Medicaid cutting foster care funds

They aren't troubled enough to require commitment to a psychiatric hospital.

They're too emotionally disturbed to be placed in regular foster homes.

For now, hundreds of Nevada's foster children with severe emotional disturbances are cared for in treatment homes, where they can receive mental health services while living in familylike settings.

But that middle tier of placement might be wiped out by looming changes in the federal Medicaid program, which now pays half the cost of therapeutic foster care.

The funding expires on Dec. 31, said Charles Duarte, administrator for the Nevada Division of Health Care Financing and Policy. And the federal agency has yet to approve either the state's proposed Medicaid plan or his request for a six-month extension.

Reasons for the federal inaction are two-fold, Duarte said. The Centers for Medicare and Medicaid Services has concerns with the way Nevada documents costs for reimbursement. The two parties have yet to agree on a new way of doing it.

Medicaid officials also are reluctant to continue paying for services related to child welfare, even though they have historically done so. Duarte said Medicaid's new administration argues that those costs should be supported by other federal funding sources or by the state itself.

"They believe -- and the U.S. General Accounting Office has shown -- that a lot of states, not Nevada, are commingling (federal child welfare funding) and supplanting them with Medicaid," Duarte said.

It's an issue that has delayed approval of Nevada's Medicaid plan for almost two years. Duarte said he does expect the federal agency to grant Nevada its requested extension. But that doesn't resolve the long-term problem of what to do with foster children who require a middle level of mental health care if Medicaid disallows payment for those services.

"Is there some kind of contingency plan?" asked Jennifer Bevacqua, regional program director for Olive Crest, a provider of local treatment foster care.

Bevacqua raised the question at least twice last week, once at a roundtable discussion on local child welfare issues called by Rep. Jon Porter, R-Nev., and again at a meeting of the Nevada Children's Behavioral Health Consortium.

The uncertainty is leaving groups that offer therapeutic foster care wondering what to do if the funding dries up.

"We're trying to do the best we can with what we're given," Bevacqua said. "But I don't know what the providers are going to do without funding."

Duarte said that in absence of Medicaid funding, therapeutic foster care would have to be paid for by either the county or the state. Since the Medicaid budget is facing a possible 8 percent reduction by Gov. Jim Gibbons, as well as cuts in its federal funding stream, it doesn't appear likely that the state can absorb the loss, Duarte said.

"I haven't seen anybody in the press saying: 'Save Medicaid,'" Duarte said Thursday.

Therapeutic foster care costs about $16 million a year in Nevada, with Medicaid reimbursing 50 percent of that. About 300 children involved with Clark County Family Services are in therapeutic foster care.

Clark County Commission Chairman Rory Reid recently pressed Gibbons to exempt child welfare funds from the possible 8 percent budget cuts faced by other state-funded government entities. That request was granted.

When asked last week whether Clark County was prepared to absorb the cost of treatment foster care if Medicaid falls through, Reid said that was unlikely.

The county, like the state, is facing shortfalls in projected revenues.

"We certainly can't make that commitment given our own financial situation," Reid said.

Without the county or the state to pick up the bill, Duarte said the program likely would be discontinued.

"If the Legislature or the county thinks that this is a valuable service and I can't pay for it, then they'll have to," Duarte said.

Now is not the time to consider cutting Clark County's child welfare services, Reid said.

The failures of the system have been well-documented at all levels: Child deaths have been underreported; Clark County Family Services is understaffed and poorly trained; children have died while in foster care; multiple lawsuits against the county allege a failure to meet the needs of children in public custody.

Problems within Clark County Family Services also have made the state fall short of meeting federal child welfare standards.

"This has to be a cooperative effort between the county, the state and the federal government," Reid said. "We can't do it alone."

Clark County Family Services Director Tom Morton said providers of therapeutic foster care probably won't surrender all the children in their care on Jan. 1 if Medicaid funding isn't extended by Dec. 31. But those entities don't have bottomless pockets, Morton said.

If something doesn't happen soon, the county will face a crisis.

"We could be seeing 300 children brought back to Child Haven," Morton said, referring to the county's emergency shelter for abused and neglected children.

Nevada Health and Human Services Director Mike Willden describes the Medicaid issue as "the 600-pound gorilla on our backs." He doesn't want to see an entire level of mental health care eliminated.

That leaves hospitalization or nothing as the only options for emotionally disturbed or mentally ill foster children.

Hospitalization is an incredibly expensive alternative, Willden said, and shouldn't even be considered unless a child requires it.

"There aren't any good options," Willden said. "We just have to hope to convince the feds to do the right thing."

Contact reporter Lisa Kim Bach at lbach @reviewjournal.com or (702) 383-0287.