Some States May Be Able to Increase Foster Parent Payments During COVID-19

The COVID-19 pan­dem­ic is under­min­ing child wel­fare sys­tems’ efforts to fos­ter sta­bil­i­ty and sup­port for chil­dren, young peo­ple and care­givers. Now is the time for agen­cies to con­sid­er a tem­po­rary raise in fos­ter par­ent rates — to pro­mote fam­i­ly care and sta­bil­i­ty for young peo­ple and help fos­ter par­ents weath­er these extra­or­di­nary cir­cum­stances. In March, two fed­er­al bills were enact­ed that can pro­vide addi­tion­al, tem­po­rary streams of mon­ey to agen­cies fac­ing fis­cal chal­lenges relat­ed to the pandemic.

While these mea­sures won’t be enough to address the upheaval affect­ing chil­dren and fam­i­lies in the child wel­fare sys­tem, they do allow agen­cies to draw on increased fed­er­al reim­burse­ments and repur­pose exist­ing streams to best sup­port chil­dren, young peo­ple and care­givers through the crisis.

“Fos­ter par­ents are crit­i­cal to the work of child wel­fare sys­tems — they’re at the front lines of ensur­ing the well-being of the youth in their care,” says San­dra Gas­ca-Gon­za­lez, vice pres­i­dent of Casey’s Cen­ter for Sys­tems Inno­va­tion. ​“Many of these kids are already deal­ing with trau­ma and insta­bil­i­ty — and that’s with­out a glob­al pan­dem­ic thrown into the mix. The nor­mal chal­lenges fos­ter fam­i­lies face on a day-to-day basis have been ampli­fied by this emer­gency, and we must respond accord­ing­ly to sup­port them.”

Child wel­fare financ­ing expert Den­nis Blazey worked for the Ohio state gov­ern­ment for 30 years and now advis­es child wel­fare agen­cies on how to max­i­mize funds.

Lever­ag­ing the Fed­er­al Med­ic­aid Assis­tance Per­cent­age (FMAP) rate

One strat­e­gy Blazey has devel­oped in part­ner­ship with the Annie E. Casey Foun­da­tion involves repur­pos­ing a tem­po­rary 6.2 per­cent­age point increase in the Fed­er­al Med­ic­aid Assis­tance Per­cent­age (FMAP) rate for cer­tain child wel­fare costs to the states. These increased dol­lars can be repur­posed to self-finance imme­di­ate, short-term rais­es in fos­ter par­ent rates for the dura­tion of the fed­er­al emergency.

“If your state draws IV‑E reim­burse­ment for these types of costs, you can poten­tial­ly use those monies to help self-finance increas­es in fos­ter par­ent pay­ments,” Blazey says. ​“It would be a tem­po­rary ges­ture — but if you act quick­ly, it could be an effi­cient way to shore up fos­ter parents.”

Some Title IV‑E child wel­fare costs for eli­gi­ble chil­dren are reim­bursed to states at the FMAP rate. This includes fos­ter care main­te­nance pay­ments (for exam­ple, pay­ments for youth in Title IV‑E–approved extend­ed care pro­grams), adop­tion sub­si­dies and guardian­ship assis­tance pay­ments. Blazey notes the increase is avail­able to all states. It is cur­rent­ly unclear if the enhanced FMAP will be extend­ed to Title IV‑E pro­grams in the Dis­trict of Colum­bia, Puer­to Rico or the U.S. Vir­gin Islands or to sev­er­al tribes.

State agen­cies in Okla­homa and New Mex­i­co moved quick­ly to take advan­tage of the expand­ed oppor­tu­ni­ties for fed­er­al dol­lars to sup­port fos­ter fam­i­lies. High­er expens­es for food and util­i­ties, tech­nol­o­gy costs for remote learn­ing and income short­falls due to job loss have result­ed in unfore­seen finan­cial bur­dens many fam­i­lies might not be able to shoul­der with­out addi­tion­al assis­tance — jeop­ar­diz­ing the sta­bil­i­ty of the chil­dren and youth in their care. Both states have imple­ment­ed rate increas­es for fos­ter par­ents in the form of sup­ple­men­tal month­ly payments.

“Being a fos­ter par­ent has its own unique stres­sors, which are now being com­pound­ed by these extreme­ly dif­fi­cult cir­cum­stances,” says Andrea Buck, deputy direc­tor of Okla­homa Child Wel­fare Ser­vices. ​“We hope that the addi­tion­al pay­ments will alle­vi­ate some of the added stress fam­i­lies are expe­ri­enc­ing dur­ing this time.” Oklahoma’s emer­gency sup­ple­ment for fos­ter fam­i­lies — an addi­tion­al $250 per child each month — began in March and will extend at least through May, and kin­ship fam­i­lies and new fos­ter fam­i­lies are eli­gi­ble for the high­er rate.

In New Mex­i­co, a $175 month­ly sup­ple­ment for each child in care — an approx­i­mate­ly 25% increase from the nor­mal aver­age rate — is effec­tive in April and will con­tin­ue until emer­gency restric­tions are lift­ed. The state is also issu­ing a sup­ple­ment direct­ly to young peo­ple in inde­pen­dent liv­ing pro­grams. ​“By help­ing to sta­bi­lize our youth where they are, we hope to pre­vent place­ment insta­bil­i­ty or home­less­ness dur­ing the surge or after,” says Bri­an Blalock, cab­i­net sec­re­tary for New Mexico’s Chil­dren, Youth and Fam­i­lies Depart­ment. ​“That’s why it was crit­i­cal to pro­vide this relief as soon as possible.”

“Agen­cies will have to eval­u­ate whether this approach works for their spe­cif­ic sit­u­a­tion,” Blazey says. ​“Our goal is to give young peo­ple in fos­ter care sta­bil­i­ty and keep them in fam­i­ly-based care — and to sup­port the fos­ter par­ents who are first respon­ders in the crisis.”

Three-step process to deter­mine fos­ter par­ent rates

Blazey sug­gests a three-step process to help agen­cies deter­mine if this approach will work for them.

1. Exam­ine your pri­or­i­ties. Determine:

• where you can have a sig­nif­i­cant impact;
• which options align with your val­ues and require few or no struc­tur­al changes; and
• how to artic­u­late the ben­e­fits of your select­ed approach.

2. Review your autho­riz­ing and oper­at­ing envi­ron­ment. Ask these questions:

• Can you get approval for reusing this mon­ey — the dol­lars gained from the tem­po­rary FMAP increase — to self-finance a tem­po­rary fos­ter par­ent rate increase?
• Can you see a clear path to mak­ing this hap­pen? Remem­ber — legal and reg­u­la­to­ry envi­ron­ments vary wide­ly by state.
• Can you exe­cute? This will like­ly require changes in IT and account­ing sys­tems that process payments.

3. Do the math. Here are the steps:

• Use Blazey’s rate sup­ple­ment cal­cu­la­tor to esti­mate how much your state can self-finance addi­tion­al, short-term sup­ports for fos­ter par­ents by repur­pos­ing funds gained from the tem­porar­i­ly high­er FMAP rate. To use the mod­el, you’ll need access to Title IV‑E claims data from your state’s Title IV‑E quar­ter­ly claim report (Form CB-496) and to bed-day cen­sus data for the pop­u­la­tion you want to cov­er with sup­ple­men­tal payments.
• Insert the data into the spread­sheet mod­el in the cells mapped for input.
• Com­pute the rate increase per child, per diem and per month that can be self-financed by the expand­ed FMAP pay. FMAP gains begin with January–March 2020 claims.
• Remem­ber that using this mod­el sim­ply iden­ti­fies a poten­tial source of addi­tion­al monies to help your agency assess the fea­si­bil­i­ty of a tem­po­rary raise in fos­ter par­ent rates — whether to take this approach is ulti­mate­ly about your agency’s values.

Down­load the rate sup­ple­ment calculator