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| Demonstration Type: | Managed Care Payment System1 |
| Approved: | September 16, 1999 |
| Implemented: | January 1, 2000 |
| Completed: | December 31, 20022 |
| Interim Evaluation Report Date: | October 31, 2002 |
| Final Evaluation Report Date: | Expected May 2004 |
Maryland intended to target 1,000 children in State custody for its managed care demonstration. Three subgroups were included: 1) 340 children entering foster care placement directly from home following a dispositional hearing; 2) 160 children entering foster care from kinship care; and 3) 500 children already placed in foster care who are five years of age and under. The number in each subgroup includes siblings of these children who were already in out-of-home care.
Jurisdiction
Maryland implemented this component of the demonstration in the city of Baltimore.
Intervention
The waiver agreement allowed Maryland to contract with up to two licensed child placement agencies to serve as lead agencies using a managed care payment system. Each lead agency was expected to provide case management, placement, permanency planning, and support services (including aftercare) to all referred children. The State expected the lead agencies to provide and/or subcontract for services as needed. The State contracted with one lead agency
for a period of three years. The lead agency received a fixed sum ($24.3 million)3 to provide services to 500 children, regardless of the children’s actual placement status and service needs during the contract period. For children who left care under the demonstration, the lead agency was responsible for their care if they re-entered care during the contract period.
The State determined the contract amount by aggregating costs for a related set of services (including days in care, type of care, and selected permanency goals) for similar, previously served populations. The agreement called for the lead agency to redirect any cost savings, achieved through early discharge from care, to enhanced services to project participants. The lead agency risked financial loss if costs for the enrolled population exceeded the fixed rate. However, the agreement included a stop-loss provision to limit the lead agency’s financial losses.
The lead service agency was responsible for paying the entire cost of room, board, and treatment, up to $3,500 per month. If, however, the lead agency determined that a child needed a placement setting where board care exceeded $3,500, the lead agency agreed to pay 10 percent of the excess costs, and the State paid 90 percent. At the end of the contract period, children who continued to need care were transitioned back to traditional services within the public child welfare agency.
Initially, the State planned to pay the lead agency in equal monthly installments of $675,680 throughout the contract period. Instead, shortly following implementation, the State and lead agency agreed to an alternative payment schedule which would give the lead agency a larger portion of the total contracted amount during the first year. In each of years two and three, the State paid the lead agency smaller portions of the total contracted amount. This was intended to give the lead agency the resources to provide the services needed up-front to reduce the length of stay in foster care.
Evaluation Design
The evaluation consists of process, outcome, and cost-effectiveness components. The State used an evaluation design based on random assignment. At project implementation, the State planned to assign children randomly to the demonstration project at a 2:1 ratio, resulting in 1,000 children in the experimental group and 500 children in the control group. Children in the control group received traditional child welfare services through the public child welfare agency.
To determine the demonstration's success, Maryland is using the following outcome measures: length of stay in out-of-home care, number of children who achieve their permanency plan, and number of children re-entering care. The State also is examining measures related to child well-being, child safety, and caregiver satisfaction and well-being.
Evaluation Findings
Process Findings
State representatives entered into the waiver agreement expecting to contract with two lead agencies that would each serve 500 children. Instead, the State contracted with one lead agency. A second vendor withdrew from the demonstration project prior to signing an agreement with the State. This resulted in a total sample size of 50 children in the experimental group and 250 children in the control group.
Because of State budget constraints, Maryland elected not to renew the existing contract as allowed under the waiver agreement. Experimental group cases that still required care at the end of the contract period (December 31, 2002) were transitioned back to the public child welfare agency’s care.
From August through December 2000, semi-structured interviews were conducted with 56 stakeholders who were directly or indirectly involved with the demonstration. Stakeholders included representatives from the State, the local child welfare agency, the lead agency, its primary subcontractor, the juvenile court, and others involved in the child welfare system. These interviews focused on planning and early implementation issues, descriptions of service delivery under experimental and control group conditions, and perceived differences between these models. Selected findings from the process study follow.
The State’s interim evaluation report(submitted October 2002) included descriptions of the service models implemented by the lead agency and its subcontractor. The lead agency assumed responsibility for leading clinical and family systems efforts, and the subcontractor was responsible for financial management, structured case decision making, and the daily operation of the experimental intervention.
The State’s Interim Report reflects the results of interviews regarding project implementation conducted by the independent evaluator and are the opinions of the interviewees.
Despite unanticipated needs relating in part to differences in age and level of need from the expected target population, the State reported that the lead agency addressed the service needs of the children as they arose. In addition, the State reported that the lead agency appeared to have been moderately successful in developing relationships with BCDSS (Baltimore City Department of Social Services) staff, the court, the medical community and other providers, in spite of the difficult start-up period.
The State found that the flexible use of IV-E funds, as implemented during the first year, did not result in the development of the expected service delivery system. Through the managed care arrangement, the State expected the lead agency to substitute lower cost services (including home- and community-based social, therapeutic, and other services) for higher cost out-of-home care services. In addition, the provision of aftercare services would be emphasized.
Through the managed care contract, the State expected the lead agency to develop a service delivery network that assured the availability of appropriate services for each client, without a waiting period. However, the State found that the lead agency had not determined the appropriate composition of the network and, therefore, had not yet developed the appropriate mix of services. In particular, the State concluded that during the first year, the lead agency had not used available funds to purchase in-home or supportive services to families to expedite or stabilize family reunification. The lead agency referred families to therapeutic services using the same vendors used by the public child welfare agency. The only services purchased through the lead agency were child care for foster parents and limited one-time emergency purchases. In addition, the State’s evaluators concluded that the lead agency focused on case management services for children to expedite adoption rather than reunification services for families.
In response to these findings, the lead agency indicated that the fixed rate available to families in the experimental group had been insufficient to meet the costs of care. On average, however, experimental group workers carried smaller caseloads than public agency workers (an average of 16 cases versus 20-28 foster care cases and 31-35 kinship care cases among public child welfare agency workers).
During the first year of implementation, the lead agency was developing, implementing, and refining the use of managed care tools. The lead agency reported using several managed care strategies related to quality control, quality enhancement, and service utilization:
Outcome Findings
Preliminary data analyses of foster care exit rates through November 2002 indicate that rates did not differ significantly between the experimental (n=501) and control (n=250) groups. However, when looking at the type of exit from care, the experimental group (n=194 exits to adoption) has a significantly higher rate of exits from foster care to adoption than the control group (n=77 exits to adoption).
1Based on information submitted by the State as of January 2004. Maryland has two waiver agreements. Under the first waiver agreement, the State is implementing an Assisted Guardianship/Kinship Permanence demonstration project. The second waiver agreement involves two project components—this Managed Care Payment System project, and a Services to Substance-Abusing Caretakers project. Back
2Originally, Maryland’s Managed Care Payment System intervention was to end December 31, 2004. Given the State’s decision not to extend a second contract, the intervention ended December 31, 2002. Back
3The lead agency received an additional $1.7 million through a contract modification to adjust for approved rate increases. Back
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