Judge blocks DCS rate changes for now

A federal judge in Indianapolis has temporarily blocked the Indiana Department of Child Services from reducing the amounts it pays to foster and adoptive parents and juvenile-service providers.

After an hours-long hearing Wednesday in two combined cases against the state agency, U.S. Judge Sarah Evans Barker of the District Court's Indianapolis Division granted a preliminary injunction against the DCS. This means that service providers and those adoptive and foster parents will continue getting the same money received during 2009, at least until the case progresses or the court orders differently.

Filed in December, one suit by the American Civil Liberties Union of Indiana is on behalf of the parents while the Indiana Association of Residential Child Care Agencies (IARCCA) represents the service providers. The cases – C.H., et al. v. James Payne, and IARCCA v. Indiana DCS and Payne – have been combined into one case, No. 1:09-cv-1574. Both claims involve the agency's planned reductions in payment rates for the respective parties. The suit represents more than 100 agencies statewide and has been certified as a class action as far as foster and adoptive parents throughout the state.

At issue is the rate setting by the DCS, which has scaled down any increases and frozen the rates to the service providers as the budget woes worsened for Indiana. The expected service-provider cuts range from 14 to 20 percent, while the foster and adoptive parents faced a 10 percent cut in monthly payments no matter when the placement or adoption took place.

As a result, both sides feared that the reductions would result in layoffs or fewer placement or service options for children and families who need them most. Both plaintiffs had asked the court to consider a preliminary injunction stopping the state agency from putting those into effect Jan. 1, and the judge granted those requests from the bench; a written ruling will follow.

Some people have already seen reductions in their payment, and those issues may be worked out at a later time, the parties said.

"We consider this a victory for children, and we're very glad that our concerns were heard," said Cathleen Graham, IARCCA executive director. "The children we're working with are very vulnerable and need these services, and I believe the judge saw the potential for harm with any delay in doing this. We're very satisfied with what she said about the importance of that promise of quality care that's stated in federal law. That speaks to what we as providers are very concerned about when we offer these services to children and their families."

Ken Falk, legal director for the ACLU of Indiana, said his class of clients was also pleased about the judge's ruling as it ensures they won't be faced immediately with lower reimbursements for the services they provide. The state now has a chance to appeal the decision, but if that doesn't happen then the case can move to trial, Falk said.

In response to the ruling, DCS spokeswoman Ann Houseworth said the agency was disappointed but will abide by it while officials continue pursuing all options to provide for the best possible care. As no official written ruling has yet been issued, Houseworth said no decision had yet been made about appealing the decision.

Despite the ongoing litigation, Graham emphasized that the cases won't impact the relationship between her organization and the service providers.

"Since the filing of this suit, we've worked with DCS on so many issues and will continue doing that collaboratively," she said. "That's best way to get these children the services they need."