, all decisions are made at the state level.) If the placement is for thepurpose of adoption—even if the prospective parents happen to be foster parents—California pays the family the appropriate California rate. In both cases, California is responsible for paying the monthly subsidy because the child was originally from California.


Health coverage is slightly different than subsidy payments, and the type of subsidy (i.e., federal vs. state) makes a difference. For federally eligible Title IV-E children, Medicaid coverage is automatic and provided by the state where the adoptive family lives. A California Medical card does little good for a family living in New Mexico. Once an adoption assistance agreement is entered into between the prospective adoptive parents and the agency in California, the ICAMA Compact Administrator will send a referral to the New Mexico Compact Administrator so the child can be issued a Medicaid card in New Mexico. The adoptive parents will, most likely, be asked to fill out an assignment of rights by the New Mexico Medicaid agency (usually the request is done by mail). An assignment of rights means that the adoptive parents give the Medicaid agency the rights to any payment for medical care from any third party coverage. Medicaid is always the payer of last resort, so if you have private medical insurance for your child, you must use that insurance first.

For state-funded, non-IV-E children, providing Medicaid (or similar state-paid health coverage) is up to the discretion of the receiving state. For states that are members of the ICAMA, children are more likely to receive coverage. In many states, a majority of children are special needs and qualify for Medicaid, regardless of funding stream (Title IV-E or state-funded). In others, only children with a diagnosis of a medical or emotional condition receive coverage. For instance, a child with severe asthma receives medical coverage, but a sibling group of two with no diagnosed special needs would not.

Nonrecurring Adoption Expenses

If the child is to receive a state- or federally-funded subsidy, the state entering into the agreement is responsible for payment. If the state from which the child is being placed is not entering into an agreement for adoption assistance with the adoptive parents, then the state where the final adoption decree is issued is responsible for paying these expenses (45 C.F.R., Section 1356.41(h)). Parents can be reimbursed up to the state’s limit (between $250 to $2,000) for these expenses. Parents can also have expenses paid directly by the state, if allowed by the state. The specific reimbursement procedures are left to each state. Parents must, however, enter into an agreement for nonrecurring adoption expenses before they can be reimbursed.

Title XX Social Services

Children receiving Title IV-E adoption assistance are categorically eligible for Title XX services, which means they are eligible to receive any service of this program offered by the state in which they live. Children line up for services like any other child eligible for the program. Services vary from state to state and can include a variety of services that may or may not be of assistance to adoptive families and their children.