Commonwealth Court Agrees With Human Service Providers: Declares Department of Public Welfare's Actions Illegal

LAFAYETTE HILL, Pa., July 29 /PRNewswire-USNewswire/ -- In a far reaching decision, the Commonwealth Court of Pennsylvania issued a ruling on July 23, 2010 which has declared illegal certain administrative policies and procedures adopted by the Department of Public Welfare (DPW) relating to payment for child welfare services such as foster care, juvenile justice, residential services, therapeutic family care and shelter care.  These services are provided by hundreds of private child welfare agencies on a daily basis to thousands of children and families throughout Pennsylvania.

This ruling was in response to a suit led by Northwestern Youth Services, Inc., a subsidiary of NHS Human Services headquartered in Lafayette Hill, PA, and joined by Adelphi Village, Appalachian Youth Services, Inc., Hermitage House Youth Services, Inc., Pyramid Healthcare, Inc. and Tabor Children's Services after unsuccessful attempts to convince DPW to halt its illegal practices.  In July 2009 they sued the Department and demanded that it rescind a series of policy Bulletins and comply with state law and formally publish and adopt the policies as regulations.  The Department rejected the providers' concerns and continued to apply the policies, and threatened severe financial sanctions for failure to comply.  DPW established a payment rate of zero for services commonly utilized by the juvenile courts without any written explanation for its decision.

In striking down DPW's payment policies, the Court determined that the policies, as written and applied, were "restrictive, directive and substantive" in nature indicating that they were indeed regulations.  Before adopting such policies that compel private agencies to perform certain duties, a government agency must subject the policies to public review and scrutiny.  According to the Court's decision, the persistent failure and refusal of DPW to comply with that long standing requirement of state law compelled it to invalidate the process.

Senator M. Joseph Rocks, Chairman and CEO of NHS Human Services stated, "The immediate and long-range impact of the Commonwealth Court's decision is of great importance for Pennsylvania's children and their families as well as our counties and providers who have historically provided care to some of our most vulnerable citizens.  This decision should stop the creeping tendency of the Pennsylvania bureaucracy to side step Pennsylvania statutes, the legislature, regulatory processes and the Independent Regulatory Review Commission (IRRC) and publish bulletins that set rates and change contractual structures between Counties and providers."

Rocks further observed that, "the Legislative intent and statutory language of Act 148 is to safeguard the authority and funding for children, youth and families in Pennsylvania.  The Department's attempts to both side-step the law and intimidate counties was rejected by the Court's thoughtful opinion."

NHS Human Services is Pennsylvania's largest provider of non–profit human services with programs in 67 counties throughout the state.  "We are proud to have taken the lead in this hard fought, but most worthwhile victory, on behalf of all the individuals we serve," Senator Rocks commented.

He also credited the NHS General Counsel, Joseph T. Kelley, Jr., and lead counsel, Jack Kane, for their work on this suit. The entire opinion is available at www.nhsonline.org or www.pacourts.us/OpPosting/Cwealth/out/386MD09_7-23-10.pdf.

SOURCE NHS Human Services