CCC Report: Checking Up on Children in New York City Foster Care: Does the Medicaid Per Diem Rate Ensure Access to Care

Published February, 2005

The Medicaid per diem rate is a daily rate received by foster care agencies to pay for outpatient health and mental health services. It was intended to provide foster care agencies with the flexibility to respond to the special health and mental health needs of children in foster care (who as a result do not have Medicaid Managed 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. 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.

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 was a survey of 22 foster care agencies operating foster boarding homes and Part 2 of the study was a survey of 17 agencies operation group homes or residential treatment centers RTCs).

CCC’s report includes a series of recommendations intended to improve health insurance coverage for children in foster care and ensure that the children placed in foster care receive the comprehensive, coordinated, and quality health and mental health services that they need. The recommendations include:

• Use the Medicaid per diem rate to fund only health and mental health screenings, care coordination, and family engagement activities related to health and mental health issues
• Fund training and implementation of the best practices set forth in the New York State Office of Children and Family Services’ recently released guide Working Together: Health Services for Children in Foster Care.
• Increase the availability of licensed health and mental health services for children in foster care and establish new foster care Medicaid fee-for- service reimbursement rates to improve access to care.