Washington, D.C. — April 22, 2010 — A Montana commission charged with reviewing community based human service provider rates, including the state’s foster care rates, could be a model for other states that wish to avoid legal challenges and improve their foster care systems, according to a new report released jointly today by the Alliance for Children and Families and United Neighborhood Centers of America, two national organizations that represent nonprofit foster care providers across the nation.
The Montana legislature established the commission, called the Department of Public Health and Human Services Rate Commission, in 2005. The commission serves an advisory role and includes representatives from the state legislature, the governor's office, foster families, and nonprofit service providers. It is charged with reviewing foster care rates and making recommendations to the legislative and executive branches.
Legal pressure is growing for states to address foster care rates, not withstanding their current budgetary situations. In December 2009, the 9th Circuit Court of Appeals ruled in California Alliance v. Allenby that federal law requires states to pay the full cost of care for children in foster care. A lower court later ruled that the state must increase rates for nonprofit group homes by 32 percent to comply. Facing an ongoing budget crisis, the state is planning to appeal.
The California decision is expected to affect rates throughout the country, including other states in the 9th Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington). It could also affect rates in other states, as other federal courts look to the California decision for guidance.
Foster care families and other out-of-home services, such as nonprofit group homes, are typically paid far less than the full cost of care. This makes it difficult for organizations to recruit and retain foster families, forcing more foster children into group homes. For organizations serving children in group care, low rates adversely affect quality of care and have forced many providers to close in recent years.
“The legal system is a terrible place to address foster care rates. It is inflexible, costly, and will not necessarily result in improvements that benefit these children,” says Patrick Lester, senior vice president for public policy at the Alliance. “The courts are a last resort. States need to think creatively, as Montana has, about how to set rates that address children’s needs, and balance those needs against state budget realities.”
The Montana commission released its first report in 2008. While the state legislature did not act on its recommendations, those involved in the process say it has laid the groundwork for a more rational system that can be implemented when the state's economy and budgetary outlook improve.
The Alliance for Children and Families, which will celebrate its 100th anniversary in 2011, is a nonprofit national membership association of private, nonprofit human service providers in the United States and Canada. Motivated by a vision of a healthy society and strong communities, the Alliance strengthens the capacities of North America’s nonprofit child- and family-serving organizations to serve and advocate for children, families, and communities. The nearly 350 members of the Alliance provide an array of community-based programs and services to all generations, serving close to 3.4 million people each year.
United Neighborhood Centers of America (UNCA) is a voluntary, nonprofit, national membership organization with neighborhood-based organizations throughout the United States. It is part of the Families International group of companies. Formerly known as the National Federation of Settlements and Neighborhood Centers, UNCA was founded in 1911 by Jane Addams and other pioneers of the settlement movement.
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