Child Welfare Finance Going Forward: Notes from The Roundtable

Just before Congress called it a summer, lead staffers for two Senate leaders on child welfare put together what amounted to a rapid-fire pitch meeting for child welfare policy ideas.

Kathy Nuebel and Libby Whitbeck – staffers for Sens. Chuck Grassley (R-Iowa) and Mary Landrieu (D-La.) – heard 17 different proposals on child welfare financing and other legislative agendas.

Youth Services Insider observed from afar, and man, a lot was said in a short amount of time. The event was, in our opinion, an effort by the leaders to draw out the common denominators that exist in the thinking among many parties. Behind closed doors, the conversation will focus on how to pay for any of it.

We certainly wouldn’t presume to speak for Whitbeck and Nuebel. But following are a few themes that popped out to us during the session:

Everybody Hates Income Eligibility

YSI isn’t even sure this qualifies as news anymore, but it’s worth pointing out that at least half the presenters called for an end to the link between Title IV-E eligibility and the antiquated income test used to determine which kids are eligible for federal foster care payments.

IV-E is a multi-billion dollar entitlement that shares the cost of foster care services with states, but only for youths taken from families that meet an income test established in 1996. As we stated in June of 2013, the eligibility test is friendless.

From presenter Rob Geen, representing the Annie E. Casey Foundation:

“The de-link has been held hostage over comprehensive reform. From a political perspective, we have to get rid of it. We spend $186 million just determining eligibility. We could get 1,000 ideas at this table on how to spend that. It’s idiotic and doesn’t belong in the system.”

Tell us how you really feel! Geen indirectly touched on an interesting pressure point with the income eligibility: politics. In YSI’s opinion, it would be pretty compelling to launch an advocacy campaign that essentially posed the question:

“How can politicians say one abused child is worth saving and another isn’t, based on how much their parents make?”

Get CNN interested, maybe an op-ed from a big name? Maybe Daily Show bites on the absurdity of the income test? Not sure there’s a Member of Congress among the 535 who could figure out a way to oppose de-linking in that instance.

But taking that tack puts you on the offensive in an effort to shame Congress into acting, while you also need at least some of their support to reform the more complex parts of child welfare financing and policy.

There is a practical concern on de-linking, and that is what happens to the federal match rate. Dropping the income test will dramatically increase the exposure of the federal entitlement, and there is zero chance in this fiscal climate that the match rate will just stay the same as this occurs.

Is there a uniform reduction in the match rate applied to all states? Or will match rates be individually pegged to some set of criteria in each state? This will be the question when the IV-E eligibility’s time finally comes.

Left Unsaid

Here are two phrases we did not hear come up once:

  • Entitlement
  • Differential Response (DR)

There was no discussion about the concept of turning the IV-E entitlement into a more flexible, but capped, mandatory funding line. The notion of expanding the allowable uses of IV-E money was certainly discussed. Casey Family Programs Public Policy Director Christine Calpin made two recommendations to that effect:

“Federal funding should be available for services for any child who meets the definition of risk in a manner that promotes and incentivizes investments that achieve better outcomes.”

“Federal funding for child welfare should allow states to address their unique challenges and issues while encouraging coordination with other programs.”

But there was no real back-and-forth about “flex versus entitlement,” which is the third rail of the child welfare finance debate.

DR, which involves the offer of voluntary services to parents without formal system involvement and monitoring, has been in the news quite a bit in recent months, somewhat in part to YSI’s boss and Chronicle Publisher Daniel Heimpel.

Casey Family Programs, a major proponent of differential response, presented at the roundtable discussion but made no mention of the strategy in its recommendations. Calpin did champion the IV-E waiver demonstrations, and some of the running waiver projects do include differential response.

Residential Distinctions

Long before this roundtable, Annie E. Casey Foundation and the Jim Casey Youth Opportunities Initiative began advocating for a reform package built around the concept of limiting the amount of time and placement options that federal IV-E dollars would support.

To their credit, the foundations have been very forthright about discussing critiques of their plan, and Geen asked attendees and the staffers for suggestions on how to improve or amend the plan.

One of the sticky points in the plan is its restrictions on federal support for congregate care, including the elimination of IV-E funding for:

  • All shelter care
  • Group care to house youths under 13
  • Group care beyond 12 months for teenagers

Two interesting contributions to the dialogue on this, from the roundtable. First, the plan received tempered support from two congregate care providers: National Crittenton Foundation and Children’s Home Society of America.

“Our agencies acknowledge that group homes are overused, and we’re open to discussions to restrict non-therapeutic” group care, said Mary Bissell, a policy advisor to Crittenton. The exception, she said, must be to draw a line between group care in general and residential services built around targeted treatment.

Said Bissell: “We want to ensure that any federal incentives to reduce over-reliance on group care do not unintentionally…restrict residential treatment options for those children who need more intensive stabilization and care in order to return to their families and communities.”

The second point came from Joe Kroll, leader of the North American Council on Adoptable Children, who said he doesn’t think that IV-E availability has any connection to state decisions to use group care.

After looking at federal data on the subject, Kroll said, is that there was often “no decrease in congregate care” noted among states that had seen a drop in IV-E funding over recent years.

“In Colorado, which has the highest rate of congregate care, the percent of youth in congregate care exceeds the percentage who are IV-E eligible,” Kroll said.

Health Placement Versus Child Welfare Placement

One of the most interesting proposals to YSI came from Joy Midman of the National Association for Children’s Behavioral Health. Midman’s message to the staffers: It’s time to make child welfare and Medicaid get on the same page.

“The gap widens with every discussion of reforming either program without considering how both should work together for children and families,” Midman said.

Midman called for the Department of Health and Human Services to develop a five-to ten-year “child welfare-mental health workforce” development plan. Among the issues in need of resolution: “common terminology defining child welfare and mental health to distinguish between placements, settings and services.”

We found that concept interesting. Establishing a uniform way to classify certain placements as related to mental health, or really just health in general, might be the best way to make a limitation on group care work.

If needed services for mental or physical reasons moved a foster youth from a “child welfare placement” to a “health placement” designation of some sort, that would shut off the IV-E tap and turn on Medicaid to deal with group-care needs. And because Medicaid managers would not want to bear the expense of long stays in health-related bed space, there would be little appetite for permitting youths to stay in group settings for long periods of time.

Social Services Block Grant

There were two schools of thought expressed on the subject of SSBG, a pot of money that many states use for child protection services and other child welfare-related services.

First school: fight for SSBG to keep its current $1.7 billion mark with a re-write of the allowable uses of the money. It’s a valuable pot of flexible money in a climate where IV-E money and other child welfare resources are eroding.

Second school: SSBG funds should be carved into small, dedicated funding streams right now, because the block grant itself is a dead man walking. It has been zeroed out by House Republicans for three straight fiscal years, and it’s only a matter of time before it is either whacked or eliminated.

“Instead of a concern about flexibility, you should be concerned about the money being there at all,” said Senate Finance Committee advisor Becky Schipp.


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John Kelly, Editor in Chief, The Chronicle of Social Change
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