In February, Congress made a bipartisan deal that avoided a government shutdown and raised spending limits for defense and non-defense programs. The deal's immediate budget implications grabbed most of the headlines at the time, but tucked into the legislative package was the biggest change in almost 40 years in how child welfare is funded.

Months later, states and localities are still trying to figure out what the new Family First Prevention Services Act means for them and whether they have enough time to comply with it.

Under the new law, the federal government will offer unprecedented support for keeping families together. In the past, the federal government would only reimburse states for child welfare services that were delivered after children were removed from their homes. Starting in October 2019, states can also be reimbursed for services that keep children safely at home with their families.

For the first time, a pot of money formally known as Title IV-E funds will be available to states for targeting parents and caretakers of children being considered for foster care. The feds will reimburse states for up to 12 months of evidence-based programs aimed at keeping families together, which often include mental health services, substance abuse treatment and in-home parenting classes.

The shift toward early intervention and treatment is "something that states have wanted to see for a long time," says Tracy Wareing Evans, executive director of the American Public Human Services Association, a group that includes child welfare administrators.

But there is at least one provision in Family First that some state officials have expressed concern about.

To pay for the new prevention services, Congress is trying to shift money away from group homes. Generally speaking, the federal government will stop reimbursing states for placing children in group homes for more than two weeks unless they are a "qualified residential treatment program" for children with mental health or behavioral needs. The law also places new requirements on these group homes, such as accreditation by an independent body and licensed clinical staff on site.

The intent of the provision is to limit group homes to children with severe behavioral or mental health needs and ensure that most kids either remain with their families, get placed with a relative or live with a foster family.

In practice though, some states will struggle to place children in a family-like setting because there is a nationwide shortage of foster families, according to research by the Chronicle of Social Change, a nonprofit news site that covers child welfare and other youth policy issues.

In recent years, the number of children in foster care increased by 11 percent from 2012 to 2017 while at least 25 states saw their foster beds decrease during that time.

"You don’t just go out and create a whole new set of foster homes that you haven’t had available before," says Carl Ayers, the family services director for Virginia's Department of Social Services.

But adding to the supply of foster homes doesn't appear to be the goal for federal officials.

"In the long run, I don’t think we will solve the problems in foster care by finding more beds for children to sleep in," said Jerry Milner, the acting commissioner of the Administration for Children, Youth and Families, in an interview with the Chronicle of Social Change last November. "We need to resolve the problems that lead to the increased need for foster care placement."

In the meantime, Sheila Poole, acting commissioner of New York's Office of Children and Family Services, says the new rules for group homes will "significantly reduce a state’s flexibility to determine the most appropriate placement and the likelihood of receiving sufficient federal funding for youth in care."

If group homes don't or can't meet the new requirements, states may have to consider using their own funds -- without federal reimbursement -- to care for children and youth who have nowhere else to go.

States are expected to either comply with Family First or seek a two-year delay by October 2019. However, many states may lobby for a third option: Currently, 25 states, plus D.C. have waivers that grant them greater flexibility in how they use federal child welfare funds. In exchange for the flexibility, they accept a cap on their reimbursement amounts.

In some cases, waiver jurisdictions were already getting reimbursed for prevention services and those services included things that aren't going to reimbursed under Family First, such as rent and transportation assistance.

"For those waiver jurisdictions, they see this as overly prescriptive, and they worry about losing money," says Daniel Heimpel, president of Fostering Media Connections, which publishes the Chronicle of Social Change. "Family First is like a New Deal-era intrusion of the federal government's desires into local jurisdictions. No local leader really likes that."

Before the Family First law passed, the National Association of Counties (NACo) urged Congress to extend those waivers through 2024. Instead, they are set to expire in October 2019. NACo is currently in talks with officials in New York City, Los Angeles County, Colorado and Ohio about getting Congress to extend the waivers, according to Eryn Hurley, an associate legislative director there.

States are still awaiting federal guidance on the law's details. It's unknown at this point, for instance, which prevention programs would satisfy the law's new evidence-based standards.

"There are a ton of unanswered questions," says Ayers.

"For some states that don’t require accreditation or don't have evidence-based practices, it’s going to be a huge shift, which is the intent of the bill," says Michelle Sanborn, president of the National Organization of State Associations for Children, which represents foster care providers. She predicts most states will request a two-year delay for the group home provisions.

"I don’t think anybody is opposed to the idea and we welcome the challenge of getting to the goal of the bill," Sanborn says. "It’s just a matter of the getting there."

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