A pair of just-released legislative reports bolster Nebraska’s decision to end a contract with a Kansas-based nonprofit and close out its 12-year experiment with private case management in child welfare.
A special investigative committee of the Legislature put out one report Wednesday. The committee had been charged with investigating how Nebraska ended up contracting with the nonprofit, Saint Francis Ministries, in July 2019 and the private agency’s performance since then.
The Public Consulting Group, a consultant hired to study Nebraska’s child welfare privatization effort, issued the second report.
Both concluded that Nebraska should return to having state workers oversee the care of abused and neglected children across the state, including in Douglas and Sarpy counties, where that task has been contracted out since 2009.
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“The three criteria used for this retrospective analysis — quality, innovation and cost — have revealed no particular advantage to privatization in the (two counties),†the consultant said. “The disruptions and resources expended in efforts to make the privatized system work do not measure up to the gains.â€
The reports came out one day after Dannette Smith, CEO of the Department of Health and Human Services, and William Clark, president and CEO of Saint Francis, announced that they had reached a “joint mutual decision†to end the contract early. The official termination is slated for Jan. 3, followed by a six-month transition period during which cases will be transferred to state workers.
Asked about the timing of the announcement, an HHS spokeswoman said the officials did not know what the reports would recommend.
Neither would talk in detail about why each reached that decision, although Smith mentioned times that the agencies have “agreed to disagree†and Clark said that the state has more resources available for children and families, particularly when it comes to having enough case workers to meet statutory caseload limits.
Laura Virgl, who brought a lawsuit challenging the continued privatization of case management in the Omaha area, said the decision to end the contract supports her argument that privatized case management is “unjustified, inequitable and has resulted in continued instability for youth and families.â€
Nebraska Appleseed, which represents Virgl, said it would continue advocating for a declaration that private case management is unconstitutional and unjustified. The organization also called for lawmakers to repeal the law allowing for a privatized “pilot project†in the area.
The legislative report did not address the legal status of privatized case management but recommended an end to the current privatization model. It said the model leads to instability because contracts inevitably end, causing disruption for children and families and making it more difficult to hire and keep staff.
The report called for creation of a work group to develop a shared strategic direction for child welfare in Nebraska, which the report said was lacking.
It also recommended hiring a consultant to work with legislative and executive branch officials on improving the state’s procurement system. The Saint Francis contract and others show that the current procurement system does not adequately vet bidders or evaluate the reasonableness of their proposals.
Saint Francis got the Nebraska contract after offering to do the job for $197 million over five years, less than 60% of the bid from PromiseShip, the Omaha-based contractor that had managed child welfare cases for nearly a decade. During the bid review, PromiseShip outscored Saint Francis on all areas except cost.
The difference in cost was erased in late January when Nebraska signed a new, emergency contract with Saint Francis. HHS officials signed the contract after Clark warned lawmakers that the nonprofit would run out of money to operate unless Nebraska agreed to pay more.
Clark has since acknowledged that the contract was underbid by former top agency officials. The Saint Francis board terminated those officials after allegations of financial mismanagement came to light.
The 25-month, $147.3 million emergency contract was scheduled to expire Feb. 28, 2023.
Concerns were raised about the contract since it was first signed. Saint Francis has struggled to meet the requirements of the contract, including ongoing failure to get enough caseworkers to meet state caseload limits. A shortage of staff contributed to falling short on other performance measures.
But the consultant’s report said the previous decade of privatization in the Omaha area had not shown advantages, compared with the rest of the state, in keeping children safe and succeeding in getting them back home or into adoptive families in a timely manner.
“Nearly all the data in this 10-year retrospective study show that at best privatization has brought the Eastern Service Area up to state averages on some measures but has yielded no net benefit,†the report said. “Amid the underperformance is the angst and drama produced by privatization.â€