March 24, 2011

Less demand for group homes saves state $126 million

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By Megan Poinski
Megan@MarylandReporter.com

The Board of Public Works approved $245 million in two-year contracts with 71 different providers of residential child care services for the Department of Human Resources on Wednesday. The contracts cost the state about $126 million less than in 2008, because fewer children need those services.

Ted Dallas, interim secretary of the Department of Human Resources, said that before the department implemented a new approach to foster services in 2007, they needed about 2,200 beds for young people in residential care. The contracts approved on Wednesday provide 1,376 beds in residential care, and Dallas said the amount of young people needing that kind of care is continuing to drop.

“It’s saved us money, but more importantly, we’ve served kids better,” Dallas said.

The last time these kinds of contracts came before the Board of Public Works, there were 125 facilities involved, said Carnitra White, executive director of the Social Services Administration. That two-year contract total in 2008 was for more than $371 million. Over the last year, White said, the department has been working with an extension of the previous contract.

The “Place Matters” initiative, started by DHR in 2007, focuses on trying to keep troubled children in their own homes, with relatives and in their communities. Providers try to make children’s stays in group homes as short as possible.
Gov. Martin O’Malley said that “Place Matters” has also helped double he number of children adopted out of foster care.

White said that they worked to award more of the contracts in places where there are more young people with needs — many of them are in Baltimore City and Baltimore County.

Dallas said that it is difficult to determine an average cost per child for the services because children placed in the group homes range from young people with severe behavioral problems to those who need to be taken out of their homes for a brief amount of time. However, he said, the contracts approved on Wednesday are based on the actual needs of the department. Previous contracts were for the maximum amount of beds, which exceeded the number of children in need.

Since the state’s need has been decreasing, this is the first time group home contracts have been put out for bid, Dallas said. All of the contracts except one met all of the state’s regulations for contracts up for bid.

According to the terms of the request for proposals, any facility with more than 25 beds needs to have at least 5% minority employees. One has fewer minority employees than that standard, and Dallas said the department is negotiating to make the contract work.