State Innovations in Child Welfare Financing. New York City: STAR (Safe and Timely Adoptions and Reunifications) Program


This initiative, implemented in April 2000 by the city’s Administration for Children’s Services (ACS), provides flexible dollars that agencies can allocate to a broad array of services to achieve timely permanency for children in placement. Agencies can obtain flexible dollars if they are able to show improvements in the length of stay for children in their care. Improvement is defined as an increased discharge rate into permanent homes without a corresponding increase in re-entries and transfers to other agencies. As an agency demonstrates improvement compared with its own past performance, ACS returns to it all or a portion of the savings generated by reduced care day utilization. ACS also monitors re-entries and reduces the fiscal awards for agencies that exceed their own past re-entry rates. ACS must approve the agency's spending plan so the saved funds can be reinvested in enhanced foster care or preventive and aftercare services. The primary target population is children who are waiting to be adopted or reunified with their families -- a large percentage of the children in foster care.

ACS provides per diem costs for all foster care services delivered to children in the care of ACS contracted agencies. Under STAR, ACS assesses an agency's history and past performance on outcomes such as time to reunification, time to adoption, and likelihood of re-entry into foster care after discharge. ACS then projects the size and characteristics (in terms of special populations) of the agency's total caseload over the next five years. For each agency, ACS projects a set of discharge rates based on six case types that reflect the agency's past experience in moving children out of foster care and into permanent homes. The historical baseline was calculated on children in the system during 1993-1998, following them as far forward as possible to capture re-entries.

An agency's acceptable range of performance is calculated as the number of re-entries or transfers in the agency's historical average rate plus and minus 15 percent of that average. If an agency demonstrates a reduction in care days, there will be corresponding per diem savings that will be available to the agency for reinvestment, although if the agency exceeds the allowable number of re-entries or transfers, ACS deducts funds from the agency's reinvestment award. ACS then calculates how much money could be saved assuming a 10 percent improvement in discharge rates and days in care. Across all STAR providers, the potential savings in 2000 was $9 million; the actual savings was $8 million, with a reduction of 185,000 care days based on tracking 23,000 children. The potential savings for 2001 is $17 million. There is no penalty for agencies that do not reduce average length of stay, although they do not receive any savings.

Currently 40 out of 44 ACS providers participate in STAR. Initially 41 opted to participate, but one agency has closed. Three providers are too new to participate (STAR requires historical data), and one opted out on ethical grounds. Providers can apply to receive start-up funds based on their projected savings (each agency is eligible to apply for up to 50 percent of their projected savings). Last year 16 of the agencies applied and received a total of $1.1 million for starting up new services; the funds were used primarily for hiring staff such as housing specialists, parent mentors/advocates, and adoption/discharge expeditors. The downside is that if an agency receives start-up funds and does not achieve the expected savings, the agency has to pay back the funds.

Based on last year's performance data, preliminary results indicate that 5 agencies will probably have to repay their start-up funds.

During the first year of the initiative, ACS produced three performance reports, but it was only at the end of the year that a report was produced that presented final performance results. This year, ACS plans to produce quarterly reports. They are still working out what kind of data to give back to the agencies, and how often.

STAR is funded by federal, state, and city dollars. Reinvestment savings that are spent for IV-E-allowable purposes can be claimed; otherwise, only the state and city portion can be reinvested. ACS expects to spend the same amount of dollars under STAR that they would have otherwise, but agencies will provide more services and additional in-home aftercare and preventive services.

ACS has developed a management information system, STARDAT, that was implemented in June 2001. The system is accessed through a secure Internet site that stores data back to 1993 on each STAR provider. Providers can query the system to extract data (both STAR data and other types of data) for management and planning purposes.

There has not been a noticeable or differential impact on minority providers. The ACS provider contracts run for 9 years, so the list of providers has not changed. And agencies who did not do particularly well on the performance reports were not minority providers; in fact, several minority providers had large savings returns -- one received over $500,000 and one received $344,000.

In terms of STAR's impact on ACS, a department was created, the contract management unit, to implement and monitor STAR and other programs. That department has 9 staff. ACS anticipates that more changes to ACS will be coming, based on the reinvestment savings budgets due on 9/10, in which providers present their plans for using the funds. One lesson learned in the past year was that ACS will need to monitor the spending of the start-up funds; in the past year, providers did not always implement the changes they had received funds for.

STAR's impact on providers has been: (1) the agencies are thinking more creatively, knowing that there is a pool of money they can tap; (2) STAR has gotten across the message about the link between length of stay and funding, and that ACS is interested in reducing care days; and (3) the agencies are more attentive to using data to inform practice, since ACS is giving them a lot of information about their cases and asking them to look at how to improve outcomes.

STAR is not being formally evaluated. Outcomes are being monitored as described above, and ACS sponsors conferences about innovative practices.

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