Two members of the Ohio House of Representatives introduced legislation last month to establish fixed payment rates for foster care across the state. The proposed bill is largely a response to the increasing financial strain on Ohio’s foster care system, as reported in previously published information.
According to Scioto County Commissioner Scottie Powell, foster care costs in Ohio have significantly risen despite a decrease in the number of children needing placement. Powell stated that since 2020, the number of Ohio children in foster care has declined by 9%. However, over the same period, costs have surged by 68%, representing a $160 million increase.
Scioto County Job and Family Services Director Tamela Moore Morton attributes this cost escalation to foster care providers raising prices. Morton explained that a limited supply of providers allows them to increase their rates. She noted that providers are able to ask for desired amounts for placing children, leaving the state and individual counties with limited options given the critical need to place these children.
Ohio House Bill 984 is designed to implement price controls for publicly funded foster care placements. The legislation proposes the creation of a statewide rate-setting system for services offered by certified foster homes and residential facilities. Under this bill, counties would be prohibited from exceeding the established statewide rate for these services. The goal of this measure is to manage excessive costs of foster care placements, especially in areas where a small number of providers might be keeping rates artificially high due to their market position.
However, the potential impact of such payment caps on the supply of foster care providers is also a significant consideration. Providing foster care is an expensive undertaking. The care for children, particularly those with complex behavioral or mental health needs, necessitates substantial resources. These include adequate staffing, consistent supervision, specialized training for caregivers, transportation services, suitable facilities, and effective crisis management. If reimbursement rates were to fall below the actual cost of delivering such comprehensive care, there is a concern that providers might become unwilling to accept children with high needs, reduce their overall capacity, or even cease providing care altogether.
Advocates of H.B. 984 believe that if current payment rates are indeed inflated due to providers exercising market power, the bill could lead to considerable savings for taxpayers without negatively affecting the quantity or quality of care provided. Conversely, if the current rates accurately reflect the increasing costs associated with serving children who present with more complex needs, then capping these rates could have an adverse effect. It could potentially deter new providers from entering the system and discourage existing providers from continuing their services.
Given these differing possibilities, there is no definitive understanding of whether H.B. 984 will successfully reduce costs or, instead, cause harm to children within the foster care system. To address this uncertainty, a proposed method involves integrating an evaluation component directly into the legislation. This approach would require the Department of Children and Youth to establish a baseline before the new rates are implemented. Key metrics would then be publicly reported at intervals of six months, one year, and two years after the new rates take effect.
By tracking specific data points such as the cost per child-day, the overall supply of providers, the difficulty in making placements, instances of displacement, the stability of placements, and the number of exceptions granted to the bill, policymakers could gain a clear understanding of the bill's real-world consequences within a few years. If costs decrease without any negative changes to provider participation, placement waiting times, or disruptions, it would provide strong evidence that the bill is achieving savings without compromising the quality of care for children. However, if the number of providers sharply declines, and concurrently, refusals, placement times, out-of-state placements, and disruptions all increase, it would indicate that the supply of foster care is being constrained.
Ultimately, the precise effects of H.B. 984 remain unknown. However, legislators have the opportunity to structure the bill in a way that allows for its impacts to be thoroughly monitored and understood over time.
