Residential (or congregate care) is the most intensive setting to meet the needs of children and youth with high levels of need due to psychiatric, emotional, and behavioral problems. Historically, there has been concern about the "overuse" of such settings. Models such as the "system of care," which is the foundation of the Children's Services Act, establish a preference for treating youth in the context of their families and communities. Over the years, several strategies have been implemented to decrease children and youth placed in residential care settings. These strategies included implementing the Children's Services System Transformation initiative, a tiered, "incentive" match rate system in CSA designed to encourage serving children and youth in community-based settings, and the transition by Medicaid to a managed care approach to these services. FY2020 continued, the steady downward trend in the number of children served in residential care continued (overall decrease of 18% from FY2018). The total CSA cost of these services increased by 8.5%. The number of youth in psychiatric residential treatment placements (PRTF) decreased by 19%. Group home (GH) placements decreased by 14%. Placements for the most challenging youth continue to be a concern for CSA and its partner agencies (VDSS, DBHDS, DMAS) and concern over the need for more costly out-of-state placements (often not eligible for Medicaid reimbursement) have been an issue of considerable attention.