2005 Texas Human Resources Code CHAPTER 45. PRIVATIZATION OF SUBSTITUTE CARE AND CASE MANAGEMENT SERVICES

HUMAN RESOURCES CODE

CHAPTER 45. PRIVATIZATION OF SUBSTITUTE CARE AND CASE MANAGEMENT 
SERVICES

SUBCHAPTER A. GENERAL PROVISIONS


	§ 45.001. DEFINITIONS.                                                      

Text of section effective until September 1, 2012
	In this chapter:                                                               
		(1)  "Case management services" means the provision of 
case management services to a child for whom the department has been 
appointed temporary or permanent managing conservator, including 
caseworker-child visits, family visits, the convening of family 
group conferences, the development and revision of the case plan, 
the coordination and monitoring of services needed by the child and 
family, and the assumption of court-related duties, including 
preparing court reports, attending judicial hearings and 
permanency hearings, and ensuring that the child is progressing 
toward permanency within state and federal mandates.
		(2)  "Commission" means the Health and Human Services 
Commission.           
		(3)  "Department" means the Department of Family and 
Protective Services.   
		(4)  "Executive commissioner" means the executive 
commissioner of the Health and Human Services Commission.
		(5)  "Family-based safety services" means services 
designed to help children at risk of being placed in foster care to 
remain safely with their families.
		(6)  "Independent administrator" means an independent 
agency selected through a competitive procurement process to:
			(A)  secure, coordinate, and manage substitute 
care services and case management services in a geographically 
designated area of the state;  and
			(B)  ensure continuity of care for a child 
referred to the administrator by the department and the child's 
family from the day a child enters the child protective services 
system until the child leaves the system.
		(7)  "Performance-based contracting" means the 
structuring of all aspects of the procurement of services around 
the purpose of the work to be performed and the desired results with 
the contract requirements set forth in clear, specific, and 
objective terms with measurable outcomes.  Contracts may also 
include provisions that link the performance of the contractor to 
the level and timing of reimbursement.
		(8)  "Permanency services" means services, other than 
family-based safety services, provided to secure a child's safety, 
permanency, and well-being, including substitute care services, 
family reunification services, adoption and postadoption services, 
preparation for adult living services, and case management 
services.
		(9)  "Placement assessment" means the process used by 
the department or another authorized entity to determine the most 
appropriate, least restrictive, safe placement resource for a child 
who must be separated temporarily from the care of the child's 
parents.
		(10)  "Privatize" means to contract with a private 
entity to provide certain governmental services.
		(11)  "Psychotropic medication" means a drug that 
affects the mind through action on the central nervous system and is 
prescribed for depression, schizophrenia, attention deficit 
hyperactivity disorder, seizures, and a variety of other similar 
conditions.
		(12)  "Substitute care provider" means a child-care 
institution or a child-placing agency, as defined by Section 
42.002.
		(13)  "Substitute care services" means services 
provided to or for children in substitute care and their families, 
including the recruitment, training, and management of foster 
parents, the recruitment of adoptive families, and the facilitation 
of the adoption process, family reunification, independent living, 
emergency shelter, residential group care, foster care, 
therapeutic foster care, and post-placement supervision, including 
relative placement.  The term does not include the regulation of 
facilities under Subchapter C, Chapter 42.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.002. PRIVATIZING SUBSTITUTE CARE AND CASE MANAGEMENT 
SERVICES;  DEPARTMENT DUTIES.  

Text of section effective until September 1, 2012
	(a)  Not later than September 1, 2011, the department shall 
complete the statewide privatization of the provision of substitute 
care and case management services in this state.
	(b)  On and after September 1, 2011:                                           
		(1)  all substitute care and case management services 
for children for whom the department has been appointed temporary 
or permanent managing conservator must be provided by child-care 
institutions and child-placing agencies;
		(2)  all substitute care and case management service 
providers shall, to the best extent possible, honor the cultural 
and religious affiliations of a child placed in the service 
provider's care, regardless of the religious affiliation of the 
service provider;  and
		(3)  except as provided by Subsections (d) and (e) and 
notwithstanding any other law, the department may not directly 
provide substitute care and case management services.
	(c)  On and after September 1, 2011, the department shall:                     
		(1)  monitor the quality of services for which the 
department and each independent administrator contract under this 
chapter;  and
		(2)  ensure that the services are provided in 
accordance with federal law and the laws of this state, including 
department rules and rules of the Department of State Health 
Services and the Texas Commission on Environmental Quality.
	(d)  On and after September 1, 2011, the department may 
provide substitute care and case management services in an 
emergency.  The executive commissioner shall adopt rules describing 
the circumstances in which the department may provide those 
services.
	(e)  The department may provide substitute care and case 
management services as a provider of last resort as provided by 
Section 264.106(k), Family Code.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.003. HIRING PREFERENCE.                                                

Text of section effective until September 1, 2012
	A substitute care or case management services provider that 
contracts with the department to provide substitute care or case 
management services shall:
		(1)  give a preference in hiring to qualified 
department employees in good standing with the department who 
provide substitute care or case management services and whose 
positions with the department may be eliminated as a result of the 
privatization of substitute care and case management services;  and
		(2)  ensure that each subcontractor with whom the 
substitute care or case management services provider contracts for 
the provision of substitute care or case management services also 
gives a preference in hiring to current and former qualified 
department employees whose positions with the department may be or 
were eliminated as a result of the privatization of substitute care 
and case management services.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.004. INDEPENDENT ADMINISTRATORS;  DEPARTMENT 
DUTIES.  (a) The department shall research and develop a 
comprehensive strategy for contracting for management support 
services from independent administrators on a regional basis.  If 
the department determines that an independent administrator could 
manage and procure substitute care and case management services 
contracts with private agencies and conduct placement assessments 
in a more cost-beneficial manner, the department shall implement a 
transition plan to transfer the procurement, management, and 
oversight of substitute care and case management services from the 
department to an independent administrator, as well as 
responsibility for placement assessments.  If the department 
determines that contracting for management support from an 
independent administrator is not cost beneficial, the 
privatization of substitute care and case management services will 
occur as provided by Section 45.002(b).
	(b)  The comprehensive strategy, at a minimum, must:                           
		(1)  use competitively procured independent 
administrators to procure and manage substitute care and case 
management providers in a geographic region designated by the 
department;
		(2)  require independent administrators to contract 
with private agencies that will:
			(A)  increase local foster and adoptive placement 
options for all children, especially teenagers, sibling groups, 
children whose race or ethnicity is disproportionately represented 
in foster care, children with severe or multiple disabilities, and 
other children who are difficult to place;  and
			(B)  expand efforts to recruit foster families, 
adoptive families, and alternative care providers through 
faith-based and other targeted recruitment programs;  and
		(3)  allow permanency services providers to enter 
client, service, and outcome information into the department's 
client data system.
	(c)  Subject to the appropriation of funds, the department 
shall:            
		(1)  enhance existing data systems to include contract 
performance information;  and
		(2)  implement a contracting data system developed or 
procured by the department, to track quality assurance and other 
contracting tools to effectively manage, monitor, and evaluate 
performance-based contracting functions.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     

SUBCHAPTER B. DEPARTMENT DUTIES


	§ 45.051. REORGANIZING STAFF RESPONSIBILITIES.                              

Text of section effective until September 1, 2012
	Not later than March 1, 2006, the department shall develop a 
plan for reorganizing the department's operation to support future 
procurement of, contracting with, and monitoring of private 
contractors and enforcement of the licensing of facilities.  The 
plan must include provisions for reducing duplication of the 
department's program monitoring activities.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.052. FINANCING.                                                        

Text of section effective until September 1, 2012
	The department shall create financing and payment 
arrangements that provide incentives for an independent 
administrator and substitute care and case management providers to 
achieve safety, permanency, and well-being outcomes and improved 
system performance.  In developing this financing arrangement, the 
department shall examine:
		(1)  the use of case rates or performance-based 
fee-for-service contracts that include incentive payments or 
payment schedules that link reimbursement to results;  and
		(2)  ways to reduce a contractor's financial risk that 
could jeopardize the solvency of the contractor, including the use 
of a risk-reward corridor that limits risk of loss and potential 
profits or the establishment of a statewide risk pool.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.053. ADOPTION OF TRANSITION PLAN.                                      

Text of section effective until September 1, 2012
	(a)  Not later than September 30, 2005, the commission and 
the department shall submit to the legislature a plan for the 
development of the transition plan, including the planning 
structure and process, engagement of stakeholders, and access to 
experienced consultation and technical assistance.
	(b)  Not later than March 1, 2006, the commission and the 
department shall, in consultation with private entities under 
contract to provide substitute care services for the department, 
including members of the boards of directors of the private 
entities and other community stakeholders, develop and adopt a 
substitute care and case management services transition plan 
consistent with the requirements of Subchapter C.
	(c)  The executive commissioner shall adopt rules to 
implement the privatization of substitute care and case management 
services in this state.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.054. REGIONAL IMPLEMENTATION.                                          

Text of section effective until September 1, 2012
	(a)  The department shall implement the privatization of 
substitute care and case management services on a regional basis in 
accordance with the transition plan.  The transition plan must 
include a schedule with deadlines for implementation of the plan.  
Subject to the requirements of Subsections (c), (d), and (e), 
statewide implementation of the plan shall be completed not later 
than September 1, 2011.  The commission shall propose the first 
three regions of the state for implementation of privatization 
based on state demographics and shall consider including a rural 
region, a metropolitan region, and a region including border areas 
of the state.
	(b)  The transition plan must include a schedule with the 
following deadlines for implementation of the plan:
		(1)  completion of the transition plan, not later than 
March 1, 2006;       
		(2)  release of a request for proposal for a geographic 
region of the state designated by the department, not later than 
April 30, 2006;
		(3)  the awarding of the contract described by 
Subdivision (2), not later than September 30, 2006;
		(4)  establishment of the multidisciplinary team and 
necessary processes, evaluation criteria, and monitoring tools to 
be used to monitor and evaluate the performance of the contractor, 
not later than September 30, 2006;
		(5)  completion of the transition of substitute care 
and case management services in the first region, not later than 
December 31, 2007;
		(6)  the review and evaluation of the multidisciplinary 
team's reports pertaining to the contractor's achievement of 
performance-based milestones and the effect on the quality of 
permanency services provided, annually beginning December 31, 
2007;
		(7)  completion of the transition of substitute care 
and case management services in the second and third regions, not 
later than December 1, 2009;  and
		(8)  completion of the statewide implementation of 
contracted substitute care and case management services for 
additional geographic regions, not later than September 1, 2011.
	(c)  Not later than the first anniversary of the date the 
department enters into the first contract for substitute care and 
case management services under this section, the department shall 
contract with a qualified, independent third party to evaluate each 
phase of the privatization of substitute care and case management 
services.  Each evaluation must:
		(1)  assess the performance of substitute care and case 
management services based on compliance with defined quality 
outcomes for children;
		(2)  assess the achievement of performance measures;                          
		(3)  compare for quality the performance of substitute 
care and case management services provided by contractors to 
substitute care and case management services provided by the 
department in similar regions;
		(4)  determine if contracted services are cost 
beneficial;  and             
		(5)  assess the private sector's ability to meet the 
performance measures, including service capacity, for the 
remaining regions.
	(d)  The independent third party with whom the department 
contracts under Subsection (c) shall submit its reports and 
recommendations to the House Human Services Committee, or its 
successor, and the Senate Health and Human Services Committee, or 
its successor.
	(e)  The department shall continue to implement the 
transition plan for the second and third regions only after:
		(1)  the commission reports to the House Human Services 
Committee, or its successor, and the Senate Health and Human 
Services Committee, or its successor, the status of the initial 
transition of services to a contractor in the first region not later 
than December 31, 2006;
		(2)  the independent third party with whom the 
department contracts under Subsection (c) evaluates and reports to 
the House Human Services Committee, or its successor, and the 
Senate Health and Human Services Committee, or its successor, on 
the performance of contracted substitute care and case management 
services in the first region not later than December 31, 2008;  and
		(3)  the commission determines, based on the report 
prepared under Subdivision (2) or information obtained by the 
review required under Subsection (b)(6), whether material 
modifications to the model for privatization of substitute care and 
case management services are necessary and submits a report and 
recommendations to the House Human Services Committee, or its 
successor, and the Senate Health and Human Services Committee, or 
its successor, not later than December 31, 2008.
	(f)  The department may not implement the transition plan for 
the second and third regions before September 1, 2009.
	(g)  The department shall continue to implement the 
transition plan for the remaining regions of the state only after:
		(1)  the independent third party with whom the 
department contracts under Subsection (c) evaluates and reports to 
the House Human Services Committee, or its successor, and the 
Senate Health and Human Services Committee, or its successor, on 
the performance of contracted substitute care and case management 
services in the second and third regions not later than September 1, 
2010;  and
		(2)  the commission determines, based on the report 
prepared under Subdivision (1) or information obtained by the 
review required under Subsection (b)(6), whether material 
modifications to the model for privatization of substitute care and 
case management services are necessary and submits a report and 
recommendations to the House Human Services Committee, or its 
successor, and the Senate Health and Human Services Committee, or 
its successor, not later than December 31, 2010.
	(h)  Nothing in this chapter, including the deadlines for 
implementing this section, precludes the department from 
immediately converting from an open-enrollment system to a 
statewide competitive procurement system for substitute care.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     

SUBCHAPTER C. TRANSITION PLAN


	§ 45.101. GOALS FOR PRIVATIZATION.                                          

Text of section effective until September 1, 2012
	The transition plan adopted under Section 45.053 must provide 
for a new structural model for the community-centered delivery of 
substitute care and case management services that is based on a goal 
of improving protective services, achieving timely permanency for 
children in substitute care, including family reunification, 
placement with a relative, or adoption, and improving the overall 
well-being of children in substitute care consistent with federal 
and state mandates.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.102. TRANSITION PLAN REQUIREMENTS.                                     

Text of section effective until September 1, 2012
	The transition plan developed by the department and the 
commission must:     
		(1)  identify barriers to privatization, including 
regional disparities in resources, provider capacity, and 
population, and propose solutions to stimulate capacity and adjust 
program delivery;
		(2)  provide details regarding the target population 
and services by region that will be part of the system redesign, 
including the number of children and families, historic caseload 
trends and service utilization information, and projected 
caseloads;
		(3)  provide details regarding the roles, 
responsibilities, and authority assigned to the public and private 
entities, including the department, independent administrators, 
and substitute care and case management providers, in making key 
decisions throughout the child and family case;
		(4)  include an implementation plan to transfer all 
foster homes certified by the department to private child-placing 
agencies, ensuring minimum disruption to the children in foster 
care and to current foster parents;
		(5)  specify the limited circumstances under which a 
foster home verified by the department may continue to be verified 
by the department when continuation would be in the best interest of 
a child in the care of the foster home;
		(6)  include a process for assessing each child who is 
transferred to a private substitute care provider to verify the 
child's service needs;
		(7)  include an implementation plan to transfer all 
adoption services to private agencies, including details of how and 
when cases will be transferred and how adoption provider contracts 
and reimbursements methods will be structured;
		(8)  describe the process to transfer the duties of 
case management and family reunification services from department 
staff to private agency staff, including the integration of family 
group conferencing into private agency case management;
		(9)  describe the manner in which the department will 
procure and contract for kinship services that are funded by the 
state;
		(10)  provide details regarding financial arrangements 
and performance expectations for independent administrators and 
substitute care and case management providers that:
			(A)  provide incentives for desired results and 
explicit contract performance and outcome indicators;
			(B)  describe how various risk-based arrangements 
will be weighed and realistically assessed using sound actuarial 
data and risk modeling and how mechanisms will be selected to limit 
uncontrollable risks that could threaten provider stability and 
quality;
			(C)  describe how financing options will increase 
flexibility to promote innovation and efficiency in service 
delivery;  and
			(D)  provide balance between control over key 
decisions and the level of risk the contractor assumes;
		(11)  require the executive commissioner to evaluate 
whether existing rate structures are appropriate to compensate 
substitute care providers who enter into contracts with an 
independent administrator under Section 264.106, Family Code, 
considering new functions to be served by the providers, and, if 
necessary, require the executive commissioner to adjust the rates 
accordingly;
		(12)  require the department to enter into contracts 
for the provision of substitute care and case management services 
as required by Section 264.106, Family Code, and describe the 
procurement and contracting process, including:
			(A)  stating how the department will shift from an 
open-enrollment system to a competitive procurement system;
			(B)  identifying the services that will be 
procured and contracted for directly with the department and the 
services that will be procured by an independent administrator;  
and
			(C)  developing a procurement and contracting 
schedule to ensure full implementation not later than September 1, 
2011;
		(13)  provide for the implementation of Sections 
264.1062 and 264.107, Family Code, by describing each party's 
responsibility and ensuring that the department retains the legal 
authority to effectively provide oversight;
		(14)  describe formal training required for department 
staff, independent administrators, and substitute care and case 
management providers;
		(15)  define roles and expectations related to 
reporting and managing data required to ensure quality services and 
meet state and federal requirements, including data collection 
responsibilities for an independent administrator and service 
provider;
		(16)  describe how the transition will impact the 
state's ability to obtain federal funding and examine options to 
further maximize federal funding opportunities and increased 
flexibility;  and
		(17)  describe the costs of the transition, the initial 
start-up costs, and mechanisms to periodically assess the overall 
adequacy of funds and the fiscal impact of the change.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     

SUBCHAPTER D. MISCELLANEOUS PROVISIONS


	§ 45.151. PROHIBITION ON CERTAIN CONTRACTS.                                 

Text of section effective until September 1, 2012
	(a)  The department may not accept a bid under this chapter 
from a person or award to a person a contract under this chapter 
that includes proposed financial participation by the person if:
		(1)  the person participated in preparing the bid 
specifications or request for proposals on which the bid or 
contract is based;  and
		(2)  the bid specifications or request for proposals on 
which the bid or contract is based:
			(A)  requires a work plan, project design, or 
other criteria for participation in the contract that is specific 
to that person or likely to limit or exclude competitors who provide 
similar goods or services;  or
			(B)  includes a scope of required goods or 
services that is so narrowly defined that it is specific to that 
person or likely to limit or exclude competitors who provide 
similar goods or services.
	(b)  The department may not accept a bid under this chapter 
from or award a contract under this chapter to an individual or 
business entity that is barred from participating in state 
contracts under Section 2155.077, Government Code.
	(c)  The department may not accept a bid under this chapter 
from or award a contract under this chapter to an individual or 
business entity that was awarded a contract valued at $1 billion or 
more during the four-year period immediately before the date of the 
issuance of relevant requests for proposals under Section 45.054.
	(d)  If the department determines that an individual or 
business entity holding a contract under this chapter was 
ineligible to have the contract accepted or awarded under 
Subsection (a), (b), or (c), the department may immediately 
terminate the contract without further obligation to the vendor.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.152. SUBCONTRACTOR PAYMENT.                                            

Text of section effective until September 1, 2012
	The existence of a dispute between the department and a 
contractor regarding a contract under this chapter does not justify 
nonpayment of a subcontractor for work completed by the 
subcontractor under the contract if the subcontractor has completed 
the work in a satisfactory manner and the work has been approved by 
the department and the contractor.

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.     


	§ 45.153. EXPIRATION.                                                       

Text of section effective until September 1, 2012
	This chapter expires September 1, 2012.                                        

Added by Acts 2005, 79th Leg., ch. 268, § 1.123, eff. Sept. 1, 
2005.