Tuesday, August 4, 2009

Cuts in Ohio’s Support for Federal Adoption Assistance; Can the State or County Agencies Make Automatic Cuts in Existing Adoption Assistance Payments?

Title IV-E Adoption Assistance

State participation in the federal Title IV-E adoption assistance program will be limited to monthly adoption assistance payments of $240 or less. Prior to the cut, the state provided the non federal portion of payments up to $300 per month. Since last April, the federal financial participation rate has been around 68.34 %, the state’s now down to about 31.66%. The state’s non federal contribution to an adoption assistance payment of $240 per month would be around $76.

The will be effective on September 1, 2009. The same federal and state requirements to negotiate adoption assistance agreements based on an equal consideration of the child’s needs and family circumstances are still in effect. Counties will be responsible for the non federal portion (31.7%) of adoption assistance payments over $240 per month instead of payments over $300 per month as was the case until the budget cuts.

Federal and state laws governing negotiation of IV-E adoption assistance agreements remain the same and adoptive parents should continue to insist that the current procedures and criteria continue to be followed. Adoption assistance agreements must be negotiated and the negotiations must take into consideration the ordinary and special needs of the child and the overall circumstances of the adoptive family. Both factors must be given equal consideration. Parents should also continue to exercise their appeal rights through the state administrative hearing system when negotiations fail to be productive.

Existing Adoption Assistance Agreements

According to the federal Child Welfare Policy Manual, the Ohio Department of Job and Family Services (ODJFS) cannot institute automatic or across the board cuts to existing adoption assistance payments.

Section 8.2A of the manual asks and answers the following question:

1. Question: Is it permissible for a State to include a statement in the title IV-E adoption assistance agreement to the effect that "The Department’s obligation to provide for Federally funded adoption assistance payments and/or services is subject to the appropriation of State funds"?

Answer: No. Although we understand that the State may experience difficulties in its ability to pay subsidies due to the State budget, such difficulties do not relieve or alter the State’s obligation under title IV-E to act in accordance with executed adoption assistance agreements. Accordingly, any statement that undermines the State’s obligation to honor the terms of the title IV-E adoption assistance agreement is not consistent with Federal requirements in sections 473(a)(1)(B)(ii) and 473(a)(3) of the Social Security Act. Once an agreement is signed, the State must obtain the concurrence of the adoptive parent if it wishes to make any changes in the payment amount with one exception. That exception is when there is an across-the-board reduction or increase in the foster care maintenance payment rate. In that circumstance, the State may adjust the adoption assistance payment without the adoptive parent's concurrence.

There are maximum statewide foster care rates in Ohio, but regular rates top out at $170 per day (around $5,100). The maximum difficulty of care rates add an additional $100 per day for specialized category and $200 per day for the exceptional care category. The chances of the state reducing maximum foster care rates anywhere close to existing adoption assistance payment levels are virtually nil. As I will argue, the only those families whose adoption assistance payments exceeded state foster care maximums could have their adoption assistance automatically reduced.

Why do federal officials cite across the board foster care reductions as the only acceptable reason for across the board cuts in adoption assistance?

Under current law, the federal share of funding for adoption assistance is available up to the child’s foster home level of support, that is the rate of payment the child would receive if they were placed in a foster home suitable to their level of care instead of an adoptive home. The only logical reason why an across the board cut in foster care rates would justify automatic or across the board reductions in adoption assistance is that existing adoption assistance payments would be higher than the newly reduced foster care rates. That portion of the adoption assistance payment that exceeded the foster care rate would not eligible for federal financial participation.

Suppose, for example, that standard therapeutic or exceptional needs foster care rate were $1,600 a month. The state reduces the therapeutic exceptional needs foster care to $1,500 per month. Adoption assistance agreements calling for adoption assistance payments of $1,600 to children with a therapeutic exceptional level of care would only be eligible for federal financial participation up to a maximum of $1,500 per month. In such situations, federal policy allows a state to make automatic or across the board cuts to adoption assistance payments.

I would argue, however, that the state cannot make any automatic cuts or across the board cuts adoption assistance payments that do not exceed the appropriate foster care rate for the child. In our example, the state could not reduce the adoption assistance of children with agreements calling for payments of $1,500 per month or less.

County agencies can always propose a reduction in adoption assistance, but must do so on an individual case by case basis and provide full notice and appeal rights. The burden of proof would rest with the county agency to establish why the needs of the child and family circumstances warranted a decrease. As we have seen, budget problems are not a valid reason.

Can Counties make automatic or across the board reductions in existing adoption assistance payments by making across the board cuts in foster care?

The answer to this question is not entirely clear, but individual counties would run into a number of difficulties in attempting to make automatic or across the board cuts in existing adoption assistance payments.

Under current law, the federal share of funding for adoption assistance is available up to the child’s foster home level of support, that is the rate of payment the child would receive if they were placed in a foster home suitable to their level of care instead of an adoptive home. Suppose for example, a child in a therapeutic foster home received or would receive $1,600 in monthly support. Federal financial participation would be available for an adoption assistance payment up to $1,600 if the agency and parties negotiated an agreement for that amount. At approximately 68.3%, the federal share of a $1,600 per month adoption assistance payment would be around $1,093.

Now, suppose across the board cuts in foster care lower the therapeutic foster care rate from $1,600 to $1,500 per month. Federal financial participation would only be available for adoption assistance payments up to $1,500 per month. It is for this reason that the federal Administration for Children and Families permit states to make across the board cuts in adoption assistance only when there are across the board cuts in foster care. Such cuts might affect federal financial participation rates.

It is not entirely clear, whether a political subdivision such as an Ohio county could legally make across the board cuts in adoption assistance by making across the board cuts in foster care. For the sake of argument, however, let us suppose that such a policy is permissible under the law.

Across the board cuts include must cuts in the specialized rates paid to a number of private service providers which provide foster homes under contract with county agencies. Recent trends have witnessed a growth in contracted foster care services, especially for child with high levels of care, as counties have struggled to secure an adequate number of qualified foster parents. If a child in a therapeutic foster home operated by a private provider qualifies for federal Title IV-E foster care maintenance and the foster parents receive $2,000 a month in support, the Ohio county benefits from 60% federal financial participation or about $1,200 in direct payments to that home. If the child were to be adopted by their therapeutic foster parents, federal participation in IV-E adoption assistance would be available for payments of up to $2,000 per month if the parents and agency negotiated an agreement for that amount.

Issue: Adoptive Parents often settle for adoption assistance payments that are lower than the child’s foster care rate, especially in cases involving specialized levels of care.

To carry the above example forward, suppose the county lowered its therapeutic foster care rate from $1,600 to $1,500. It is quite likely that few families that have adopted children through the county with a therapeutic level of care have adoption assistance agreements calling for monthly payments of $1,600. I doubt whether very many would have agreements in place calling for adoption assistance payments of $1,500. What about families whose adoption assistance payments remain at or below the foster care rates even after the county makes across the board cuts?

Issue: May a county cut adoption assistance payments if they remain at or below the foster care rates appropriate for the child?

Continuing our example, suppose after cutting the therapeutic foster care rate from $1,600 to $1,500, the highest adoption assistance rate in the county is $1,400. I would argue that the county cannot make any automatic cuts in those adoption assistance payments as long as they do not exceed the appropriate foster care rate for that child.

County agencies can always propose a reduction in adoption assistance, but must do so on an individual case by case basis and provide full notice and appeal rights. The burden of proof would rest with the county agency to establish why the needs of the child and family circumstances warranted a decrease. As we have seen, budget problems are not a valid reason.

My position rests on the fact that adoption assistance agreements are individual contracts, a position supported by Region IV of the federal Administration for Children and Families and two recent federal court decisions.


On May 1, 2006, a federal judge struck down the State of Missouri’s attempt to reduce adoption assistance, by retroactively making all existing adoption assistance agreements expire on their one year anniversary. In E.C. v. Sherman, the court determined that by abrogating existing adoption assistance agreements that commonly ran until the child’s 18th birthday, the state violated the families’ contractual rights, which in turn violated Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.

A 2008 settlement of the class action lawsuit in ASW, et al. v. State of Oregon compensated 6,688 adoptive families reversed the state’s 7.5% across the board cuts in adoption assistance as a 2003 budget measure. The settlement was reached after the Ninth Circuit Court of Appeals ruled that the families had a federal right to individualized adoption assistance agreements as well as the right to appeal through the administrative hearing process. The Oregon Supreme Court refused to hear the state’s appeal of that decision.

Finally, in responding to an inquiries about across the board or automatic cuts in adoption assistance from the State of Florida, Region IV of the federal Administration for Children and Families affirmed the contractual status of the adoption assistance agreement. The adoption assistance agreement, signed by all parties,” wrote the federal official, “is a legally-binding document.”

Summary

Based on federal policy issuances, court decisions and federal law itself, I feel confident in stating that county agencies cannot make automatic cuts in existing Title IV-E adoption assistance payments, unless there are across the board foster care cuts and then only in those cases where the adoption assistance payment exceeds the new foster care rate. In all other cases, where the adoption assistance payment remains at or below the existing foster care rate, the county must first propose to reduce the individual family’s payment, then show at hearing why such a reduction is justified. Under state regulations, the reduction could not take place until the appeal process had run its course. Counties would face dozens, perhaps hundreds of hearings and their chances of prevailing would not be good.

One more point deserves consideration. In a time, when the search for qualified foster parents has county agencies turning to private service providers in increasing numbers, how much can counties lower foster care rates without driving foster parents away? In tough economic times, the number of children entering foster care usually increases.