State Innovations in Child Welfare Financing. Kansas: Public-Private Partnership


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.

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