80R1692 KKA-D

By: Naishtat H.B. No. 363

A BILL TO BE ENTITLED

AN ACT

relating to the provision of case management services for children by the Department of Family and Protective Services.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Section 264.106, Family Code, is amended to read as follows:

Sec. 264.106. REQUIRED CONTRACTS FOR SUBSTITUTE CARE [AND CASE MANAGEMENT] SERVICES.

SECTION 2. Sections 264.106(a)(2) and (3), Family Code, are amended to read as follows:

(2) "Independent administrator" means an independent agency selected through a competitive procurement process to:

(A) secure, coordinate, and manage substitute care services [and case management services] in a geographically designated area of the state; and

(B) ensure continuity of care for a child referred to the administrator by the department and the child's family from the day a child enters the child protective services system until the child leaves the system.

(3) "Permanency services" means services, other than family-based safety services, provided to secure a child's safety, permanency, and well-being, including substitute care services, family reunification services, adoption and postadoption services, and preparation for adult living services[, and case management services].

SECTION 3. Sections 264.106(b), (c), (d), (f), (i), (j), and (k), Family Code, are amended to read as follows:

(b) The department shall, in accordance with Section 45.004, Human Resources Code:

(1) assess the need for substitute care [and case management] services throughout the state;

(2) either contract directly with private agencies as part of regional community-centered networks for the provision of all necessary substitute care [and case management] services or use an independent administrator to contract for those services;

(3) contract with an independent administrator, if cost beneficial, to coordinate and manage all substitute care services needed for children in the temporary or permanent managing conservatorship of the department in a designated geographic area;

(4) monitor the quality of services for which the department and each independent administrator contract under this section; and

(5) ensure that the services are provided in accordance with federal law and the laws of this state, including department rules and rules of the Department of State Health Services and the Texas Commission on Environmental Quality.

(c) An independent administrator may not:

(1) directly provide substitute care services; or

(2) be governed by a board that has a member who has a financial interest in a substitute care [or case management] provider with whom the independent administrator subcontracts.

(d) Administrative services to be provided by an independent administrator include:

(1) recruiting and subcontracting with community-based substitute care [and case management] providers to ensure a full array of services in defined geographic areas;

(2) managing placements and making referrals for placement based on department-approved protocols;

(3) monitoring services delivered by subcontractors;

(4) providing training and technical assistance to contract providers;

(5) maintaining data systems that support tracking and reporting key performance and outcome data; and

(6) ensuring accountability for achieving defined client and system outcomes.

(f) A contract with an independent administrator for substitute care [and case management] services under Subsection (b)(2) must include department-approved provisions that:

(1) enable the independent administrator and the department to:

(A) monitor the effectiveness of substitute care [and case management] services; and

(B) specify performance standards and authorize termination of the contract for cause;

(2) describe how performance is linked to reimbursement amounts or schedules to provide incentives for desired results;

(3) require all independent administrators and private contractors to disclose to the department any information that may indicate an actual or potential conflict of interest with the commission, the department, or another health and human services agency, including information regarding actual or potential related-party transactions, relationships, interests, or business history, and any other factor that may indicate an actual or potential conflict of interest;

(4) authorize the independent administrator, an agent of the independent administrator, the department, an agent of the department, and the state auditor to inspect all books, records, and files maintained by a contractor relating to the contract; and

(5) the department determines are necessary to ensure accountability for the delivery of services and for the expenditure of public funds.

(i) Except as provided by Subsections (j) and (k) and notwithstanding any other law, on and after September 1, 2011, the department may not directly provide substitute care [and case management] services for children for whom the department has been appointed temporary or permanent managing conservator.

(j) On and after September 1, 2011, the department may provide substitute care [and case management] services in an emergency. The executive commissioner shall adopt rules describing the circumstances in which the department may provide those services.

(k) The department may provide substitute care [and case management] services as a provider of last resort in any region of the state in which the department or an independent administrator contracting with the department is unable to contract with a private agency to provide those services.

SECTION 4. Section 264.1063, Family Code, is amended to read as follows:

Sec. 264.1063. MONITORING PERFORMANCE OF SUBSTITUTE CARE [AND CASE MANAGEMENT] PROVIDERS. (a) The department, in consultation with private entities under contract with either an independent administrator or the department to provide substitute care [or case management] services, shall establish a quality assurance program that uses comprehensive, multitiered assurance and improvement systems based, subject to the availability of funds, on real-time data to evaluate performance.

(b) The contract performance outcomes specified in a contract under Section 264.106 must be consistent with the fiscal goals of privatizing substitute care [and case management] services and must be within the contractor's authority to deliver. The contract must clearly define the manner in which the substitute care [or case management] provider's performance will be measured and identify the information sources the department and, if applicable, the independent administrator will use to evaluate the performance.

SECTION 5. The heading to Chapter 45, Human Resources Code, is amended to read as follows:

CHAPTER 45. PRIVATIZATION OF SUBSTITUTE CARE [AND CASE MANAGEMENT] SERVICES

SECTION 6. Sections 45.001(6) and (8), Human Resources Code, are amended to read as follows:

(6) "Independent administrator" means an independent agency selected through a competitive procurement process to:

(A) secure, coordinate, and manage substitute care services [and case management services] in a geographically designated area of the state; and

(B) ensure continuity of care for a child referred to the administrator by the department and the child's family from the day a child enters the child protective services system until the child leaves the system.

(8) "Permanency services" means services, other than family-based safety services, provided to secure a child's safety, permanency, and well-being, including substitute care services, family reunification services, adoption and postadoption services, and preparation for adult living services[, and case management services].

SECTION 7. The heading to Section 45.002, Human Resources Code, is amended to read as follows:

Sec. 45.002. PRIVATIZING SUBSTITUTE CARE [AND CASE MANAGEMENT] SERVICES; DEPARTMENT DUTIES.

SECTION 8. Sections 45.002(a), (b), (d), and (e), Human Resources Code, are amended to read as follows:

(a) Not later than September 1, 2011, the department shall complete the statewide privatization of the provision of substitute care [and case management] services in this state.

(b) On and after September 1, 2011:

(1) all substitute care [and case management] services for children for whom the department has been appointed temporary or permanent managing conservator must be provided by child-care institutions and child-placing agencies;

(2) all substitute care [and case management] service providers shall, to the best extent possible, honor the cultural and religious affiliations of a child placed in the service provider's care, regardless of the religious affiliation of the service provider; and

(3) except as provided by Subsections (d) and (e) and notwithstanding any other law, the department may not directly provide substitute care [and case management] services.

(d) On and after September 1, 2011, the department may provide substitute care [and case management] services in an emergency. The executive commissioner shall adopt rules describing the circumstances in which the department may provide those services.

(e) The department may provide substitute care [and case management] services as a provider of last resort as provided by Section 264.106(k), Family Code.

SECTION 9. Section 45.003, Human Resources Code, is amended to read as follows:

Sec. 45.003. HIRING PREFERENCE. A substitute care [or case management] services provider that contracts with the department to provide substitute care [or case management] services shall:

(1) give a preference in hiring to qualified department employees in good standing with the department who provide substitute care [or case management] services and whose positions with the department may be eliminated as a result of the privatization of substitute care [and case management] services; and

(2) ensure that each subcontractor with whom the substitute care [or case management] services provider contracts for the provision of substitute care [or case management] services also gives a preference in hiring to current and former qualified department employees whose positions with the department may be or were eliminated as a result of the privatization of substitute care [and case management] services.

SECTION 10. Sections 45.004(a) and (b), Human Resources Code, are amended to read as follows:

(a) The department shall research and develop a comprehensive strategy for contracting for management support services from independent administrators on a regional basis. If the department determines that an independent administrator could manage and procure substitute care [and case management] services contracts with private agencies and conduct placement assessments in a more cost-beneficial manner, the department shall implement a transition plan to transfer the procurement, management, and oversight of substitute care [and case management] services from the department to an independent administrator, as well as responsibility for placement assessments. If the department determines that contracting for management support from an independent administrator is not cost beneficial, the privatization of substitute care [and case management] services will occur as provided by Section 45.002(b).

(b) The comprehensive strategy, at a minimum, must:

(1) use competitively procured independent administrators to procure and manage substitute care [and case management] providers in a geographic region designated by the department;

(2) require independent administrators to contract with private agencies that will:

(A) increase local foster and adoptive placement options for all children, especially teenagers, sibling groups, children whose race or ethnicity is disproportionately represented in foster care, children with severe or multiple disabilities, and other children who are difficult to place; and

(B) expand efforts to recruit foster families, adoptive families, and alternative care providers through faith-based and other targeted recruitment programs; and

(3) allow permanency services providers to enter client, service, and outcome information into the department's client data system.

SECTION 11. Section 45.052, Human Resources Code, is amended to read as follows:

Sec. 45.052. FINANCING. The department shall create financing and payment arrangements that provide incentives for an independent administrator and substitute care [and case management] providers to achieve safety, permanency, and well-being outcomes and improved system performance. In developing this financing arrangement, the department shall examine:

(1) the use of case rates or performance-based fee-for-service contracts that include incentive payments or payment schedules that link reimbursement to results; and

(2) ways to reduce a contractor's financial risk that could jeopardize the solvency of the contractor, including the use of a risk-reward corridor that limits risk of loss and potential profits or the establishment of a statewide risk pool.

SECTION 12. Sections 45.053(b) and (c), Human Resources Code, are amended to read as follows:

(b) Not later than March 1, 2006, the commission and the department shall, in consultation with private entities under contract to provide substitute care services for the department, including members of the boards of directors of the private entities and other community stakeholders, develop and adopt a substitute care [and case management] services transition plan consistent with the requirements of Subchapter C.

(c) The executive commissioner shall adopt rules to implement the privatization of substitute care [and case management] services in this state.

SECTION 13. Sections 45.054(a), (b), (c), (e), and (g), Human Resources Code, are amended to read as follows:

(a) The department shall implement the privatization of substitute care [and case management] services on a regional basis in accordance with the transition plan. The transition plan must include a schedule with deadlines for implementation of the plan. Subject to the requirements of Subsections (c), (d), and (e), statewide implementation of the plan shall be completed not later than September 1, 2011. The commission shall propose the first three regions of the state for implementation of privatization based on state demographics and shall consider including a rural region, a metropolitan region, and a region including border areas of the state.

(b) The transition plan must include a schedule with the following deadlines for implementation of the plan:

(1) completion of the transition plan, not later than March 1, 2006;

(2) release of a request for proposal for a geographic region of the state designated by the department, not later than April 30, 2006;

(3) the awarding of the contract described by Subdivision (2), not later than September 30, 2006;

(4) establishment of the multidisciplinary team and necessary processes, evaluation criteria, and monitoring tools to be used to monitor and evaluate the performance of the contractor, not later than September 30, 2006;

(5) completion of the transition of substitute care [and case management] services in the first region, not later than December 31, 2007;

(6) the review and evaluation of the multidisciplinary team's reports pertaining to the contractor's achievement of performance-based milestones and the effect on the quality of permanency services provided, annually beginning December 31, 2007;

(7) completion of the transition of substitute care [and case management] services in the second and third regions, not later than December 1, 2009; and

(8) completion of the statewide implementation of contracted substitute care [and case management] services for additional geographic regions, not later than September 1, 2011.

(c) Not later than the first anniversary of the date the department enters into the first contract for substitute care [and case management] services under this section, the department shall contract with a qualified, independent third party to evaluate each phase of the privatization of substitute care [and case management] services. Each evaluation must:

(1) assess the performance of substitute care [and case management] services based on compliance with defined quality outcomes for children;

(2) assess the achievement of performance measures;

(3) compare for quality the performance of substitute care [and case management] services provided by contractors to substitute care [and case management] services provided by the department in similar regions;

(4) determine if contracted services are cost beneficial; and

(5) assess the private sector's ability to meet the performance measures, including service capacity, for the remaining regions.

(e) The department shall continue to implement the transition plan for the second and third regions only after:

(1) the commission reports to the House Human Services Committee, or its successor, and the Senate Health and Human Services Committee, or its successor, the status of the initial transition of services to a contractor in the first region not later than December 31, 2006;

(2) the independent third party with whom the department contracts under Subsection (c) evaluates and reports to the House Human Services Committee, or its successor, and the Senate Health and Human Services Committee, or its successor, on the performance of contracted substitute care [and case management] services in the first region not later than December 31, 2008; and

(3) the commission determines, based on the report prepared under Subdivision (2) or information obtained by the review required under Subsection (b)(6), whether material modifications to the model for privatization of substitute care [and case management] services are necessary and submits a report and recommendations to the House Human Services Committee, or its successor, and the Senate Health and Human Services Committee, or its successor, not later than December 31, 2008.

(g) The department shall continue to implement the transition plan for the remaining regions of the state only after:

(1) the independent third party with whom the department contracts under Subsection (c) evaluates and reports to the House Human Services Committee, or its successor, and the Senate Health and Human Services Committee, or its successor, on the performance of contracted substitute care [and case management] services in the second and third regions not later than September 1, 2010; and

(2) the commission determines, based on the report prepared under Subdivision (1) or information obtained by the review required under Subsection (b)(6), whether material modifications to the model for privatization of substitute care [and case management] services are necessary and submits a report and recommendations to the House Human Services Committee, or its successor, and the Senate Health and Human Services Committee, or its successor, not later than December 31, 2010.

SECTION 14. Section 45.101, Human Resources Code, is amended to read as follows:

Sec. 45.101. GOALS FOR PRIVATIZATION. The transition plan adopted under Section 45.053 must provide for a new structural model for the community-centered delivery of substitute care [and case management] services that is based on a goal of improving protective services, achieving timely permanency for children in substitute care, including family reunification, placement with a relative, or adoption, and improving the overall well-being of children in substitute care consistent with federal and state mandates.

SECTION 15. Section 45.102, Human Resources Code, is amended to read as follows:

Sec. 45.102. TRANSITION PLAN REQUIREMENTS. The transition plan developed by the department and the commission must:

(1) identify barriers to privatization, including regional disparities in resources, provider capacity, and population, and propose solutions to stimulate capacity and adjust program delivery;

(2) provide details regarding the target population and services by region that will be part of the system redesign, including the number of children and families, historic caseload trends and service utilization information, and projected caseloads;

(3) provide details regarding the roles, responsibilities, and authority assigned to the public and private entities, including the department, independent administrators, and substitute care [and case management] providers, in making key decisions throughout the child and family case;

(4) include an implementation plan to transfer all foster homes certified by the department to private child-placing agencies, ensuring minimum disruption to the children in foster care and to current foster parents;

(5) specify the limited circumstances under which a foster home verified by the department may continue to be verified by the department when continuation would be in the best interest of a child in the care of the foster home;

(6) include a process for assessing each child who is transferred to a private substitute care provider to verify the child's service needs;

(7) include an implementation plan to transfer all adoption services to private agencies, including details of how and when cases will be transferred and how adoption provider contracts and reimbursements methods will be structured;

(8) describe the process to transfer the duties of [case management and] family reunification services from department staff to private agency staff[, including the integration of family group conferencing into private agency case management];

(9) describe the manner in which the department will procure and contract for kinship services that are funded by the state;

(10) provide details regarding financial arrangements and performance expectations for independent administrators and substitute care [and case management] pr oviders that:

(A) provide incentives for desired results and explicit contract performance and outcome indicators;

(B) describe how various risk-based arrangements will be weighed and realistically assessed using sound actuarial data and risk modeling and how mechanisms will be selected to limit uncontrollable risks that could threaten provider stability and quality;

(C) describe how financing options will increase flexibility to promote innovation and efficiency in service delivery; and

(D) provide balance between control over key decisions and the level of risk the contractor assumes;

(11) require the executive commissioner to evaluate whether existing rate structures are appropriate to compensate substitute care providers who enter into contracts with an independent administrator under Section 264.106, Family Code, considering new functions to be served by the providers, and, if necessary, require the executive commissioner to adjust the rates accordingly;

(12) require the department to enter into contracts for the provision of substitute care [and case management] services as required by Section 264.106, Family Code, and describe the procurement and contracting process, including:

(A) stating how the department will shift from an open-enrollment system to a competitive procurement system;

(B) identifying the services that will be procured and contracted for directly with the department and the services that will be procured by an independent administrator; and

(C) developing a procurement and contracting schedule to ensure full implementation not later than September 1, 2011;

(13) provide for the implementation of Sections 264.1062 and 264.107, Family Code, by describing each party's responsibility and ensuring that the department retains the legal authority to effectively provide oversight;

(14) describe formal training required for department staff, independent administrators, and substitute care [and case management] providers;

(15) define roles and expectations related to reporting and managing data required to ensure quality services and meet state and federal requirements, including data collection responsibilities for an independent administrator and service provider;

(16) describe how the transition will impact the state's ability to obtain federal funding and examine options to further maximize federal funding opportunities and increased flexibility; and

(17) describe the costs of the transition, the initial start-up costs, and mechanisms to periodically assess the overall adequacy of funds and the fiscal impact of the change.

SECTION 16. Section 264.106(a)(1), Family Code, and Section 45.001(1), Human Resources Code, are repealed.

SECTION 17. As soon as possible after the effective date of this Act, the Health and Human Services Commission and the Department of Family and Protective Services shall make any modifications to the transition plan adopted in accordance with Section 45.053(b), Human Resources Code, as that section existed before amendment by this Act, necessary to reflect the changes in law made by this Act.

SECTION 18. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.