FIJ Quarterly - Summer 2022 Edition

monitors found that, for well over a decade, as foster care declined, child safety improved. 13 That changed, but not because of any change in financial incentives. Rather, according to the attorney who brought the suit, 14 and the monitors, 15 it was due to massive budget cuts. So, the cycle began again. There were more high-profile fatalities and another foster-care panic. Now the number of children in foster care is up to 20,600. 16 But that still is far lower than in 1997, suggesting that the change in financial incentives continues to have an effect. Per diem reimbursement remains the norm, however, because private “child welfare” agencies are a powerful lobbying force. Their boards of directors often are larded with members of a community’s business, civic and religious elite. If there is a child abuse fatality and they choose to scapegoat efforts to keep families together, they have the ears of powerful politicians. Some agencies will respond that they can’t be motivated by money because they are nonprofit organizations. When people say that, I tell a story from my early days in journalism when I worked for a nonprofit—a public television station. Twice, during pledge breaks in the midst of Sesame Street, someone from the station told the young viewers that they might have to take away Sesame Street if their parents didn’t send money. This is why it would be a mistake to assume that these problems can be solved simply by banning explicitly for-profit corporations from the foster-care business. The will to survive can induce in nonprofits a form of greed that is as corrosive of common decency as the worst corporate behavior. Into the Weeds: How

state uses every source. I will focus here on the most important: Title IV-E Title IV-E is the primary source of federal funding for foster care and adoption. It also helps fund certain administrative costs connected to family policing. Title IV-E is an entitlement. For every eligible child, IV-E pays at least half the cost of holding a child in foster care or subsidizing adoption. The amount varies from state to state. But for FY2023 the “base” reimbursement rate is projected to be between 50 cents and 78 cents on the dollar. 17 But it gets worse. Reimbursement for foster care is tied to a formula for reimbursement for Medicaid; 50 cents to 78 cents is based on something called the Federal Medical Assistance Percentage (FMAP). Whatever a state gets for Medicaid it gets for foster care. This creates another bad incentive: whenever the federal government does something good: paying more of the cost of health insurance for poor people, it automatically does something bad: paying more of the cost of foster care. The problem was illustrated by the COVID-19 pandemic. As part of the American Rescue Plan, the FMAP was increased by more than six percentage points in order to help cover the costs of health care for the poor. That is ______________ 13 Fuller, Tamara, et. al. Highlights from the FY2018 Monitoring Report of the B.H. Consent Decree . University of Illinois School of Social Work Children & Family Research Center. files/field_documents/highlights_from_the_fy2018_ monitoring_report_of_the_bh_consent_decree.pdf 14 Personal communication, Benjamin Wolf, Emeritus Legal Director, Illinois Branch, American Civil Liberties Union. 17 Kaiser Family Foundation. Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier: Timeframe: FY 2023 . state-indicator/federal-matching-rate-and-multiplier/? currentTimeframe=0&sortModel=%7B%22colId%22:%22L ocation%22,%22sort%22:%22asc%22%7D 15 Fuller, supra note 13. 16 HHS, supra note 12.

the Government Incentives Work

As noted above, there are a vast number of different potential sources of government funds for the family policing system. Not every

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