"NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) The state of Washington and several Indian tribes in the state of Washington assume legal responsibility for abused or neglected children when their parents or caregivers are unable or unwilling to adequately provide for their safety, health, and welfare;
     (b) Washington state has a strong history of partnership between the department of social and health services and contracted service providers who currently serve children and families in the child welfare system. The department and its contracted service providers have responsibility for providing services to address parenting deficiencies resulting in child maltreatment, and the needs of children impacted by maltreatment;
     (c) Department caseworkers and contracted service providers each play a critical and complementary role in the child welfare system. A 2007 Washington state children's administration workload study found significant gaps in the number of case-carrying social workers relative to the demands of their workload;
     (d) The current system of contracting for services needed by children and families in the child welfare system is fragmented, inflexible, and lacks incentives for improving outcomes for children and families.
     (2) The legislature intends:
     (a) To reform the delivery of certain services to children and families in the child welfare system by creating a flexible, accountable community-based system of care that utilizes performance-based contracting, maximizes the use of evidence-based, research-based, and promising practices, and expands the capacity of community-based agencies to leverage local funding and other resources to benefit children and families served by the department;
     (b) To phase in implementation of performance-based contracting in order to develop the contracting experience and other capacity necessary for statewide implementation;
     (c) To achieve improved child safety, child permanency, including reunification, and child well-being outcomes through the collaborative efforts of the department and contracted service providers and the prioritization of these goals in performance-based contracting; and
     (d) To implement performance-based contracting under this act in a manner that supports and complies with the federal and Washington state Indian child welfare act.

NEW SECTION.  Sec. 2   For purposes of this chapter:
     (1) "Case management" means convening family meetings, developing, revising, and monitoring implementation of any case plan or individual service and safety plan, coordinating and monitoring services needed by the child and family, caseworker-child visits, family visits, and the assumption of court-related duties, excluding legal representation, including preparing court reports, attending judicial hearings and permanency hearings, and ensuring that the child is progressing toward permanency within state and federal mandates, including the Indian child welfare act.
     (2) "Child" means:
     (a) A person less than eighteen years of age; or
     (b) A person age eighteen to twenty-one years who is eligible to receive the extended foster care services authorized under RCW 74.13.031.
     (3) "Child-placing agency" has the same meaning as in RCW 74.15.020.
     (4) "Child welfare services" means social services including voluntary and in-home services, out-of-home care, case management, and adoption services which strengthen, supplement, or substitute for, parental care and supervision for the purpose of:
     (a) Preventing or remedying, or assisting in the solution of problems which may result in families in conflict, or the neglect, abuse, exploitation, or criminal behavior of children;
     (b) Protecting and caring for dependent, abused, or neglected children;
     (c) Assisting children who are in conflict with their parents, and assisting parents who are in conflict with their children, with services designed to resolve such conflicts;
     (d) Protecting and promoting the welfare of children, including the strengthening of their own homes where possible, or, where needed;
     (e) Providing adequate care of children away from their homes in foster family homes or day care or other child care agencies or facilities.
     (5) "Department" means the department of social and health services.
     (6) "Evidence-based" means a program or practice that is cost-effective and includes at least two randomized or statistically controlled evaluations that have demonstrated improved outcomes for its intended population.
     (7) "Network administrator" means an entity that contracts with the department to provide defined services to children and families in the child welfare system through its provider network, as provided in section 3 of this act.
     (8) "Performance-based contracting" means structuring all aspects of the procurement of services around the purpose of the work to be performed and the desired results with the contract requirements set forth in clear, specific, and objective terms with measurable outcomes and linking payment for services to contractor performance.
     (9) "Promising practice" means a practice that presents, based upon preliminary information, potential for becoming a research-based or consensus-based practice.
     (10) "Provider network" means those service providers who contract with a network administrator to provide services to children and families in the geographic area served by the network administrator.
     (11) "Research-based" means a program or practice that has some research demonstrating effectiveness, but that does not yet meet the standard of evidence-based practices.

NEW SECTION.  Sec. 3   (1) No later than December 1, 2013, the department shall enter into performance-based contracts for the provision of family support and related services. The department may enter into performance-based contracts for additional services, other than case management, in future procurements.
     (2) Beginning December 1, 2013, the department may not renew its current contracts with individuals or entities for the provision of the child welfare services included in performance-based contracts under this section for services in geographic areas served by network administrators under such contracts, except as mutually agreed upon between the department and the network administrator to allow for the successful transition of services that meet the needs of children and families.      
     (3) The department shall conduct a procurement process to enter into performance-based contracts with one or more network administrators for family support and related services. As part of the procurement process, the department shall consult with department caseworkers, the exclusive bargaining representative for employees of the department, tribal representatives, parents who were formerly involved in the child welfare system, youth currently or previously in foster care, child welfare services researchers, and the Washington state institute for public policy to assist in identifying the array of family support and related services that will be included in the procurement. In identifying services, the department must review current data and research related to the effectiveness of family support and related services, and prioritize those services that are most critical to the mitigation of child safety concerns and are evidence-based or research-based. Expenditures for family support and related services purchased under this section must remain within the levels appropriated in the operating budget.
     (4)(a) Network administrators shall, directly or through subcontracts with service providers:
     (i) Assist caseworkers in meeting their responsibility for implementation of case plans and individual service and safety plans; and
     (ii) Provide the family support and related services included in a child or family's case plan or individual service and safety plan within funds available under contract.
     (b) While the department caseworker retains responsibility for case management, nothing in this act limits the ability of the department to continue to contract for the provision of case management services by child-placing agencies, behavioral rehabilitation services agencies, or other entities that provided case management under contract with the department prior to July 1, 2005.
     (5) In conducting the procurement, the department shall actively consult with other state agencies with relevant expertise, such as the health care authority, and with philanthropic entities with expertise in performance-based contracting for child welfare services. The director of the office of financial management must approve the request for proposal prior to its issuance.
     (6) The procurement process must be developed and implemented in a manner that complies with applicable provisions of intergovernmental agreements between the state of Washington and tribal governments and must provide an opportunity for tribal governments to contract for service delivery through network administrators.
     (7) The procurement and resulting contracts must include, but are not limited to, the following standards and requirements:
     (a) The use of family engagement approaches to successfully motivate families to engage in services and training of the network's contracted providers to apply such approaches;
     (b) The use of parents and youth who are successful veterans of the child welfare system to act as mentors through activities that include, but are not limited to, helping families navigate the system, facilitating parent engagement, and minimizing distrust of the child welfare system;
     (c) The establishment of qualifications for service providers participating in provider networks, such as appropriate licensure or certification, education, and accreditation by professional accrediting entities;
     (d) Adequate provider capacity to meet the anticipated service needs in the network administrator's contracted service area. The network administrator must be able to demonstrate that its provider network is culturally competent and has adequate capacity to address disproportionality, including utilization of tribal and other ethnic providers capable of serving children and families of color or who need language-appropriate services;
     (e) Fiscal solvency of network administrators and providers participating in the network;
     (f) The use of evidence-based, research-based, and promising practices, where appropriate, including fidelity and quality assurance provisions;
     (g) Network administrator quality assurance activities, including monitoring of the performance of providers in their provider network, with respect to meeting measurable service outcomes;
     (h) Network administrator data reporting, including data on contracted provider performance and service outcomes; and
     (i) Network administrator compliance with applicable provisions of intergovernmental agreements between the state of Washington and tribal governments and the federal and Washington state Indian child welfare act.
     (8) Performance-based payment methodologies must be used in network administrator contracting. Performance measures should relate to successful engagement by a child or parent in services included in their case plan, and resulting improvement in identified problem behaviors and interactions. For the initial three-year period of implementation of performance-based contracting, the department may transfer financial risk for the provision of services to network administrators only to the limited extent necessary to implement a performance-based payment methodology, such as phased payment for services. However, the department may develop a shared savings methodology through which the network administrator will receive a defined share of any savings that result from improved performance. If the department receives a Title IV-E waiver, the shared savings methodology must be consistent with the terms of the waiver. If a shared savings methodology is adopted, the network administrator shall reinvest the savings in enhanced services to better meet the needs of the families and children they serve.
     (9) The department must actively monitor network administrator compliance with the terms of contracts executed under this section.
     (10) The use of performance-based contracts under this section must be done in a manner that does not adversely affect the state's ability to continue to obtain federal funding for child welfare-related functions currently performed by the state and with consideration of options to further maximize federal funding opportunities and increase flexibility in the use of such funds, including use for preventive and in-home child welfare services.

NEW SECTION.  Sec. 4   (1) For those services included in contracts under section 3 of this act, the service providers must be chosen by the department caseworker from among those in the network administrator's provider network. The criteria for provider selection must include the geographic proximity of the provider to the child or family, and the performance of the provider based upon data collected and provided by the network administrator. If a reasonably qualified provider is not available through the network administrator's provider network, at the request of a department caseworker, a provider who is not currently under contract with the network administrator may be offered a provisional contract by the network administrator, pending that provider demonstrating that he or she meets applicable provider qualifications to participate in the administrator's provider network.
     (2) The department shall develop a dispute resolution process to be used when the network administrator disagrees with the department caseworker's choice of a service provider due to factors such as the service provider's performance history or ability to serve culturally diverse families. The mediator or decision maker must be a neutral employee of the department who has not been previously involved in the case. The dispute resolution process must not result in a delay of more than two business days in the receipt of needed services by the child or family.
     (3) The department and network administrator shall collaborate to identify and respond to patterns or trends in service utilization that may indicate overutilization or underutilization of family support and related services, or may indicate a need to enhance service capacity.

NEW SECTION.  Sec. 5   (1) On an annual basis, beginning in the 2015-2017 biennium, the department and contracted network administrators shall:
     (a) Review and update the services offered through performance-based contracts in response to service outcome data for currently contracted services and any research that has identified new evidence-based or research-based services not included in a previous procurement; and
     (b) Review service utilization and outcome data to determine whether changes are needed in procurement policies or performance-based contracts to better meet the goals established in section 1 of this act.
     (2) In conducting the review under subsection (1) of this section, the department must consult with department caseworkers, the exclusive bargaining representative for employees of the department, tribal representatives, parents who were formerly involved in the child welfare system, youth currently or previously in foster care, child welfare services researchers, representatives of child welfare service providers, and the Washington state institute for public policy.

NEW SECTION.  Sec. 6   (1) To achieve the service delivery improvements and efficiencies intended in sections 1, 3, 4, and 7 of this act and in RCW 74.13.370, and pursuant to RCW 41.06.142(3), contracting with network administrators to provide services needed by children and families in the child welfare system, pursuant to sections 3 and 4 of this act, and execution and monitoring of individual provider contracts, pursuant to section 3 of this act, are expressly mandated by the legislature and are not subject to the processes set forth in RCW 41.06.142 (1), (4), and (5).
     (2) The express mandate in subsection (1) of this section is limited to those services and activities provided in sections 3 and 4 of this act. If the department includes services customarily and historically performed by department employees in the classified service in a procurement for network administrators that exceeds the scope of services or activities provided in sections 3 and 4 of this act, such contracting is not specifically mandated and will be subject to all applicable contractual and legal obligations.

NEW SECTION.  Sec. 7   For the purposes of the provision of child welfare services by provider networks, when all other elements of the responses to any procurement under section 3 of this act are equal, private nonprofit entities, federally recognized Indian tribes located in this state, and state employees must receive primary preference over private for-profit entities.

Sec. 8   RCW 74.13.360 and 2010 c 291 s 4 are each amended to read as follows:
     (1) ((No later than July 1, 2011, the department shall convert its current contracts with providers of child welfare services into performance-based contracts. In accomplishing this conversion, the department shall decrease the total number of contracts it uses to purchase child welfare services from providers. The conversion of contracts for the provision of child welfare services to performance-based contracts must be done in a manner that does not adversely affect the state's ability to continue to obtain federal funding for child welfare related functions currently performed by the state and with consideration of options to further maximize federal funding opportunities and increase flexibility in the use of such funds, including use for preventive and in-home child welfare services.
     (2))) No later than December 30, ((2012)) 2015:
     (a) In the demonstration sites selected under RCW 74.13.368(4)(a), child welfare services shall be provided by supervising agencies with whom the department has entered into performance-based contracts. Supervising agencies may enter into subcontracts with other licensed agencies; and
     (b) Except as provided in subsection (((4))) (3) of this section, and notwithstanding any law to the contrary, the department may not directly provide child welfare services to families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a).
     (((3))) (2) No later than December 30, ((2012)) 2015, for families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a), the department is responsible for only the following:
     (a) Monitoring the quality of services for which the department contracts under this chapter;
     (b) Ensuring that the services are provided in accordance with federal law and the laws of this state, including the Indian child welfare act;
     (c) Providing child protection functions and services, including intake and investigation of allegations of child abuse or neglect, emergency shelter care functions under RCW 13.34.050, and referrals to appropriate providers; and
     (d) Issuing licenses pursuant to chapter 74.15 RCW.
     (((4))) (3) No later than December 30, ((2012)) 2015, for families and children provided child welfare services by supervising agencies in the demonstration sites selected under RCW 74.13.368(4)(a), the department may provide child welfare services only:
     (a) For the limited purpose of establishing a control or comparison group as deemed necessary by the child welfare transformation design committee, with input from the Washington state institute for public policy, to implement the demonstration sites selected and defined pursuant to RCW 74.13.368(4)(a) in which the performance in achieving measurable outcomes will be compared and evaluated pursuant to RCW 74.13.370; or
     (b) In an emergency or as a provider of last resort. The department shall adopt rules describing the circumstances under which the department may provide those services. For purposes of this section, "provider of last resort" means the department is unable to contract with a private agency to provide child welfare services in a particular geographic area or, after entering into a contract with a private agency, either the contractor or the department terminates the contract.
     (((5))) (4) For purposes of this chapter, on and after September 1, 2010, performance-based contracts shall be structured to hold the supervising agencies accountable for achieving the following goals in order of importance: Child safety; child permanency, including reunification; and child well-being.
     (((6))) (5) A federally recognized tribe located in this state may enter into a performance-based contract with the department to provide child welfare services to Indian children whether or not they reside on a reservation. Nothing in this section prohibits a federally recognized Indian tribe located in this state from providing child welfare services to its members or other Indian children pursuant to existing tribal law, regulation, or custom, or from directly entering into agreements for the provision of such services with the department, if the department continues to otherwise provide such services, or with federal agencies.

Sec. 9   RCW 74.13.370 and 2009 c 520 s 9 are each amended to read as follows:
     (1) ((Based upon the recommendations of the child welfare transformation design committee, including the two sets of outcomes developed by the committee under RCW 74.13.368(4)(b), the Washington state institute for public policy is to conduct a review of measurable effects achieved by the supervising agencies and compare those measurable effects with the existing services offered by the state. The report on the measurable effects shall be provided to the governor and the legislature no later than April 1, 2015.
     (2))) No later than ((June 30, 2011)) December 1, 2014, the Washington state institute for public policy shall provide the legislature and the governor an initial report on the department's conversion to the use of performance-based contracts as provided in ((RCW 74.13.360(1))) sections 3 and 4 of this act. No later than June 30, ((2012)) 2016, the Washington state institute for public policy shall provide the governor and the legislature with a second report on the ((department's conversion of its contracts to performance-based contracts)) extent to which the use of performance-based contracting has resulted in:
     (a) Increased use of evidence-based, research-based, and promising practices; and
     (b) Improvements in outcomes for children, including child safety, child permanency, including reunification, and child well-being.
     (((3))) (2) The department and network administrators shall respond to the Washington institute for public policy's request for data and other information with which to complete these reports in a timely manner.
     (3) The Washington state institute for public policy must consult with a university-based child welfare research entity to evaluate performance-based contracting.

NEW SECTION.  Sec. 10   RCW 74.13.362 (Performance-based contracts -- Legislative mandate) and 2009 c 520 s 4 are each repealed.

NEW SECTION.  Sec. 11   Sections 1 through 7 of this act constitute a new chapter in Title 74 RCW."