(CN) - California underpays its foster care providers and is therefore in violation of the federal Child Welfare Act, the 9th Circuit ruled. The San Francisco-based panel said the state's payments of 80 percent or less of the actual cost of care is illegal and insufficient.
In determining whether California's 80 percent payment will "cover the cost" of foster care group homes, the circuit decided that a lower court incorrectly determined that California was in compliance with the Child Welfare Act. "The natural meaning of 'cover the cost' is to pay in full, not in part," the panel wrote, adding that the "state isn't doing this."
The lawsuit was filed last year by the California Alliance of Child and Family Services, which represents group homes in California. It claimed that rate increases were withheld during 14 of the last 19 years, and the state was only funding care at 77 percent of costs.
"That percentage would have been even lower had another federal judge not recently blocked a proposed 10 percent reduction in reimbursements paid by the state," Alliance said in a statement.
"This is the first time that a court has declared that a state must cover the cost of foster care if it receives federal funds under the Child Welfare Act," Alliance Executive Director Carroll Schroeder said. "While this isn't the final answer to our effort to properly fund the care to which these kids are entitled ... 80 percent isn't 'substantial' when it comes to providing for kids whose needs cannot be met in family settings because of behavioral issues or severe emotional trauma."
The case goes back to the district judge to decide how the state should remedy its alleged failure to comply with the Child Welfare Act's requirements of states receiving federal matching.
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