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'Quality of care' at stake in DCS rate-cut case

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The federal judge who granted a preliminary injunction in the combined suits against the Department of Child Services for cutting reimbursement rates for adoptive and foster parents and child care agencies found the quality of care for children would suffer if the rate cuts stood.

In a 38-page order released Tuesday, U.S. District Judge Sarah Evans Barker detailed her reasons for granting the preliminary injunction from the bench Jan. 20 that blocked the rate cuts by DCS.

"The injuries that all categories of plaintiffs stand to suffer if an injunction is not issued are significant and the type for which there is no adequate remedy at law," she wrote. "There is much more than money at issue in the case. ... Plaintiffs are likely to suffer a variety of substantial harms due to the rate cuts."

Both the parents of adoptive and foster children and the Indiana Association of Residential Child Care Agencies sued DCS in December after learning of cuts to reimbursement rates by the DCS to those parties. The suits were combined into one case, C.H., et al. v. James Payne, No. 1:09-CV-1547. The suit represents more than 100 agencies statewide and has been certified as a class action for foster and adoptive parents throughout the state.

The issue is the rate setting done by DCS, which cut or froze rates to the service providers and parents anywhere from 14 to 20 percent for the service providers and up to 10 percent for parents. The cuts came after the state had asked DCS to cut 10 percent from its budget to send those funds back to the state.

After the state assumed responsibility for the standard per diem for rates, DCS examined the rate structure and decided to lower the reimbursements based on a United States Department of Agriculture report on actual expenditures parents made on children and a nationwide report on foster care per diem rates.

But relying on the USDA report was "questionable" because the report included all children and didn't specify information on costs of raising foster children, wrote Judge Barker. DCS also relied on the figures for the lowest income group in its calculations - numbers that are skewed by the poverty of the recipients instead of reflecting what items actually cost, she continued.

DCS also failed to use a methodology that takes into consideration the actual costs of providing items specified in federal statute such as food, school supplies, and reasonable travel expenses to visit the child's home.

"In addition, to the extent that budgetary concerns drove the decision to impose the uniform across-the-board ten percent reduction, rather than consideration of the specific factors mandated by the statute, such a procedure is in our view inappropriate under Title IV-E," wrote the judge.

DCS also failed to consult with adoptive parents in making individualized determinations of the payment amounts based on the specific needs of children being adopted.

In regards to the service providers, they too successfully proved the need for a preliminary injunction preventing the cuts. The rate setting for the providers didn't follow any specific written procedure and appeared to be "almost entirely motivated and controlled by budgetary concerns," wrote Judge Barker.

She also found persuasive the IARCCA's contention that the rate cut directive DCS instituted was in the nature of a rule and so it is subject to the statutory requirements that govern rulemaking.

"It is the quality of care promised to the children under the applicable statutes that is at stake in the case at bar," she wrote. "Any deficiency in such care cannot later be undone with monetary compensation."

The preliminary injunction restrains DCS from reducing or altering the reimbursement rate to any licensed child care placing agency or residential placement provider below the DCS rates paid on Aug. 1, 2009, and below the rates on Dec. 31, 2009, for the parents. The order also prevents DCS taking any action to circumvent the order, such as transferring a child to a less expensive placement or reclassifying a child to a less expensive rate. The injunction remains in effect until further order from the court.

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  1. This law is troubling in two respects: First, why wasn't the law reviewed "with the intention of getting all the facts surrounding the legislation and its actual impact on the marketplace" BEFORE it was passed and signed? Seems a bit backwards to me (even acknowledging that this is the Indiana state legislature we're talking about. Second, what is it with the laws in this state that seem to create artificial monopolies in various industries? Besides this one, the other law that comes to mind is the legislation that governed the granting of licenses to firms that wanted to set up craft distilleries. The licensing was limited to only those entities that were already in the craft beer brewing business. Republicans in this state talk a big game when it comes to being "business friendly". They're friendly alright . . . to certain businesses.

  2. Gretchen, Asia, Roberto, Tonia, Shannon, Cheri, Nicholas, Sondra, Carey, Laura ... my heart breaks for you, reaching out in a forum in which you are ignored by a professional suffering through both compassion fatigue and the love of filthy lucre. Most if not all of you seek a warm blooded Hoosier attorney unafraid to take on the government and plead that government officials have acted unconstitutionally to try to save a family and/or rescue children in need and/or press individual rights against the Leviathan state. I know an attorney from Kansas who has taken such cases across the country, arguing before half of the federal courts of appeal and presenting cases to the US S.Ct. numerous times seeking cert. Unfortunately, due to his zeal for the constitutional rights of peasants and willingness to confront powerful government bureaucrats seemingly violating the same ... he was denied character and fitness certification to join the Indiana bar, even after he was cleared to sit for, and passed, both the bar exam and ethics exam. And was even admitted to the Indiana federal bar! NOW KNOW THIS .... you will face headwinds and difficulties in locating a zealously motivated Hoosier attorney to face off against powerful government agents who violate the constitution, for those who do so tend to end up as marginalized as Paul Odgen, who was driven from the profession. So beware, many are mere expensive lapdogs, the kind of breed who will gladly take a large retainer, but then fail to press against the status quo and powers that be when told to heel to. It is a common belief among some in Indiana that those attorneys who truly fight the power and rigorously confront corruption often end up, actually or metaphorically, in real life or at least as to their careers, as dead as the late, great Gary Welch. All of that said, I wish you the very best in finding a Hoosier attorney with a fighting spirit to press your rights as far as you can, for you do have rights against government actors, no matter what said actors may tell you otherwise. Attorneys outside the elitist camp are often better fighters that those owing the powers that be for their salaries, corner offices and end of year bonuses. So do not be afraid to retain a green horn or unconnected lawyer, many of them are fine men and woman who are yet untainted by the "unique" Hoosier system.

  3. I am not the John below. He is a journalist and talk show host who knows me through my years working in Kansas government. I did no ask John to post the note below ...

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