Between 1991 and 2002, New York State focused on expanding health insurance coverage for children. The combined efforts of government and advocates resulted in many achievements, including: creating and expanding the Child Health Plus program; investing state and federal funds to expand eligibility for Medicaid and to support the facilitated enrollment initiative; and streamlining some of the administrative hurdles families encountered during the insurance application and re-certification processes.

Unlike the thousands of New York children who benefited from the recent efforts to expand and streamline access to health insurance, children in foster care did not. Unfortunately, the availability of adequate health insurance for children in foster care continues to be treated as a child welfare issue separate and apart from the State’s public health insurance agenda. This is true despite the fact that most children in foster care are insured by Medicaid.

New York State relies on two types of Medicaid reimbursement for children in foster care: the Medicaid per diem rate and Medicaid Fee-For-Service.2 The Medicaid per diem rate, a daily rate received by foster care agencies to pay for outpatient health and mental health services, is unique to children in foster care. It was intended to provide foster care agencies with the flexibility to respond to the special health and mental health needs of children in care. The Medicaid per diem rate affords foster care agencies with two choices: (1) hire staff who provide health and mental health services directly and/or (2) pay for services obtained in the community. For foster care agencies opting to provide services directly, New York State does not require them to obtain a license to do so and subjects them to only minimal oversight and regulation. For foster care agencies opting to secure services in the community, many refer children to state licensed health and/or mental health clinics that obtain Medicaid Fee-For-Service reimbursement. Referrals to Medicaid-Fee-For-Service providers alleviates some of the financial strain experienced by foster care agencies year after year because New York State has set the Medicaid per diem rates so low that they could not otherwise afford to pay for the services rendered.

The end result is that the inadequacy of the Medicaid per diem rates, limited regulation of health and mental health service delivery by foster care agencies, and the reliance on Medicaid Fee-For-Service providers has resulted in wide variation as to how foster care agencies address the health and mental health needs of children in their care. These circumstances raise serious concern about whether children in foster care receive the services to treat their mental health problems, promote their healthy development, and help to facilitate reunification with their family or other caregivers.

From a policy and planning perspective, New York State’s complicated health insurance arrangement for children in foster care makes it difficult to ascertain how foster care agencies spend the Medicaid per diem rate and the total amount of Medicaid per diem and Medicaid Fee-For- Service dollars spent on children in foster care. The absence of this data undermines efforts to allocate resources in ways that promote ready access to coordinated, comprehensive, and ongoing health and mental health services for children in foster care. A goal New York State has pursued vigorously for millions of other children.

Recent efforts to address the disparity in health insurance coverage for children in foster care and its consequences have met with no tangible success. The New York State Department of Health (SDOH) and the New York State Office of Children and Family Services (OCFS) formed a workgroup in 1999. Over a period of five years, the OCFS/SDOH Workgroup developed proposals to: restructure the Medicaid per diem rate methodology; improve care coordination and increase investment for mental health screening, assessment, and treatment services; and equip foster care agencies with the resources to serve categories of children depending on their level of mental health need. None of these proposals advanced beyond the Workgroup or surfaced in a state executive or legislative budget proposals.

Most recently, OCFS released Working Together: Health Services for Children in Foster Care (Working Together), a manual distributed to foster care agencies that describes the state mandates related to, and the best practices for, delivering health and mental health services to children in foster care. Although originally intended to become regulatory requirements, an inability to secure state funding to enable foster care agencies to comply with the standards resulted in OCFS’s decision to transform Working Together into a manual of recommended best practices. Presently, with the exception of the state mandates, there is no mechanism for monitoring or enforcing compliance with these standards. These circumstances highlight the gap, created by the inadequacy of the Mediciad per diem, between how foster care agencies try to meet the health and mental health needs of children in foster care and how foster care agencies could and should improve their practices if adequately funded.

After three years of advocacy in Albany to improve health insurance coverage for children in foster care, CCC decided that a change of approach was needed.3 To this end, CCC initiated a two-part study to examine how foster care agencies actually use the Medicaid per diem rate and/or other resources to address the health and mental health needs of children in their care. Part I of the study focused exclusively on agencies operating regular foster boarding homes. A total of 22 foster care agencies that operated foster boarding homes (FBH agencies) in New York City participated in Phase I of CCC’s study. Part II of the study focused on children placed in regular group homes and regular residential treatment centers (RTCs). A total of 17 agencies that operated either regular group homes or regular residential treatment centers (RTCs) participated in Phase II of the study.