Every year, Amy Rice stands at a wooden lectern in front of the Henry County Board of Supervisors and tries to explain the escalating costs of the Children’s Services Act.
She’s typically asking the board for more money because the cost of serving at-risk kids is always more than they anticipate. Rice, the county’s director of social services, said it gets harder every year to explain why the county should keep paying the never-ending bill.
Henry County is one of many Virginia localities seeing CSA costs skyrocket, with little ability to control, or even predict, the increases. By February, the county had spent $1.3 million in fiscal year 2021 on CSA costs, a 457% increase compared to the same period five years ago.
“They’re writing a blank check every year,” Rice said. “CSA is just this gap. We have no way to predict how many children are going to have needs or what those needs will be.”
The Children’s Services Act, legislation implemented in the 1990s, pooled state money from social services, education, behavioral health and juvenile justice. That pool of funds is used by the state and each locality to pay for services for at-risk children: kids in foster care or in private special education, or those who receive community services to avoid foster care.
The services are considered sum-sufficient, which means that no matter what a child needs or how much it costs, the state and its localities are required to pay for it. Currently, more than 15,000 kids are in the program statewide.
Year after year, Virginia asks localities what they need to better care for children referred to social services. And year after year, localities respond with the same lists of struggles. But instead the state hands down new mandates focused on curbing spending in whatever area is facing the biggest cost increase at the time.
The most recent surveys, conducted by the state Office of Children’s Services, show the same service gaps as the year before: Localities struggle to find enough behavioral health counselors, and almost every region in the state is in dire need of foster care homes.
Family foster homes are one of the least expensive ways to care for children. Without them, kids are sent to more expensive therapeutic foster care homes through private agencies or to residential facilities and group homes that offer more intensive services — even if they don’t need that type of care.
The outcomes for children who are unnecessarily placed in residential facilities and group homes is bleak: They are more likely to become delinquent, post lower test scores, drop out of school and experience physical abuse while in care, according to Casey Family Programs, a national foundation focused on foster care issues.
So not only are some of Virginia’s most vulnerable children being improperly served, the state is paying more money to do it.
“At the end of those dollars are children,” Rice said. “I see children who I helped in CSA who are now on the news for criminal charges, and I just wonder what we’re doing.”
Like a game of whack-a-mole
The state’s response to CSA cost increases has followed the same pattern for years.
Each time a new report delves into CSA funding, lawmakers focus on the one area facing the most significant cost increase rather than looking broadly at the system as a whole.
Advocates have likened the reaction to a game of whack-a-mole.
Margaret Nimmo Holland, vice president of external relations at enCircle, has seen this pattern play out. EnCircle runs Minnick Schools — special education private day schools — and also provides treatment foster care services. Nimmo Holland also formerly served as the executive director of Voices for Virginia’s Children, a child policy and advocacy organization.
“At the end of the day, the needs of these kids have to be met by someone, somehow,” she said. “They’re complex needs and they need a certain level of attention and support that’s going to be expensive. And if they aren’t served one place, they’ll pop up somewhere else that’s also expensive.”
The General Assembly’s watchdog agency, the Joint Legislative Audit and Review Commission, first studied CSA in 1998. The resulting report said CSA cost increases, which had been an issue since the legislation was implemented, could be attributed to more poverty, more kids entering foster care, and children needing treatment for more severe, and expensive, needs.
The report also found that only half the children being served through CSA were receiving services that actually met their level of need — 35% were receiving higher-level services than necessary. In some localities, the report said, “case managers make placement decisions based upon the fact that there are inadequate resources, both for funding and for community alternatives.”
In response, the state created a new mandate to standardize the way social workers decide where to place children, and it required localities to further review the cases of children in residential facilities. Legislators also established the Office of Children’s Services to monitor local CSA programs.
The changes led to decreasing costs in residential care as localities began to use more community-based services, but overall CSA program expenditures continued to rise.
In 2006, another JLARC study found that many localities placed children in more restrictive settings, like residential care, than necessary because less expensive and more effective community-based services were not available.
“These service gaps jeopardize children’s ability to improve, contribute to escalating program costs, and prevent the state from achieving the CSA’s core objectives of providing appropriate and cost effective services,” the report said.
In the years following that report, the state focused on lowering residential placements and costs, the largest driver in spending growth at the time. It implemented a match-rate incentive system in which localities pay a larger share for residential services than they would if they placed the child in a community setting. The new system was successful — the percentage of foster care kids in group homes decreased 40% and total CSA expenditures declined nearly 9%.
But it further exacerbated another problem that had also been pointed out in 1998: Some localities require departments to try every possible solution to a child’s behavioral problems before resorting to residential care and taking on the higher cost. This means that children are required to “fail” multiple services before they can finally access the one they might need.
Rice said she agrees that most children should be served in their community whenever possible. But the incentive system punishes a locality financially for using a higher-level service, like residential care, even when the child needs it, she said.
“There are times when children need greater intervention and need a facility,” she said. “But when you have a system that is set up to penalize a county for putting children into congregate care, it just lengthens the timeline for them.”
Seeking legislative remedies
JLARC’s most recent CSA study, released in November 2020, focused on the use and costs of private special education day schools. The money spent on placements at such schools has more than doubled since 2010, growing about 14% per year from $81 million to $186 million. It now accounts for nearly half of all CSA spending.
Children who are placed in private special education cannot be adequately served by public schools. Sometimes these children exhibit disruptive behaviors, or they might have been diagnosed with autism or other learning challenges that require more intensive, one-on-one instruction.
CSA money spent on special education can only be used in private, not public, schools, according to Virginia law.
In response to the JLARC report, legislators introduced a flurry of bills during the last regular session focused on private special education. Most of them were incorporated into a bill from Sen. Monty Mason, D-Williamsburg, which took on five of JLARC’s recommendations, including quick fixes like licensing private day schools and standardized reporting of tuition rates.
But the biggest outcome of his bill was the creation of a committee to study whether CSA money should be able to be used in public schools and whether the funds used in CSA for special education should be transferred to the Department of Education instead.
In the meantime, students transitioning back to public school will be allowed to use the funds for 12 months.
For the third time in nearly 25 years, JLARC addressed longstanding service gaps that hinder CSA’s effectiveness, such as the need for foster care homes and school-based mental health services.
Del. Rob Bell, R-Albemarle, sponsored a bill that would require the Department of Medical Assistance Services to investigate why enrollment in one school-based mental health service, therapeutic day treatment, has dropped substantially in the last few years. Therapeutic day treatment is seen as the last option for kids with severe mental health needs before they are sent to a private day school or residential treatment or are hospitalized.
No policies or state regulations have changed, but children who had once been approved for the program are now being denied by Medicaid, Bell said. Even before the COVID-19 pandemic, the number of kids in the program suddenly dropped by 35%.
Bell’s bill would have set up an appeals process for children who had been denied the service, but it was tabled and will be studied by a subcommittee.
The state is moving away from therapeutic day treatment in search of a more robust mental health system in schools, but there is not yet a replacement.
“We have this time gap between when the new system will be in place and the old system is not providing services anymore,” Bell said. “Nobody is thinking there will be less demand for mental health support. So then the question is, what will the local school counselor do when the child is identified as needing more than she can provide?”
The Office of Children’s Services identified community-based behavioral health services, a category that includes therapeutic day treatment, as the number one service gap statewide in fiscal year 2019.
The JLARC report also recommended reviving the Innovative Community Services grant fund, which had allowed localities to apply for money to create new programs that would address service gaps. The grant expired and has not been implemented again, even after JLARC recommended it in 2006.
Meanwhile, half of Virginia’s localities identified a lack of funding as one of the major barriers to addressing service gaps.
28 years and counting
Lawmakers during late summer and early fall begin to put together their slate of issues for the coming session. This is also an election year, and while candidates are talking about the well-being of children, the huge need for foster care families and lower-level services to help keep children’s needs from escalating is once again not at the forefront.
Bob Cohen, the former director of the Virginia Treatment Center for Children at Virginia Commonwealth University, wrote a book on the Children’s Services Act that was published in 2017. He also worked on the legislation when it was being developed in the 1990s.
He said that over CSA’s 28 years, he has seen both progress and shortcomings. CSA was created to be a comprehensive system, but over the years it has developed flaws.
Service gaps continue to thrive in Virginia without a coordinated effort to fill them and attract new providers. Meanwhile, kids aren’t able to access the services they need when they need them.
Cohen said the state must look at the system as a whole instead of focusing on individual service types.
“Twenty-eight years later and we’re in a very different situation,” Cohen said. “I don’t think more Band-Aid approaches are going to help you create the comprehensive system we wanted.”
Too many ‘ifs’
In Henry County, Rice will apply the new rules and mandates to the children she and her staff serve every day. The county has 76 foster children and 22 kids in residential care, according to data from the Office of Children’s Services. In 2017, the county had 50 kids in foster care and only 11 in residential care.
When a child is removed from a home, social workers must find a place for the child immediately. If no local foster homes are available, workers look for an available home in another locality, a therapeutic foster care home, or, as a last resort, a group home. A more restrictive, or intensive, placement is never the goal, but sometimes there are no alternatives.
For example, Rice said Henry County lacks adequate access to juvenile sex offender treatment, so some kids who could stay in the community while receiving treatment are instead sent to residential facilities.
Rice said the department has access to therapeutic foster care homes from private agencies, but they can’t always handle the child’s behaviors. As more kids have come into foster care, the county’s 24 local foster care homes have filled up.
“When people ask me, ‘What is it that you need in social services?’ it’s not just one thing. We need a variety of things,” Rice said. “The solutions the state seems to apply always follow the money, but we’re responding to the human condition. There’s no set thing that will work for everybody.”
In Rice’s office at the Henry County-Martinsville Department of Social Services, she hangs the thank-you notes she’s received from families she’s been able to help in the past.
But she’s haunted by the ones where she could have made more of a difference if the family had been more open, if there had been more money, or if they had more time.
“And there are as many ‘ifs’ as there are families,” she said.
Alison Graham is The Secular Society Investigative Fellow at The Roanoke Times.