House panel reviews new funding formula for Florida child-welfare lead agencies

Members of the Florida House Human Services Subcommittee on March 1 heard a Department of Children and Families presentation on a new funding methodology for Community‑Based Care lead agencies under House Bill 7,089 but took no formal vote on the bill.

The model, developed with an actuarial firm and input from the CBCs, organizes payments into three tiers: a fixed operational tier, a blended per‑child‑per‑month tier and an optional incentive tier. Casey Penn, chief of staff at the Department of Children and Families, told the committee the approach is “cost based” and aims to capture prior expenditures, local supplemental funding and regional growth factors.

The funding formula is intended to address long‑standing disparities in CBC funding that Rep. McFarland described from her district in Sarasota, where she said local providers historically received less per child than in other parts of the state. “We will finally update the funding formula,” Representative McFarland said, recounting outreach and a multi‑year work group that produced an 80‑page report on the methodology.

Under the model shown to the committee, tier 1 covers operational and administrative costs, including salaries and benefits, and is paid as a standard monthly amount. Tier 2 is a blended per‑child‑per‑month payment across placement types and will be reconciled annually against actual census; the model applies age and serious‑mental‑illness risk factors to reflect higher costs for older or higher‑acuity children. Tier 3 would be an optional incentive pool the Legislature may choose to fund to reward local performance measures such as timely permanency and placement with kin.

Penn said the model includes a one‑sided 2% risk corridor for tier 2 — a safety buffer if costs rise because of increased acuity — and estimated the corridor would cost about $16 million statewide if every CBC needed it. The formula’s gross budget need was presented at roughly $1.392 billion; after a $15.3 million hold‑harmless provision and a roughly $32.6 million offset of unspent pass‑through funds, the net increase over last year’s funding was presented as approximately $28.6 million, about a 2% increase from last year’s schedule.

Committee members pressed for detail. Representative Abbott asked whether prevention services are captured; Penn said prevention spending is incorporated in the blended payments now and could be reported distinctly once the department’s new finance module is complete. Ranking Member Robinson and others asked how large a Tier 3 incentive pool might be; Penn said an amount was not yet determined but the department can model options on request.

Members also questioned executive compensation caps for CBC leaders and how multiple contracts affect caps. Sam Kears of DCF described changes in House Bill 7,089 intended to limit the amount of a CEO’s salary that may be charged to CBC contracts and explained that other departmental contracts (for example, managing‑entity contracts) remain separate, which can produce multiple allowable allocations; DCF said CBCs completed a post‑bill exercise with finance staff to align salaries with the statute.

Penn said the department collected two years of CBC general ledger and census data, engaged CBCs and KPMG in multiple workshops and completed more than 70 individual meetings to build the model. She said DCF is implementing a CCWIS finance module to improve data granularity for future iterations and reconciliation.

No formal vote or committee action on HB 7,089 occurred during the meeting; committee members indicated further work and potential bill language will follow as the Legislature moves into budget and bill drafting phases.