Family First in Financial Focus: Financing for Family-Centered Substance Use Disorder (SUD)Treatment

Family First represents a bipartisan policy consensus around supporting families impacted by parental substance use to promote healing, recovery, and family integrity where safely possible.

 

Family-Centered Substance Abuse Treatment in Context

Parental substance use remains a primary driver of child welfare system involvement.

  • In FY2023, caregiver drug use was cited as a factor in approximately one-third of all foster care entries, a likely undercount.

  • Research suggests that in some states, as many as two-thirds of removals involve substance use as a contributing factor.

What Family-Centered Substance Abuse Treatment Does 

Strong evidence supports family-centered treatment, models that serve the entire family together. This allows children to remain safely with parents during the recovery process. These approaches are associated with improved outcomes for both parents and children, including higher rates of family preservation and reunification.

How Family First Supports Family-Centered Substance Abuse Treatment 

Recognizing this alignment of need and evidence, Family First created two key new pathways for using Title IV-E funds to support SUD treatment:

Residential Family-Based Substance Use Disorder Treatment: Reimbursement for Children’s Room and Board

  • What it does: Allows states to claim Title IV-E foster care maintenance payments for a child placed with their parent in a licensed residential SUD treatment facility.

  • Purpose: Enables children to remain with their parent during treatment, reducing trauma, supporting family stability, and enhancing treatment engagement.

  • Funding details: Reimbursement is available for up to 12 months.

  • Eligibility: No income test; licensing is required but flexible.

  • Program requirements: Treatment must integrate parenting skills training, parent education, and child development supports.

Title IV-E Prevention Services for SUD Treatment

  • What it does: Permits states to draw Title IV-E reimbursement for evidence-based outpatient or residential SUD treatment services provided as part of Family First prevention services.

  • Eligible populations:

    • Candidates for foster care (children at imminent risk of removal)

    • Pregnant and parenting youth already in foster care

    • Parents or kin caregivers of these youth

    This pathway allows for earlier intervention—aiming to prevent the need for foster care altogether by addressing SUD risks in the family context.

Regional Partnership Grants: A Complementary Support

In addition to the new Title IV-E financing options, Family First extended the Regional Partnership Grant (RPG) program under Title IV-B:

  • Purpose: Supports collaborative partnerships between child welfare agencies, SUD treatment providers, courts, and community partners.

  • Funding: Competitive grants (3-5 years), authorized under Title IV-B.

  • Role: Builds infrastructure and cross-system alignment to improve outcomes for families affected by SUD.

Current Status and Participation 

Utilization of the residential treatment foster care maintenance option remains very limited:

  • In FY2023, only three states and one tribe claimed funds under this provision:

    • Utah: $288,412

    • Missouri: $1,597 (possible coding error noted)

    • Washington: $33,408

    • Eastern Band of Cherokee Indians: $74,400

    Total national claims: $397,817—representing just 0.004% of total foster care maintenance claims.

  • Average children served per month: 11—across the entire country.

  • Key Complications: 

    • For states to draw down funding, the child must be formally in foster care.

Treatment providers are used to billing health financing systems, not Title IV-E.

Implementation to Date: Prevention Services for SUD

Barriers to Broader Rollout

The data suggest policy barriers to effective implementation. Understanding them can support the identification of potential reforms that merit further deliberation.

  • Limited service alignment: The existing Clearinghouse-approved array does not fully reflect the SUD treatment field’s best practices—including but not limited to family-centered practice and enlisting Multidisciplinary Assessment Team (MATs)—especially for family-centered treatment approaches.

  • Administrative burden: Navigating Title IV-E claiming processes adds additional hurdles for already resource-constrained treatment providers and state agencies.


 

MORE FROM THE FFPSA POLICY EXPLAINER SERIES:

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Family First in Financial Focus: Non-Family Placements

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An Introduction to the Family First Prevention Services Act