Is Medicaid properly serving youth in foster care?

By Is Medicaid properly serving youth in foster care?

March 2023


Older youth who are transitioning out of foster care face many mental health challenges such as trauma and attachment and trust issues. In addition, they grew up in a flawed foster care that often results in the youth who have experienced multiple placements in different foster homes, overwhelmed caseworkers and poor planning for transitional living to adulthood.

Most children and youth in foster care are eligible for Medicaid, with individual states determining eligibility criteria within federal guidelines. Data from the Children’s Defense Fund shows that Medicaid covers over 99% of children in foster care and that up to 80% of children entering foster care have a significant mental health need. However, reimbursement problems associated with Medicaid often lead to a disruption of mental health services for these youth.

Q&A With Chase Chick

Chase Chick, co-founder of Pursuit of Happiness in Dallas, spoke with Counseling Today about Medicaid’s deficiencies in serving counseling agencies that work with youth in foster care and the steps his practice is taking to reform Medicaid for foster care youth in Texas and around the country.

What is the capitation rate model of Medicaid and how does it work?

The capitation rate model is a perverse idea on its face.The government, rather than implementing health care themselves, gives giant lump sums of money to commercial insurance companies called, you guessed it, a capitation rate. The insurance companies derive their profits based on what they do not spend. You can certainly draw your own conclusions about why this is a prima facie bad idea.

What are the main problems your practice has encountered under this model?

Inappropriateclaim denials, unending audits, delayed payments, no payments at all, failing to enroll providers in a timely fashion. The list goes on and on. The fun part is when a counselor who pours their heart and soul into this population starts getting inappropriateclaim denials and has to tender their resignation against their own wishes. What follows is a disruption of services (if we can even find a replacement counselor in time to resume services at all) with a vulnerablekid whodoesn’t deserve tohave their counselor quit on them. The lack of consistent counseling is preciselythe No. 1 reason why these kids far too often become statistics.

What steps is your practice taking to correct these problems?

We have made numerous complaints to the Texas Health and Human Services Commission (HHSC) about the issues. The problem is that HHSC is slow to act, if they act at all,and they often side with the insurance company. When HHSC actually bothers to correctly side with us, too often the claim denials have already impacted the counselor and they have already resigned. It's a pretty hollow feeling getting claims paid to a counselor who has already moved on. The damage is already done, but worse still, the damage to the foster kid is immense. Usually, these kids show up at psych hospitals after a suicide threat or a meltdown and the caregiver calls Child Protective Services (CPS) or the placement agency and tells them they’ve had enough and to come and get the kid. From there it’s off to a residential treatment center or sleep in theCPS offices. And from there it’s statistics time.

Anyone want to take a guess on how well a foster kid does after having their caregivers quit on them with nowhere else to go but sleeping on the floor of a CPS office? The worst part? We had a chance to get a good counselor in front of this kid whocould have made a difference. We had the referral. We had the counselor. We had the kid scheduled. But instead, thecapitation rate model claim[ed] another victim. Rinse and repeat.

What are your goals in bringing this matter to legislators on Capitol Hill?

We absolutely have to get the insurance companies out of the driver’s seat, especially when it comes to mental health. During one conversation with a particular insurance company, we were told we were wrong for rendering individual and family counseling on the same day, despite the fact that in addition to working with the kid individually, helping integrate the kid into the family unit is something that CPS caseworkers and placement agencies often beg us to do in order to avoid disruption.

Our legislative proposal offers a beautiful fix in that it follows the precedent of the Saint Anthony Hospital v. Eagleson decision from Illinois in correctly naming the state as the one ultimately responsible for implementingMedicaid. The kicker is that it will work out to be a revenue positive for the state, which is always a legislative concern when scoring the impact on the governmental budget.

I'm not sure if I want to get into the mechanics of how it actually works at this time because the insurance lobby is extremely well funded, but it would be a giant leap toward making sure that the days of inappropriateclaim denials and other antics are a thing of the past.

We’re a great organization [that] specializes in what I believe to be a population that presents us the best opportunity to spread the most amount of good. Our counselors do exceptional work and pour everything they have into these patients. Making sure they are paid for their work rather than being cheated out of their hard-earned pay should be a priority at the top of every list.

Medicaid and Medicare combined are twice the budget of the United States military, and as such, [this] is a very expensive issue. Making sure these taxpayer dollars are respected and utilized as they should be rather than a money-making scheme for insurance companies should enrage every single person in the United States. We all live in this society together. The Medicaid program is supposed to be a tool to make sure that the most vulnerable among us have an opportunity to become a contributorto society. With the current capitation rate model, the best I can say is good luck.

Read more about the challenges faced by older youth in foster care in Counseling Today's February feature article, "Counseling youth aging out of foster care."

Lisa R. Rhodes is a senior writer at Counseling Today. Contact her at

The views expressed in Counseling Today are those of the authors and contributors and may not reflect the official policies or positions of the editors or the American Counseling Association.

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