Capitol: HHS officials brief state on child welfare costs
January 5th, 2012
Lincoln, NE – Conflicting views on child welfare and health care were in the air on the second day of the legislative session.
As lawmakers continued to introduce new bills, the Health and Human Services Committee got a briefing from state officials on child welfare costs. Kerry Winterer, head of the Department of Health and Human Services, said KVC, one of the private contractors running child welfare services, had asked in November for an additional $2.1 million a month to continue.
That drew this reaction from Sen. Bob Krist: “I just want to say by any other definition, that by any other word, that’s extortion,” Krist said. “If you’re telling me that KVC told us that they were going to take their pail and bucket and go home unless they got some more money, then they have essentially grown to a position within this structure, where they are extorting money from this government.”
KVC Nebraska President Sandra Gasca-Gonzalez, who was not at the briefing, said the company had not ‘sprung” anything on the state, and had been talking for months about the need for more money to make up for costs no longer covered by Medicaid. And Winterer said the department had negotiated KVC down to a one-time payment of $1.8 million while it worked on a new payment method known as a case rate.
“We had two choices,” Winterer said. “We could say KVC go away. Take it all back by January. That was one choice. Another choice was to find some way to fund them so they could stay around. And they wanted a heck of a lot of money to do that, which we really weren’t willing to do. The other choice was to say let’s find a way to keep them around in the short term and get to a case rate.”
A case rate is a system whereby contractors are paid a set amount for each child served, and expenses rise and fall according to the number of those children. Department officials say that’s better than simply paying all the funds that are available and budgeted. They say their goal is to reach a case rate by the end of January.
Meanwhile, legislation is being introduced that would return management of child welfare cases from contractors to the state. The administration has expressed concern about the costs, but senators like Krist say experience has shown the use of contractors has itself increased costs.
On another health-related issue, senators introduced competing bills on establishing health care exchanges. Sen. Jeremy Nordquist’s proposal would establish the exchange, or marketplace for people to shop for health insurance, under the direction of an appointed board.
Sen. Rich Pahls’ proposal would authorize, but not require, establishing an exchange under the direction of the Department of Insurance. The proposals reflect different views of federal health care reform.
Supporters want the state to go ahead and establish an exchange; critics including Gov. Dave Heineman want to wait until after the U.S. Supreme Court rules on the constitutionality of the federal law.