(The Center Square) – Louisiana spent at least $92.7 million on residential behavioral health services for 1,004 foster children during fiscal years 2023 through 2025, or about $92,000 per child according to a new state auditor’s report.
Managed care entities paid $68.3 million of that total, while the Department of Children and Family Services paid $24.4 million. Auditors said it is unclear whether some of the money paid by Family Services should instead have been billed to Medicaid. Family Services used $9.7 million from the state general fund, while the remainder was covered by federal funding streams.
The biggest costs came from inpatient psychiatric hospitalization, psychiatric residential treatment facilities and therapeutic group homes. Auditors found foster children often stayed in psychiatric hospitals longer than medically necessary because less intensive follow-up care or placement options were not available.
The Center Square was unsuccessful prior to publication getting comment about what specific services and benefits a child receives with $92,000.
The report also found the payment process for foster children’s Medicaid services can be “complex and confusing,” with gaps in policy and documentation that increase the risk Family Services could approve payments Medicaid should have handled.
Family Services agreed with the audit’s recommendations. In its response, the agency said it “implemented updated, standardized policies” effective Feb. 4 to clarify what documentation is needed before approving payments for services that may be Medicaid-eligible. Family Services also said it updated provider guidance to reinforce Medicaid as the primary payer and to clarify when denials should be appealed before billing the state.
Family Services said it is also working with the Louisiana Department of Health and managed care entities to reduce hospital stays that continue past medical necessity by expanding coordination and discharge planning.
