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Under the waiver, Maryland will aim for more intensive case management for families, as well as enhanced coordination of services, especially to link substance abuse treatment and child welfare services. The goals are to reduce out-of-home placements of children and to decrease the length of stay for children already placed in foster care.

"Maryland is breaking new ground in its efforts to address the real-world conditions that have challenged the child welfare system," said Secretary Shalala. "Maryland's waiver will confront head-on the fact that substance abuse is the leading cause for placement of children in the child welfare system. And at the same time, the state will try building incentives and rewards for positive results into the very payment system for contracted social services."

The substance abuse component will combine treatment for mothers in the program with intensive support from a Family Support Services Team, consisting of chemical addiction counselors, mentors, parent aides, agency staff and treatment providers. The program is designed to encourage women to complete successful drug and alcohol treatment.

The "managed care" component will test a new way of reimbursing private agencies that provide social services under contract to counties. Paying for services on a per capita basis, the program is intended to provide reward for good results. Service providers who fail to meet standards will risk financial loss. But those whose work results in reduced out-of-home placements and reduced lengths of stay in foster care, while continuing to ensure safety of children, will have flexibility to redirect cost savings to innovative an enhanced services. The aim is to reshape the contractual relationship between public and private agencies from "payment for care" to "reward for results."

"I want to commend Maryland for seeking new approaches to improve the child welfare system, and for presenting us with an opportunity to join in benefiting families and children through greater flexibility and creativity in both services and management" said Olivia A. Golden, HHS assistant secretary for children and families. "Maryland has the unprecedented opportunity to remake its child welfare services to meet the needs of children most at risk and provide them a healthy future."

The Adoption and Safe Families Act of 1997 authorized HHS to approve up to 10 demonstration projects each year through 2002. HHS has encouraged states to develop innovative child welfare projects aimed at increasing adoptions of special needs children, promoting community-based services to prevent child abuse and neglect, improving access to needed health and mental health services, and addressing the unique needs of American Indian children. Maryland is the 22nd waiver approved under this authority

The demonstration project will be cost neutral, independently evaluated, and last up to five years.

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