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The goal of Arizona’s initiative Family Builders is to enhance parents’ ability to create safe, stable, and nurturing home environments that promote the safety of all family members and healthy child development. The initiative was implemented first in two urban areas, in January 1998. Other districts were added in 1999; currently it covers four districts out of six. The initiative is a public/private partnership that provides an alternative response system to families with low or potential risk child abuse or neglect reports. (Prior to Family Builders, most of these families were not being served at all.)
When a report comes in to the state, a state employee screens the report, and if it is judged to be low or potential risk, decides which Family Builders contractor the report should go to. The contractor then has 48 hours to contact the family. The family participates voluntarily, and many (as many as two thirds) decline to participate. The initiative uses a strength-based, family-centered approach to reduce the re-occurrences of subsequent child abuse and neglect reports.
The state has contracts with eight community providers to receive referrals, assess families, and provide the services identified in the service plans. Services that contractors must have available include family assessment, housing search and relocation, emergency services, intensive family preservation services, case management, parenting skills, parent aide services, child day care, transportation, respite services, shelter services, and supportive intervention/guidance counseling. The state monitors the contracts to ensure that services are provided as specified in the treatment plan. Contractors are paid a case rate, and bill the state at three points: referral, assessment, and completion of service plan.
In the first 18 months of operation, a total of 8,335 families were referred to Family Builders contractors. Of those families, 5,600 families declined services, 2,800 families received an assessment, and 2,300 families received services and completed a service plan. An evaluation conducted by the Arizona Office of the Auditor General (2000) found that families participating in the program were just as likely to have a new child maltreatment report after entering the program as two similar groups of families not participating in the program. However, caseworker assessments indicated that the risk of child maltreatment among participants decreased slightly.
Alameda County Department of Children and Family Services’ Project DESTINY (Demonstrating Effective Strategies for Intensive Placement Youth) was first implemented in 1997 as a small pilot project to support children living in group homes and residential treatment, and attempt to move them to the least restrictive environment whenever possible. The pilot project was expanded in 1999 as part of the California Title IV-E Child Welfare Waiver Demonstration Project – Intensive Services Component. Under the waiver, federal title IV-E funds may be used flexibly to pay for services not traditionally covered by title IV-E.
The project targets children between the ages of six and seventeen who:
Alameda County contracts with three private agencies (Seneca Center, Lincoln Child Center, and Fred Finch Youth Center), collectively called the FlexCare Consortium, to provide case management and wraparound services to eligible children. Generally, the county screens every high-level group home referral to determine whether the child is eligible for Project Destiny. If eligible, the case is referred to the FlexCare Consortium for review and randomly assigned to one of the three private agencies. Currently, the three agencies serve approximately 90 children. However, the county has appropriated funds to serve 256 children over the entire waiver period.
Service providers use a child and family team model to engage families and their natural support systems (i.e., extended family, neighbors, and friends) in service planning and delivery. Flexible funding enables providers to deliver an array of services such as parent advocacy, social and recreational rehabilitation in the community, 24-hour crisis response, respite, parenting skills activities, individual and family therapy in the home or community, and collaboration between community agencies, family, and mental health counselors.
The county reimburses providers a capitated rate of $4,082 per child per month, for a two-year period. During that time, providers remain responsible for delivering all services that the child may need regardless of the placement setting. Hence, the payment system encourages providers to deliver services in least restrictive community settings and to minimize the length of stay in high level and expensive residential treatment.
Case oversight is provided through the Case Management Workgroup, which is composed of both county and FlexCare case management staff. This group meets weekly to discuss ongoing cases and review new referrals. In addition, the University of California-Berkeley has been engaged to conduct an experimental evaluation of the project. UC Berkeley will rely on Department of Children and Family Services’ administrative data, a number of family assessment tools, and in-depth family interviews to evaluate the project.
From 1991-1997, the State of Colorado funded 90 percent of the costs for each child who met out-of-home placement criteria. In 1991-1992, out-of-home expenditures were $40.9 million; by 1996-1997, that had risen to $125.9 million. The legislature that year denied a supplemental funding request and demanded that the state child welfare agency roll back provider rates by 10 percent for three months. The agency had been discussing privatizing the entire child welfare system; the legislature told the agency to study managed care for six months and come back with a report.
Then the legislature decided to support a public child welfare managed care model, but not privatization. In 1997, the legislature block-granted child welfare funding and capped it (the legislation is referred to as “Capped Allocation”). That legislation also authorized three managed care pilots, and legislation in 1998 authorized three more pilots. The state’s objectives for the managed care pilots are to control costs and to assist children and families to achieve safety and permanency within ASFA timeframes. The requirements are: (1) there is a single entry point (i.e., the client was not referred out for services); (2) there are interagency agreements with community partners regarding funding of services; and (3) there are utilization review mechanisms (which often resulted in front-end approval mechanisms).
The managed care initiative is testing the principles of child welfare managed care; the counties keep savings that, if it were a private corporation, would go to shareholders, and they put the savings back into child welfare services. In addition, pilots are required to have performance agreements regarding outcomes, and some rules and regulations are waived. Managed care counties also have more flexibility for spending within the lines; they can negotiate provider rates, services, and outcomes except for some rates such as for Residential Treatment Centers. One result has been that counties with children in high-end placements moved relatively quickly toward getting those children adopted. The counties can opt to apply up to 5 percent of their savings toward their 20 percent portion of child welfare costs (there’s an 80/20 split with the state), but so far they all have opted to use their savings instead for creative ways to do child welfare.
Establishing the right allocation is difficult, and there is little incentive to become a managed care pilot site unless a county is sure it would have savings. For the first couple of years, managed care counties underspent their allocations, and in 2000 four out of six overspent their allocations. They were trying to find a balance, but the rule for blocked allocations is that since managed care counties can keep their savings, they’re last in line to receive any surplus child welfare funds. So those counties ended up covering their overspending with county-only funds. Eight of the 10 big counties overspent; both of the 2 who did not overspend were managed care counties.
Boulder County was one of the original three pilots and initiated its managed care initiative in July 1997. Several collaborative efforts were already in place in the county, and the pilot was seen as an opportunity to implement managed care activities by building on the existing collaborations, without using a for-profit managed care organization. The objective of the Boulder County Managed Care Pilot was to gain the flexibility to enhance the interagency partnership.
Boulder’s initiative involved developing a new organizational entity called Integrated Managed Partnership for Adolescent Community Treatment (IMPACT). The local community mental health center, the Mental Health Center of Boulder County, Inc., served as the fiscal agent, while the pilot’s board comprised representatives of all of the local child- and youth-serving agencies (Department of Youth Corrections or DYC, probation, mental health, Department of Social Services or DSS, public health, substance abuse services provider, and other community members). IMPACT’s primary function is to manage out-of-home placements for DYC, mental health, and social services; each of these agencies provides funding to IMPACT based on their historical costs for providing out-of-home placements. In addition, each participating organization contributes funding for IMPACT.
IMPACT is organizationally a part of the county mental health department. The county DSS has a contract with the mental health department for IMPACT services, and DSS supervises IMPACT staff. DSS is responsible for all administrative functions for the initiative, and usually DSS does intake and works with the family. Out-of-home case management is the responsibility of IMPACT, and service delivery usually is done by contract providers but some foster homes are provided by the county or through private foster care agencies.
The initiative’s focus is adolescents ages 12-18 in need of, or at-risk of needing, residential services. Also all DYC youth are included. The rationale for focusing on these youth is that they are the most expensive; also, the model is very interagency-focused, and probation is an important partner. Any of the partners (schools, mental health centers, probation, child welfare) can refer cases, and all youth who fit the criteria are referred. IMPACT serves about 500 youth per year.
After referral, an interagency meeting assesses needs and plans the treatment. Staff present at the interagency meeting can authorize services; they also decide whether the case will be in the child welfare or the juvenile justice system. The flexibility of the initiative allows services to be “out of the box” and also allows the county to avoid duplication. Ongoing utilization review identifies and addresses gaps in services.
The funding for services varies according to the type of provider. For example, the mental health center is a partner, and its services are paid for by one lump sum spread over 12 months. For that amount, they provide services to everyone referred. Residential treatment centers and day treatment providers are fee-for-service. The rates are determined by how the amount of funding appropriated by the state. The child welfare block allocation is flexible, and the county negotiates rates based on utilization patterns and how much money is available. The core services allocation is less flexible; the county negotiates with providers and sets the rates.
In the first couple of years after implementation, DSS had substantial savings because of managed care, and those savings were shared with the partners – they go into the IMPACT “pot” and are divided among the partners. In 2000 DSS experienced significant losses, due in large part to the State granting a 15 percent increase for Medicaid but only 1.5 percent to the counties, so the county allocation was not sufficient to fund residential treatment centers. Also, staff were given a larger raise than 1.5 percent. So DSS overspent, but the county was able to save money through DYC and “bail out” part of the financial liabilities. There is no risk sharing with the residential providers.
Connecticut implemented the Continuum of Care pilot project in 1999 to reduce the entry and length of stay of children in residential treatment facilities. The state contracts with two lead service agencies (LSAs), one each in the North Central and South Central regions, to develop a network of providers and coordinate community-based services for children assigned to the program. The program targets children between the ages of seven and fifteen who are referred to the state’s central placement team for residential treatment. Overall, the program can serve a maximum of 70 children.
Cases are referred from the two state regional offices to the central placement team for review. Based on a review of information pertaining to the child’s functioning, the placement team determines whether the child is eligible for the program. Aside from determining that the child’s acuity level is high enough to warrant treatment in a residential facility, the placement team does not recommend specific service plans. Eligible children are randomly assigned to residential treatment or one of the two LSAs.
LSAs are paid a case rate based on the average annual cost of in-state residential treatment. The case rate, $5000, is intended to cover all administrative, case management, and service costs for 15 months. LSAs receive payment in four installments -- at case assignment, 50 days, 180 days, and discharge. Payments may be withheld if a case review determines that the treatment plan, services being provided, or progress toward goals are unsatisfactory. Providers are also required to maintain invoices that are audited by the state’s independent evaluator. To discourage providers from under-serving children and families, LSAs are required to use 90 percent of the case rate, and any unexpended funds are returned to the state.
Within two weeks of receiving a referral, the LSA meets with the family and other service providers to assess the child and develop a treatment plan. LSAs may use the case rate flexibly to deliver, or purchase from other providers, a range of services needed to maintain children in community settings. Ideally, children will be returned to their communities prior to the end of the 15 months so that after care can be provided in the last several months of the treatment period. The decision to close a case is made jointly between the state and the LSA.
An independent consultant is evaluating the pilot project. The evaluators are monitoring both program processes and outcomes including child and family well-being, child functioning, education, safety, health, caseload size, number of client contacts, and costs.
In 1996, the Florida legislature adopted the privatization strategy for the state child welfare system by calling for pilot “Community Based Care (CBC)” projects that would implement the lead agency model on a county-by-county basis. In 1999, the legislature expanded the CBC requirement statewide; the original target date for privatizing all 67 counties was Jan. 2003, but the public agency has requested a two-year extension on that target date and it is likely to be granted. Across the state, 14 counties are in some stage of privatization, representing about 50 percent of the active child welfare cases in the state. Initially Florida planned to operate the initiative under a title IV-E waiver, which was granted by the federal government, but the state decided not to use the waiver, due at least in part to the stringent research requirements.
Under CBC, state child welfare workers still take initial calls of alleged maltreatment and conduct investigations, but one private agency is selected for each county to take over the primary responsibility for foster care, adoption, and family support. The agency can either provide services directly or subcontract with service providers.
Unlike any other child welfare privatization initiative in the United States, Florida’s CBC initiative is funded through “global budget transfers” (like block grants) to lead agencies. Other privatization initiatives use capitated or case rates. Florida’s initiative thus potentially transfers a large amount of risk (based on intensity, duration, and volume) to contractors. A statewide risk pool can be tapped in cases of excess referrals or catastrophic service costs. The initiative is supported through IV-B, IV-E, Medicaid, TANF, social services block grant, CAPTA, adoption incentive grants, and state funds.
The first pilot project implemented was the Coalition for Children and Families in Sarasota County, which began serving clients in January 1997. The lead agency is the Sarasota YMCA. All children in the county who are determined by state child welfare workers to be abused or neglected and in need of services, whether in-home or out-of-home, are referred to the Coalition, which then provides for all case management and services. A multidisciplinary team develops the case plans and participates in monitoring and decisionmaking. The Coalition has an active caseload of 1,600-1,700 children. Lead agencies are allowed, under state law, to receive “excess earnings” of federal reimbursements as bonuses, and the Coalition has been successful in doing that. The money has been used for maintenance adoption subsidies and out-of-home care for IV-E-eligible children.
Children in the Atlanta region who are not eligible for Georgia’s program for Severely Emotionally Disturbed (SED) children are referred to Metropolitan Atlanta Alliance for Children (MAAC). Established in 1998, MAAC is an MCO that contracts with a network of providers to deliver a range of services. In addition to residential treatment and foster care, providers in the MAAC network also deliver reunification and adoption services. The range of levels of care provided by the network members enables MAAC to move children out of high levels of care more quickly than would be possible if only the agency providing the intensive care were managing the case. Over the past year, MAAC served approximately 30 children and its capacity was recently expanded to serve 40 children.
MAAC is responsible for placing referred children with a network provider according to the level of care that is needed, and remains responsible for providing care until the case is closed. Referrals to MAAC are reviewed by a six-member professional committee made up of representatives from each of the six provider agencies. This committee determines the level of care that the child needs and assigns the case to a network provider. The placement decision is made by consensus among the six-member committee. For children in state custody, the service agency caseworker, the state child welfare worker, and any other professional assigned to the case attend all case staffings and court hearings.
Rather than increasing the array of services that any one provider delivers, the effect of MAAC has been to make available a wider array of services to any child served by the network. Through the provider network, children can more easily move between levels of care and service. Furthermore, because providers can rely on each other for support services, placement disruption is less likely. For instance, the network’s intensive in-patient hospital provides short-term stabilization for network members’ clients. Otherwise, the hospital only provides long-term care in chronic cases. As a result of this collaborative effort among network members, individual providers are more willing to maintain care for a child for longer periods because the other providers are more available to them if short-term supportive services are needed to avoid placement disruption.
The state pays MAAC a flat per diem rate of $159.60 for each child referred to the network by Match. MAAC then pays the provider at the following per diem rates that are set by the state: basic care $70-80, intermediate care $133 to $230, and intensive care $313. Hence, the payment system imposes a financial incentive for MAAC to avoid placing children in higher-level, higher-cost care and to keep the length of stay in this type of care to a minimum.
MAAC’s administrative entity has taken on the financial risk of the network arrangement since member agencies also receive referrals from other sources that pay the same per diem rate. Hence, the providers can survive financially without MAAC, but the administrative component of MAAC can’t survive if it overspends its budget. As it is, the state per diem only covers services provided by network members, not MAAC’s administrative costs. MAAC conducts private fundraising efforts to pay its administrative costs.
The overall goal of this initiative was to redirect resources from maintaining children in the system to a focus on gaining permanency for children. Its objectives were to provide the resources necessary to improve permanency outcomes for children, hold the system more accountable, improve the quality of care, and create incentives to perform in the best interest of children and families. When the initiative was implemented, a top priority was addressing a large and growing permanency backlog. It was implemented for Cook County relative care in July 1997, and expanded in July 1998 to all traditional foster care statewide. The budget for FY99 was about $334 million, including $192 million for case management and $141 million for maintenance payments; this represents about one-fourth of Illinois' child welfare budget.
The initiative accomplishes the objectives by linking provider reimbursements to performance. Agencies are no longer guaranteed a caseload but are expected to manage their cases by balancing the cases flowing in with those flowing out; if the standards are not met, caseloads will increase but the level of payment remains steady. Agencies that move more than the contracted number of children (24 percent of their caseload) into permanent living arrangements do not experience a reduction in case management payments, and they may receive a bonus above the standard payment. Each placement that results in a "pay-out" will be replaced with another referral. However, agencies that do not achieve their contracted performance standards may lose up to 33 percent of their contract because they will not continue to receive referrals. The initiative includes new investments in reunification services, permanency capacity, subsidized guardianship, emergency care, recruitment, counseling, and case assignment.
The target population is all children in relative care and traditional foster care statewide. Approximately 23,000 children (over 70 percent of Illinois' substitute care population) were expected to be served in 2000 through the performance contracts. The initiative excludes children in specialized foster care, independent living programs, and residential placements. Services provided include case management, family preservation and support services, family foster care, kinship care, adoption, and respite care.
Monitoring teams review the agencies' performance and provide feedback for continuous quality improvement. Benchmarks measure the quality of care provided to children and families. The performance standards negotiated with providers are substantially higher than the previous average, and agencies that fail to achieve the standards set under the contract risk having their intake placed on hold. Throughout the year aggregate permanency performance data (managed by Chapin Hall) are shared with all providers and each agency is ranked from high to low; agencies can reconcile their numbers if they believe the numbers are not accurate.
Under performance contracting, payments to providers are made in two parts: maintenance payments, which are passed through to foster parents and relatives caring for children, and administrative payments, which provide for services to the child, the child's family, the foster family/relative caregiver, and administration costs. The monthly administrative payments provide for case management; a permanency worker, recruitment worker, and education liaison for each team, counseling and therapy; and emergency care. Agencies also receive lump-sum payments for reunification/aftercare, and traditional (non-relative) foster care agencies receive additional resources for the recruitment and training of foster parents and the provision of emergency foster care. Administrative payment rates are based on expected caseload ratios (22.5 cases per caseworker), with differential expectations of intake, permanency outcomes, and non-permanency outcomes depending on whether the agency is in or outside of Cook County and whether the case is relative or traditional foster care. The current effective monthly rate for traditional foster care administrative payments is $569 per child; for relative foster care, administrative payments range from $600 to $714 per child, depending on the agency's previous performance. Maintenance payments range from $361 to $445, depending on age of child. The difference between the administrative payment level and the actual caseload represents the fiscal incentive/disincentive of the initiative.
An important result of the initiative has been a dramatic reduction in caseload, from over 51,000 children in care to less than 30,000 in three years. In Cook County, caseworker relative care caseloads declined from 25 to 22 within existing spending levels. A byproduct of this trend was that there were not enough referrals to meet the contracted intake obligations of performance contracts, especially in downstate Illinois. The state responded by transferring cases from "lower performing" cases to the rest of the system, which is not viewed as a long-term solution to the systemic problem of "intake-dependency."
Of all the state fiscal reform initiatives in child welfare, the Kansas Public-Private Partnership may be the most comprehensive in its scope. Over the course of fiscal year 1997, Kansas completely privatized all family preservation, adoption, and foster care services.
The state was divided into five regions and contracts for each of the services were given to private agencies. For family preservation services, monthly case rates were $2,200 for 12 months. Agencies were paid this rate regardless of the extent of the services they provided but they were expected to stabilize the family within 90 days. If a child was brought back into the system during the first year after case completion, the private agency had to service the case without any additional case payments. The state imposed the following outcome measures on the agencies: there must be no confirmed reports of neglect or abuse in at least 90 percent of the families; children must remain home in at least 80 percent of the cases; and finally, clients should be satisfied with the services.
The first adoption contract went into effect on October 1, 1996, with one agency (Lutheran Social Services) in charge of adoptions throughout the entire state. The provider is responsible for recruiting and training adoptive families, matching the adoptive family with an available child, and providing support services for the family for the first eighteen months after the adoption is completed. The agency was paid a case rate of $13,556 in the first contract. The main outcome was originally to place 70 percent of the children within 180 days. However, after the first year, this goal was revised downward to 55 percent. Other important outcomes are to finalize 90 percent of the placements by the end of the first year after placement, to ensure that 90 percent of the placements are intact 18 months after the adoption is finalized, to have at least 90 percent of children stay in only one placement from the time parental rights are terminated until the adoption is finalized, and to have a 90 percent family satisfaction rate.
The privatization of foster care services began in early 1997 with contracts to three agencies. These contractors are required to accept all referrals from the state and to provide post-reunification services for 12 months after the reunification of the child with its family. The case rates originally started at $12,860 for the lowest level of need and went up to $15,504. After the first year, the case rates were increased and a number of catastrophic risk pool slots were created for each provider to deal with extremely high-end cases. The payments are based on the expected achievement of case milestones. The contracts specify that 60 percent of the children will be returned to their families within six months. Other important outcomes are that 98 percent of the children will not be the subject of reports of abuse or neglect, that 90 percent will have no more than three foster care placements, and that 65 percent of sibling groups would be placed together.
Kansas has now changed from a case rate model to a capitated per/child, per/month system for foster care and adoption contracts. The monthly payment, which varies by region, begins with referral and ends when the child returns home, is adopted, ages out, or is referred to another agency. The shift from case rate to capitated rate was due to the financial shortages experienced by contractors under the case rate system; the state acknowledged that contractors did not have control over all factors that influenced permanency and should not bear all the risk.
Kentucky’s Quality Care Initiative started in early 2000 after an extended dialogue between the Mary Hearst agency and the state Department of Community Based Services. This pilot project is currently only available in Jefferson County. Under this initiative the agency is given a case rate and is expected to achieve designated permanency goals for the children. There is a stop-loss provision in order to limit potential losses to the provider. The provider covers any loses up to 125% of the case rate and the state covers any additional costs beyond that point.
The program is designed to serve three distinct target populations: teenage girls in need of residential placement; children in the foster care system who are transitioning home; and children who have just entered foster care in the last 45 days. At the time of the interviews with QCI staff, there were 5 youth from population 1, 21 youth from population 2, and 5 youth from population 3. There are no immediate plans to increase the number of youth involved in the program. The total number of youth served for the course of the program is 60.
This initiative has increased the provider’s involvement in the decision-making process. The provider determines the level of services that they offer to the family and they also attend court hearings to give reports on case progress. According to the provider administrator, the main advantage for this program is the additional freedom to provide wraparound services rather than the strictly prescribed services that are offered by other state programs.
The Baltimore Child Welfare Managed Care Project, Maryland’s title IV-E waiver demonstration, began serving clients in January 2000. It targets children age 0 to 5 in out-of-home care and their siblings and families. It is testing cost neutrality – i.e., can the contractor obtain better outcomes without costing more money.
The Baltimore child welfare agency refers cases that fit the criteria to the evaluator, who randomly assigns them to the initiative or to regular services. Upon referral, the contractor takes over all functions: case management, assessment, foster care payments, service plan, service delivery, wraparound care. The contractor is receiving $24 million to serve 500 children over three years. There is a stop-loss provision: if the cost for a child exceeds $3,500 per month, the state pays 90 percent of the costs over $3,500 and the contractor pays 10 percent.
The initiative’s evaluation will include a process evaluation, a cost-benefit study, and a cost-neutrality study. The contractor has agreed to improve benchmarks on length-of-stay, time to permanency, and re-entries. Early results indicated reduced length-of-stay and re-entry rate and increased adoption rate for children in the initiative.
The goal of Massachusetts’s Family-Based Services Initiative is to implement a collaborative, community-based approach utilizing Department of Social Services (DSS) financial resources in coordination with other community, state, and private providers, systems, and funding sources in order to address family needs in a comprehensive and efficient manner. The impetus for the initiative came from the State child welfare staff wanting to be able to provide more flexible, collaborative, and responsive services to improve outcomes for children. The previous system of purchasing services through contracts prohibited the local customizing of services. The initiative allows the customizing of services based on community needs and resources; it enlarges the pool of service providers available; and it allows the State to purchase services on an as-needed basis. In addition, it provides a new emphasis on maximizing third party reimbursement and access to services not funded by DSS.
The target population for the initiative is primarily intact families who are at-risk of their children entering custody due to supported assessments of abuse and neglect. About 75 percent of the 38,000 children in the child welfare system are still at home, so that is the primary population targeted, although children in out-of-home care are not excluded.
The initiative, which began serving clients in January 2000, involves the State contracting with nonprofit community-based child welfare agencies to serve as lead agencies for DSS service areas. There are 29 service areas and 18 lead agency contracts – some area offices joined together to be covered by a single lead agency. The lead agencies receive a specified amount of money (initially $100,000 per year) to provide lead agency functions – gatekeeping, conducting utilization review, creating and coordinating provider networks, monitoring quality of services, and accessing third-party reimbursement. Each service area office now has a staff person from the lead agency on-site full-time. A separate contractor (Community for People) is tracking the initiative and developing and supporting a database for utilization management. There is no formal evaluation in place, but the State recently completed a six-month self-assessment report.
The lead agencies develop local networks comprising a broad array of formal and informal social service, educational, housing, and cultural resources serving families. These agencies recommend a core group of network providers from whom DSS purchases family-based services through contracts and at rates the providers negotiate with DSS. The providers are paid primarily on per-diem and hourly rates. The state is encouraging case rates, as the initiative utilizes models that vary in intensity according to the needs of the families, but case rates require time to develop necessary administrative structures.
The array of services required include family stabilization and reunification services, family support services, respite and short-term placement services, and miscellaneous resources (the last category is capped at $500 per family, and is flexible money to purchase either goods or services). Most of an area’s service budget is obligated in an “open order encumbrance” assigned to the lead agency, and payments to the network providers are made against and “draw down” on the open order encumbrance. Thus, the service budget is flexible and able to respond to changing client needs without the burden of administrative contract amendments. However, it is necessary to manage the service budget closely, pay attention to the services being provided, and be careful not to duplicate services. Although lead agencies do not receive incentive payments for exceeding goals or financial penalties for underperformance, one agency has already ceased being a lead agency for the initiative, at least partially because it went through the service budget too quickly. The initiative emphasizes the importance of informal family and neighborhood supports as primary components of every family’s treatment plan; the rough rule-of-thumb is that 75 percent of the treatment should come from family, faith, and friends, with 25 percent funded services.
The lead agencies convene and facilitate treatment planning teams, which consist of small groups of providers, other persons representing systems and/or community resources, and families. After a social worker brings a case to the attention of the area DSS office, the team (including the family) meets to develop and discuss a treatment plan. Two important changes the Initiative has brought about are (1) the involvement of the family right from the beginning as key players in planning the treatment, and (2) the involvement of the team in planning and coordinating services, rather than the social worker directly calling service providers.
Quality of services is monitored by lead agencies through weekly meetings with the core team and six-week review meetings with the families. Lead agencies meet quarterly with DSS to discuss quality issues. Providers are supposed to administer client satisfaction surveys, but it is not administered consistently.
It appears that the initiative is able to serve more families than were served under the previous system because the families now turn over more quickly. The initial funding for the lead agencies ($100,000 per service area, for a total of $2.9 million) was taken from the direct services budget rather than staffing budgets, which was not popular among providers but obviated the need to reduce public agencies’ staff sizes. (There were some staffing reductions, but this was handled by eliminating a few vacant positions so that nobody was laid off.) There is no formal evaluation being conducted, but the State developing a database, reviewing every three months and retooling as needed.
The initiative has broadened and enhanced the pool of providers and provides opportunities for newcomers. A major goal is to include minority agencies and community-based agencies, and the state is providing capacity-building for these agencies.
Michigan Families is a IV-E waiver demonstration project that was launched in 1999 and currently operates in 6 of the state’s 83 counties (St. Clair, Monroe, Livingston, Van Buren, Jackson, and Nuwego). The objectives of Michigan Families are to reduce foster care placements, shorten lengths of stay in foster care, and accelerate family reunification. Providers have adopted a wraparound model to deliver services in the home and the community.
When first implemented, the program targeted children who were in foster care or at risk of placement. However, the majority of children served are not in foster care and receive placement prevention services. Because providers have tended to serve lower-risk children who do not meet the criteria established for federal match dollars, recently the state lost a half million dollars in federal reimbursement. The program now has been modified to target only children in foster care.
In five of the six sites, Michigan’s Family Independence Agency (FIA) has contracts with community mental health centers that act as lead agencies, but in one county the FIA is the lead agency. Lead agencies deliver most services directly, but may subcontract with other providers for services that they don’t provide. The FIA retains responsibility for administrative functions — contracts, billing, reimbursement, and training — and oversees the provision of services. Case management is a collaborative effort between the FIA worker and the community and family team at the lead agency. The community team reviews referrals and develops service plans in collaboration with the FIA, the school system, and the family’s informal supports. FIA workers have discretion over placement decisions and maintain the role of making recommendations to the court regarding the case.
Lead agencies are reimbursed $1586 dollars per month per child to provide all services that are needed. This payment rate is based on the state’s average payment for all foster care, including residential and specialized, in 1997. Lead agencies are allowed to deposit any unexpended funds into an agency risk pool. The lead agency can draw from the risk pool to provide higher levels of care that cost more than the monthly reimbursement. Alternatively, unexpended funds may be used to expand the array of services that are provided by the agency. However, 50 percent of unexpended funds that are above 10 percent of the budget is returned to the state. Likewise, costs exceeding 10 percent of the lead agency budget are also shared 50/50.
Flexible funding enables providers to deliver a wider array of services to families in community settings including the provision of in-home services to prevent foster care placement or facilitate reunification. The state had expected agencies to use flexible dollars to provide nontraditional services such as parent mentoring, neighborhood-based services, school-based services, and after-school programs to address families’ unique needs. But generally, lead agencies have delivered more traditional services like parenting classes and substance abuse treatment.
FIA staff review cases that are assigned to the lead agencies quarterly to ensure that appropriate services are provided and that providers are operating in accordance with the wraparound model. No performance standards are currently in place, but the state plans to include standards such as family functioning, length of stay, and recidivism when contracts are renewed. The initiative is being evaluated by a third-party contractor.
Michigan’s Permanency Focused Reimbursement System was implemented in 1997 to reduce children’s lengths of stay in foster care and to increase the number of children placed in permanent homes with parents, relatives, legal guardians or adopted within specified timeframes. The primary mechanism for inducing providers to achieve permanency goals within specified time frames is an incentive payment system.
Under this system, at initial case referral, providers receive a lump sum payment of $2,150 and an ongoing per diem administrative rate of $13.20. An additional payment of $1,850 is made to the provider if the child is returned home, placed with a relative or legal guardian, or moved into supervised or independent living arrangements within 290 days; or if parental rights are terminated within 515 days. For placement cases, providers receive $1,250 if the child remains in the home for six consecutive months, and an additional $1,550 for placements that are stable for twelve consecutive months. Providers who place a child in an adoptive home within seven months of termination of parental rights receive a payment of $1,250.
These payment rates were based on average foster care costs. Hence, providers are expected to have financial losses on some cases and gains on others, but should break even overall. Providers may use payments flexibly to deliver and purchase whatever services are deemed necessary to hasten permanency.
Currently, under this pilot project, the state contracts with six providers that together serve 45 percent of foster care population in Wayne County (approximately 8,900 children). Providers receive cases on a rotational basis and may not refuse referrals. Also, once a case is assigned, the provider remains responsible for delivering services for 365 days following placement in a permanent home without additional incentive payments. However, if children do re-enter foster care prior to the 365-day period, the provider continues to receive the per diem administrative rate. The incentive payment cycle is restarted for children who reenter foster care after remaining in a placement for 365 days.
At present, state monitoring of the pilot system focuses on whether providers achieve permanency goals within specified timeframes. Contracts with the providers stipulate that the program goals will be achieved in 80 percent of cases. Based on a recent analysis of incomplete data, providers had met permanency goals in about 40 percent of their cases. According to the program administrators, barriers such as a scarcity of foster homes and high staff attrition in Wayne County have prevented higher success rates. In addition to monitoring permanency goals, the Purchase of Care Division conducts site visits to review cases and evaluate the quality and timeliness of services.
In terms of utilization management, one provider employs an access manager. The manager tracks how many children are receiving various services, the length of time children receive services, and the number of slots that are open. Also, the manager is responsible for approving services that the caseworkers provide.
Michigan has contracted with the University of Michigan, Ann Arbor, MI, to evaluate the pilot project.
Beginning in the mid-1990s, Minnesota (where child welfare is county-administered) began funding two types of collaboratives: (1) the Children’s Mental Health Collaboratives, which are coordinated by the state Department of Human Services, and (2) the Family Service Collaboratives (covering children in the child welfare system), which are coordinated by the state Department of Children, Families, and Learning (the equivalent of an education department). Both types of collaboratives bring partners together to do coordination, planning, and purchasing of services, and allow a more holistic and locally-designed approach. Also, the collaborative structure allows access to federal funding for IV-E and Medicaid. Local public partners include school districts, public health, corrections, and human services, and private partners include organizations such as Boy Scouts, Girl Scouts, 4-H, and YMCAs, as well as substance abuse treatment and mental health agencies.
The Putting All Communities Together (PACT) 4 Families Collaborative is one of the earliest and possibly most successful examples. It is a four-county, multi-agency partnership that operates both types of collaboratives in west-central Minnesota. The four counties cover 3,700 square miles and have a total population of 93,000 people. PACT 4 emphasizes prevention and early intervention, targets the needs of children ages 0 to 21 with severe emotional problems, and provides support to families so that they can keep their children. In addition to state funding, it receives local funding: the four counties each fund it at $1 per capita, schools contribute $1 per student, and organizations contribute $1,500-3,000, depending on their budget. PACT 4 has also received some foundation funding. The program helps to create awareness of all the services available and encourage services other than probation and corrections for the targeted children. Overall, the early intervention has helped prevent out-of-home placements, infused additional resources into child welfare, and put children’s mental health needs in the forefront of the child welfare systems.
The State of Missouri has formed the Missouri Interdepartmental Initiative for Children with Severe Needs, which is a consortium of child-serving divisions from the Department of Social Services, Department of Mental Health, Department of Health, and Department of Elementary and Secondary Education. The Initiative integrates funding from all the participating Departments to support comprehensive, integrated Plans of Care for children with severe behavioral health needs and their families, implemented under a single, unified care management process.
The Initiative operates in two regions of the State, an eastern region (an urban area comprising St. Louis and surrounding suburbs) and a central region (a more rural area in the center of the State). It targets children and families with disruption likely to result in long-term residential care. Eligible children for enrollment are between the ages of 4 and 18 who (1) reside in those regions, (2) are currently in or at serious risk of long-term residential placement, and (3) have serious behavioral health needs as measured by a standardized instrument (Childhood Severity of Psychiatric Illness, or CSPI). This population of children is likely to need services funded by multiple State agencies, and the State realized that better coordination of services was needed to reduce barriers, enhance effectiveness and efficiency, and prevent children from “falling through the cracks.” In addition, the State hoped to enable many of the children to stay in their homes or return home or to their home communities by providing community-based wraparound support services, thus avoiding unnecessarily long and expensive residential placements.
The State contracts with two agencies to deliver services and provide operational support. The Care Management Organization (CMO), currently the Missouri Alliance for Children and Families, has responsibility for developing a network of resources, assigning care managers, purchasing services, and monitoring the quality and utilization of services. The Technical Support Organization (TSO), currently ValueOption, supports the initiative by managing information, finances, quality improvement, and communication. An interdepartmental management team manages the planning, procurement and contracting, start-up, and implementation of the Initiative and oversees system operation.
On March 1, 1999 the first children were enrolled. Currently there are about 250 children being served at any given time. The Initiative was originally designed to enroll 1,000 children in multiple CMO’s, but there is only one CMO and the maximum capacity of that CMO is 250. Child welfare workers, juvenile corrections workers, and mental health workers refer children to the Initiative through interagency teams (IT’s), which consists of local representatives from each participating State agency. About 60 percent of the referrals are from child welfare, 20 percent from juvenile corrections, and 20 percent from mental health. The IT enrolls and assigns children and families, reaching all decisions by consensus. Each eligible child must meet the criteria specified previously; there is a cut-off score for the CSPI, then all children who meet the criteria are enrolled as long as slots are available. Teams are notified each month how many openings are available.
The date that the IT enrolls a child is the day that State services cease and the CMO becomes responsible for all care and costs. The State’s practice is to give the CMO about two weeks lead time to review the referral and become acquainted with the child and family before becoming responsible for services. The minimum services required for each child include care management, team meetings, and development of a Plan of Care. The contract specifies that the CMO may not refuse any referral or disenroll any child from the Initiative until all plan of care objectives are met and the IT approves disenrollment (a “no reject, no eject” policy). The CMO is required to deliver services required by the treatment plan and is responsible for all costs except physical health, which is covered by Medicaid. Children are enrolled for six months; if necessary, an additional three-month period may be authorized.
The CMO is required to assess the child and family within 7 days of enrollment, and have in place an individualized, community-based Plan of Care within 14 days of enrollment. A family support team, consisting of the care manager, the family, the child, providers, neighbors, school personnel, the referring agency, juvenile court) develops the Plan of Care, monitors progress, and recommends disenrollment. The list of services that the CMO is required to make available is extensive, and includes inpatient psychiatric evaluation and treatment, residential treatment, residential sexual abuse and offender treatment, alcohol and drug abuse treatment (inpatient and outpatient), foster care, respite care, adoption services, educational services, outpatient psychiatric services, psychological consultation services, medication management/monitoring, individual/group/family therapy, crisis intervention stabilization, assessment, case management, intensive in-home services, day treatment, family support group services, wraparound services, crisis intervention access, residential support services, community integration support services, transitional living services, school-based behavioral support services, transportation, recreation, parent aide, supported work services, and mentor services.
The CMO, the Missouri Alliance for Children and Families, is a limited liability corporation (private for-profit) set up specifically for the contract under the Initiative. Its primary mission is to provide wraparound services under case rates to move children from restrictive placements to their home or other places within the community. It consists of nine member agencies – eight residential treatment providers and one psychological counseling agency – and was established in response to the growing movement of child welfare into managed care.
The CMO is paid a case rate that begins when a child is enrolled. Currently the case rate is $3,329 per month, with $226 per child for case management. The case rate was originally set up based on the 1,000 most expensive children in the two regions, and the Initiative was designed to include at least four CMO’s, each of which would receive a cross-section of the 1,000 children. As it turned out, only one CMO bid on the contract (probably due at least in part to companies concerned that the cost would exceed the case rate), and the most expensive (rather than a cross-section) of the children were referred to the initiative. Accordingly, the case rate was low. After the CMO lost money the first year, the state covered part of the loss. The CMO contract specifies 3 percent risk sharing – 3 percent of the budget was set aside to handle high-cost children – but there was no procedure established to access that risk pool.
The case rate is financed by contributions from divisions within the Department of Mental Health (DMH) and the Department of Social Services (DSS). The percentage at which each division participates was calculated from the actual expenditures identified in the historical costs for the target population. The contributing percentages are as follows:
The TSO, ValuOptions, documents performance and collects data pertaining to quality and outcomes. The CMO is required to report data on outcome, but that process is still being refined. The CMO monitors quality of services – the care managers monitor children’s progress and CMO staff conduct site visits to the residential facilities. The CMO reviews service utilization weekly, especially for the most expensive children, to make sure the teams understand that the goal is to move the children into the communities. Researchers at Washington University are evaluating the initiative, with a comparison group of children, but the evaluation is just beginning.
The goal of the initiative was to design a more efficient and effective way to spend the dollars, and provide flexibility to enhance outcomes. The creation of interagency teams resulted in broader cooperation generally between the member public agencies, and they now enjoy enhanced relationships across the board, not just with initiative cases. When the system moved from fee-for-service to case rates, a different composition of services was needed – especially more workers to work directly with families. And the initiative has not had a drastic impact on the court’s role, but it does divert some children who came into the child welfare system only because placement with the State could get them services, not because there were child abuse and neglect issues. Now the children do not have to be in the custody of one of the agencies to receive services.
This initiative, implemented in April 2000 by the city’s Administration for Children’s Services (ACS), provides flexible dollars that agencies can allocate to a broad array of services to achieve timely permanency for children in placement. Agencies can obtain flexible dollars if they are able to show improvements in the length of stay for children in their care. Improvement is defined as an increased discharge rate into permanent homes without a corresponding increase in re-entries and transfers to other agencies. As an agency demonstrates improvement compared with its own past performance, ACS returns to it all or a portion of the savings generated by reduced care day utilization. ACS also monitors re-entries and reduces the fiscal awards for agencies that exceed their own past re-entry rates. ACS must approve the agency's spending plan so the saved funds can be reinvested in enhanced foster care or preventive and aftercare services. The primary target population is children who are waiting to be adopted or reunified with their families -- a large percentage of the children in foster care.
ACS provides per diem costs for all foster care services delivered to children in the care of ACS contracted agencies. Under STAR, ACS assesses an agency's history and past performance on outcomes such as time to reunification, time to adoption, and likelihood of re-entry into foster care after discharge. ACS then projects the size and characteristics (in terms of special populations) of the agency's total caseload over the next five years. For each agency, ACS projects a set of discharge rates based on six case types that reflect the agency's past experience in moving children out of foster care and into permanent homes. The historical baseline was calculated on children in the system during 1993-1998, following them as far forward as possible to capture re-entries.
An agency's acceptable range of performance is calculated as the number of re-entries or transfers in the agency's historical average rate plus and minus 15 percent of that average. If an agency demonstrates a reduction in care days, there will be corresponding per diem savings that will be available to the agency for reinvestment, although if the agency exceeds the allowable number of re-entries or transfers, ACS deducts funds from the agency's reinvestment award. ACS then calculates how much money could be saved assuming a 10 percent improvement in discharge rates and days in care. Across all STAR providers, the potential savings in 2000 was $9 million; the actual savings was $8 million, with a reduction of 185,000 care days based on tracking 23,000 children. The potential savings for 2001 is $17 million. There is no penalty for agencies that do not reduce average length of stay, although they do not receive any savings.
Currently 40 out of 44 ACS providers participate in STAR. Initially 41 opted to participate, but one agency has closed. Three providers are too new to participate (STAR requires historical data), and one opted out on ethical grounds. Providers can apply to receive start-up funds based on their projected savings (each agency is eligible to apply for up to 50 percent of their projected savings). Last year 16 of the agencies applied and received a total of $1.1 million for starting up new services; the funds were used primarily for hiring staff such as housing specialists, parent mentors/advocates, and adoption/discharge expeditors. The downside is that if an agency receives start-up funds and does not achieve the expected savings, the agency has to pay back the funds.
Based on last year's performance data, preliminary results indicate that 5 agencies will probably have to repay their start-up funds.
During the first year of the initiative, ACS produced three performance reports, but it was only at the end of the year that a report was produced that presented final performance results. This year, ACS plans to produce quarterly reports. They are still working out what kind of data to give back to the agencies, and how often.
STAR is funded by federal, state, and city dollars. Reinvestment savings that are spent for IV-E-allowable purposes can be claimed; otherwise, only the state and city portion can be reinvested. ACS expects to spend the same amount of dollars under STAR that they would have otherwise, but agencies will provide more services and additional in-home aftercare and preventive services.
ACS has developed a management information system, STARDAT, that was implemented in June 2001. The system is accessed through a secure Internet site that stores data back to 1993 on each STAR provider. Providers can query the system to extract data (both STAR data and other types of data) for management and planning purposes.
There has not been a noticeable or differential impact on minority providers. The ACS provider contracts run for 9 years, so the list of providers has not changed. And agencies who did not do particularly well on the performance reports were not minority providers; in fact, several minority providers had large savings returns -- one received over $500,000 and one received $344,000.
In terms of STAR's impact on ACS, a department was created, the contract management unit, to implement and monitor STAR and other programs. That department has 9 staff. ACS anticipates that more changes to ACS will be coming, based on the reinvestment savings budgets due on 9/10, in which providers present their plans for using the funds. One lesson learned in the past year was that ACS will need to monitor the spending of the start-up funds; in the past year, providers did not always implement the changes they had received funds for.
STAR's impact on providers has been: (1) the agencies are thinking more creatively, knowing that there is a pool of money they can tap; (2) STAR has gotten across the message about the link between length of stay and funding, and that ACS is interested in reducing care days; and (3) the agencies are more attentive to using data to inform practice, since ACS is giving them a lot of information about their cases and asking them to look at how to improve outcomes.
STAR is not being formally evaluated. Outcomes are being monitored as described above, and ACS sponsors conferences about innovative practices.
Ohio’s title IV-E waiver demonstration was implemented in October 1997, and Franklin county’s initiative (part of the waiver) was implemented in July 1999. This initiative combines performance contracting and managed care contracts. Its goal is to reduce length of stay and increase flexibility of services.
The target population is all children and families with reports. When a case comes in, it is randomly assigned (a requirement of the waiver) to the public agency or to one of two managed care companies. The public agency is using performance bonuses and incentives linked to success. The two managed care organizations include the Ohio Youth Advocate Program (a full-service provider) and the Permanent Family Solutions Network (a collaborative of three large services providers). Currently the managed care organizations are serving about 17.5 percent of cases (1200 children out of 6300).
The contractors have a "no reject/eject" requirement for all children randomly assigned to them. They are required to provide intake, assessment, and case management for all cases, plus whatever services indicated by the treatment plan. Services that the contractors must make available include crisis intervention, homemaker, home health, parenting skills education, home-based services, transportation, outpatient and inpatient mental health, partial hospitalization for children, treatment for children who commit sexual abuse, substance abuse assessment and treatment, programming for children with developmental disabilities, assistance in accessing services, access to medical services for children, emergency aid for household expenses, protective day care, crisis placements, foster care services at all levels, residential treatment for children, intermediate residential programs for children, reunification services, independent living arrangements for adolescents, and linkage to community services when families are reunified.
The public agency is using a staff "bonus" system as incentive to increase permanency in cases handled by public agency staff. They receive yearly raises based on success at achieving outcome goals including visits and recidivism. An interagency team (the Intersystem Program) is used to develop wraparound services for children in the care of the public agency.
The primary payment to the contractor is made on a Continuum of Services (COS) basis (i.e., case rate), which is $23,074. This covers all services provided to the child and family. Partial payments are made at three points: 50 percent is paid at referral, 40 percent is paid at three months from the referral, and 10 percent is paid at case closing. When the costs of a case exceed four times the COS payment amount, with prior written approval the County begins paying 50 percent of the direct service costs excluding the costs of case management.
The contractors utilize case management, outcomes monitoring, and service coordination. Contractors are responsible for all services needed for up to six months after the case is closed. After that, contractors can be paid in "fractional" payments after case closure. Risk corridors were established as follows: In the first year, the contractors are responsible for the first 5 percent of costs that exceed revenues and may retain the first 5 percent of "excess" revenue. In the second year, the risk corridor rises to 10 percent. In the third and subsequent years, the corridor is 15 percent. The next 10 percent of excess costs or revenues each year will be shared by the contractors and the County equally up to 5 percent each. The County is responsible for excess of costs beyond the corridors.
The County's quality assurance department monitors the contractors, and service provision is monitored against indicators of increased risk to children and expectations for client contact and service documentation. Outcomes are monitored, and each outcome indicator has a goal threshold. Client data are entered into the MIS daily. Franklin County is part of the IV-E waiver, which is being evaluated by independent evaluators.
The Oklahoma Children’s Services initiative was begun in a limited area in 1989 and expanded statewide in 1992. The “backbone” of the program is Comprehensive Home-Based Services, with the objectives of bringing about reunification quickly for families with children in care; preventing family breakdown for intact families with children at risk of placement; and preventing disruption for youth in placement who are at risk of disruption. It focuses on preventive, supportive, and wraparound services, and has put resources into developing local capacity to provide services and enhancing community ownership of child welfare.
The initiative has a caseload of about 2,000 families and includes 12 contracts with 8 contractors, based on geographic area. The contractors do all case management, assessments, case planning, referrals, and service delivery. Funding is allotted to each district based on the number of children in care in that district, and limited by the amount the legislature appropriates. Annual contracts specify the funding amount and the number of children and families the funding is supposed to cover, and each contractor serves everyone referred. The state closely monitors contractor spending and services delivered, and can take funding away if it not used on services to families.
In Pennsylvania (with a State-supervised, county-administered system), Berks County piloted a fiscal reform initiative that operated from July 1997-February 2000. This initiative, Berkserve, was designed to implement managed care principles in the delivery of child welfare services. It was designed and implemented by the Laurel Group, a statewide group of about 15 child welfare agencies that decided to pilot their own managed care initiative to avoid having managed care requirements imposed by the State without provider input. The providers also wished to develop an efficient public-private partnership model that relied on a network of local agencies to provide services.
The design phase lasted about two years, with numerous meetings involving county commissioners and the provider agencies' boards, as well as a study completed by a consultant. The Laurel Group canvassed for counties to participate in the pilot and Berks County was selected. Concern, Inc., which was the largest provider agency in Berks County and one of the four Berks County providers involved in developing the Berkserve concept, became the lead agency.
Concern, Inc. is a 501(c)3 agency that provides foster care services through 10 offices located throughout eastern Pennsylvania and Maryland. It serves about 525 children per day, providing treatment foster care primarily for children with severe needs who would otherwise be institutionalized. Although most of the agency staff were not employed by the Berkserve initiative, as the lead agency a few Concern staff members spent a large amount of time and effort trying to make the initiative work. The agency ended up losing money in the process, about $1500 a month, which was an indication of the agency's level of commitment to Berkserve. The Laurel Group also committed resources to keep the initiative going and helped "navigate the politics.”
Referral into the Berkserve initiative involved utilizing an extensive set of protocols developed by the four local private agencies and the county child welfare agency. According to the program administrator, a great deal of effort and thought went into the protocols to decide "what's reasonable and what's possible" in developing service plans and delivering services. The protocols specified for each step in the process how long the task should take and who was responsible for completing the task.
The protocols in essence formed a decision tree for county intake workers to follow, which involved going through selection/admission criteria step by step. If an intake worker worked through the protocol and decided that a case was appropriate for Berkserve, the worker called the lead agency (Concern) and referred the child into the initiative. The protocol also indicated which services the child needed to receive. Then the lead agency made the arrangements for services to be delivered, either through the four private agencies or through the network of 12 local providers that Concern had already established. The lead agency provided administrative, case management, and utilization review functions. All services except inpatient hospitalization could be provided through the network; inpatient hospitalization had to be handled in the traditional way.
The service providers were paid fee-for-service. The lead agency was responsible for monitoring services and verifying that they had occurred. The providers invoiced Concern, who paid the providers and invoiced the State for the costs. The invoices included 3-4 percent of billable services as administrative costs, which was a pool of money set aside by the county for administrative services. Concern and Laurel each got a portion of that 3-4 percent.
The plan was to reimburse providers on a fee-for-service basis for their actual costs during the first year. In the second year, a risk corridor would be established -- providers would not make or lose more than 5 or 10 percent. Then in the third year, case rates would be implemented and there would be full risk on the part of the providers. However, the plan never progressed beyond the first step.
Another plan was to set performance goals and quality standards as they went along. In the first phase, they were analyzing the costs of providing services through the initiative compared with providing services the traditional way, as well as monitoring timeliness and safety. There was a mechanism designed to assess client feedback and satisfaction, but it was not utilized. The initiative was not evaluated.
Initially, the children eligible to be served through Berkserve were families that had at least one child in care and had been involved with the county child welfare agency less than six months (they wanted to test the initiative with families that had not been "contaminated" with system-wide experience). However, there were such a limited number of families being enrolled under those criteria that they opened the initiative up to any case. Throughout the 2-1/2 years of Berkserve's operation, only about 24 children were served through the initiative, with a group of comparison children served in the traditional way.
Throughout Berkserve's period of operation, there was a great deal of frustration with and resistance to the initiative within both the county child welfare agency and the providers. The decision tree process was complex and often difficult for provider staff to follow, and many county workers were resistant both because they had not been involved in the design of the protocols and they were afraid privatization would end their jobs. Turnover was high on both sides.
Although Berkserve eventually ceased operations, it did move the county agency along toward a collaboration with private provider, and the providers got a better understanding of the public agency's work. Also, the initiative involved establishing a computer network of providers, and that computer network has evolved into "E-Home," an electronic referral system that will provide a quicker and more efficient method of locating foster homes for children. Providers will post available resources, and the county agency will reserve placements on-line. Within two years, 95 percent of referrals will be made through E-Home.
Like many other states in the late eighties, Tennessee experienced a surge in the number of children entering care. This large influx of children eventually overburdened the foster care system and the state budget for children’s services. In response to the state legislature’s concerns about the quality of care that children were receiving and the escalating costs of providing services for the growing number of children entering care, a series of reform efforts were initiated to both reduce costs and improve care. Of those reform efforts, Tennessee’s Continuum of Care (CoC) has been one of the most successful. Currently, the state has 40 CoC contracts with private providers who serve 4,400 (38 percent) of the 11,500 children in the state’s custody.
CoC targets children who have serious emotional and behavioral problems or problems that are more moderate but disruptive to family functioning and school life. Prior to the implementation of CoC in 1995, children with these problems were placed in residential treatment and often remained in those facilities until they were discharged from state custody. The intent of CoC is to divert children from placement in residential facilities or to step them down to non-residential settings with services as quickly as possible. In order to accomplish this goal, under the new CoC system, private agencies that were previously reimbursed only for residential care can use funds flexibly to provide a variety of services in a range of treatment settings including residential facilities, therapeutic foster homes, regular foster care, and the child’s home of origin.
CoC provider’s reimbursement rate is no longer determined by where services are delivered, but rather the level of care that the child needs. Thus, private agencies with CoC contracts are reimbursed a per diem rate based on the level of care that the state determines is needed when a child first enters care irrespective of the placement setting. CoC uses a staggered reimbursement structure in which a provider delivering services to children with greater needs are reimbursed at a higher rate. Once a reimbursement rate is established for a particular child, CoC providers continue to receive that rate regardless of the setting where services are delivered. Hence, although the CoC maintains a per diem rate system rather than shifting to a case rate as is common to other managed care arrangements, flexible use of the per diem rate provides a financial incentive to deliver services in the least costly setting. Providers receive the established per diem reimbursement until the child is either discharged from care or the annual maximum reimbursement that is stipulated in the contract is reached.
CoC contracts include provisions that are intended to ensure provider accountability. To prevent providers from avoiding more difficult and costly cases and to encourage the timely discharge of children from the most expensive care settings, providers are limited to a maximum number of rejected referrals and are required to accept a minimum number of admissions each month. Furthermore, to discourage providers from prematurely discharging children to lower levels of care, CoC contracts stipulate that 80 percent of children be successfully maintained in their own home or other family home for nine months after discharge.
In addition to using funds more flexibly, CoC providers also have greater responsibility for case decisions. Although the public agency retains responsibility for protective investigations, initial removals, and recommendations to the court for adjudication into foster care, once a child is referred to CoC, the private provider has primary responsibility for planning and delivering all services. The role of the public agency caseworker is limited to the approval of case plans, goal changes, reunification, case closure, preparation of court documents, and oversight of provider performance.
The state has put in place several mechanisms to monitor CoC providers. All providers are licensed by the state and their licenses are subject to annual review. State caseworkers monitor CoC contracts and conduct quarterly physical plant evaluations. To monitor provider performance, the state requires providers to submit monthly statistical reports. These reports include the number of children entering and exiting the provider’s care, the number of children returned to their own home or placed in another family home, the number of children who remain in a family home for nine months, as well as the number of placements that disrupt. The state also conducts an annual financial and program audit of 30 percent of contracted providers.
Project PACE (Permanency Achieved through Coordinated Efforts) was initiated by the Texas State Legislature, which wanted the Texas Department of Protective and Regulatory Services to examine ways to increase the competition in the procurement process for child welfare services. After a series of discussions with policy makers and service agencies, Project PACE was developed.
The initiative targeted children in Fort Worth and the surrounding ten counties (not including Dallas). The target population consisted of all children in the foster care system who required more than the most basic services and their siblings. This was determined using a six point level of care scale (1 meaning minimal care and 6 meaning extended in-patient psychiatric services). The average LOC for a child in the PACE program was approximately a 3.6.
Under the PACE program, the Lena Pope Homes, based in Fort Worth, was given a contract to serve children who met the program criteria. They handled all of the case decision-making process and were responsible for developing a provider network to meet all service provision needs. Originally, Lena Pope was expected to serve 217 children at any one time, at the peak of this program, in late 1999, they were serving almost 600 children. For the entire two and a half years of the project, they had a total number of 1,400 children. They were paid a flat case rate and bore the full risk for any case expenses that exceeded that rate. The rate began at $72 a day and eventually rose to $77 a day.
The advantage that the PACE project gave to the Lena Pope Homes was increased flexibility in devising their own service provider network. LPH pursued this part of the project vigorously, expending a good deal of resources training the organizations in their network. They hired an outside consulting firm, Praesidium Inc., to help staff members identify risk factors quickly. One of the problems facing the Texas child welfare system was the difficulty of finding foster and adoptive parents. Drawing on expertise within the Ft. Worth business community, LPH conducted a poll and had some focus groups to find out why people were not interested in foster parenting and adoption and how to overcome some of the barriers that prevented people from becoming involved. Through this process they developed an enlarged pool of foster and adoptive parents. This is considered by the state and by the provider as one of the enduring legacies of the PACE project.
Project PACE started operations on September 1, 1998 and closed down at the end of March, 2001. The project ceased operations because Lena Pope homes was losing too much money servicing the children in their care. The financing of private agencies in Texas is set up so that the state covers approximately 90% of the program costs and the private agency raises funds to make up the remaining 10%. Because the PACE program became so large, with expenditures of more than a millions dollars a year, the Lena Pope Homes was faced with the task of raising more than a $100,000 per year in addition to their other fundraising obligations.
This program is being evaluated by the University of Texas School of Social Work. As of this writing, the results have not been made public.
The Children’s Administration of the Washington State Department of Social and Health Services (CA) initiated this demonstration project in an attempt to provide more services to children in the state child welfare system at home (if possible) and within their communities. In order to achieve this goal, the CA made blended, flexible funds available to cover the cost of services, which included both basic and specialized services. The target population for this initiative were children in the child welfare system who were between the ages of eight and seventeen and in need of high-cost mental health and special education services.
The demonstration project was active in one region of the state (Spokane County). The CA had a contract with the Regional Support Network (RSN) to provide a wide range of residential, in-home, and follow-up services.
The RSN established a sub-contract with a local provider to manage the actual service provision. This provider then developed its own sub-contract with another agency to facilitate the Individualized and Tailored Care (ITC) teams. The ITC teams consisted of staff from the state, county, and providers where treatment plans were developed. These teams involved the foster parents and, where appropriate, family members in the discussions. The local provider had hoped that by sub-contracting out the facilitation of the ITC teams it could make case management more efficient and cost-effective. However, it was not able to achieve these efficiencies and its services sometimes overlapped with those of the sub-contractor.
This demonstration project was terminated after six months in November 2000. The local provider assumed the financial risk and during the course of the project it lost approximately $250,000. The RSN initially received $2,400 per child per month but this was quickly raised to $2,550 once it became clear that the sub-contractors were losing large sums of money. However, the local provider estimated that the services they were providing cost $4,800 per month. One problem that was highlighted in the final evaluation by the state was that the Children’s Administration believed that the RSN would free up some internal funds to complement the other flexible monies available for the children but the RSN denies that they ever agreed to do this. The evaluation notes that there was “insufficient communication” between state and county administrators and that this adversely affected the achievement of program goals.
In 1998, the state of Wisconsin (previously entirely a county-administered child welfare system) took over child welfare in Milwaukee County. The purpose was to reform child welfare in the county to ensure the safety of children in care, achieve permanency as quickly as possible, and work cooperatively with the community to better serve children and families.
The county was divided into five service regions, with a contract in each region for a lead agency (called a “partner”). State workers do intake and investigative reports of child abuse and neglect, while contractors provide case management and develop and maintain networks of providers that provide services to children in care as well as families with children at-risk of placement. Contractors also track services used, authorize services, and arrange for payment for services.
Services are provided through the Safety Services Program to prevent placement (somewhat similar to family preservation services), and through Wraparound Milwaukee to support children in care. Overall about 6,000 children are in out-of-home care in Milwaukee County, and thus receiving case management from contractors, while about 500 families are receiving Safety Services and about 200 children in care are receiving wraparound services. Contractors receive a global payment (like a block grant) to provide case management for all children referred, and they receive a case rate of about $1200 per month for four months to provide Safety Services. Their funding is flexible – contractors are expected to use the dollars in ways that keep children safe. Wraparound Milwaukee services are paid for through mental health (Medicaid) and child welfare funding. Contractors can keep savings and re-invest them in services.
The Bureau of Milwaukee Child Welfare emphasizes community ownership and its accountability to the community. For example, when hiring new social workers, every interview has a community representative on the interview panel. It has focused on building capacity within neighborhoods in partnership with the community. The legislation establishing state responsibility also created a local partnership council that serves in an advisory role to the Bureau and ensure community input in service development, design, and delivery.
An evaluation is in process, but there is already a sense that the Safety Services component has reduced the rate of entries into care, that length-of-stay for new families has shortened, and that Milwaukee contributed to a drop in the state’s rate of child abuse and neglect.
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