The Kids Oneida Project: What Happened to Services When the Payment Rules Changed

Community-based systems of care may provide high quality, cost-effective alternatives to institutional care for children and adolescents. This report examines Kids Oneida (KO), a not-for-profit managed care entity established in upstate New York in 1998 to serve such children and their families. Changes in payment rules that established the program allowed KO to contract with a wide array of providers to provide and be reimbursed for non-traditional and formerly unreimbursable services, such as mentoring and supervision. By design, emphasis was on highly individualized plans of care in which traditional office-based services played only a small part. During the first 30 months of KO’s operation, 228 children, whose severity of emotional disturbances was comparable to those of children placed in residential treatment centers, had average monthly expenditures for first admissions of $2,734 for services and $228 for administrative fees. Median length of stay in the program was 13.5 months, yielding an estimate of $39,987 for typical length of stay. Length of stay and treatment costs were not related to children’s gender or race. Length of stay was significantly longer for children with diagnoses indicating attention deficit hyperactivity disorder and behavior disorders. Treatment costs were significantly higher for children with behavior disorders and/or substance use and children who had had prior contact with the juvenile justice system.