BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 403 (Mark Stone) - Public social services: foster care placement: funding ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: July 16, 2015 |Policy Vote: HUMAN S. 5 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 17, 2015 |Consultant: Jolie Onodera | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 403 states the intent of the Legislature to improve California's child welfare system and its outcomes through the use of comprehensive initial child assessments, increasing the use of home-based family care and the provision of services and supports to home-based family care providers, reducing the use of congregate care placement settings, and creating faster paths to permanency to reduce the duration of a child's involvement in the child welfare and juvenile justice systems. This bill, among its numerous provisions, establishes the framework for the commencement of the development of the reforms to the existing foster care placement system and payment structures through the codification of a number of recommendations included in the Department of Social Services' report, California's Child Welfare Continuum of Care Reform (CCR). Fiscal Impact: AB 403 (Mark Stone) Page 1 of ? Local child welfare and probation agencies : Major initial investments in the tens of millions of dollars (General Fund*) annually over a number of years to local agencies for increased costs for activities including but not limited to comprehensive initial child assessments, recruitment, retention, and support services (including staffing, training, specialized care, and child care) for home-based family care providers, increased services costs for higher rates for wraparound services, foster family agencies (FFAs), and short-term residential treatment centers (STRTCs), potential impacts of the formalized role of child and family teams, performance and outcome measurement and data collection, and accelerated statewide implementation of the Resource Family Approval (RFA) process. 2015 Budget Act : Includes initial funding to support recommendations in the CCR report consisting of $20.3 million ($17.2 million General Fund) to increase foster parent and relative caregiver recruitment, retention, and training efforts, and $7.3 million ($4.3 million General Fund) to fund a 15 percent increase in FFA social worker rates. DSS licensing, oversight, and administration : Significant one-time and ongoing costs (General Fund) for the development of revised rate structures, multiple sets of regulations for new and revised licensing categories and RFA due process procedures, development and implementation of a system of governmental monitoring and oversight, the development of revised training curricula, and automation system changes. The magnitude and duration of these costs will be dependent on the complexity and structure of the processes developed, which are undetermined at this time. DHCS administration : Significant one-time costs (General Fund) to promulgate regulations regarding program standards, oversight, enforcement, and due process for the mental health certification of STRTCs and FFAs that provide intensive or therapeutic treatment services, and to collaborate with DSS on a monitoring and oversight program. EPSDT/specialty mental health services : Major costs potentially in the millions to tens of millions of dollars (Federal Funds/Local Revenue Fund 2011(Behavioral Health Subaccount)) annually for increased services and administration for both new and existing cases to the extent the bill's reforms result in more appropriate placements and assessments of need for children entitled to these services. Pursuant to 2011 Realignment, responsibility for specialty AB 403 (Mark Stone) Page 2 of ? mental health and EPSDT services rests with the counties. Long-term impact : Unknown, potentially significant future cost savings to the child welfare and juvenile justice systems to the extent the reforms result in better-informed and appropriate initial placements provided with targeted services, coupled with greater use of family-based care and declining use and duration of congregate care placements and costs, resulting in shorter and/or fewer stays in the child welfare and juvenile justice systems. This overall savings is predicated on numerous interdependent factors including but not limited to the availability of adequate capacity and quality of placement options for youth, the successful provision of services to meet the individual needs of each child, an effective system of monitoring and local interagency coordination to ensure identified services are being provided and transitions to home-based family care are made timely, the rates developed for STRTCs/FFAs and the number of GH placements from each RCL level transitioned to the restructured rates, successful efforts to maximize federal financial participation, the ability of families to meet the specialized needs of this population, and performance measures and standards developed including data collection to enable analysis and accountability. Proposition 30* : Provides that to the extent this legislation has an overall effect of increasing the costs already borne by a local agency for programs or levels of service mandated by 2011 Realignment, it shall apply to local agencies only to the extent that the state provides annual funding for the cost increase. Recognizing the wide variation between counties in geographic size, population of impacted children, and the level and costs of services and supports currently being provided, as well as the varying impacts and timing of this measure on local agencies within each county (including child welfare, county probation, county mental health), the point at which each local agency's overall costs may decrease will likewise vary. At this time, the methodology including baseline assumptions for calculating this "overall effect" pursuant to Proposition 30 is unclear. Annual THP-Plus FC COLA : To the extent the specified provision in this bill is determined to codify existing law with regard to the rate structure established by the workgroup pursuant to WIC §§ 11402(b) and 11403.3(a)(1)(B), no new state costs. AB 403 (Mark Stone) Page 3 of ? Background: In response to the legislative mandate pursuant to SB 1013 (Committee on Budget and Fiscal Review) Chapter 35/2012, which required the Department of Social Services (DSS) to establish a stakeholder workgroup to develop recommended revisions to the current rate-setting system, services, and programs serving children and families in the continuum of eligible foster care placement settings including, at a minimum, all programs provided by foster family agencies and group homes, the DSS led a multi-year effort and produced the report, California's Child Welfare Continuum of Care Reform (January 2015), which outlines a comprehensive approach to improving the experiences and outcomes of children and youth in foster care. The report envisions a new model of care based on the premise that children are best served by living in their communities in a setting of home-based family care coupled with the provision of appropriate supports and services. With the intent of eliminating the practice of long-term placements into congregate (group home) care in favor of utilizing placements into congregate care that are time-limited in duration and focused on specific treatment goals, the new model of care supports subsequently transitioning children into home-based family care while ensuring appropriate levels of services and supports are maintained. The report recommendations include but are not limited to more comprehensive assessments of children and families to enable informed and appropriate initial placement decisions, emphasis on home-based family care placements of children, the importance of appropriate support of those placements with available services, revised goals for congregate care placements, input from a child and family team with regard to placement decisions and assessment of needs, and greater transparency and accountability for child outcomes. As indicated in the report and notably relevant to this fiscal analysis: Several of the recommendations in this report will need short-term upfront investments as changes to the placement system are phased in. In the longer term, these recommendations are expected to become cost-neutral by creating placement cost savings and will permit strategic leveraging of federal Title IV-E and Title XIX funding to further improve child AB 403 (Mark Stone) Page 4 of ? outcomes. It is worth noting that California is one of twelve states in which the state is responsible for policy, regulation and outcome monitoring, with counties responsible for operation of the program itself. California also is unique in its current financial relationship: The 2011 realignment of child welfare services transferred all of the non-federal placement costs and corresponding revenue to the counties. This realignment also provides that new administrative requirements, regulations, or enacted legislation after September 30, 2012, that has an overall effect of increasing the costs already borne by county child welfare or juvenile probation programs, applies to local agencies only to the extent that the State provides annual funding for the cost increase. This reform effort is focused on improving outcomes and requires significant changes to current out-of-home care placements and supports. This reform effort will improve the assessment process and alter the roles of various placement settings and their service arrays, and occurs in the context of other system changes that serve to increase access to existing federally-entitled services. While this reform effort will change how and where services are provided, it does so without creating new services. This bill seeks to commence the establishment of the framework, including the development of revised funding structures and components necessary to implement the model of care as outlined in the report recommendations, towards realization of the overarching goal of a reduced reliance on congregate care as a long-term placement setting and increased capacity of home-based family care to better address the individual needs of all children and caregivers, with the goal of the achievement of safety, permanency, and well-being. Proposed Law: This bill includes overarching legislative intent language to improve California's child welfare system and its outcomes, with an expectation that the short-term funding provided by the state to local agencies to implement the bill's provisions will reduce AB 403 (Mark Stone) Page 5 of ? overall costs to local agencies and allow local savings to be reinvested in child welfare services. This bill also states the intent of the Legislature to maintain children's safety, well-being, and healthy development when they are removed from their own families by placing them with relatives or someone familiar, whenever possible or appropriate, or with other caregiving families, and to achieve this intent, the Legislature recognizes numerous factors, as specified. In summary, this bill provides for the following: Group Home (GH) and Residential Care Reforms Creates a new licensure category of "short-term residential treatment centers" (STRTCs), defined to mean a residential facility licensed by DSS and operated by a public agency or private organization that provides short-term, specialized, and intensive treatment, including core services, as defined, and 24-hour care and supervision to children, as specified. Effective January 1, 2017, sunsets existing law authorizing a GH to accept children assessed as seriously emotionally disturbed (SED). Provides for a conditional one-year extension to individual GHs to accept SED placements. Requires DSS to license STRTCs commencing January 1, 2017, and authorizes DSS to license STRTCs prior to January 1, 2017. As a condition of licensure, requires STRTCs to meet the following criteria: o Have national accreditation from an entity identified by the DSS, as specified. Provides DSS the authority to extend provisional licenses for STRTCs for up to two years, if it determines this additional time is required to secure accreditation. o Obtain and have in good standing a mental health certification. Requires STRTCs to have a written plan of operation, as specified by DSS, and requires a county licensed to operate an STRTC to describe its conflict-of-interest mitigation plan in its plan of operation. Effective January 1, 2017, authorizes STRTCs to accept for placement a child who meets all of the following criteria: o A child who does not require inpatient care in a licensed health facility. o A child who has been assessed as requiring the level of services provided in order to maintain the AB 403 (Mark Stone) Page 6 of ? safety of the child or others due to behaviors that render the child or those around the child unsafe, and who meets at least one of the following conditions: § A child who has been assessed as meeting the medical necessity criteria for specialty mental health services under the Medi-Cal Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program. § A child assessed as SED. § A child who has been assessed as requiring the level of services provided in order to meet his or her behavioral or therapeutic needs, which in appropriate circumstances may include the following children: A commercially or sexually exploited child. A private voluntary placement, as specified. A juvenile sex offender. A child who is affiliated with or impacted by a gang. Requires providers to ensure that AFDC-FC funded children accepted for placement have been approved for placement by an interagency placement committee (IPC), as specified. Effective January 1, 2017, sunsets the existing GH rate classification system, but provides that DSS may grant an exception on a case-by-case basis for a GH to extend its rate through December 31, 2017, both for child welfare and probation youth, and potentially beyond that date, with six-month reviews, to meet the needs of probation youth, as specified. Provides for an interim GH rate classification process until January 1, 2018, for those GHs provided an extension. Commencing January 1, 2017, requires DSS to commence development of a new payment structure for STRTC program placements claiming Title IV-E funding that includes consideration of the following factors: core services, specialized and intensive treatment supports, staff training, health and safety requirements, accreditation, mental health certification, and maximization of federal financial participation. Prohibits DSS from establishing a rate for an STRTC or FFA that provides intensive and therapeutic treatment AB 403 (Mark Stone) Page 7 of ? unless the provider submits a recommendation from the host county or primary placing county that the program is needed and that the provider is willing and capable of operating the program at the level sought. Commencing January 1, 2017, provides that the rate paid for a dependent infant living with a dependent teenage parent receiving AFDC-FC benefits in an STRTC shall equal the infant supplement rate for STRTCs established by DSS. Requires DSS to develop and establish an administrator certification training program for STRTCs, as specified, and establish a process no later than January 1, 2017, for convening a peer review panel for review of plans of operation for STRTCs. Foster Family Agency (FFA) Reforms Removes the requirement for DSS to develop licensing regulations differentiating between FFAs that provide treatment of children in foster families and those that provided nontreatment services. Expands the definition of FFA to include a public agency, and requires a county licensed to operate an FFA to include a conflict-of-interest mitigation plan in its plan of operation. Establishes new requirements for FFAs, including the maintenance of a written plan of operation as required by DSS. Additionally: o On and after January 1, 2017, requires FFAs to have national accreditation from an entity identified by the DSS, as specified. o Authorizes DSS to issue a provisional license to an FFA for up to two years and may extend the term of the provisional license in order for the FFA to secure accreditation. o On and after January 1, 2017, requires an FFA's plan of operation to demonstrate its ability to support the differing needs of children and their families and include a program statement that contains a description of its core services and supports, treatment practices that will be used, description of services to be provided to meet treatment needs of children assessed. o Requires FFAs that provide treatment services to maintain in good standing the appropriate mental health certification issued by the DHCS. AB 403 (Mark Stone) Page 8 of ? Sunsets existing provisions of law on the rate setting system for FFAs on January 1, 2017, and on that same date requires DSS to commence development of a new payment structure for the Title IV-E funded FFA placement option for FFAs that provide nontreatment, treatment, intensive treatment, and therapeutic foster care programs based on a list of enumerated factors. Provides for an interim rate structure until January 1, 2018. Provides that DSS may grant an exception on a case-by-case basis for an FFA to extend its rate through December 31, 2017, both for child welfare and probation youth, as specified, and establishes an interim rate system for FFAs through January 1, 2018, for those FFAs granted an extension. Authorizes FFAs that provide treatment services to accept for placement children who do not require inpatient care in a licensed health facility and who meet at least one of the following conditions: o A child who has been assessed as meeting the medical necessity criteria for specialty mental health services under the Medi-Cal EPSDT program. o A child assessed as SED. o A child who has been assessed as requiring the level of services provided in order to meet his or her behavioral or therapeutic needs. Effective January 1, 2017, requires FFAs to approve resource families in lieu of certifying foster homes. Probation Youth Commencing January 1, 2016, requires county probation departments to do the following: o Work with GH providers to develop STRTCs that meet the needs of probation-supervised youth in foster care. o Work with FFAs to develop strategies to recruit, retain, and support specialized foster homes for probation youth. o Work with DSS on strategies to identify, engage, and support relative caregivers. o Work with DSS to define probation youth outcome measures to be collected and analyzed to assess implementation of this act. Commencing January 1, 2018, requires DSS in consultation with the Chief Probation Officers of California, to assess AB 403 (Mark Stone) Page 9 of ? the capacity and quality of placement options for probation youth in foster care, as specified. Requires DSS to provide an interim report to the Legislature no later than January 10, 2019, and a final report no later than January 10, 2021, to include specified data and whether there is a continued need for probation placement in GHs. Child and Family Team (CFT) Activities Defines a CFT as a supportive team that informs the process of placement and services to children and youth in foster care or who are at risk of foster care placement. Provides that a CFT is comprised of the child or youth, the child's family, the caregiver, the placing agency caseworker, a county mental health representative, and a representative of the child's or youth's tribe or Indian custodian, as applicable, and may include other persons as specified and appropriate. Requires the case plan to be developed in collaboration with the CFT. Requires the placing agency to consider the recommendations of the CFT and document the rationale for any inconsistencies between the case plan and the CFT recommendations. After January 1, 2017, requires a CFT meeting to be convened by the county placing agency for the purpose of identifying the supports and services needed to achieve permanency and enable the child or youth to be placed in the least restrictive, most family-like setting. Resource Family Approval (RFA) Process Mandates statewide implementation of the RFA process no later than January 1, 2017. Under existing law, implementation by all counties is authorized effective July 1, 2017, but statewide implementation is not required until July 1, 2019. Revises RFA standards and requirements to include successfully meeting a home environment assessment and permanency assessment standards. Commencing January 1, 2016, authorizes DSS to establish participation conditions, and select and authorize FFAs that voluntarily submit implementation plans and revised plans of operation in accordance with requirements established by DSS to approve resource families in lieu of certifying foster homes. Authorizes DSS to adjust the FFA AB 403 (Mark Stone) Page 10 of ? AFDC-FC rate for implementation of these activities. Effective January 1, 2017, requires FFAs to approve resource families in lieu of certifying foster homes. No later than July 1, 2017, requires FFAs to provide a detailed description of the RFA process to all certified family homes and notification that in order to care for a foster child, RFA is required by December 31, 2019. Provides that a certified family home with an approved adoptive home study completed prior to January 1, 2018, shall be deemed to be an approved resource family. No later than July 1, 2017, requires counties to provide a detailed description of the RFA process to all licensed foster family homes (FFHs), approved relatives and nonrelative extended family members (NREFMs), and that in order to care for a foster child, RFA is required by December 31, 2019. Provides that a licensed FFH, an approved relative, or NREFM with an approved adoptive home study completed prior to January 1, 2018, shall be deemed to be an approved resource family. Requires counties to provide supportive services to all certified family homes with a child in placement to assist with the resource family transition and to minimize placement disruptions. Authorizes counties to provide supportive services to all licensed FFHs, relatives, and NREFMs with a child in placement to assist with the resource family transition and to minimize placement disruptions. Requires DSS to implement due process procedures including providing a statewide fair hearing process for denials, rescissions, or exclusion actions. Requires counties to ensure resource families have the necessary caregiver training, including a minimum of 12 hours of pre-approval training and a minimum of 8 hours annually thereafter. Specifies that resource families shall not be subject to civil penalties imposed pursuant to the Community Care Facilities Act. Provides that personal identifying information of resource families shall not be disclosed by any state or local agency pursuant to the California Public Records Act, except as specified. Other Provisions Requires DSS to provide available funding to counties AB 403 (Mark Stone) Page 11 of ? for the purpose of recruiting, retaining, and supporting foster parents, relative caregivers, and resource families based on DSS approval of plans submitted by each county that requests funding for staffing, exceptional child needs not covered by the caregiver-specific rate, child care, intensive relative finding, engagement, and navigation efforts, and emerging technological or other non-traditional approaches to outreach to potential foster homes, resource families, and relatives. Requires DSS to develop a system of governmental monitoring and oversight of STRTCs and FFAs to be carried out in coordination with DHCS. Oversight responsibilities must include, but not be limited to, ensuring conformity with federal and state law, including program, fiscal, and health and safety reviews. Requires DHCS to promulgate regulations for oversight, enforcement, and due process for the mental health certification of STRTCs and FFAs that provide treatment services. Effective January 1, 2017, sunsets the existing rate for wraparound services and establishes a new rate of $8,573, based on a revised methodology, as specified. Commencing January 1, 2018, and annually thereafter, provides for a cost-of-living increase (COLA) to be applied to the wraparound services rate, subject to the availability of county funds, equal to the CNI, as specified. Sunsets existing provisions of law outlining foster parent training requirements on January 1, 2017, and replaces with an annual training requirement of 8 hours, as specified. No later than January 1, 2017, requires DSS to consult with stakeholders to develop regulations or identify policy changes necessary to allow for the sharing of information with caregivers regarding a child's educational, medical, dental, and mental health history and current needs. Authorizes DSS to license temporary shelter care facilities on or after January 1, 2016, only to counties operating a licensed GH as of January 1, 2016, and limits placement duration to no more than 10 calendar days, as specified. Requires DSS to provide a report to the Legislature by January 1, 2021, on the use of temporary shelter care and whether there is a continued need for the licensing and operation of these facilities. On and after January 1, 2017, provides that facilities AB 403 (Mark Stone) Page 12 of ? with licensed capacity of 184 that were in operation prior to January 1, 2015, that offer placements for the purpose of attending an onsite high school may continue to operate under an appropriate licensing category subject to submittal of a transition plan to DSS. Codifies legislative intent to provide an annual COLA equal to the CNI, as specified, on THP-Plus Foster Care Program payments. Related Legislation: AB 1299 (Ridley-Thomas) 2015 would shift responsibility for the provision of medically necessary mental health services for foster youth placed out-of-county, from the county of original jurisdiction to the foster youth's county of residence, in order to increase access to mental health services for youth. This bill is scheduled to be heard today by this Committee. SB 238 (Mitchell), SB 253 (Monning), SB 319 (Beall), and SB 484 (Beall) 2015, are four bills proposing a set of reforms aimed at curbing excessive and inappropriate authorization and administration of psychotropic medications to foster youth. These bills are pending hearing in the Assembly Appropriations Committee. Prior Legislation: AB 93 (Committee on Budget) Chapter 10/2015, the Budget Act of 2015, and SB 79 (Committee on Budget and Fiscal Review) Chapter 20/2015, the Human Services budget trailer bill, provided the authority and initial funding to support foster parent recruitment, retention, and support, budget bill language specifying how the recruitment, retention, and support funds are to be spent, and funds to increase FFA social worker rates. SB 1013 (Committee on Budget and Fiscal Review) Chapter 35/2012, among its provisions, required DSS to establish a working group to develop recommended revisions to the current rate-setting system, services, and programs serving children and families in the continuum of foster care settings. This bill also enacted the RFA program. AB 403 (Mark Stone) Page 13 of ? Staff Comments: This bill establishes the general framework for commencing development of the reforms described in the Continuum of Care Reform report, the potential fiscal impacts of which will be dependent on numerous factors including but not limited to the outcomes of processes and structures required to be developed pursuant to the bill's provisions but have yet to be determined. The absence of specificity with regard to revised rate structures, program standards, and implementation details notwithstanding, this bill will likely require the provision of substantial funding, potentially in the tens of millions of dollars annually over a number of years to local agencies to successfully initiate implementation of such a comprehensive reform as the bill's legislative intent language describes. For example, acknowledging the critical need to expand the existing capacity of family-based placements to enable the successful transition of youth from existing GH and future STRTC placements, the bill requires DSS to provide "available funding" to counties for the purpose of recruiting, retaining, and supporting foster parents, relative caregivers, and resource families. While the 2015 Budget Act includes over $17 million General Fund in one-time funding to support these activities, significant additional investments will likely be required in order to continue to build on these initial efforts. Notably, the Chief Probation Officers of California have indicated only 46 probation youth currently reside with foster families or FFAs, and approximately 2,100 probation youth are currently placed in GHs. The availability and ability of home-based family caregivers to meet the needs of both the probation and child welfare populations will be a key component to successfully reducing the use of congregate care placements and costs. The overall fiscal impact of this measure over time cannot be known with certainty given the multitude of interdependent factors and as of yet undetermined components in the bill including but not limited to the availability of adequate capacity and quality of placement options for youth, the successful provision of services to meet the individual needs of each child, an effective system of monitoring and coordination AB 403 (Mark Stone) Page 14 of ? to ensure identified services are being provided and transitions to home-based family care are made timely, the rate levels developed for STRTCs/FFAs and the number of GH placements from each RCL level transitioned to the restructured rates, successful efforts to maximize federal financial participation, and the development of performance measures and standards including data collection to enable analysis of outcomes and accountability. Adding to the complexity of determining the potential fiscal impacts of this bill are the provisions of Proposition 30 and 2011 Realignment. Proposition 30 provides that to the extent this legislation has an overall effect of increasing the costs already borne by a local agency for programs or levels of service mandated by 2011 Realignment, it shall apply to local agencies only to the extent that the state provides annual funding for the cost increase. Recognizing the wide variation between counties, as well as the varying impacts and timing of this measure on local agencies within each county (including child welfare, county probation, county mental health), the point at which each local agency's overall costs may decrease will likewise vary. To facilitate the ability to measure the fiscal and programmatic effects of this legislation, the establishment of performance standards, outcome measures, and data to be collected and analyzed would be required. It is unclear how the long-term implementation of the provisions of this bill will be funded, and to what extent any local agency savings from reduced congregate care placement costs will be measured and potentially used to offset other local agency costs. At this time, the methodology including baseline assumptions for calculating this "overall effect" pursuant to Proposition 30 is unclear. Proposed Author Amendments: The author has indicated numerous amendments are forthcoming, both substantive and technical in nature. These amendments were not available at the time of this analysis. Recommended Amendments: Staff recommends the state funding to be provided to counties for the services to support the recruitment and retention of home-based family care providers pursuant to WIC § AB 403 (Mark Stone) Page 15 of ? 16003.5 in Section 98 of the bill specify the funds are to be provided subject to appropriation by the Legislature. -- END --