State Innovations in Child Welfare Financing. Pennsylvania: Berkserve


In Pennsylvania (with a State-supervised, county-administered system), Berks County piloted a fiscal reform initiative that operated from July 1997-February 2000. This initiative, Berkserve, was designed to implement managed care principles in the delivery of child welfare services. It was designed and implemented by the Laurel Group, a statewide group of about 15 child welfare agencies that decided to pilot their own managed care initiative to avoid having managed care requirements imposed by the State without provider input. The providers also wished to develop an efficient public-private partnership model that relied on a network of local agencies to provide services.

The design phase lasted about two years, with numerous meetings involving county commissioners and the provider agencies' boards, as well as a study completed by a consultant. The Laurel Group canvassed for counties to participate in the pilot and Berks County was selected. Concern, Inc., which was the largest provider agency in Berks County and one of the four Berks County providers involved in developing the Berkserve concept, became the lead agency.

Concern, Inc. is a 501(c)3 agency that provides foster care services through 10 offices located throughout eastern Pennsylvania and Maryland. It serves about 525 children per day, providing treatment foster care primarily for children with severe needs who would otherwise be institutionalized. Although most of the agency staff were not employed by the Berkserve initiative, as the lead agency a few Concern staff members spent a large amount of time and effort trying to make the initiative work. The agency ended up losing money in the process, about $1500 a month, which was an indication of the agency's level of commitment to Berkserve. The Laurel Group also committed resources to keep the initiative going and helped "navigate the politics.”

Referral into the Berkserve initiative involved utilizing an extensive set of protocols developed by the four local private agencies and the county child welfare agency. According to the program administrator, a great deal of effort and thought went into the protocols to decide "what's reasonable and what's possible" in developing service plans and delivering services. The protocols specified for each step in the process how long the task should take and who was responsible for completing the task.

The protocols in essence formed a decision tree for county intake workers to follow, which involved going through selection/admission criteria step by step. If an intake worker worked through the protocol and decided that a case was appropriate for Berkserve, the worker called the lead agency (Concern) and referred the child into the initiative. The protocol also indicated which services the child needed to receive. Then the lead agency made the arrangements for services to be delivered, either through the four private agencies or through the network of 12 local providers that Concern had already established. The lead agency provided administrative, case management, and utilization review functions. All services except inpatient hospitalization could be provided through the network; inpatient hospitalization had to be handled in the traditional way.

The service providers were paid fee-for-service. The lead agency was responsible for monitoring services and verifying that they had occurred. The providers invoiced Concern, who paid the providers and invoiced the State for the costs. The invoices included 3-4 percent of billable services as administrative costs, which was a pool of money set aside by the county for administrative services. Concern and Laurel each got a portion of that 3-4 percent.

The plan was to reimburse providers on a fee-for-service basis for their actual costs during the first year. In the second year, a risk corridor would be established -- providers would not make or lose more than 5 or 10 percent. Then in the third year, case rates would be implemented and there would be full risk on the part of the providers. However, the plan never progressed beyond the first step.

Another plan was to set performance goals and quality standards as they went along. In the first phase, they were analyzing the costs of providing services through the initiative compared with providing services the traditional way, as well as monitoring timeliness and safety. There was a mechanism designed to assess client feedback and satisfaction, but it was not utilized. The initiative was not evaluated.

Initially, the children eligible to be served through Berkserve were families that had at least one child in care and had been involved with the county child welfare agency less than six months (they wanted to test the initiative with families that had not been "contaminated" with system-wide experience). However, there were such a limited number of families being enrolled under those criteria that they opened the initiative up to any case. Throughout the 2-1/2 years of Berkserve's operation, only about 24 children were served through the initiative, with a group of comparison children served in the traditional way.

Throughout Berkserve's period of operation, there was a great deal of frustration with and resistance to the initiative within both the county child welfare agency and the providers. The decision tree process was complex and often difficult for provider staff to follow, and many county workers were resistant both because they had not been involved in the design of the protocols and they were afraid privatization would end their jobs. Turnover was high on both sides.

Although Berkserve eventually ceased operations, it did move the county agency along toward a collaboration with private provider, and the providers got a better understanding of the public agency's work. Also, the initiative involved establishing a computer network of providers, and that computer network has evolved into "E-Home," an electronic referral system that will provide a quicker and more efficient method of locating foster homes for children. Providers will post available resources, and the county agency will reserve placements on-line. Within two years, 95 percent of referrals will be made through E-Home.

View full report


"report.pdf" (pdf, 545.25Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®