State Innovations in Child Welfare Financing. Texas: Project PACE


Project PACE (Permanency Achieved through Coordinated Efforts) was initiated by the Texas State Legislature, which wanted the Texas Department of Protective and Regulatory Services to examine ways to increase the competition in the procurement process for child welfare services. After a series of discussions with policy makers and service agencies, Project PACE was developed.

The initiative targeted children in Fort Worth and the surrounding ten counties (not including Dallas). The target population consisted of all children in the foster care system who required more than the most basic services and their siblings. This was determined using a six point level of care scale (1 meaning minimal care and 6 meaning extended in-patient psychiatric services). The average LOC for a child in the PACE program was approximately a 3.6.

Under the PACE program, the Lena Pope Homes, based in Fort Worth, was given a contract to serve children who met the program criteria. They handled all of the case decision-making process and were responsible for developing a provider network to meet all service provision needs. Originally, Lena Pope was expected to serve 217 children at any one time, at the peak of this program, in late 1999, they were serving almost 600 children. For the entire two and a half years of the project, they had a total number of 1,400 children. They were paid a flat case rate and bore the full risk for any case expenses that exceeded that rate. The rate began at $72 a day and eventually rose to $77 a day.

The advantage that the PACE project gave to the Lena Pope Homes was increased flexibility in devising their own service provider network. LPH pursued this part of the project vigorously, expending a good deal of resources training the organizations in their network. They hired an outside consulting firm, Praesidium Inc., to help staff members identify risk factors quickly. One of the problems facing the Texas child welfare system was the difficulty of finding foster and adoptive parents. Drawing on expertise within the Ft. Worth business community, LPH conducted a poll and had some focus groups to find out why people were not interested in foster parenting and adoption and how to overcome some of the barriers that prevented people from becoming involved. Through this process they developed an enlarged pool of foster and adoptive parents. This is considered by the state and by the provider as one of the enduring legacies of the PACE project.

Project PACE started operations on September 1, 1998 and closed down at the end of March, 2001. The project ceased operations because Lena Pope homes was losing too much money servicing the children in their care. The financing of private agencies in Texas is set up so that the state covers approximately 90% of the program costs and the private agency raises funds to make up the remaining 10%. Because the PACE program became so large, with expenditures of more than a millions dollars a year, the Lena Pope Homes was faced with the task of raising more than a $100,000 per year in addition to their other fundraising obligations.

This program is being evaluated by the University of Texas School of Social Work. As of this writing, the results have not been made public.

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