Florida’s IV-E Waiver Hit is a Fraction of What Was Feared

This month, a slate of federal waivers offering states flexibility on child welfare funds came to an end. Many of the big child welfare systems with waivers have forecasted big cuts to the federal supply of dollars to their budgets as a result.

But in at least one of those states – Florida, home to the third largest foster care population in the country – those claims appear to have been overstated. After initially predicting a funding hit of more than $100 million, the state appears to have figured out a plan to almost entirely neutralize the loss of the waiver.

For the uninitiated: Title IV-E is the federal entitlement through which states have traditionally received funds for foster care and adoptions. And since 1996, states have been able to obtain IV-E waivers to create more flexibility in how they spend the money.

At first, the waivers were pegged to measured projects: guardianship programs for relatives, or substance abuse treatment for parents. But in 2005, Florida got a statewide waiver that gave it full flexibility with a capped allocation of dollars. The state has touted the use of this waiver to, among other things, build up a strong network of prevention services.

In the year leading up to the waiver’s expiration, the Florida Department of Children and Families (DCF) – which saw the number of youth in its care jump from 18,000 in 2013 into the mid-20,000s in recent years – announced that the shift back to regular rules would cost it $120 million, about a fifth of its budget.

This figure was echoed in local media op-eds as recently as the end of September, the last month before all IV-E waivers expired.

“When the waiver expires – in just days – this flexibility and, likely, the outcomes that come along with it, stops,” said Laura Kolkman, chair of the state board of directors for the Children’s Home Society of Florida, in an op-ed published by the Pensacola News Journal on September 29. “Bottom line: Without action, $120 million in federal funding is at risk for Florida, and the fate of Florida kids will be uncertain.”

Youth Services Insider dug around to see what exactly the source of the loss was. Turns out, by the time we got into it, the state had already marked down the expected gap to $90 million. And then it amassed a plan – called the Path Forward Initiative – that made up for the loss. The goal of the initiative was “expanding the IV-E footprint” of Florida.

Per YSI’s conversations with DCF, and review of a presentation by DCF consultant Melissa Jaacks, here is how a $120 million gap went to zero.

New State Spending: The state legislature committed some additional money to DCF’s budget. This funding was described to YSI by DCF spokesperson DaMonica Smith as “$20 million in recurring state general revenue.”

Extended Foster Care: Florida has permitted foster youth to remain in care until age 21 since 2013, but it has been a completely state-funded program. Since the passage of the Fostering Connections to Success and Increasing Adoptions Act in 2008, states have been able to receive IV-E reimbursement for older youth in care. But in order to tap into IV-E, the plan for extended foster care had to include certain guarantees for services and protections for youth.

So far, 27 states have received approval for an IV-E extended care plan. Florida aims to become the next, and estimates that this will bring in about $7 million in federal funding.

Support for Relatives: The Fostering Connections Act also permitted states use of IV-E to help pay for guardianship assistance programs (GAP), where a relative or fictive kin becomes the legal and custodial caretaker without formally adopting a child in foster care. Florida is one of just 14 states without an approved GAP plan, and is now moving to finalize one and steer more relative caregivers into guardianship arrangements. Expected federal revenue: $20 million.

Candidates for Foster Care: The Family First Prevention Services Act, which took effect this month, will for the first time allow IV-E services to be spent on services aimed at families with a child or children who are candidates for foster care, meaning they are at “imminent risk” of removal without some intervention.

But while IV-E services used to be limited to foster care and adoption, states have long been able to receive matching IV-E funds for administrative costs related to candidates for foster care. And Jaacks said in her Path Forward presentation that the state “expects that practically 100 percent of our in-home population will meet the definition.”

Expected federal revenue: $40 million. And when Family First is implemented in Florida – likely in 2021 – it could see another bump in funding for this group.

IV-E Eligibility: States can only draw down IV-E funds for foster care if the child is deemed “IV-E eligible,” and the primary metric of eligibility is the income of the caregivers he or she is taken from. If the parents meet the standard of poverty from 1996, the child can be claimed on for federal dollars.

We had heard from some close to Florida child welfare that this was going to be the biggest administrative nightmare for DCF when the waiver ended. The state didn’t have to determine eligibility to claim dollars under the waiver, and there probably weren’t a lot of staff around from pre-2005 that had experience doing eligibility determinations.

But after assessing its caseload this year, Jaacks said, DCF believes that 68 percent of its foster care population is IV-E eligible, and that with a better process it could boost the rate to 72 percent. Either of those rates would put Florida at the top of the pile, per IV-E penetration rates provided for fiscal 2016 by Child Trends.

Expected federal revenue: $10 million.

Not everyone is convinced that this plan is foolproof. YSI has heard from multiple sources in Florida that DCF has not been in the business of determining candidacy or IV-E eligibility for a long time, and that might challenge the agency’s ability to maximize revenue quickly. Others wonder if the plan is simply one made with rose-colored glasses.

“We agree that there have been tremendous efforts of the part of [DCF] and community based care providers to close the gap in a post-waiver environment,” said Andry Sweet, CEO of  Children’s Home Society of Florida. But “given the substantial change and unknowns facing Florida in this transition period…we remain concerned about the projections.”

So if all goes according to plan here, the state might have managed to dodge any major fiscal hit from the end of its waiver, while probably also shifting some relative caregivers toward more financial support. And some other systems under a waiver can probably take a lesson in that it seems to have accomplished much of this by just availing itself of already existing IV-E services that any state can access.

But that is not the full story. Florida used its waiver to cover foster care costs for kids who weren’t IV-E eligible, to help its provider network lower caseloads, and to stand up prevention services aimed at working with families before maltreatment occurred, or at least before foster care became necessary. Just because these moves rendered the end of the waiver fairly cost neutral, it is still possible that what gets funded will change.

It will be interesting to see what programs or services, if any, are cut back or eliminated as DCF moves out of the waiver. Because so much of Florida’s child welfare system is carried out by private providers, with different regions offering a varying array of family preservation services, that could be fairly difficult to ascertain.

“Children are on the other end of this equation, and we don’t want to jeopardize any services to children that were available before the waiver expired,” said Sweet.

Children’s Home Society, along with providers in agencies from a number of states with IV-E waivers, have been pushing for federal legislation that would provide a bridge for waiver states to better prepare for the shift from to the new rules under the Family First Prevention Services Act. Their preferred vehicle is a two-year extension, but the more likely federal help to pass Congress will be a transition bill that will guarantee fiscal assistance to make up for demonstrable losses in waiver states.

But for the short term, Florida appears poised to move past the waiver era without a crippling hit to its child welfare budget.

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John Kelly
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John Kelly is editor-in-chief of The Chronicle of Social Change.