Financing Systems of Care

Chris Koyanagi, Policy Director

Bazelon Center for Mental Health Law

Funding Sustainable Interagency Systems of Care

Advice from successful sites: Get out of match frame of mind Program must drive financing Build budget with sustainable funds

(Medicaid, Title IV-B, etc.) Adhere to SOC values, philosophy Use cooperative agreement dollars to

stimulate contributions from partners and state

Funding Sustainable Interagency Systems of Care

Advice from successful sites: Grants are about systems change; do not lose

sight of need for interagency action to change how services are delivered

Get out of match frame of mind Program must drive financing Address long-range financing early; don’t wait to

panic at end of year 3 Use cooperative agreement dollars as venture

capital

Build structures to ensure strong collaboration with other agencies:

Coordinate financing policies across systems Build relationships early and focus on high

priority issues in each system Ensure financing policies in all agencies

comport and support SoC approach Redeploy -- use money in other systems more

efficiently:

Shift funds from high-end or overly-clinical services to less intensive care and family support

Winning Strategies for Sustainable Systems

Use Match Rules to Your Advantage

Federal government is seeding a new way of doing business in your community and providing unusually long support

Federal funding declines over life of grant in a deliberate strategy to force local support

There are many resource materials available to you on financing SoC and sustaining them

Use federal time-limited funds to test ideas and start new initiatives, such as:

Applying for other special grants with partner agencies

Making mini grants to stimulate new high-priority services

Selling critical services to other agencies (training and TA)

Use of Federal Grants

Look to the Future

Use the time while you have federal funds to build activities and plans for future funding: Get commitments for later years’ funding now Build a strategy to win state general fund

support Co-locate staff Provide services to avoid juvenile justice

placement, child welfare large residential placements, etc. that can continue (and be funded) when federal funds expire

Financing Rules for Applicants: Maintenance of Effort (MOE)

Cannot use as match for the first grant year an amount equivalent to the non-federal funds expended by the applicant for same purposes over prior 2-years

This amount also cannot be used as match for subsequent years

Calculating MOE

To calculate MOE: Average the amount of funds spent by applicant

over the previous two fiscal years: in same locality as that served by the

cooperative agreement for community mental health services for children to be served by the applicant

agency (your target population) Non-federal match must then exclude this MOE

base amount for each FY of the cooperative agreement

Definition of Match

Match funds are: Non-federal public or private funds Funds not used as match for any other

federal program (including Medicaid) Funds spent on the system of care Either cash or in-kind, fairly evaluated For Indian Tribes or Tribal Organizations,

Section 638 funds

Non-Federal Cash Match

Can Be: New state or local general fund dollars spent by

any partner agency

Funds redirected from residential or other institutional services to community services for child served by the program

Funds from private entities, including health insurance, donations, etc

Not allowable as match are: Funds spent for a purpose not permitted for

federal grant funds Funds not spent on SOC, but in another

part of state or locality Funds expended for services to children

who are not SOC children MOE

Funds That Cannot Be Match

Non-Federal In-Kind Match

Can be plant, equipment, or services

Must be allowable cost under terms of cooperative agreement if site were to pay for them

Examples: Personnel costs (teachers, child welfare

workers, etc.) Space (used by staff of any agency when

serving SoC child, space for other SoC activities)

Volunteer, family, or youth time

Additional In-Kind Options

Vehicles for transportation Training or TA costs Evaluations or other support from universities

or others Donated media activities Utilities, phone, space, or equipment Time contributed by community members and

Board Equipment donated

Rules on In-Kind Match In-kind funds must be fairly evaluated Space/equipment where 3rd party has title must

be valued at fair rental rate Volunteer services by professionals, technical

personnel, family members, consultants and others must be integral and necessary part of an approved program and constitute allowable cost if program had to pay for it

Calculating Value of In-Kind

Use fair market rent or value To calculate volunteer time use:

Cost of site employee who performs similar work or Rate consistent with that paid for similar work in

labor market in which the grantee competes

Include cost of reasonable fringe benefits

Supplies must be calculated at the market value at the time of the donation

Sources for Cash Match for Sites

Sites have tapped: State and local general fund Targeted taxes Realigned mental health budget Redirected child welfare funds from residential

care Juvenile justice funds for diversion and probation Private funding: foundations (local and national),

United Way, community groups

Where is The Money?

To fund a sustainable program: States, states and states Local government to some degree Partner agencies: state and local funds or in-kind

services Redeployed funds into lower cost services Third party reimbursement

Medicaid Private insurance

Medicaid Most community services covered:

In-home services Crisis intervention (mobile teams, hot lines, in-home,

etc.), crisis stabilization Skills-building (social skills, daily living skills,

communication skills, self-management skills, and independent living skills, etc.)

Behavioral aides/adolescent peer specialists Case management Social and recreational activities if meeting rehab plan

goal Anger and behavior management services Day treatment Family psychoeducation and family skill-building Services to support participation in education,

including school-based services by qualified provider

Evidence-Based Practices

Medicaid will pay for (and states are billing for): Multi-systemic therapy Wrap-around Intensive in-home services Family psycho-education Integration MH-SA treatment ACT teams Therapeutic foster care Illness/disability self management

Targeted Case Management

New rules in DRA TCM provided by mental health agency case

manager always covered, little change TCM provided by child welfare worker or juvenile

justice probation or parole officer harder to justify Children in foster care or on probation still eligible

for TCM from mental health like any other child

Targeted Case Management

Child welfare activities specifically not billable to Medicaid: Gathering and completing documentation

required by foster care program Recruiting potential foster parents Serving legal papers Home investigations Providing transportation Making placement arrangements Administering foster care subsidies

Other Core Federal Programs

Child welfare: Title IV-E (foster care) and IV-B to prevent out-of-home placement

Education: IDEA Juvenile justice: Federal funds, court, and

probation funds MH and SA block grants

Tribal Sites

Different federal rules: Use of PL 93-638 funds Medicaid—can be 100% federal if

provided through Indian health service program

Other revenue sources: Tribal funds from various sources Casino revenue In-kind match States: requires effort

Sustainability

Study of earlier graduates shows the most important funding sources are: Medicaid State mental health funding Partner agency funds (obtaining and

coordinating) Redeploying funds into lower cost

service alternatives

Conclusion

A few things to remember: Match is a tool; not an end in itself Work from day one on sustainability and

use match to your advantage Sustainable systems of care must be

partnerships – other agencies are your customers

Medicaid and other federal entitlement programs are a core source of on-going support but state and local investment is critical

Questions?

Please press *7 on your phone

to unmute your line.

When you are finished, please

press *6 to remute.