Neb. agrees to pay foster parents, subcontractors left in lurch by Omaha agency’s bankruptcy

Neb. to pay foster parents left in lurch

OMAHA, Neb. — The state of Nebraska will pay foster care providers and subcontractors left in limbo after an Omaha-based agency closed its doors amid financial troubles, under an agreement announced late Monday.

The deal with Visinet will also cover back pay for former Visinet employees, but it won’t reinstate the foster care provider’s contract with the state, said Jeanne Atkinson, spokeswoman for the Department of Health and Human Services.

The state expects to begin issuing payments after the amounts owed are verified, which should take seven to 10 days.

Todd Reckling, who oversees child and family services for the state, said funding will come from roughly $2 million left on Visinet’s $12 million contract with the state. He said Visinet has requested about $627,000 in back pay for its former employees and $306,000 for foster parents. The amount owed to subcontractors was still being determined.

“It’s important to note that children and families continue to get services, and almost all of the children stayed in their same placements as we worked to come to this agreement,” Reckling said.

Visinet filed for Chapter 11 bankruptcy early last month, leading the state to end its contract to coordinate services for children and families in state care. The bankruptcy protection case was dismissed after HHS objected to Visinet’s request for an extension to file a list of creditors. HHS is among the company’s creditors.

The agency had planned to continue providing services as it worked to get its finances in order. But it closed its doors in mid-April, saying it couldn’t reach a new agreement with HHS.

The agency has said it lost at least $10,000 a day under the contract and “was simply unable to continue operating at that level of loss.”

Visinet was one of five private agencies HHS hired last fall to coordinate services as part of changes to Nebraska’s child welfare system. Another agency, Cedars Youth Services, recently canceled its contract with the state.

The remaining three agencies will monitor the needs of children and families in state care, either providing services themselves or arranging for other agencies to provide them. The concept is similar to the way a general contractor hires and oversees subcontractors on a construction project.

Online:

Nebraska Department of Health and Human Services: www.hhs.state.ne.us/