AUSTIN — Texas, under fire to improve its system of long-term foster care, is using federal crime-victim grant money to test whether it can get the worst-off foster children in state custody out of institutions.

The pilot program will house and work with 500 children whom Child Protective Services has found hard to place, many of them winding up in psychiatric hospitals and residential treatment centers, Gov. Greg Abbott announced Wednesday.

The children would receive "wrap-around care" — individualized medical care and mental health therapies — in "the least restrictive and most appropriate setting" at four different sites in the state, Abbott's office said in a release.

His office's Criminal Justice Division issued an $8 million grant to CPS' parent agency, the Department of Family and Protective Services.

The department will accept bids from foster-care providers who want to build and operate the "integrated coordinated care" model, and "move toward implementation over the next several months," the Abbott release said.

"It is crucial that the most vulnerable Texans under the state's care receive the highest-quality treatment so that they may be freed from an unacceptable cycle of crisis," the Republican governor is quoted as saying. "By better coordinating the care of our highest needs children in the foster care system, we will begin to unwind the abuse and trauma they have endured."

The pilot is only one part of department chief Henry "Hank" Whitman's effort to hire special vendors to care for the estimated 1,000 "high needs" foster children in Texas.

They are those who the department considers to have suffered the worst emotional, psychological and medical harm because of maltreatment by their birth families.

The Abbott initiative will help only kids whom CPS attests have been victims of crime.

They also will have to fit one of three requirements: In the past 12 months, they were hospitalized at least once, staying beyond "medical necessity;" they lived in two or more residential treatment centers, which are live-in health care facilities providing therapy for substance abuse, mental illness or other behavioral problems; or they're cared for through one of the department's "child-specific contracts."

A child-specific contract is a very expensive, customized procurement for youngsters whom traditional child placing agencies can't handle. Their numbers are growing. In fiscal 2015, the state spent about $6.3 million on 179 child-specific contracts. Last year, it spent $14.7 million on 679 contracts involving 529 different children.

Whitman first publicly mentioned his plan to have a special procurement to serve high-needs foster children in an Oct. 27 letter to the Senate Finance Committee.

"Under this program, a single vendor/entity will be responsible for care coordination; with a no eject/no reject framework," Whitman wrote.

For nearly a decade, the department has been frustrated that foster-care vendors can refuse to accept a highly troubled child, leaving CPS with no option but to have children sleep in state offices or motels, under the supervision of already-harried caseworkers.

The vendors, though, have complained that the department pays too little. Also, the department's separate contracting and licensing arms sometimes have different rules for vendors, and punish private agencies if they protest what they consider arbitrary policing, the vendors say.

Just over a year ago, the department's consultant, New Hampshire-based The Stephen Group, recommended some of the steps Whitman is taking in a report on Texas' high needs children.

In the report, the consultant estimated there may be as many as 5,000 children with special "needs that range from emotional, medical, and intellectual/developmental disability."

Asked why the state is now using 1,000 as the estimate, department spokesman Patrick Crimmins said, "We worked with The Stephen Group and just narrowed their number to the children with the most profound and urgent needs, as well as those children who best fit this particular program."

In a written statement, Whitman thanked Abbott for taking "decisive action" to help very troubled children.

"This grant will eliminate bureaucratic hurdles and keep foster kids out of CPS offices," he said.

Also Wednesday, Sen. Charles Schwertner, the Senate's chief social services policy writer, prefiled a CPS overhaul bill.

Among other things, it would make the department contract with a nonprofit to set up a regional pilot program. In its goal, the pilot sounds very similar to Abbott's initiative -- "to provide comprehensive case management services for foster children with the most acute medical and behavioral health needs."

Schwertner, R-Georgetown, also would put some restrictions on Whitman's ambitious plan to roll out a new procurement method -- "foster care redesign" -- to 10 areas of the state by the end of the next two-year budget cycle. It's getting good reviews but being used in only one area: Tarrant and six nearby counties.

Schwertner's bill would require a "readiness review" before launching the program in a new area and ban participation by for-profit vendors. In a failed pilot effort before the one in Fort Worth, the state had a bad experience with a for-profit company.

The push to improve foster care comes as Texas continues to try to fend off a 5-1/2-year-old class-action lawsuit. Last December, the state lost badly at the trial stage.

In a preliminary ruling, U.S. District Judge Janis Graham Jack of Corpus Christi said "rape, abuse, psychotropic medication and instability are the norm" for the 12,000 children who are in CPS' custody for at least one year to 18 months or more.

She ruled that because Texas has such a drastic shortage of "conservatorship" or foster care caseworkers and foster homes, and is so lax at policing foster-care vendors, children are at grave risk of harm. Thus, the state has violated their 14th Amendment rights, she said. State officials, while acknowledging the system needs work, have appealed.