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"Just last week the Clinton Administration announced a record number of adoptions and the first ever bonuses for increased adoptions from the public foster care system, " said Secretary Shalala. "The comprehensive service networks proposed by Texas between child protective services and private adoption agencies will help more children reach safe, loving and permanent homes."

Under the demonstration, Texas will examine the effectiveness of increased provider training and enhanced assessment services by contracting with a consortium of service providers under a case rate performance--based financing system. The goal is to increase the recruitment of prospective adoptive families by providing special needs adoption services and to improve the safety, permanency and well being of the children, along with overall efficiencies in the system.

The adoption component is designed to increase the pool of adoptive families by enhancing the process of matching adoptive families with children in protective custody in order to increase the number of children leaving foster care for adoption. Also, the program intends to decrease the dissolution rate of adoptions.

The managed care component will test a new way of reimbursing community-based non-profit agencies that provide social services under contract. Paying for services on a capitated basis, the program is intended to provide reward for good results. Service providers 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 and enhanced services. The service goals include raising the level of children's care, improving child functioning, increasing stability of placements and reducing the rate of return to foster care. The aim is to reshape the contractual relationship between public and private agencies from "payment for care" to "reward for results." Those providers who fail to meet standards will risk financial loss.

"My visit to Texas is to highlight the need for high quality programs that serve young children in need. It is especially gratifying to announce approval of this demonstration for Texas to present this important opportunity to benefit vulnerable children through greater flexibility and creativity in both services and management," said Golden. "We look forward to learning the results of the demonstration."

The Adoption and Safe Families Act of 1997 authorized HHS to approve up to 10 demonstration projects each year through 2002. Texas is the 26th approval waiver approved under this authority.

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

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