Executive Summary

Nearly all children and youth in foster care are eligible for Medicaid, which is the primary source of funding for both physical and behavioral health care for this population. A range of Medicaid-covered services is necessary to meet the significant health, behavioral, and other needs of foster children and youth. It is widely recognized that children and youth in the foster care system face significantly more behavioral health challenges than most other Medicaid enrollees. The recovery process is aided by treatment delivered by skilled child welfare staff and mental health providers who provide appropriate, trauma-informed, evidence-based services. Yet, a significant shortage of mental health providers persists across Texas. Furthermore, there is a shortage of providers trained specifically to diagnose and treat childhood trauma.

Objectives, Scope and Methodology

Objectives: The purpose of this review was to identify options to increase and sustain child welfare providers enrolled in the Texas Medicaid program to provide behavioral health services.

Scope: Behavioral health services are defined to include the full array of services, including MHTCM and MHR. Child welfare providers include licensed CPAs contracted by the Texas Department of Family and Protective Services (DFPS) to provide residential child care services for children in its managing conservatorship.

Methodology: Data and information was collected using the following quantitative and qualitative research methods:

Best Practice Research: Information on the importance and status of behavioral health service delivery for children was collected through a review of relevant literature.

Focus Group: Qualitative information was collected during a focus group with Texas CPAs who are currently enrolled in the Texas Medicaid program to provide behavioral health services. Participants were asked to discuss obstacles to participating in the Texas Medicaid program as well as possible solutions.

Provider Survey: Texas CPAs were surveyed in May and June 2020 to collect information on the obstacles faced when considering Medicaid enrollment and credentialing as well as possible solutions.

The Role of Medicaid in Serving Children and Youth in Foster Care

Medicaid provides health coverage for most children and youth involved in the Texas foster care system. Nearly all children and youth in foster care are eligible for Medicaid, which is the primary source of funding for both physical and behavioral health care for this population. The most common eligibility pathway to Medicaid for children and youth in foster care is through Title IV-E eligibility. Title IV-E of the Social Security Act provides funding to support safe and stable out-of-home care for children who are removed from their homes. Children and youth in foster care who receive federal child welfare assistance under Title IV-E are automatically eligible for Medicaid. For children and youth in foster care who are not eligible under Title IV-E, there are other ways that they may be eligible to receive Medicaid, such as low income or disability.

Foster children and youth require a range of Medicaid-covered services to meet their significant health, behavioral, and other needs. Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, which is a mandatory service under the Medicaid program, provides comprehensive health coverage for children and youth under the age of 21. Medicaid services for this population include preventive, screening, diagnostic, and treatment services necessary to ensure optimal physical and behavioral health. The EPSDT program can help ensure that health problems, including mental health and substance use issues, are diagnosed and treated early before they become more complex and their treatment more costly.

Behavioral Health Needs of Children and Youth in Foster Care

Foster children and youth suffer from serious physical, mental, developmental, and psychosocial problems rooted in childhood adversity and trauma. Children and youth placed in foster care often enter care with significant health issues, including mental health and substance use disorders. Health issues may be related to poverty and other at-risk conditions, such as parental substance use or mental illness. The actual abuse or neglect, including medical neglect, also contributes to poor health, as can the disruption caused by removal from the home and placement in foster care. It is widely recognized that children and youth in the foster care system face significant behavioral health challenges. Several studies have documented the increased prevalence of emotional and behavioral disorders in the foster care population.

The Need for Trauma Informed Behavioral Health Services

Foster children and youth are vulnerable to the effects of trauma. Traumatic experiences overwhelm a child’s natural ability to cope and places them at a greater risk for developing behavioral health and substance use disorders. Trauma interferes with normal child development and causes long-term harm to a child’s physical, social, emotional, and spiritual well-being. SAMHSA defines trauma as the result of “an event, series of events, or set of circumstances that is experienced by an individual as physically or emotionally harmful or life-threatening and that has lasting adverse effects on the individual’s functioning and mental, physical, social, emotional, or spiritual well-being.” Acute trauma occurs from single events that are limited in time (e.g., car accident, shooting, or earthquake). Children who are exposed to multiple traumatic events over time that are severe, pervasive, and interpersonal in nature, such as repeated abuse and neglect, face complex trauma. Complex trauma may interfere with a child’s ability to form secure attachments to caregivers and many other aspects of healthy physical and mental development.

Shortage of Behavioral Health Providers to Treat Children and Youth in Foster Care

When community-based, trauma-informed behavioral health services are not readily available, some of the poor outcomes for children can include:

• Placement disruption – Foster parents may not be able to cope with the needs of children with behavioral health conditions. This is exacerbated by an inability to access appropriate services

• Difficulty finding appropriate placements – As of December 2019, CPS had 10 children without placement. This trend fluctuates over time, but has improved significantly compared to May 2019 when over 100 children lacked placement. Some factors that have lowered this number include the availability of treatment foster care and the expansion of the Community-Based Care model, where finding placement for each child is a requirement. However, this can still occur.

• Nights spent in child welfare offices – This issue was more prevalent in 2015, but is directly related to the difficulty finding placements.

• Delayed achievement of positive permanency – Studies have established the link between the number of placements and poor permanency outcomes; the greater the number, the longer the time in care and the reduced chances of both reunification and adoption.

CPA Providers Barriers to Medicaid Participation

DFPS contracts with licensed CPAs to provide residential child care services for children in its managing conservatorship. As of August 31, 2019, there were 387 CPAs licensed by HHSC (note this count includes branch offices). As of August 31, 2019, more than two-thirds (67.9 percent) of the 17,247 children in foster care were placed in CPA foster homes. These entities provide care, supervision, assessment, training, education, and treatment services to meet the needs of these children. CPAs train foster and adoptive parents and find homes for children. CPAs receive payments from the state for the care of foster children of which a portion is passed on to foster families.

CPAs are in a unique position to help meet the needs of children with behavioral health needs by enrolling in the Texas Medicaid program to provide the full array of behavioral health services, including MHTCM and MHR. Efforts to increase and sustain the number of CPAs who are enrolled in Medicaid to provide these services can expand access to behavioral health services for children and youth in foster care. CPA participation in Medicaid can also increase access to evidence-based behavioral health care that is trauma-informed and provided in-home.

Provide Funding to Increase CPA Participation in Medicaid

Medicaid providers knowledgeable about the child welfare population and trained in effective practices are fundamental to providing effective care. Providers are needed with expertise that is relevant to children in child welfare, such as abuse, attachment disorders, and trauma. Increasing and sustaining the participation of CPAs in Medicaid can improve access to behavioral health providers who are trauma-informed and understand the complexities faced by foster children and youth. There is a cohort of at least 11 child welfare providers who have expressed interest in becoming and/or are at various stages in the process to participate in the Texas Medicaid program. The Texas Legislature should provide funding and administrative relief to help these and other CPAs overcome barriers to participation in Medicaid and expand access to behavioral health care for foster children and youth, through the following recommendations:

(1) Provide $1.2 million in state funds and include a related rider in the DFPS bill pattern to create a grant program whereby CPAs interested in providing Medicaid-funded behavioral health services could apply for funding to cover start-up costs and ongoing expenses. This program would include a matching funds requirement for the provider agency.

(2) Include a rider in HHSC’s bill pattern requiring the Commission to work with managed care organizations (MCOs) to address the operational challenges experienced by child welfare providers of TCM and Rehab including issues with contracting and credentialing, listing in the provider directory, and other administrative processes as needed, and provide a report to the Legislature on the implementation of these efficiencies.

Best State Practices


There is alignment between the Medicaid agency, the regional behavioral health authorities who administer the state’s BH Services, and the child welfare agency in meeting the BH needs of foster children. Notable features of the state’s approach include:

• A single MCO serves foster children (Comprehensive Medical and Dental Program).
• Inclusion of specialized Medicaid services in the array (Multisystemic Therapy) and high needs case management
• Mandatory inclusion of the Wraparound process for all children receiving BH services including foster children
• BH providers required to undergo specialty training on “a day in the life in child welfare”.
• Regional Behavioral Health Authorities are mandated to contract with specialty child welfare providers to ensure access to trauma-informed, child welfare system-informed providers and these providers are required to be Medicaid-enrolled.
• The state’s Medicaid rate structure includes risk-adjusted capitation rates for children in care.

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