Year-End Spending Bill Includes Hundreds of Millions for Family First Act

The Family First Act was signed into law in February 2018, took effect in October 2019.

The nearly 2,000-page spending bill released yesterday, which is expected to be approved by both chambers of Congress, will include legislation that seeks to incentivize and ease the path for states on implementation of the Family First Prevention Services Act.

Assuming the spending bill passes and President Trump signs it, which would all likely happen before the holidays, the provisions of a compromised Family First Transition Act will provide a general implementation fund, fill in losses for states coming off of child welfare waivers, and install delays in tight restrictions on services meant to help prevent the use of foster care.

The act will provide “needed resources” for the “transition to a prevention-focused infrastructure ​as laid out in the Family First Prevention Services Act,” said Ilana Levinson, senior director of government relations for the Alliance for Strong Families and Communities.

The Family First Act, signed into law in 2018, expands the Title IV-E entitlement – which currently only funds foster care and adoption services – to include efforts at preventing the use of foster care in some child welfare cases. This will be known as “IV-E Prevention,” and the list of fundable services is limited to substance abuse treatment, mental health interventions and in-home parenting programs.

The law also limits IV-E funds for placing foster youth in group homes and other “congregate care” settings. States will only be able to tap into IV-E for two weeks of funding for those placements, with exceptions for those that serve pregnant/parenting teens, youth older than 18, youth at risk of sex trafficking, and youth with acute health needs.

Both the front-end funds, and the group care limits, took effect in October of this year.

States were given the right to delay the effect of the limits on congregate care through fiscal 2021, but would forfeit the ability to draw down the new foster care prevention funds during such a delay. Thirty-nine states indicated plans to delay for at least a year, and 11 announced an intention to implement Family First in its first year. Thus far, only Washington, D.C. and Utah have received the necessary approval to draw IV-E prevention funds.

The hope among champions of the legislation is that the new sweeteners included in the spending bill – which you can find starting on page 1,483– will help move more states off the bench and into the game. Here is Youth Services Insider’s breakdown of the new provisions as they are seen in this spending bill…

Family First Fund

A $500 million appropriation, distributed proportionately to all states to support the implementation of the act. There aren’t any specifics written into the bill on what the money can be used for, but our guess is the main needs among states will be:

  • Updating case management and information systems to include Family First elements.
  • Recruiting more foster parents, particularly therapeutic caregivers.
  • Helping some group care providers establish themselves as qualified residential treatment programs (QRTP), an exception in Family First to the limits on congregate care funds.

YSI’s initial thought was that the executive branch, through the U.S. Children’s Bureau wing of Health and Human Services (HHS), might lay down some specifics about what this fund can be used for. But the money is actually coming from the Department of the Treasury, so it’s not actually under the purview of HHS.

Evidence-Based Standards

The front-end of Family First is restricted to services that are rated by a clearinghouse to have one of three tiers of evidence behind them: “Well-Supported,” “Supported” or “Promising.”Under the current rules of the law, 50 percent of spending under IV-E Prevention must be for things in the well-supported basket.

The transition provisions kick this can down the road a bit. By 2022, states would have to show 50 percent of spending on either Well-Supported or Supported. And by 2024, it would winnow down to 50 percent of just Well-Supported.

This is critical because the U.S. Children’s Bureau has already told one state that the only expenditures that count toward the “50 percent rule” will be IV-E expenditures. But the bureau has also made clear that IV-E will be a “payer of last resort” behind Medicaid.

So in a state where Medicaid will pay for a lot of Well-Supported programs, it will be tough to demonstrate enough IV-E spending on those services to be compliant with Family First. This change punts that problem down the road a few years while, hopefully, the evidence base is strengthened in child welfare and more programs can earn the prized Well-Supported tag.

The spending bill also includes a one-time, $2.75 million increase for the clearinghouse itself, which presumably will help to ratchet up the speed of its initial review process.

Making Waiver States (Almost) Whole

This is the most complicated of the changes. While IV-E is currently limited to covering foster care and adoption, many states have obtained a waiver that permits more flexibility to spend the funds on services that wouldn’t normally be eligible for the money, or on children who would not be eligible due to an income test attached to IV-E.

Many of these states, fearing a drop-off in funding levels under Family First, have been fervently pushing for a two-year extension on waivers, which all expire in September. There is a bill in both chambers that would do this, but it does not appear to have traction.

The changes in this spending bill would not extend the waivers, but it offers payments to make up most of any losses that the states could demonstrate. The bill would guarantee 90 percent of waiver funds for fiscal 2020, and 75 percent of the funds for fiscal 2021.

There are a few rules and caveats. States cannot factor in any change to their waiver made after August of this year in calculation. And the make-up funds must go to the areas of the state that operated under a waiver, in proportion to the amount that jurisdiction has reportedly lost as a result of the waiver’s end.

The funds under the waiver sweetener will remain available for disbursement for four fiscal years.

In addition to the substantive changes around Family First implementation, the spending bill also includes a much-deserved honor for MaryLee Allen, the veteran child welfare advocate who passed away this year after a brief battle with cancer. It would change the name of the Promoting Safe and Stable Families Program to the MaryLee Allen Promoting Safe and Stable Families Act Program.

The Family First Transition Act included in the spending bill was introduced in the Senate Finance Committee by Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.). In the House Ways and Means Committee, the bill was introduced by Reps. Jackie Walorski (R-Ind.) and Danny Davis (D-Ill.).

It is a narrowed-down version of a bill originally drafted in the spring by Sens. Debbie Stabenow (D-Mich) and Sherrod Brown (D-Ohio). That version would have also eliminated an income test that determines which youth in foster care get federal funding and which do not. That income standard has not been updated since 1996, and has contributed to a steady decline in the number of youth in care who are covered by federal foster care payments.

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