Privatization of Child Welfare Will Always Fail Without Oversight

Privatization does not work because there is no oversight.

When these private contractors are religious-based not-for-profits, always remember:

"You can not audit God".

Michigan is experimenting with the same policies and is still under federal monitoring.

Medicaid fraud in child welfare will always prevail in the wake of privatization with oversight.

Nebraska privatization of child welfare hasn't produced 'any measurable benefit,' new study finds

LINCOLN — Nebraska’s five-year experiment with privatizing child welfare has not produced “any measurable benefit” for the state, according to a study released Thursday.

The study compared results achieved by state child welfare workers and by the Nebraska Families Collaborative, the private agency that manages child welfare cases in the Omaha area.

It found no significant difference — either positive or negative — in outcomes for children and families and no cost savings.

“Privatization promised better outcomes at a lower cost, and that has not happened,” the authors wrote. “It was, perhaps, a worthy experiment, but it has failed.”

But Helaine Hornby and Dennis Zeller, the study’s authors, said it is not clear what direction Nebraska should go from here.

They offered three options — staying the course with the private contractor, returning all case management responsibilities to the state or revamping the roles of the state and the collaborative to achieve real reform.

Each option could result in better services and improved results, the study said. However, each choice would require some changes in order to be successful.

State lawmakers commissioned the study last year, as part of a bill authorizing the Nebraska Department of Health and Human Services to extend its contract with the collaborative into 2015.

State Sen. Bob Krist of Omaha, who sponsored last year’s legislation, expressed confidence in the results of the study. He said he expects policymakers will take several months to discuss it and weigh the options.

“It’s up to the Legislature and new director of HHS to work jointly and make sure that the changes we make are evidence-based and that we go in the right direction,” he said.

Krist said he doesn’t know what direction the state may end up taking. He said it may be an option that draws from several of the study’s recommendations.

However, he said he would argue against anything that would create more disruption for children, families and workers.

“The political ramifications of flushing what we have are unpalatable,” Krist said.

The child welfare system has endured several disruptions since Nebraska launched the privatization effort in November 2009.

Since then, four of the five original private contractors lost or ended their contracts, citing inadequate reimbursement from the state. By early 2012, the collaborative was the only contractor.

David Newell, the collaborative’s president and CEO, said the best choice would be for the private agency to continue managing cases in Douglas and Sarpy Counties.

He defended what the collaborative has achieved, saying the agency has produced the best outcomes ever for children and families in the area.

“Our region has been transformed from being the historically lowest-performing child welfare system in Nebraska to being on par with or better than the other service areas for the very first time,” he said.

The study compared current outcomes for the Omaha area with the rest of the state. It did not compare current outcomes for the Omaha area with outcomes in previous years.

Newell could find himself on the other side of the table with the collaborative, however. Gov. Pete Ricketts named him this week as a finalist for the top HHS position.

According to the study’s authors, the only argument for maintaining the current privatized system is to avoid disruption.

They said the argument for returning case management to the state is that privatization has not fulfilled its promises, which takes away the rationale for having a private agency force services on families.

The authors said the third option could produce better results for children and families.

Under that option, the collaborative would take on a new role as the lead agency in creating and managing new and expanded in-home services, while the state would resume managing cases.

Among other highlights of the study:

— The state spends an average of $74.17 per day per client on services, while the collaborative spends $48.10. But the collaborative charges parents for services, using a sliding fee scale if they are not eligible for Medicaid, a practice that the study said means clients and Medicaid are paying the difference in costs.

— The state has to pay back more than $20 million of federal foster care funds because it could not document how the money was spent by the private contractors. Nebraska continues to lose out on available federal funds because of problems created by how the collaborative is paid.

— While a key goal of privatization was to serve more children in their own homes, the proportion of state wards in out-of-home care has remained steady at around 70 percent over the five years.

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Nebraska Privatization Wastes Another $3.2 Million

Privatization of child welfare services has always been ultimate goal of the States but child advocate groups seem to only understand one form of privatization and that is to let them run the show.

The only way to make privatization successful is to make it public because secrecy cannot be audited or held accountable.

Feds order Nebraska HHS to pay back $3.2 million

LINCOLN — The cost of Nebraska's experiment in privatizing child welfare services has jumped by $3.2 million.

This is just another situation of false claims.

Federal officials notified the Nebraska Department of Health and Human Services on Friday that the state would be penalized for failing to follow regulations for use of foster care funds. 

Last year, the State Auditor General notified Nebraska Department of Health and Human Services last year that it was making posthumous contract payments.  

The penalty announced is for fiscal year 2010, said Thomas Pristow, HHS children and family services director. Additional penalties are likely for fiscal years 2011 and 2012. 

Additional fines will come because there are no internal controls in privatization.

“The bottom line is the department made errors,” Pristow said, noting that the decisions were made before he started. The issue dates back to the contracts that HHS signed with five private child welfare agencies in November 2009. 

Pristow inherited the mess.

Under the contracts, the state paid the agencies a fixed amount per month to provide all services for abused and neglected children and their families.

Read the audit on the contracts here.

The rates were paid regardless of the actual cost of care, and the state did not have documentation to prove that the payments were allowable or reasonable.  Pristow said he has been working with federal officials from the Administration for Children and Families and the Children's Bureau to get the state into compliance. 

I recently received information that these Nebraska privatized child welfare programs were filing false claims of reimbursement costs regarding counseling services to relatives of children in foster care who never received services.  The term is called phantom services.  The funding stream would be Medicaid.

The steps include seeking federal approval for the state's current contract with the Omaha-based Nebraska Families Collaborative, the last of the five original contractors. Pristow said he expects to get approval for the contract soon. 

Starting in July, the state switched from paying fixed monthly rates to the Nebraska Families Collaborative to paying by the case. 

I wonder how long it took to come up with this idea?  When paying by the case, there are internal controls to reduce fraud, waste and abuse.

The financial penalty is the latest blow to Nebraska's failed privatization effort. Launched with promises of reform, the initiative wound up costing millions more than planned during its 2½-year life. 

Four of the five private agencies lost or dropped their contracts, citing inadequate reimbursement from the state, and the goal of improving care for children went unrealized.

Nebraska lawmakers passed several major child welfare bills this year addressing problems uncovered by a legislative investigation into the privatization effort. 

The $3.2 million penalty will come out of the $19.4 million worth of federal foster care funds that Nebraska receives annually. The federal dollars are included in the $133 million that the state budgeted to provide services for children and families involved with the child welfare and juvenile justice systems this year.

Carolyn Rooker, executive director of Voices for Children of Nebraska, urged state officials to minimize the impact on children and families when deciding where to find the $3.2 million.

The remedy is already on the books in Nebraska Revised Statute 68-936.

Pristow said he still has hopes of negotiating a smaller penalty with the federal government. If he cannot, however, he promised to take the money from places where it will not hurt the child welfare program.  

Pristow also hopes to minimize the effect of the penalty on Nebraska's bid for a federal waiver allowing the state more flexibility in using federal foster care dollars. 

Waiver funding is based on the previous four to five years' worth of funding provided to each state.  Nebraska did not seek approval for previous child welfare contracts, despite warnings from federal officials that the child welfare reform plan could jeopardize the state's federal foster care dollars.

Instead, HHS officials sent an email to the federal government on July 9, 2009, saying, “The state would prefer to avoid the submission of a formal request, the subsequent response and back and forth.”

Pristow offered little insight into why the state had not tried to work with the federal officials before. But he said the department is “doing what we are supposed to do” since he started in March.

This is another form of privatization for which I am analyzing.  Currently, New York and Massachusetts are progressing into the realm of social impact bonds.

 

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Nebraska Fails At Privatization, Again

It has been a while since I have last been treated with such a formal piece of child abuse propaganda.

Top DHHS official resigns

By Hilary Stohs-Krause, NET News

September 16th, 2011

Lincoln, NE – Late Friday, the Nebraska Department of Health and Human Services announced that Todd Reckling was resigning. Reckling has been the director of the Division of Children and Family Services since April, 2009. That division is in charge of the privatization of child welfare, and Reckling’s resignation comes on the heels of a scathing report by State Auditor Mike Foley alleging mismanagement of funds, lack of documentation and a refusal to cooperate with the audit process.  See below.

Todd Reckling has headed the Division of Children and Family Services since 2009. (Photo credit DHHS)

However, a spokesperson for DHHS told NET News that Reckling was not pressured by Gov. Dave Heinemann or DHHS CEO Kerry Winterer to resign; instead, the spokesperson said, Reckling is resigning for personal health reasons. I would be sick as a dog, too, if I was the subject of the audit below. The spokesperson said the department will begin searching for a replacement immediately.

State Sen. Jeremy Nordquist from Omaha has been a vocal critic of the reform process. He told NET News that Todd Reckling has been a great advocate for children in state, and said the department will be losing someone with a lot of expertise.  Sounds like State Senator Nordquist will be losing some campaign contributions.  Oh my, did I say that out loud!?!

Sen. Nordquist said he trusts the state’s claim that Reckling’s resignation has nothing to do with the privatization problems, but adds that they won’t go away with one person.  And the privatization problems will not go away with the death of a business.

“The responsibility for accountability goes beyond Director Reckling,” he said. “Really, it goes up to Winterer and Gov. Heinemann.”  Actually, it goes up to Attorney General Joe Bruning.

Foster children are welfare recipients, Joe.

The child welfare reform process has been plagued by setbacks since private contractors first took over in 2009. Thursday, Gov. Heinemann responded to the auditor’s report, saying, he expects better results and expects them soon.

Gov. Heineman, Reckling and Winterer were unavailable for comment.

Just in case it is not posted, I thought I would preserve the moment.  I was available.  Here is my comment:

It is such an insult that the State Department of Health and Human Services would actually believe that its people are so gullible to believe that the aberrant management of its funds had nothing to do with privatization.

Privatization can be fiscally responsible.

Privatization of foster care and adoption services should be embraced with joy. This is what we all have been awaiting.

Privatizing foster care and adoption services releases the constraints of enforcement within the executive branch. The Attorney General is now able to flick the switch of the oversight machine and provide accountability for the state and its families. This is what is to happen:

The responsibility of contract monitoring and compliance is transferred from DHHS back into the hands of the Attorney General. For example, families whose children have been removed where privatized agencies do not believe in family reunification, can now file complaints with the Attorney General regarding protection of consumer rights. They may now protect, not just vulnerable adults who cannot access justice, but vulnerable children.

When the Attorney General conducts investigations and finds material violations of law and policy by the privatized child placing agencies, he is now allowed to follow through with full prosecution of the agencies and their workers.

In turn, families are provided proactive services, there are no longer phantom programs funded by DHHS, tens of millions of dollars in improper payments of improper, unneccessary services and placements of children in foster care are ameliorated.
The number of children entering foster care are reduced because privatized child placing agencies must promote and advocate for placement of children within the family which is more cost effective than having a child prescribed psychiatric medication to "calm" from the trauma of being ripped from his/her home and placed in a strangers home, further reducing medicaid waste and fraud.

Privatized child placing agencies, under the theory of punishment by deterrence, will produce accurate and transparent audit reports, simply from the fear of prosecution.

Practices of targeting minority and impoverished children, due to the fact that child abuse and neglect is an entitlement program, will cease in the face of civil rights penalties.

Privatization is a model for accountability and transparency by reducing dependency of federal funding streams in Social Security, mainly Medicaid, the largest uncapped funding stream of child welfare.

Through privatization, a state is no longer liable for litigation. The Executive Office is no longer a demagogue to privatized child placing agencies, who also lobby and financially contribute to political campaigns (many without proper IRS status), but becomes the fiscal savior of our future.

Everyone wins...except the privatized child placing agencies which violate federal and state laws and policies, under color of state law, like those under the leadership of Todd Reckling.


Nebraska Child Welfare Audit 2011

Nebraska Pays Dead Businesses In Child Welfare

This one of those times when I just sit back in satisfaction and gloat over the fact that I was the first to start screaming about privatization in child welfare.  I have always argued that privatization can be fiscally responsible.  Unfortunately, as we all know, this would mean the end of secrecy in child welfare.

I even screamed about the privatization factor in Kansas, yet these child welfare propaganda groups popped up in defense of the practice of fraud.

There is one thing to talk about phantom programs, but posthumous reimbursements!  By the way, these services are Targeted Case Management...Medicaid fraud.

A Nebraska private contractor still receiving child welfare services reimbursement doing his job.

End to privatization urged

Nebraska audit blasts child welfare services

LINCOLN, Neb. (AP) — Nebraska's effort to privatize child welfare services increased costs by 27 percent in a two-year period and led to millions of dollars in overpayments to a provider that has since gone out of business, according to a state audit released Wednesday.

Nebraska State Auditor Mike Foley told a legislative panel that the Department of Health and Human Services failed to publicly bid multi-million dollar contracts with private service providers, and spent thousands of dollars on duplicate claims and payments to the wrong contractors.

The audit was part of a legislative review of the rising costs and instability within Nebraska's child welfare system. The state began to privatize services in 2009, handing cases of neglected and abused children over to contractors. Three of the five providers have since dropped or lost their contracts as caseloads and costs grew unsustainable.

Foley told the Legislature's Health and Human Services committee that department officials have not turned over documents his auditors requested, in possible violation of state law. He said the department's lack of cooperation with the audit ranks "among the worst ever encountered in my office."

Red Flag Medicaid Fraud Alert!!   

Committee members vented frustration with the agency for what several described as a lack of clear answers about costs and care services for vulnerable children. State workers have returned to child care duties in parts of the state where contracts have ended, and lawmakers are trying to decide how to proceed. Critics of privatization have suggested a return to the old system.

"The longer I sit here, the more my blood is beginning to boil," said Lincoln Sen. Amanda McGill. "In terms of going back or going forward — based on what we heard this morning, I don't know if I trust putting it all back in HHS."

The audit alleged that the department failed to take possession of important and potentially confidential documents relating to client services after it terminated contracts with a service provider. Service providers failed to meet client service coordination and delivery benchmarks required in their contracts, according to the audit.

Kerry Winterer, the department's CEO, says agency officials "strongly and fundamentally disagree" with the audit findings. He disputed claims that the service provider was overpaid, and says the agency cooperated with auditors.

Winterer said management decisions questioned in the audit were made to protect the integrity of the child welfare and juveniles services system.

Todd Reckling, director of the department's Division of Children and Family Services, said the agency agrees with some of the findings and has already increased its oversight of lead contractors and financial issues. In June, the agency named Families Matter administrator in the agency's two service areas with lead contractors to provide full-time oversight.

Winterer said the department has legal authority to award contracts without competitive bidding for child welfare service provided to individuals. Even so, he said, the department chose to issue a request for qualifications for the contracts, allowing all interested bidders to compete publicly.

He said the service provider in the report, Visinet, was not overpaid because the department has the authority to settle contract disputes. The amounts paid to the company and its employees, foster families and subcontractors were allowed under its contract, he said.

Winterer said the department could have been more effective in its response to the audit, and has since made changes. But he said the department acted in good faith responding to the state auditors.

Critics of privatization pointed to the audit as the latest sign that the reforms have failed. But several advocates and lawmakers said it may be too late to resume the old system, because the state has a severe caseworker shortages and growing case loads.

"I think that, particularly with the release of the auditor's report this morning, it's time to say, 'Enough is enough,'" said Sarah Helvey, director of child welfare for the group Nebraska Appleseed. "There is a growing body of evidence that this reform is failing."

Nebraska Child Welfare Audit 2011

Nebraska To Waste Tax Dollars Traumatizing Babies

Alright, let's have some fun here.  When the mother gives birth on U.S. soil, what do you think will happen?

Foster Care!  That's right, folks.  If an undocumented foreigner residing in the U.S. applies for social assistance, that person is denied.  The baby, once born will be an American citizen and a ward of the state.  The mother will be deported and the child will be placed in foster care.

Will the baby ever get Medicaid?

Yes, automatically upon the rubber stamping of the child protective services petition for removal of the child.

Just think, instead of investing in the best interests of a child to mature and grow to become a productive citizen to pay taxes and be a beneficial part of society, we waste tax dollars on prosecution and deportation of mom.  Then we dump massive amounts of money into the state care of the baby who will eventually be traumatized in foster care, pumped up with psychotropic meds to age out and become another statistic to eventually produce an offspring to be snatched and placed into foster care.

How cold have we become as a nation to deny medical assistance to a baby?  How can one choose to destroy the bonds of a family under the fallacy of saving money?  It will cost more than 10 times the amount of medical and financial assistance to Legally Kidnapped  a baby, dumping it in foster care, than just care about another human.  It becomes so easy to perpetuate this cycle of hate called foster care because no one knows about it.

Stop Child Medicaid Fraud

Illegal immigrant sues Nebraska to get Medicaid for her unborn baby

A nine-months pregnant woman filed suit against Nebraska Aug. 26, alleging that her unborn baby qualifies for Medicaid benefits, even though she is ineligible as an undocumented immigrant.

Sarah Roe (pseudonym), 33, sued the Nebraska Department of Health and Human Services and the heads of its Division of Children and Families and Division of Medicaid and Long-Term Care in a class-action suit in Lancaster County Court.

The suit contends that the Nebraska Medical Assistance Act includes unborn babies in the category of children under 19 who qualify to receive free medical treatment without regard to the immigration situation of their parents, according to Fox News.

On June 28, a law went into force in Nebraska prohibiting the provision of free prenatal medical services to undocumented foreigners.

Roe said in her lawsuit that when the Nebraska legislature approved the law denying medical services to undocumented mothers, it did not modify the benefits that were available to the children of those mothers, Fox News reported.

“According to the U.S. Department of Health and Human Services, unborn children are not citizens or aliens, and as such are eligible for Children’s Health Insurance Program (CHIP) regardless of the pregnant mother’s immigration status,” according to the text of the complaint. “Thus, under CHIP, states are allowed to provide medical assistance to unborn children, even if a mother is an otherwise ineligible immigrant, if all other eligibility criteria are met.”

The suit asks that the Lancaster County District Court order the Nebraska Department of Health and Human Services to provide prenatal care regardless of the prospective mothers’ immigration status, according to Fox News.

Roe seeks declaratory judgment and an injunction.

Roe asked that her lawsuit include all pregnant women and their unborn children who were denied coverage under the Nebraska medical aid program, which may include about 1,500 women.

Kansas-Nebraska Act Just Alike

Before I even start, you have to watch this to even begin to understand what I am experiencing at this moment.



Here you have Kansas State Representative Pete Degraaf (R. Mulvane) in legislative inquiry, surviving the ad nauseum horrific-feces-filled-shovel-tossed-testimony Secretary of the Kansas Department of Social and Rehabilitative Services Don Jordan.

My deepest condolences, Rep. Degraaf.

Never in my life, I have I ever heard such, back-stepping, arrogant ignorance, idiocy, shall I continue?  And to think this man gets paid with tax-payer dollars!

The Secretary stated he did not believe Kansas was doing as doing as bad as the rest of the country. Secretary Jordan said he would "check it out".

Don't worry, Secretary Jordan, I checked it out for you.

Whenever I hear a person allow themselves to intentionally place contradictory rhetoric on public record, my fraud senses begin to tingle. I remembered the Department of Health and Human Services and the Department of Justice Health Care Fraud and Abuse Control Program Report for Fiscal Year 2008, and my eyes lit up. Here is the section I pulled for your viewing enjoyment:

HHS/OIG estimated that for State FYs 2001 and 2003 Kansas did not ensure that its $62 million ($37.2 million Federal share) in TCM claims for recipients of child welfare services was within the limit specified in the State’s Medicaid plan. Because the State could not produce the rate and cost data necessary to apply the limit, HHS/OIG was unable to express an opinion on the reasonableness of the claim, and recommended that the State work with CMS to determine the allowability of the $62 million claimed for the audit period.

TRANSLATION: The pattern of child welfare fraud had previously been tagged by the DHHS OIG that it was put on the hot plate for H.E.A.T. making it the fifth report submitted in its Targeted Case Management fraud report. The fraud was so bad in Kansas that the Centers for Medicare and Medicaid are going to be all over Kansas, or rather Secretary Jordan, as he is close to the state Medicaid Directors Andrew Allison, former, and Barbara Langner, Acting Medicaid Director. 

And that, my dear readers, is the reason why Kansas SRS Secretary Jordan was talking out the back of his neck, because the feds are breathing down his neck.  Perhaps that is why there has been musical chairs at the Kansas Health Policy Authority.

See for yourself, Kansas-Nebraska Act just alike, always did, always will, but this time its fraud. No wonder Secretary Jordan offered to write federal law.

DHHS Audit of Foster Care Nebraska 2003

435 F3d 326 State of Nebraska Department of Health and Human Services v. Department of Health and Human Services O

435 F.3d 326

STATE OF NEBRASKA DEPARTMENT OF HEALTH AND HUMAN SERVICES, Appellee

v.

DEPARTMENT OF HEALTH AND HUMAN SERVICES and Michael O. Leavitt, Secretary of the Department of Health and Human Services, Appellants.

No. 04-5429.

United States Court of Appeals, District of Columbia Circuit.

Argued November 17, 2005.

Decided January 27, 2006.

Appeal from the United States District Court for the District of Columbia (No. 03cv01873).

Wendy M. Keats, Attorney, U.S. Department of Justice, argued the cause for appellants. With her on the briefs were Peter D. Keisler, Assistant Attorney General, Kenneth L. Wainstein, U.S. Attorney, and Barbara C. Biddle, Assistant Director. Claire M. Whitaker, Michael J. Ryan, and R. Craig Lawrence, Assistant U.S. Attorneys, entered appearances.

Phyllis D. Thompson argued the cause for appellee. With her on the brief was Jon C. Bruning, Attorney General, Attorney General's Office of State of Nebraska.

Before: GINSBURG, Chief Judge, and GARLAND and BROWN, Circuit Judges.

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge.
1

The United States Department of Health and Human Services (HHS) appeals from a judgment of the district court vacating three policy announcements for lack of notice and comment rulemaking and ordering approval of a cost allocation plan (CAP) submitted by the State of Nebraska Department of Health and Human Services (Nebraska). Because Nebraska challenged only HHS's rejection of its proposed CAP, the district court erred in vacating the announcements. The court also abused its discretion when it determined the CAP should be approved rather than remanding the matter for the Department to reconsider its decision without reference to the policy announcements.

I. Background
2

The Congress has enacted several statutes aimed at improving child welfare services provided by the several States. Title IV-E of the Social Security Act, 42 U.S.C. § 670 et seq., makes funds available to state programs that offer "foster care and transitional independent living programs for children" and "adoption assistance for children with special needs." Id. § 670. Title IV-B of the Act, id. § 620 et seq., offers federal funds to "State public welfare agencies in [order to] establish[], extend[], and strengthen[] child welfare services." Id. § 620(a). The amount of money a State may receive under Title IV-B is capped, see id., whereas under Title IV-E a State may obtain reimbursement without limit for 75% of the costs it incurs to train employees, see id. § 674(a)(3)(A).
3

In order to obtain reimbursement under Title IV-E, a State must submit to the HHS Division of Cost Allocation (DCA) a CAP detailing the State's expenditures. See 45 C.F.R. § 95.517(a) (limiting financial assistance to that provided "in accordance with [a State's] approved [CAP]"). A question that arises when a State prepares its CAP is how it should allocate expenditures that benefit more than one federal program. See id. § 95.507(a)(4) (DCA evaluates "correctness and fairness" of State procedures for "allocating all costs to each of the programs operated by the State agency"). For example, each child protection and safety worker (PSW) in Nebraska handles cases under Title IV-B and, we are told, is "expected to handle" cases under Title IV-E. Nebraska therefore must determine how to allocate the costs of training PSWs between the two programs. Title IV-E cases constitute only 21.5% of all child welfare cases the PSWs manage but, left to its own devices, Nebraska could allocate all PSW training costs to Title IV-E and thus avoid the cap on reimbursement under Title IV-B....more

Kansas is next.

February 25, 2010 UPDATE: I STAND CORRECTED.  MAINE WAS NEXT IN LINE.