(a) The department shall commence development of a new payment structure for the Title IV-E funded foster family agency placement option that maximizes federal funding, in consultation with county placing agencies.

(b) The department shall develop a payment system for foster family agencies that provide treatment, intensive treatment, and therapeutic foster care programs, and shall consider all of the following factors:

(1) Administrative activities that are eligible for federal financial participation provided, at the request of the county, for and to county-licensed or approved family homes and resource families, intensive case management and supervision, and services to achieve legal permanency or successful transition to adulthood.

(2) Social work activities that are eligible for federal financial participation under Title IV-E (42 U.S.C. Sec. 670 et seq.) of the federal Social Security Act.

(3) Social work and mental health services eligible for federal financial participation under Title XIX (42 U.S.C. Sec. 1396 et seq.) of the federal Social Security Act.

(4) Intensive treatment or therapeutic services in the foster family agency.

(5) Core services that are made available to children and nonminor dependents either directly or secured through agreements with other agencies, and which are trauma informed, culturally relevant, and include any of the following:

(A) Specialty mental health services for children who meet medical necessity criteria for specialty mental health services, as provided for in Section 1830.205 or 1830.210 of Title 9 of the California Code of Regulations.

(B) Transition support services for children, youth, and families upon initial entry and placement changes and for families who assume permanency through reunification, adoption, or guardianship.

(C) Educational, physical, behavioral, and mental health supports, including extracurricular activities and social supports.

(D) Activities designed to support transition-age youth and nonminor dependents in achieving a successful adulthood.

(E) Services to achieve permanency, including supporting efforts to reunify or achieve adoption or guardianship and efforts to maintain or establish relationships with parents, siblings, extended family members, tribes, or others important to the child or youth, as appropriate.

(F) When serving Indian children, as defined in subdivisions (a) and (b) of Section 224.1, the core services specified in subparagraphs (A) to (E), inclusive, shall be provided to eligible Indian children consistent with active efforts pursuant to Section 361.7.

(G) The core services specified in subparagraphs (A) to (F), inclusive, are not intended to duplicate services already available to foster children in the community, but to support access to those services and supports to the extent already available. Those services and supports may include, but are not limited to, foster youth services available through county offices of education, Indian Health Services, and school-based extracurricular activities.

(6) Staff training.

(7) Health and Safety Code requirements.

(8) A process for accreditation that includes all of the following:

(A) Provision for all licensed foster family agencies to maintain in good standing accreditation from a nationally recognized accreditation agency with expertise in programs for youth group care facilities, as determined by the department.

(B) Promulgation by the department of information identifying the agency or agencies from which accreditation shall be required.

(C) Provision for timely reporting to the department of any change in accreditation status.

(9) Mental health certification, including a requirement to timely report to the department any change in mental health certificate status.

(10) Populations served, including, but not limited to, any of the following:

(A) (i) Children and youth assessed as seriously emotionally disturbed, as described in subdivision (a) of Section 5600.3, including those children and youth placed out-of-home pursuant to an individualized education program developed under Article 2 (commencing with Section 56320) of Chapter 4 of Part 30 of Division 4 of Title 2 of the Education Code.

(ii) Children assessed as meeting the medical necessity criteria for specialty mental health services, as provided for in Section 1830.205 or 1830.210 of Title 9 of the California Code of Regulations.

(B) AFDC-FC children and youth receiving intensive and therapeutic treatment services in a foster family agency.

(C) AFDC-FC children and youth receiving mental health treatment services from a foster family agency.

(11) Maximization of federal financial participation for Title IV-E (42 U.S.C. Sec. 670 et seq.) and Title XIX (42 U.S.C. Sec. 1396 et. seq.) of the federal Social Security Act.

(c) Commencing January 1, 2017, the department shall establish rates pursuant to subdivisions (a) and (b). The rate structure shall include an interim rate, a provisional rate for new foster family agency programs, and a probationary rate. The department may issue a one-time reimbursement for accreditation fees incurred after August 1, 2016, in an amount and manner determined by the department in written directives.

(1) (A) Initial interim rates developed pursuant to this section shall be effective January 1, 2017, through December 31, 2020.

(B) The initial interim rates developed pursuant to this paragraph shall not be lower than the rates proposed as part of the Governor’s 2016 May Revision.

(C) The initial interim rates set forth in written directives or regulations pursuant to paragraph (4) shall become inoperative on January 1, 2021, unless a later enacted statute, that becomes operative on or before January 1, 2021, deletes or extends the dates on which they become inoperative.

(D) It is the intent of the Legislature to establish an ongoing payment structure no later than January 1, 2021.

(2) Consistent with Section 11466.01, for provisional and probationary rates, all of the following shall be established:

(A) Terms and conditions, including the duration of the rate.

(B) An administrative review process for the rate determinations, including denials, reductions, and terminations.

(C) An administrative review process that includes a departmental review, corrective action, and an appeal with the department. Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), this process shall be disseminated by written directive pending the promulgation of regulations.

(3) (A) (i) The foster family agency rate shall include a basic rate pursuant to paragraph (4) of subdivision (g) of Section 11461. A child or youth placed in a certified family home or with a resource family of a foster family agency is eligible for the basic rate, which shall be passed on to the certified parent or resource family along with annual increases in accordance with paragraph (2) of subdivision (g) of Section 11461.

(ii) A certified family home of a foster family agency shall be paid the basic rate as set forth in this paragraph only through December 31, 2020.

(B) The basic rate paid to either a certified family home or a resource family of a foster family agency shall be paid by the agency to the home from the rate that is paid to the agency pursuant to this section.

(C) In addition to the basic rate described in this paragraph, the department shall develop foster family agency rates that consider specialized programs to serve children with specific needs, including, but not limited to, all of the following:

(i) Intensive treatment and behavioral needs, including those currently being served under intensive treatment foster care.

(ii) Specialized health care needs.

(4) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the foster family agency rates, and the manner in which they are determined, shall be set forth in written directives until regulations are adopted.

(d) The department shall develop a system of governmental monitoring and oversight that shall be carried out in coordination with the State Department of Health Care Services. Oversight responsibilities shall include, but not be limited to, ensuring conformity with federal and state law, including program, fiscal, and health and safety reviews. The state agencies shall attempt to minimize duplicative audits and reviews to reduce the administrative burden on providers.

(e) The department shall consider the impact on children and youth being transitioned to alternate programs as a result of the new ratesetting system.

(f) (1) Commencing July 1, 2019, the rates paid to foster family agencies shall, except for the rate paid to a certified family home or resource family agency pursuant to clause (i) of subparagraph (A) of paragraph (3) of subdivision (c), be 4.15 percent higher than the rates paid to foster family agencies in the 2018–19 fiscal year.

(2) (A) The rate increase described in paragraph (1) shall be suspended on December 31, 2021, unless subparagraph (B) applies.

(B) If, in the determination of the Department of Finance, the estimates of General Fund revenues and expenditures determined pursuant to Section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain projected annual General Fund revenues that exceed projected annual General Fund expenditures in the 2021–22 and 2022–23 fiscal years by the sum total of General Fund moneys appropriated for all programs subject to suspension on December 31, 2021, pursuant to the Budget Act of 2019 and the bills providing for appropriations related to the Budget Act of 2019 within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, then the implementation of the rate increase described in this subdivision shall not be suspended pursuant to subparagraph (A).

(C) If subparagraph (A) applies, it is the intent of the Legislature to consider alternative solutions to facilitate the continued implementation of the rate increase described in paragraph (1).

(Amended by Stats. 2019, Ch. 777, Sec. 23. (AB 819) Effective January 1, 2020.)