>> Increase financial monitoring of child welfare. Have HHS provide quarterly reports on expenditures to the Legislature and separate child welfare spending from spending on other public assistance programs.
>> Establish contract requirements. Require cost-benefit and financial implications of personal services contracts valued at $25 million or more.
>> Create the position of inspector general of Nebraska child welfare, with jurisdiction to investigate state and private agencies that serve children.
>> Require data standards. HHS should implement a process to obtain access to “real-time” data to improve decision-making, among other things.
>> Don’t extend privatization of child welfare case management into additional areas of the state.
>> Don’t extend current contracts with private contractors, which end on June 30, 2014. Amendments would be used to comply with any legislative changes before then.
>> Resolve outstanding claims by subcontractors owed money from a previous contractor, Boys and Girls Homes, by using the Miscellaneous Claims Act.
>> Continue to monitor the relationship between child welfare and behavioral health, particularly the cost-shifting from Medicaid to the child welfare system. Provide a continuum of residential and community-based services.
>> Require a minimum standard base rate for foster care payments and develop additional, tiered compensation to provide for children with special circumstances. Make it a priority to increase focus on recruiting and retaining high-quality, experienced, trained foster parents.
LINCOLN — Saying Nebraska is failing in its responsibilities to children, a panel of state lawmakers called Thursday for pulling back on the controversial privatization of child welfare services.
In the final report from a months-long investigation, the Health and Human Services Committee proposed sweeping changes aimed at creating better outcomes for children and better financial oversight for the state.
The report could mark the beginning of the end for Nebraska's two-year-old experiment in turning over to private contractors the bulk of duties for ensuring the safety and well-being of abused and neglected children in the state.
But it also sets up a potential conflict between lawmakers and Gov. Dave Heineman, who has resisted previous calls to slow or halt his administration's privatization effort.
The governor had no immediate comments about the proposals. Jen Rae Hein, his spokeswoman, said he had not seen the inch-thick report yet.
Topping the committee's list of proposals were:
» Returning the management of child welfare cases to state workers by July 1, 2012.
» Establishing a new Department of Children's Services by July 1, 2013, that would pull together services from several agencies.
» Setting up a Nebraska Children's Commission to develop plans for child welfare reform and the new department and to provide ongoing advice to all three branches of government.
State Sen. Kathy Campbell of Lincoln, the committee chairwoman, said the proposals are not about privatization but about how Nebraska should construct a sustainable system for the protection and well-being of children.
"Child welfare reform is not synonymous with privatization," she said. "Privatization is a tool."
Lawmakers launched the investigation in February out of concern about the turmoil created by the privatization initiative.
Starting in November 2009, the Nebraska Department of Health and Human Services contracted with five private agencies to provide services for children and families in the child welfare and juvenile justice systems.
Since then, three of the five agencies have lost or dropped their contracts, citing financial and management issues.
The two remaining contractors are Kansas-based KVC, which handles all cases in southeast Nebraska and one-third of those in the Omaha area, and the Omaha-based Nebraska Families Collaborative, which handles the rest of the Omaha-area cases.
The committee report was highly critical of the initiative. It concluded the contracts had been "ill-advised" from the beginning and had produced "neither the outcomes nor the cost savings for which the state contracted."
Studies done as part of the investigation showed that the switch to private contractors increased state spending on child welfare by 27 percent but did not significantly reduce the number of children removed from their families or improve the state's performance on federal child welfare standards.
"Disruptions to the system have reached the level that (the department) is not fulfilling its statutory responsibilities to children as a result of privatization and the subsequent abdication of case management responsibility," the committee said.
Campbell said the committee had not determined what role private contractors should play in a revamped system. She said the proposed commission would answer those kinds of questions.
Representatives from KVC and the collaborative panned the recommendation to take away their case management duties.
"We would see that as a step backwards," said David Newell, executive director of the collaborative.
The contractors added the case management responsibility in January. Previously, they were in charge of coordinating services for children and families, while state workers handled case management.
State officials said they made the change to reduce costs and eliminate duplication and confusion. But the committee said that costs had not decreased and that the current system leaves the state dependent on contractors.
Sandra Gasca-Gonzalez, KVC's Nebraska president, said the proposal would create yet another disruption for case managers, some of whom have had five different employers during the past two years.
"They've been through so many changes they may not wish to work for the state again," she said. "This is not a small issue, it's a big change."
But Julie Dake Abel, executive director of the Nebraska Association of Public Employees, the largest state employees union, expressed confidence the state could hire back good workers.
A spokeswoman for the Department of Health and Human Services said agency officials will be reviewing the report and had no immediate comments.
The proposals drew plaudits from advocacy groups, which have been sounding the alarm since before the state launched the privatization effort.
Carol Stitt, executive director of the Nebraska Foster Care Review Board, said it was "extraordinary work with extraordinary leadership by Sen. Kathy Campbell and her committee at a time of extraordinary need to improve our troubled child welfare system. It is a road map for improvement."
Kathy Bigsby-Moore, former executive director of Voices for Children of Nebraska, liked the plan for a separate children's agency. "Prioritizing the needs of children is absolutely the right direction," she said.
Said Carolyn Rooker, the group's current executive director: "We've had an underfunded, broken system for years. Finally, we're looking at what it will take to meet the needs of these kids. We're excited."
Sarah Helvey of the Nebraska Appleseed Center for Law in the Public Interest said the committee hit on the core issues of concern with the system.
Campbell said the committee had not calculated the costs of the proposals. "I think at this point the committee feels that sometimes we have looked at 'How much money do we have available,' not 'How much money do children need,'" she said.
Sen Bob Krist of Omaha said that the current system is "unmanageable" and that putting children's services into a single agency will result in greater accountability and efficiency.
But he said it also might take higher spending to take care of children properly.
The report avoided pointing fingers at any one decision or person for privatization's failures.
Campbell said state officials had many opportunities to step back and take another look at the direction they were headed, but they did not. Nor did they take advantage of numerous studies and resources before launching the effort, she said.
The Nebraska Democratic Party did not hesitate to lay the blame on Heineman.
"This governor has been no advocate for the Nebraska taxpayers, who have had to foot the bill and pay millions unnecessarily during this long period of bumbled mismanagement," said Jim Rogers, the Democratic Party's executive director.
It would take legislation to translate the committee's proposals into action. Legislative leaders say they expect bills arising from the report to be a major focus of the coming session.
Contact the writer:
402-473-9583, martha.stoddard@owh.com
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