An Indiana effort to shift some foster care costs to the federal government would throw up more red tape and make it harder for caretakers and providers to get services for troubled children, a coalition of child care agencies said Friday.

The group called IARCCA, an Association of Children and Family Services, also said rules proposed by the Indiana Department of Child Services would shift some costs from the state to the federal Medicaid program at the expense of residential treatment centers and child placement agencies.

IARCCA wants the proposed rules withdrawn.

The IARCCA concerns, which were to be presented at a public hearing on the new rules Friday afternoon, marked the latest round in a fight between DCS and foster parents and agencies over cost-cutting steps taken by Gov. Mitch Daniels' administration. Foster parents and agencies claims the cuts threaten services for children with special needs, including medical and emotional conditions.

IARCCA, which has more than 100 member agencies, won a federal injunction in January blocking DCS from cutting payments to foster and residential care agencies.

"They're going to delay children getting therapies," said Cathleen Graham, IARCCA's executive director of IARCCA. "The additional referrals we will have to get for these therapies will be in the thousands" for all the children affected.

DCS has said the rules would shift about $22 million in state costs to Medicaid, but Graham said it would cost agencies and centers more than $26 million in additional paperwork, staff time and other expenses to comply with the rules.

Graham also said Indiana has not yet filed an amendment to its state Medicaid plan seeking federal approval for the new costs. She said the federal Centers for Medicaid and Medicare services rejected a similar attempt in 2002 to shift some state costs to the federal health plan for needy people.