A 10-year-old federal and state program designed to give poor children basic, routine medical care is failing to reach more than a fraction of those Congress intended to be served, according to report released yesterday by the Children's Defense Fund.

Based on a two-year study of the Early and Periodic Screening, Diagnosis and Treatment program under Medicaid, the report said that only about a quarter of the required screenings are being performed annually.

"Almost no children" were rescreened periodically as required by the 1967 law establishing the program, the report said.

Roughly 40 per cent of the medical and mental problems diagnosed in children in fiscal 1976 in the intitial screening process did not receive care as required, it said.

The program was added in 1967 to Medicaid, a federal and state program of medical assistance to the poor, after studies showed that the poor had a higher incidence of physical and mental defects and that early detection and attention could reduce the need for treatment and services later. About 12 million to 13 million children are eligible for the screening program.

The District of Columbia and Maryland were among the lowest states in terms of number of screenings performed per 100 eligible patients. The District ranked 44th out of 51, with 7.8 screenings per 100 eligible patients. Maryland ranked 49th with 4.9 per 100. Virginia was 25th with 24.4 per 100. Colarado ranked first with 58.8 and Puerto Rico was last with 2.4. (Forty-nine states, the District and Puerto Rico participate in the program; Arizona does not have Medicaid.)

The report blames the program's shortcomings on a shortage of medical providers or the wrong kind in some areas, a failure on the part of the states to inform eligible individuals of the program's existence, unclear standards established by the Department of Health, Education and Welfare as to what states are required to do, and a failure by HEW to enforce the 1967 law.

The Carter administration has asked Congress to replace the screening program with a proposed Child Health Assessment Program, with new federal expenditures of $180 million. But the report said that the administration proposal does not go far enough.

Where the administration would make eligible about 700,000 children of the working poor under 6 years old, the Children's Defense Fund proposes that the expansion of coverage be extended to age 21 - adding another 700,000 children. Wendy Lazarus, director of the CDF study, estimated that the addition would cost an additional $125 million annually on top of Carter's $180 million request.

Approximately $15 billion was spent on Medicaid in fiscal 1976, $2.6 billion of that paying for services to eligible children, according to the report. According to rough estimates, the report said, the early screening program costs about $136 million - $75 million paid by the federal government and $61 million by the states.

Sources familiar with the program estimated that bringing its performance up to the law's requirements could cost $1 billion or more annually.

The report indicates, however, that investment in screening and treatment could result in savings. A study of the program's costs in one state, matching screened against unscreened children, found that the former spent 55 per cent fewer days in the hospital and had 26 per cent fewer visits to physicians in hospitals and other settings outside of offices.

The report recommends that:

The program's emphasis be shifted to comprehensive health care for eligible children.

Complete health services after the initial assessment be provided and routine dental care be provided as needed.

Clear federal regulations with explicit standards be drawn.

Financial incentive be given to encourage private, nonprofit community health programs to provide services under the program.