Former Nebraska-contracted foster care provider sued over payments to foster parents, homes

OMAHA, Neb. — An Iowa-based foster care provider that ended its contract with Nebraska over financial concerns owes almost $500,000 in back payments to foster parents and homes, according to lawsuits filed by its subcontractors.
Boys and Girls Homes and Family Services Inc., based in Sioux City, Iowa, was required by its state contract to reimburse subcontractors within 45 days of billing but many remain unpaid six months after the contract was dissolved, the filings said.
Mid-Plains Center for Behavioral Healthcare Services in Grand Island filed a lawsuit Wednesday in Hall County District Court seeking $136,000 in back payments. Two similar lawsuits were filed Thursday in Buffalo County District Court. South Central Behavioral Services and Compass are seeking a combined $337,000.
A message left Thursday for Boys and Girls wasn't immediately returned. Todd Reckling, director of Nebraska's Division of Children and Family Services, said Thursday that the state has been working with Boys and Girls Home to ensure subcontractors are paid but the issue has not yet been resolved.
"We understand the impact this situation has had on the subcontractors and truly appreciate their services to our children and families," he said.
Boys and Girls had coordinated child welfare services for the Western, Central and Northern service areas until mid-October. Its contract with the state was dissolved by mutual agreement, leaving Nebraska with two contracted providers.
HHS chief executive officer Kerry Winterer and Bob Sheehan, president and CEO of Boys and Girls Home, said at the time that financial issues were among the reasons for the cancelled deal.
Nebraska began an overhaul of its child welfare system in 2009, starting out with five contractors. It lost two of them last April when Visinet Inc. went broke and Cedars Youth Services canceled its contract with the state. At the time, Cedars Youth Services said the state didn't pay enough to cover the cost of services, and Visinet said it lost at least $10,000 a day under the state contract