The Problem With Qualified Residential Treatment Programs in Illinois and the Solution to Repair It

by Ashley Deckert
November 16, 2022

Illinois is no stranger to the youth mental health crisis and its impact on the state and more specifically on youth in foster care. The Department of Children and Family Services (DCFS) has been in a battle to address and end a 34-year-old consent decree which highlights the reforms needed to address the severe shortage of mental health services and the need for high-quality residential treatment. Its state partner, the Department of Healthcare and Family Services (HFS) under the N.B. Consent Decree, has also made efforts to develop a system to deliver mental and behavioral health services to Illinois youth under Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) requirements.

Additionally, there have been several publications over the years that speak to the issue of youth staying in psychiatric hospitalizations beyond medical necessity (BMN), with the most recent article by WTTW highlighting “DCFS’ struggle to find appropriate placements for youth with high-needs”. However, this is not just a DCFS issue. Other state Departments such as the Illinois State Board of Education (ISBE), the Illinois Department of Human Services, Division of Developmental Disabilities (DDD), and HFS experience the same struggles for youth with severe behavioral health needs who require appropriate placements.

In March 2022, Governor J.B. Pritzker answered the call to action around this decades-long issue by announcing the Children’s Behavioral Health Transformation Initiative, led by Dr. Dana Weiner, a clinical psychologist and child welfare expert. Dr. Weiner has coordinated an Interagency Crisis Staffing Workgroup, comprised of representatives from six state agencies who meet several times a week to address the mental health and placement crisis for young people and youth in care here in Illinois. The coordination, data analysis, and process improvements are highlighted in Dr. Weiner’s Monthly Progress Report.

Along with significant and timely investments in Illinois’ community-based human services sector that work to improve child and family wellbeing, the Governor’s initiative – which takes an inter-agency approach – is tasked with developing a program where young people with severe emotional and behavioral concerns can have their needs met. Furthermore, the Pritzker Administrations most recent press release highlights why this is a public health issue that requires a public health response and coordination with hospitals, pediatricians, and other mental health systems.

While it appears that Illinois is doing all it can to address these lingering issues, one concern that remains unaddressed that could have huge financial implications in our state is Medicaid coverage of Qualified Residential Treatment Programs (QRTPs) for Children in Foster Care. As highlighted in this fact sheet developed by the Medicaid and CHIP Payment and Access Commission, the Family First Prevention Services Act (FFPSA) makes significant reforms to the child welfare system including placing restrictions on federal funding for congregate care. Specifically, the FFPSA restricts the availability of Title IV-E Foster Care Maintenance payments to 14 days, unless the child is placed in a newly defined category of group homes and residentials called Qualified Residential Treatment Programs. QRTPs provide trauma-informed care to children with serious emotional and behavioral health disorders and are intended to be used for time-limited placements when family-based settings cannot meet a child’s needs.

The FFPSA QRTP approach is great in theory, however one unintended consequence of this measure is that QRTPs may be considered Institutions for Mental Disease (IMD) for the purposes of Medicaid payment depending on their size. An IMD is defined as a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of individuals with mental diseases. Under a provision of the Medicaid statute, state Medicaid programs are generally prohibited from making payments for care in settings identified as IMDs.

So, what is the problem you ask? Well, all QRTP’s in Illinois have over 16 beds meaning state child welfare agencies like Illinois DCFS who are complying with the Family First Prevention Services Act will not be able to use federal Medicaid funding to pay for a wide range of Medicaid-supported services without an exception to the IMD Exclusion. Children residing in QRTPs, who require treatments like medical, behavioral health, and supportive services, would not qualify for federal Medicaid funding unless we make this change.

Over the last year, the National Organization of State Associations for Children (NOSAC) has participated in a national effort to pass legislation which exempts QRTPs from the IMD exclusionary rule. The Ensuring Medicaid Continuity for Children in Foster Care Act, H.R.5414 and S.2689 has just over a month to be passed so that Illinois, along with other states impacted by this unintended consequence, do not lose significant Medicaid funding from its system of care. This fiscal burden has been so steep that at least six other states have not implemented Qualified Residential Treatment Programs. As initially highlighted, with children already beyond medical necessity and interventions for some children being wholly unavailable, Illinois cannot afford to ignore this dire issue any longer. A recent blog written by the Child Welfare Monitor also highlights why this national issue cannot be ignored.

How can we make a change?

As of today, 616 national organizations, including several ICOY Member Organizations, signed on to a letter of support urging members of Congress to co-sponsor the Ensuring Medicaid Continuity for Children in Foster Care Act. Please reach out to Illinois’ congressional delegation and urge them to sign on as a co-sponsor for this very critical legislation, for the sake of children and families in Illinois.