Title IV-E as Payer of Last Resort: The Achilles Heel of the Family First Act?

The Family First Prevention Services Act Act was widely hailed as allowing for the first time the use of federal Title IV-E child welfare funds for services to prevent a child’s placement in foster care. Unfortunately, the law has been interpreted in a way that has almost negated this central purpose of Family First. Thanks to a technical-sounding determination about Title IV-E’s place in the hierarchy of programs as payers for services, Title IV-E funds are now unavailable to beef up services that are eligible for funding from other programs.

Before implementation of Family First on October 1, 2019, federal matching funds under Title IV-E of the Social Security Act could be used only to match state spending on foster care. Advocates of Family First and its predecessors argued that providing Title IV-E funds for foster care and not services to prevent it encouraged  jurisdictions to place children in foster care rather than helping their parents address their problems and keep their children at home. As I argued in an earlier post, this was a false narrative that disregarded the fact states were already working with families in their homes using other funds, such as Medicaid, maternal and child health programs, and others.

But the advocates won and Family First was passed. It allowed federal Title IV-E matching funds to be used for evidence-based practices (EBP’s) in the categories of “in home parent skill-based programs,” mental health, and drug treatment programs that meet criteria for being “evidence-based” as defined by the Act. These are all considered to be “prevention services” because they are aimed at preventing placement of children in foster care. (Funds can also be spent on kinship navigator programs to help kin who agree to take custody of children temporarily while their parents pursue services.) The Act also created a clearinghouse  of programs from which states can choose.  The clearinghouse has so far approved nine programs for inclusion and is in the process of considering 21 more.

But the contents of the clearinghouse have much less impact in light of decisions made by Congress and the Children’s Bureau, as explained in a useful webinar from the Chronicle of Social Change. As a result of these decisions, Title IV-E became in effect the “payer of last resort” for the foster care prevention services authorized under the Act .

It would be difficult to overestimate the magnitude of this decision to make Title IV-E the payer of last resort for foster care prevention services. Many of the services that are already included in the clearinghouse or being reviewed now are covered by Medicaid or paid for by other programs in many states.  This means that states with more generous Medicaid plans (those covering more people and/or more services) and more participation in other federal programs have less opportunity to use Title IV-E funds for foster care prevention services.

Consider the District of Columbia, which has a generous Medicaid program in terms of whom and what it covers. In my five years as a child welfare social worker in the District, I don’t remember a parent who was not eligible for Medicaid. The District was the first jurisdiction to submit a Family First plan and the first to have its plan approved, but it’s hard to understand the District’s eagerness to make the transition. In its plan, the District’s Child and Family Services Agency (CFSA) indicates that of the seven services in its plan that are currently deemed allowable by Title IV-E, six are funded through other federal sources–Medicaid and the Maternal, Infant, and Early Childhood Home Visiting Program. Therefore, CFSA will be claiming Title IV-E funds for only one allowable evidence-based program–Parents as Teachers (PAT).

So here is the irony. Family First was supposed to revolutionize child welfare by allowing federal foster care funds to be used for family preservation or foster care prevention, whatever one chooses to call it. Never mind that states have been using Medicaid and other funds for this purpose for many years. And now it turns out that with Title IV-E as a payer of last resort, many states will continue to provide these services with other funds. Family First will make little difference except adding a new layer of bureaucracy: states will now have to include these services in their prevention plans even if they are not funded by Title IV-E!

Things are actually worse under Family First for the 27 states that had waivers under Title IV-E. Under the waivers, states were able to use Title IV-E funds in combination with other funds to expand and improve services–an option not available to them now.

It gets even worse. Under Family First, states must spend at least 50% of their Title IV-E prevention funds on practices defined as “well supported” as defined by the Act. It looks like payments made by Medicaid won’t count toward the 50%, so states will need to find enough “well-supported” practices that are not covered by Medicaid in order to meet this requirement, which may cause great difficulty.

Title IV-E’s status as payer of last resort also appears to prevent Title IV-E from paying a provider who does not accept Medicaid for an EBP that is allowed under Medicaid. It is widely known that low Medicaid reimbursement rates restrict the quality and quantity of mental health services available to Medicaid participants. Both jurisdictions where I have served as a foster care social worker, Maryland and the District of Columbia, use their own funds to pay for top-notch providers who don’t accept Medicaid. In both jurisdictions and I suspect many others, children with the most complex mental health needs are enrolled with one of these high-quality providers rather than left to the mercy of the Medicaid-funded agencies, with their long waits for service and high turnover. We rarely or never paid for mental health services to parents but isn’t that just what Family First should allow jurisdictions to do? Where, otherwise, is the revolution in child welfare that Family First was supposed to bring about?

Title IV-E as payer of last resort means that very little will change, except perhaps in some states with very narrow Medicaid programs and little categorical federal funding.  To have any hope of fulfilling its promise to keep families together, Family First should be amended to allow Title IV-E to supplement Medicaid and other funding to provide critically needed services to parents.