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3rd Path/ Children’s Mental Health Residential Services Path

In compliance with legislation that passed in 2021, the state of Minnesota has developed another way to access Children’s Residential Facilities (CRF) (formerly known as Residential Treatment Centers or RTC) services to assist children living with severe emotional disturbance (SED) and their families. This pathway is called the Children’s Mental Health (CMH) Residential Services Path, also referred to as “3rd Path,” which was developed with the goal of providing children and their families an alternative way to gain access to services to meet a child’s individual and specific needs in a CRF.

State allocation for room and board costs

The CMH Residential Services Path does not fund licensed CRFs in the same manner as the two existing service entry methods or “paths.” When accessing children’s residential services using the existing paths, the county or initiative tribe has placement authority. The three initiative tribes are Red Lake Nation, Leech Lake Band of Ojibwe, and White Earth Nation. Historically, when a child is admitted to a CRF, they may enter via a voluntary placement agreement (VPA) or through a placement for juvenile safety reasons. In both circumstances, the court is involved. Because of this court involvement, the county or initiative tribe receives federal IV-E reimbursement. IV-E reimbursement is used to pay for the cost of room and board. Medical Assistance (MA), pre-paid health plans/managed care (MCO), and private insurance, if applicable, are responsible for the cost of mental health services provided in the CRF.

The CMH Residential Services Path creates an alternative to the two paths outlined above. In situations where a child and family choose the CMH Residential Services Path, a voluntary placement agreement (VPA) is not utilized. A child accesses this as a service rather than a placement, and the county or initiative tribe does not receive IV-E funds. The legislature appropriated $1,964,000 in state fiscal year 2022 and $1,979,000 in state fiscal year 2023 to the Department of Human Services. This state funding is ongoing, and will be used to reimburse counties and the three initiative tribes for lost IV-E room and board funding.

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