Visinet notified workers Thursday evening its foster care, shelters and all other services were shutting down as of midnight.
Department of Health and Human Services spokeswoman Kathie Osterman said the department was working with foster families and providers to ensure there was no disruption in services for about 2,000 children and 1,100 families.
According to an e-mail to employees obtained by the Journal Star, Visinet had been negotiating with Health and Human Services to provide a smooth transition of services to children after it declared bankruptcy April 8.
"Unfortunately, we have reached an impasse with HHS in resolving these issues," Visinet CEO John Powers said in the e-mail.
The department had terminated its contract with Visinet on the afternoon the company filed for Chapter 11 bankruptcy protection. But it said the state would work with Visinet to make the transition as seamless as possible.
Powers said that because of the requirements of the bankruptcy court and the constraints in place with the impasse, Visinet would cease foster care, emergency shelter, in-home services and electronic monitoring services in the Lincoln and Omaha areas. That includes 16 counties in Southeast Nebraska as well as Sarpy and Douglas counties.
"Visinet offered a reasonable compromise with legal representatives from DHHS and regrettably that figure was rejected," Powers wrote. "Consequently, we have no choice but to inform you that as of (12 a.m. Friday), Visinet cannot guarantee anyone's pay check for time and services rendered."
Osterman said Health and Human Services could not discuss the Visinet negotiations Thursday night.
"Our employees are doing whatever is necessary to provide continuity of services and have been putting contingency plans in place," she said. "We have talked with many foster parents and providers, and they know we want to work with them into the future with this transition."
Cedars President and CEO Jim Blue said his agency was finding emergency placement for several of the children Thursday night in foster homes and shelters.
The loss of Visinet as a lead agency in foster care came on the heels of Cedars' announcement a week before that it would pull out of its contract with the state as of June 30. Blue said financial projections showed his agency would lose $5.5 million next year as a result of that contract.
Reach JoAnne Young at 473-7228 or email@example.com.