BILL REQ. #:  Z-1223.1 

Read first time 01/25/10.   Referred to Committee on Early Learning & Children's Services.

     AN ACT Relating to the implementation of delivery of child welfare services through performance-based contracts; amending RCW 74.13.368, 74.13.360, 74.13.364, and 74.13.366; and reenacting and amending RCW 74.13.020.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 74.13.368 and 2009 c 520 s 8 are each amended to read as follows:
     (1)(a) The child welfare transformation design committee is established, with members as provided in this subsection.
     (i) The governor or the governor's designee;
     (ii) Four private agencies that, as of May 18, 2009, provide child welfare services to children and families referred to them by the department. Two agencies must be headquartered in western Washington and two must be headquartered in eastern Washington. Two agencies must have an annual budget of at least one million state-contracted dollars and two must have an annual budget of less than one million state-contracted dollars;
     (iii) The assistant secretary of the children's administration in the department;
     (iv) Two regional administrators in the children's administration selected by the assistant secretary, one from one of the department's administrative regions one or two, and one from one of the department's administrative regions three, four, five, or six;
     (v) The administrator for the division of licensed resources in the children's administration;
     (vi) Two nationally recognized experts in performance-based contracts;
     (vii) The attorney general or the attorney general's designee;
     (viii) A representative of the collective bargaining unit that represents the largest number of employees in the children's administration;
     (ix) A representative from the office of the family and children's ombudsman;
     (x) Four representatives from the Indian policy advisory committee convened by the department's office of Indian policy and support services;
     (xi) Two currently elected or former superior court judges with significant experience in dependency matters, selected by the superior court judge's association;
     (xii) One representative from partners for our children affiliated with the University of Washington school of social work;
     (xiii) A member of the Washington state racial disproportionality advisory committee;
     (xiv) A foster parent; ((and))
     (xv) A youth currently in or a recent alumni of the Washington state foster care system, to be designated by the cochairs of the committee; and
     (xvi) A parent representative who has had personal experience with the dependency system.
     (b) The president of the senate and the speaker of the house of representatives shall jointly appoint the members under (a)(ii), (xiv), and (((xv))) (xvi) of this subsection.
     (c) The representative from partners for our children shall convene the initial meeting of the committee no later than June 15, 2009.
     (d) The cochairs of the committee shall be the assistant secretary for the children's administration and another member selected by a majority vote of those members present at the initial meeting.
     (2) The committee shall establish a transition plan containing recommendations to the legislature and the governor consistent with this section for the provision of child welfare services by supervising agencies pursuant to RCW 74.13.360.
     (3) The plan shall include the following:
     (a) A model or framework for performance-based contracts to be used by the department that clearly defines:
     (i) The target population;
     (ii) The referral and exit criteria for the services;
     (iii) The child welfare services including the use of evidence-based services and practices to be provided by contractors;
     (iv) The roles and responsibilities of public and private agency workers in key case decisions;
     (v) Contract performance and outcomes, including those related to eliminating racial disparities in child outcomes;
     (vi) That supervising agencies will provide culturally competent service;
     (vii) How to measure whether each contractor has met the goals listed in RCW 74.13.360(5); and
     (viii) Incentives to meet performance outcomes;
     (b) A method by which the department will substantially reduce its current number of contracts for child welfare services;
     (c) A method or methods by which clients will access community-based services, how private supervising agencies will engage other services or form local service networks, develop subcontracts, and share information and supervision of children;
     (d) Methods to address the effects of racial disproportionality, as identified in the 2008 Racial Disproportionality Advisory Committee Report published by the Washington state institute for public policy in June 2008;
     (e) Methods for inclusion of the principles and requirements of the centennial accord executed in November 2001, executed between the state of Washington and federally recognized tribes in Washington state;
     (f) Methods for assuring performance-based contracts adhere to the letter and intent of the federal Indian child welfare act;
     (g) Contract monitoring and evaluation procedures that will ensure that children and families are receiving timely and quality services and that contract terms are being implemented;
     (h) A method or methods by which to ensure that the children's administration has sufficiently trained and experienced staff to monitor and manage performance-based contracts;
     (i) A process by which to expand the capacity of supervising and other private agencies to meet the service needs of children and families in a performance-based contractual arrangement;
     (j) A method or methods by which supervising and other private agencies can expand services in underserved areas of the state;
     (k) The appropriate amounts and procedures for the reimbursement of supervising agencies given the proposed services restructuring;
     (l) A method by which to access and enhance existing data systems to include contract performance information;
     (m) A financing arrangement for the contracts that examines:
     (i) The use of case rates or performance-based fee-for-service contracts that include incentive payments or payment schedules that link reimbursement to outcomes; and
     (ii) Ways to reduce a contractor's financial risk that could jeopardize the solvency of the contractor, including consideration of the use of a risk-reward corridor that limits risk of loss and potential profits or the establishment of a statewide risk pool;
     (n) A description of how the transition will impact the state's ability to obtain federal funding and examine options to further maximize federal funding opportunities and increased flexibility;
     (o) A review of whether current administrative staffing levels in the regions should be continued when the majority of child welfare services are being provided by supervising agencies;
     (p) A description of the costs of the transition, the initial start-up costs and the mechanisms to periodically assess the overall adequacy of funds and the fiscal impact of the changes, and the feasibility of the plan and the impact of the plan on department employees during the transition; and
     (q) Identification of any statutory and regulatory revisions necessary to accomplish the transition.
     (4)(a) The committee, with the assistance of the department, shall select two demonstration sites within which to implement chapter 520, Laws of 2009. One site must be located on the eastern side of the state. The other site must be located on the western side of the state. Neither site must be wholly located in any of the department's administrative regions.
     (b) The committee shall develop two sets of performance outcomes to be included in the performance-based contracts the department enters into with supervising agencies. The first set of outcomes shall be used for those cases transferred to a supervising agency over time. The second set of outcomes shall be used for new entrants to the child welfare system.
     (c) The committee shall also identify methods for ensuring that comparison of performance between supervising agencies and the existing service delivery system takes into account the variation in the characteristics of the populations being served as well as historical trends in outcomes for those populations.
     (5) The committee shall determine the appropriate size of the child and family populations to be provided services under performance-based contracts with supervising agencies. The committee shall also identify the time frame within which cases will be transferred to supervising agencies. The performance-based contracts entered into with supervising agencies shall encompass the provision of child welfare services to enough children and families in each demonstration site to allow for the assessment of whether there are meaningful differences, to be defined by the committee, between the outcomes achieved in the demonstration sites and the comparison sites or populations. To ensure adequate statistical power to assess these differences, the populations served shall be large enough to provide a probability greater than seventy percent that meaningful difference will be detected and a ninety-five percent probability that observed differences are not due to chance alone.
     (6) The committee shall also prepare as part of the plan a recommendation as to how to implement chapter 520, Laws of 2009 so that full implementation of chapter 520, Laws of 2009 is achieved no later than June 30, 2012.
     (7) The committee shall prepare the plan to manage the delivery of child welfare services in a manner that achieves coordination of the services and programs that deliver primary prevention services.
     (8) Beginning June 30, 2009, the committee shall report quarterly to the governor and the legislative children's oversight committee established in RCW 44.04.220. From June 30, 2012, until January 1, 2015, the committee need only report twice a year. The committee shall report on its progress in meeting its duties under subsections (2) and (3) of this section and on any other matters the committee or the legislative children's oversight committee or the governor deems appropriate. The portion of the plan required in subsection (6) of this section shall be due to the legislative children's oversight committee on or before June 1, 2010. The reports shall be in written form.
     (9) After the two demonstration sites have been selected and are in operation, the committee shall develop recommendations for a competitive contract bidding process to allow state employees to bid for performance-based contracts for provision of case management and child welfare services if the demonstration sites are continued beyond the pilot period or further expanded under RCW 74.13.372. The committee shall report its recommendations to the governor and the legislative children's oversight committee.
     (10) The committee, by majority vote, may establish advisory committees as it deems necessary.
     (((10))) (11) All state executive branch agencies and the agencies with whom the department contracts for child welfare services shall cooperate with the committee and provide timely information as the chair or cochairs may request. Cooperation by the children's administration must include developing and scheduling training for supervising agencies to access data and information necessary to implement and monitor the contracts.
     (((11))) (12) It is expected that the administrative costs for the committee will be supported through private funds.
     (((12))) (13) Staff support for the committee shall be provided jointly by partners for our children and legislative staff.
     (((13))) (14) The committee is subject to chapters 42.30 (open public meetings act) and 42.52 (ethics in public service) RCW.
     (((14))) (15) This section expires July 1, 2015.

Sec. 2   RCW 74.13.020 and 2009 c 520 s 2 and 2009 c 235 s 3 are each reenacted and amended to read as follows:
     For purposes of this chapter:
     (1) "Case management" means the management of services delivered to children and families in the child welfare system, including permanency services, caseworker-child visits, family visits, the convening of family group conferences, the development and revision of the case plan, the coordination and monitoring of services needed by the child and family, 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 person less than eighteen years of age.
     (3) "Child protective services" has the same meaning as in RCW 26.44.020.
     (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.
     "Child welfare services" does not include child protection services.
     (5) "Committee" means the child welfare transformation design committee.
     (6) "Department" means the department of social and health services.
     (7) "Measurable effects" means a statistically significant change which occurs as a result of the service or services a supervising agency is assigned in a performance-based contract, in time periods established in the contract.
     (8) "Out-of-home care services" means services provided after the shelter care hearing to or for children in out-of-home care, as that term is defined in RCW 13.34.030, and their families, including the recruitment, training, and management of foster parents, the recruitment of adoptive families, and the facilitation of the adoption process, family reunification, independent living, emergency shelter, residential group care, and foster care, including relative placement.
     (9) "Performance-based contracting" means the structuring of 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. Contracts shall also include provisions that link the performance of the contractor to the level and timing of reimbursement.
     (10) "Permanency services" means long-term services provided to secure a child's safety, permanency, and well-being, including foster care services, family reunification services, adoption services, and preparation for independent living services.
     (11) "Primary prevention services" means services which are designed and delivered for the primary purpose of enhancing child and family well-being and are shown, by analysis of outcomes, to reduce the risk to the likelihood of the initial need for child welfare services.
     (12) "Supervising agency" means an agency licensed by the state under RCW 74.15.090, or ((an)) licensed by a federally recognized Indian tribe located in this state under RCW 74.15.190, that has entered into a performance-based contract with the department to provide case management for the delivery and documentation of child welfare services, as defined in this section.

Sec. 3   RCW 74.13.360 and 2009 c 520 s 3 are each amended to read as follows:
     (1) No later than ((January)) 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 July 1, 2012:
     (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) 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) No later than July 1, 2012, 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) No later than July 1, 2012, 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 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) 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) 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. 4   RCW 74.13.364 and 2009 c 520 s 5 are each amended to read as follows:
     Children whose cases are managed by a supervising agency as defined in RCW 74.13.020 remain under the care and placement authority of the state. The child welfare transformation design committee, in selecting demonstration sites for the provision of child welfare services under RCW 74.13.368(4), shall maintain the placement and care authority of the state over children receiving child welfare services at a level 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.

Sec. 5   RCW 74.13.366 and 2009 c 520 s 6 are each amended to read as follows:
     ((Performance-based contracts with private nonprofit entities who otherwise meet the definition of supervising agency shall receive primary preference. This section does not apply to Indian tribes.)) For the purposes of the provision of child welfare services by supervising agencies under this act, the department shall give primary preference for performance-based contracts to private nonprofit entities, including federally recognized Indian tribes located in this state, who otherwise meet the definition of supervising agency under RCW 74.13.020. In any continuation or expansion of delivery of child welfare services purchased through the use of performance-based contracts under the provisions of RCW 74.13.372, private nonprofit entities, federally recognized Indian tribes located in this state, and state employees shall receive primary preference over private for profit entities.