New Bill Offers Sweetener to Waiver States on Family First Act

The Family First Act was signed into law in February 2018, and takes effect in October 2019

A bill greasing the skids to help states move quicker on the Family First Prevention Services Act is expected to be introduced as early as this week, Youth Services Insider has learned.

As the fiscal year ends, the two big provisions of the Family First Act take effect. The law 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 funds for those placements, with exceptions for those that serve pregnant/parenting teens, youth over 18, youth at risk of sex trafficking and youth with acute health needs.

States are allowed to delay the limits on congregate care through 2021, but must forgo the IV-E prevention funds if they do. Based on our request for information from each state, The Chronicle of Social Change expects 36 states to seek a delay and 14 to implement Family First. But as of last week, only four systems had submitted the required plan for implementation to the Children’s Bureau: Arkansas, Kentucky, Utah and Washington, D.C.

The bill is a pared-down version of the Family First Transition and Support Act, introduced in both chambers this year mostly by Democrats with some Republican support. The skinny version is expected to include three major provisions aimed at enticing quicker movement on Family First…

Waiver State Sweetener: 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 either services, or kids, who wouldn’t normally be eligible.

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.

This new 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.

Mark Mecum, CEO of the Ohio Children’s Alliance, said he believed the proposal would address Ohio’s concerns as a waiver state.

“The Ohio Children’s Alliance enthusiastically supports it,” Mecum said of the plan, in an e-mail to Youth Services Insider. “The legislation will support states, including Ohio, transition from our Title IV-E waivers to the new Family First landscape. [It] also provides Family First transition funding to all states which is absolutely critical to gear up for Family First and be ready to implement it successfully.”

One-time Flex Fund: A $500 million appropriation, distributed proportionately to all states to support implementation of the act. The outline YSI saw doesn’t include any details on what is allowable for this fund, and the full bill hasn’t been introduced. We’d assume some uses states might need help with include:

  1. Updating case management and information systems to include Family First elements.
  2. Recruiting more foster parents, particularly therapeutic caregivers.
  3. 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.

Evidence-Based Standards: This bill will delay a rule that requires states to spend half of their Family First foster care prevention funds on programs with the highest, hardest-to-achieve rating of effectiveness.

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.

But the guidance on Family First has made IV-E a “payer of last resort” behind Medicaid, a much larger health care entitlement program serving low-income individuals and families. That means if Medicaid will pay for a service that’s deemed to be “Well-Supported,” Medicaid must pay for it.

The problem there is, the Children’s Bureau has already told one state that the only expenditures that count toward the “50 percent rule” will be IV-E expenditures. 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 to be compliant with Family First.

The transition bill would delay the 50 percent rule until 2022. Then, for 2022 and 2023, states would have to show 50 percent of spending was on Well-Supported or Supported.

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