Contracted Foster Care Case Management Costs

PURPOSE: This rule establishes the methodology for the provision of reasonable cost for foster care case management contracted services as set forth in section 210.112.4.(6), RSMo. (1) Payment to individuals and entities providing foster care case management services pursuant to section 210.112, RSMo, and 13 CSR 35-35.120 (hereinafter referred to as “contractors”) contracted by the Children’s Division of the Department of Social Services (hereinafter referred to as the “division” or “CD”) shall be based on the reasonable cost of services as determined through the competitive procurement process. Contractors and prospective contractors (hereinafter referred to as “contractor” or “contractors”) shall certify their bid covers all reasonable costs at a firm fixed price unless otherwise provided by law. (A) Upon request by CD, the contractor shall submit a written explanation and supporting documentation detailing how the contractor calculated the reasonable costs of services. The CD may not award a contract to any contractor which fails to sub mit such information when requested by CD. (B) CD, in its sole discretion, may reject any bid where CD de termines that the bid amount for a service or services exceeds the reasonable cost of the service or services. The Department of Social Services shall apply the cost principles set forth in 2 CFR Part 200 as applicable in the approval, evaluation, and audit of bids and contracts. CD shall use federal Uniform Guidance, pursuant to 2 CFR 200.404, to define reasonable costs as follows: 1. Reasonable costs. A cost is reasonable if, in its nature or amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of the reasonableness is particularly important when the contractor is predominantly federally funded. In determining the reason ableness of a given cost, consideration shall be given to— A. Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the contractor or the proper and efficient performance of the contract; B. The restraints or requirements imposed by such factors as sound business practices; arm’s-length bargaining; federal, state, local, tribal, and other laws and regulations; the terms and conditions of the federal award of monies to the state, generally-accepted sound business practices, and terms and conditions of the contract; C. Market prices for comparable goods or services for the geographic area; D. Whether the individuals concerned acted with pru dence in the circumstances, considering their responsibilities to the contractor, its members, employees, and clients, the public at large, and the state and federal government; and E. Whether the contractor significantly deviates from the established practices of the division or the contractor, which may unjustifiably increase the contract costs. (2) CD may, in its sole discretion, establish a cap on the highest amount that CD will pay for the reasonable cost of services identified in the Request for Proposal (RFP) or Invitation for Bid (IFB). CD will announce the cap for services in the RFP or IFB. CD shall utilize one (1) or more of the following methods to es tablish the cap as part of the competitive procurement process: (A) Industry cost reports for the previous three (3) calen dar years which demonstrate the costs to the contractor to deliver the services identified in the RFP or IFB. Such reports shall include costs for case management services, community resource development, treatment services, special expenses, crisis expenses, administrative costs, and any other cost in curred to provide the services identified in the RFP or IFB. Upon request by CD, case management contractors or prospective case management contractors who submit a proposal or bid for a contract shall provide CD with cost reports and support ing documentation, if and when required by the RFP or IFB. The format for submission of cost report information shall be included in the RFP or IFB. 1. Cost for case management services shall include all costs associated with assessments, case planning, placement services, service planning, permanency planning, and concur rent planning. Such costs shall include salaries and benefits for required staff. A. Assessments shall be defined as the consideration of all social, psychological, medical, educational, and other factors to determine diagnostic data to be used as a basis for the case plan. B. Case planning is a process of negotiation between the family case manager, parent(s) or guardian(s) from whom the child was removed, and the juvenile officer which describes the services and activities necessary for the purpose of achiev ing a permanent familial relationship for the child. C. Placement services is the selection of the most ap propriate placement resource for children in out-of-home care based on the assessment of the child’s unique needs and personality and the out-of-home care contractor’s capacity and skills in meeting those needs. D. Service planning is the provision of any services in dicated and identified as needed through an assessment and case plan or ordered by the juvenile court. E. Permanency planning is determining the permanent plan which best meets the needs of the child. F. Concurrent planning is a process of pursuing a pri mary permanency goal for children in out-of-home care, such as reunification, while simultaneously establishing and imple menting an alternative permanency plan for that child. 2. Cost for community resource development shall include all costs associated with the recruitment, assessment, training, and maintenance and retention of out-of-home care contrac tors. It shall also include the development of those services which shall best meet the needs of the child and his/her family. 3. Cost for treatment services shall include all services designed to meet the service and treatment needs of an indi vidual. 4. Cost for special expenses shall include all costs associ ated with needs of children which are not designed to meet a service or treatment need. These costs would not be included in the foster care maintenance payment to the placement con tractor. An example is a clothing allowance. 5. Cost for crisis expenses shall include all reasonably necessary costs incurred to address the critical financial and resource needs of families. Crisis funds are utilized to purchase specific items family members need to alleviate a crisis. An ex ample is payment to have utilities restored so that a child may be returned home. 6. Administrative costs are those which are incurred to deliver the case management services defined in the RFP or IFB which are not included above in paragraphs (2)(A)1., (2)(A)2., (2) (A)3., (2)(A)4., or (2)(A)5. Such costs include expenses for general administrative functions and overhead. 7. Contractor costs shall be determined and validated by a third-party contractor retained by CD or the Department of Social Services for that purpose. The contractor shall submit any and all information that CD, the Department of Social Services, or the third-party contractor may require to validate the cost report. The contractor shall certify such information is truthful, accurate, and complete. 8. Contractor costs shall include any applicable credits or payments received through federal or state funding sources or private contributions. 9. Industry cost reports shall include any audited financial statements for the applicable time period under review; (B) Cost to CD for the three (3) previous calendar years for similar services identified in the RFP or IFB; (C) Historical expenditures of agencies contracted to pro vide the services identified in the RFP or IFB for up to three (3) previous calendar years. These expenditures shall include any payments the contractor has made on behalf of the children and families receiving services identified in the RFP or IFB; (D) Historical expenditures of the CD for up to three (3) pre vious calendar years for all services identified in the RFP or IFB which have been provided to children placed in out-of-home care in the regions to be served by the foster care case man agement contractors. CD expenditures shall only be utilized in conjunction with industry cost reports and/or historical expenditures of agencies contracted to provide the services identified in the RFP or IFB; and (E) CD shall consider all applicable state and federal laws and regulations when a cap is established. (3) Contracts shall be made to the lowest and best qualified bidder(s), subject to applicable procurement law and available appropriation. A qualified bidder is a contractor which meets all of the requirements in law, regulation, and policy related to the services identified in the RFP or IFB. A qualified bidder must also meet the qualifications outlined in the RFP or IFB. (4) The number of bids, contracts, and cases awarded to any given contractor are subject to available appropriation. (5) The contract shall specify the monthly amount which is to be paid to the contractor based on the number of cases awarded unless payment has been reduced for reasons spec ified in this regulation. The contract may include a provision that the parties to the contract may amend the contract to increase or decrease the rate if authorized by statute or appro priation. (A) CD shall refer the number of cases in the Notice of Award to the contractor when cases are available. CD shall refer addi tional cases, when available, throughout the contract year with the intention of replacing cases which are expected to move to permanency each month based on the percentage of children who are to achieve permanency as identified in the contract. CD reserves the right to increase the number of referrals during subsequent renewal periods when the number of children en tering CD’s custody increases in the geographic region served by the contractor with the agreement of the contractor. CD will decrease the number of referrals in a region when CD cannot replace cases on a one-for-one basis. The provider’s base case award shall be decreased, which shall be effectuated through a contract amendment. CD in its discretion may shift case al locations to another region where there is a greater need and may increase another provider’s base caseload, which shall be effectuated through a contract amendment. CD and the con tractor will mutually agree upon the implementation period when necessary to meet service needs or address emergency circumstances. Implementation periods identified within the applicable contract amendment for increases or decreases to a contractor's base case award will generally range from thirty (30) to ninety (90) days, depending upon operational needs, staffing considerations, provider capacity, and regional service demands of both CD and the contractor. (B) The contractor may return cases to CD when children have been placed with their parent, or legal guardian from whom they were removed, for more than ninety (90) days only with the prior, written permission of the CD. 1. The contractor shall return cases to CD when an adoption has been finalized, the courts have awarded a legal guardianship, and when the juvenile court has terminated jurisdiction over the child. CD may replace such cases on a one-for-one basis. When the one-for-one case replacement methodology is utilized, CD shall replace cases in the following order of preference if cases are available: A. The next child and any sibling who enter care no more than ten (10) calendar days prior to, and no later than ten (10) calendar days following, a permanency achievement or an exit from court jurisdiction. These cases will be replaced in the county where the previous child exited when possible; B. A child and any sibling currently case managed by CD in the county where the case was returned with services being provided by a supervisor or coworker due to the extended absence of the assigned worker; C. A child and any sibling who entered care within thirty (30) calendar days in the county where the case was returned which is case managed by CD; D. A child and any sibling from a county other than the one where the case was returned which is served by the contractor and meets the criteria set forth in subparagraph (5)(B)1.A., (5)(B)1.B., or (5)(B)1.C. above, when agreeable to the contractor. 2. In the event the contractor is assigned more active cases than awarded in an effort to keep one (1) worker assigned to a sibling group, cases shall not be replaced until such a time when the contractor is serving the number of active cases awarded. Active cases do not include— A. Cases where the child has been placed for ninety (90) days with their parent, or legal guardian from whom they were removed, when CD has assigned a replacement case upon the contractor’s request; B. Children who have been adopted; C. Those situations where the courts have awarded a legal guardianship; D. Situations where the juvenile court has terminated jurisdiction over the child; or E. Reentries into care unless they meet the criteria spec ified in subparagraph (5)(C)4.A. below or the rate or number of reentries into care within twelve (12) months has not exceed ed the allowable rate or allowable number as defined in para graph (5)(C)5. below. 3. The contractor shall not be assigned a sibling group which would increase the number of cases awarded by more than two percent (2%). (C) The contractor shall be paid for the number of cases awarded except in the following situations: 1. CD shall reduce the payment by the number of cases disenrolled and not replaced, when CD determines it is in the best interest of a child to reassign the case to CD staff; 2. CD shall reduce payment when the contractor is placed on referral hold as the result of the contractor’s staff involve ment with an unacceptable, egregious situation. Payment shall be reduced by the number of cases which CD is unable to refer while the contractor is on referral hold due to an unacceptable, egregious situation. Unacceptable, egregious situations in clude any situation which seriously impacts the delivery of ser vices to a child or family assigned to the contractor, including a material breach of the contract with the division, and shall include, but is not limited to, the following: A. Court contempt order; B. Violating the condition(s) of a court order; C. Unsafe environments or inappropriate out-of-home placements by the contractor as evidenced by the following: (I) Placement in unlicensed foster homes or facilities unless approved by the court; (II) Placements by a contractor without conducting a background screening; (III) Placements by a contractor with a failed back ground screening as defined in the CD Child Welfare Manual; (IV) Placements without full compliance with the requirements of the Interstate Compact on the Placement of Children (section 210.620, RSMo); (V) Placements without court approval where court approval is required; and (VI) Any other circumstances where CD determines that placement of a child by the contractor will compromise child safety; D. Breaches of confidentiality as defined in the contract; E. Intentionally, recklessly, knowingly, or negligently entering false data in CD’s automated case management system; F. Failure to comply with the requirement to report suspected child abuse and neglect, child injuries, child fatalities, or other critical incidents as required by contract and/or as required by section 210.115, RSMo; and G. Other violations of federal or state law; 3. Payment shall be reduced in the following month, and subsequent months, during the contract year, and subsequent renewal periods to correspond with the number of cases which could not be assigned when the counties have no case which meets any of the criteria identified in subparagraph (5)(B)1.A., (5)(B)1.B., (5)(B)1.C., or (5)(B)1.D. above; 4. The contractor shall not invoice for reentries into care within twelve (12) months of previous exit except under those circumstances described below: A. The contractor shall be paid for reentries into care whereby the number of cases replacing those which are expected to move to permanency each month shall be reduced to correspond with the number of reentries when— (I) The contractor does not have an opportunity to serve the case, such as when emergency protective custody is allowed to expire, or the court terminates jurisdiction and there is clear and convincing documentation to support the contractor was against the release of jurisdiction; or (II) A youth between the ages of eighteen (18) and twenty-one (21) has elected to return to care pursuant to 211.036, RSMo; 5. CD shall set an allowable rate of reentries or the allowable number of reentries into care within twelve (12) months of previous exit, which shall not include the reentries defined above in parts (5)(C)4.A.(I) and (5)(C)4.A.(II). CD, at its sole discretion, may adjust this rate or number based on mitigating factors. The contract shall set forth that after the rate or number is exceeded, the contractor shall not be paid for cases exceeding the allowable rate or the allowable number of reentries set forth in the contract. (D) When CD assumes the cost of foster care or residential treatment, or when the cost of the child’s placement is covered by a waiver, the contractor’s monthly case rate shall be reduced to remove the foster care and residential treatment costs. (E) CD reserves the right in its sole discretion to reduce the number of cases assigned in subsequent contract years with payment reduced to correspond when the contractor fails to exceed the permanency expectation defined in the contract. CD also reserves the right to terminate the contract. In the event the contractor fails to exceed the permanency expectation and the number of cases is reduced in subsequent contract years, CD may reduce the number of cases awarded as follows: 1. CD may request the return of active cases; and/or 2. CD may not replace cases which are closed by the contractor. (F) CD will reduce payment to correspond with the number of active cases served. (6) The contract shall provide for the payment of incentives to recognize accomplishment of case goals and corresponding cost savings to the state, subject to the availability of appropriated funds. In the event that sufficient funds are not available to pay the full incentives, as adjusted, and calculated pursuant to this section, the Department of Social Services shall reduce the payment to each contractor eligible to receive an incentive payment pro rata on the basis of the proportion of cases that the eligible contractor handled during the period to the total number of cases handled by foster care case management contractors eligible to receive an incentive payment during the period. (A) For the purpose of this regulation, “permanency” is de fined as reunification with the child’s parent, or legal guardian from whom they were removed, a finalized adoption, or estab lishment of a legal guardianship. Reunification shall include a child who has been placed with their parent, or legal guardian from whom they were removed, for more than ninety (90) days. (B) Incentive for Exceeding Permanency Expectations. Sub ject to available appropriation, the contractor can qualify for fifty percent (50%) of the possible incentive payment calculated as provided in this subsection. CD shall pay an incentive for the sum of the monthly differences between the number of chil dren who are expected to achieve permanency as provided in the contract and the number of children who do achieve per manency when the one-for-one case replacement methodolo gy is utilized. The following provisions shall apply to the ad ministration of the permanency incentive: 1. The percentage of children who are to achieve permanency in a twelve- (12-) month contract period shall be based on one (1) of the following percentages, whichever number is higher: A. The percentage of children CD serves who move to permanency within a geographic region as defined in the contract, utilizing an average for all counties served within the region; or B. The percentage of children contractors serve who move to permanency within a geographic region as defined in the contract, utilizing an average of the performance of contractors serving the region; 2. The contractor shall exceed the regional permanency expectations as defined in the contract to qualify for an incentive payment; 3. The incentive for permanency shall be a one- (1-) time payment for the number of children who exceeded the permanency expectation during the contract year. (C) Incentive based on 13 CSR 35-35.100 Performance Goals. If the contractor qualifies for an incentive by exceeding the permanency performance expectation for the geographic region as provided in subsection (6)(B) of this regulation, then the contractor will qualify to be eligible for the remaining fifty percent (50%) of the possible incentive payment as provided in this subsection. To earn the remaining fifty percent (50%) of the incentive payment, the contractor must meet or exceed the performance goals and outcomes established or subsequently amended pursuant to 13 CSR 35-35.100 as they are phased in, and as further provided in this subsection. Any incentive payment is subject to available appropriation. 1. The CD shall establish relative weights to be given to each item in the Safety, Well-Being, and Service Domains and the additional requirements of the Permanency Domain as they are phased in as provided in 13 CSR 35-35.100. The incentive payment shall be reduced as provided in paragraph (6)(C)2. of this regulation if the contractor fails to meet the performance goals established of 13 CSR 35-35.100 and the evaluation tool therein. 2. The remaining fifty percent (50%) of the incentive payment shall be calculated as follows: A. Tier 1 Incentive: A contractor will be eligible for a performance-based incentive payment if a contractor achieves a score of equal to or greater than sixty percent (60%) of the weighted performance and outcome score after calculating the aggregate score of all weighted metrics specified in 13 CSR 35-35.100. If eligible for a performance-based incentive, the contractor shall receive an incentive payout equal to their aggregate weighted score, rounded up to the nearest whole number, not to exceed one hundred percent (100%) of the available incentive amount. For example, if a contracted provider has an aggregate weighted score of sixty-nine and a half percent (69.5%) at the end of a contract year, that number will be rounded up to seventy percent (70%) (the nearest whole number) and the contract provider would be eligible for a Tier 1 performance-based incentive payment of seventy percent (70%) of the total remaining incentive payment; B. Tier 2 Incentive: Except as provided in parts (6)(C)2.B.(I)- (II) below, if a contractor is not eligible for a performance-based incentive payment, then the contractor will be eligible for an improvement-based incentive payment if the contractor’s aggregate weighted score is an improvement from the same contractor’s aggregate weighted score for the previous contract year. The incentive awarded shall be equal to the percentage of improvement of the contractor’s performance score when compared to their prior-year score, not to exceed fifteen percent (15%) of the total remaining incentive. For example, if a contracted provider had an aggregate weighted score of forty percent (40%) during the previous contract year and improved their aggregate weighted score to fifty percent (50%) the following contract year, the contracted provider would be eligible for a Tier 2 improvement-based incentive payment of ten percent (10%) of the total remaining incentive payment. (I) For the first year of the contract effective October 1, 2026, or thereafter, contracted providers are not eligible for a Tier 2 improvement-based incentive payment and are only eligible for a Tier 1 performance-based incentive payment. (II) New contracted providers with no previous per formance baseline established are not eligible for a Tier 2 im provement-based incentive payment until such time as the contracted provider has two (2) consecutive years of aggregate weighted scores to compare; C. If a contractor qualifies for a performance-based incentive payment, the contractor will not be eligible for an improvement-based incentive payment; D. If a contractor fails to qualify for a performance-based incentive payment and fails to qualify for an improvementbased incentive payment, the contractor shall not receive an incentive payment under subsection (6)(C). 3. To calculate the performance and outcome score speci fied in paragraph (6)(C)2. of this regulation, the division will cal culate for each contractor the percentage of the performance outcome goal for each item in each domain being scored under 13 CSR 35-35.100 that each contractor actually achieved for that item during the phase for the period. The percentage achieved for each item under each domain shall then be multiplied by the weight factor (if any) assigned to each item. The aggregate weighted score of the weighted percentages will be the final score for each contractor for the period. The performance out come goals for the period and the weights to be assigned to each item will be established by the division, in conjunction with the Research and Evaluation team and other individuals, following the procedures specified in 13 CSR 35-35.100. 4. The final scores shall be rounded up to the nearest whole number. 5. The scores for each contractor shall be published on the division’s website. (7) Changes to reimbursements for services in addition to the contracted amounts will be based upon available increased or decreased appropriations for services specifically included in the case management contract. Increases or decreases will be allocated to both the state agency and private contractors of such services. Any increase or decrease will result in an increase or decrease to the monthly case rate paid to the con tractor. The allocation shall be calculated using a numerator equal to the contractor’s base case award and a denominator equal to the total number of cases served statewide at the point in time the calculation is performed. The resulting pro portion shall determine the contractor’s share of the increased or decreased appropriation. The division shall be allocated the residual amount of the appropriation after contractor allocations are calculated, such that the total sum of all allo cations equals the total available appropriation. Any increase or decrease in appropriations will only be expended for the purposes specified by the General Assembly. The proportional methodology described in this section shall not apply when the General Assembly directs a different methodology through bill language, budget language, or other instruction. Under no circumstances shall the Department of Social Services and the Children’s Division’s aggregate, total expenditure for foster care case management services contracts exceed the amount appropriated by the General Assembly for that purpose nor shall it exceed the funds available. AUTHORITY: sections 207.020 and 660.017, RSMo 2016, section 210.112.8, RSMo Supp. 2025,* and Young v. Children’s Division, State of Missouri Department of Social Services, 284 S.W.3d 553 (Mo. 2009). This rule originally filed as 13 CSR 35-32.030. Original rule filed Feb. 28, 2011, effective Oct. 30, 2011. Emergency amend ment filed June 11, 2021, effective July 1, 2021, expired Feb. 24, 2022. Moved to 13 CSR 35-35.130 and amended: Filed June 11, 2021, effective Jan. 30, 2022. Amended: Filed March 12, 2026, effective Sept. 30, 2026. *Original authority: 207.020, RSMo 1945, amended 1961, 1965, 1977, 1981, 1982, 1986, 1993, 2014; 210.112, RSMo 2004, amended 2005, 2011, 2018, 2020, 2025; and 660.017, RSMo 1993, amended 1995.